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The  Banker's  magazine 


Digitized  by  t^ooQle 


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THE 


Bankers  Magazine 


RHODES  JOURNAL  OF  BANKING  AND  THE  BANKERS'  MAGAZINE 
CONSOLIDATED 


VOLUME  LXXXI 

JULY  TO  DECEMBER 

1910 


NEW  TORE 

THE  BANKERS  PUBLISHING  CO..  Publishers 
263  BROADWAY 


Digitized  by  t^ooQle 


COPYRIGHT  1910 
BY  THE 

BANKERS  PUBLISHING  CO. 


Digitized  by  t^ooQle 


INDEX 


July  to  December,  1910 


I.  EDITORIAL  COMMENT  AND  LEADING  ARTICLES 


Adjusting  branch  bank  finances 786 

American  Bankers’  Association 142 

American  Bankers’  Association  con- 
vention   443 

Ancient  and  modem  millionaires 622 

Automobile  owners  being  watched....  447 

Bank  atmosphere  783 

Bankers  and  banking  problems 448 

Bazo  v.  Gonzales  (credit  insurance)....  628 

*' Bicentral  banking”  610 

Bills  of  lading  controversy  616 

Business  and  the  crops  444 

Canadian  banking  and  commerce  ....  293 

Casualty  Insurance,  cost  of  444 

Central  bank,  a modified  609 

Central  bank  of  limited  scope  621 

Central  bank,  the  use  of  public  funds 

for  781 

Central  bank,  President  not  for 4 

Central  bank  with  branches,  a 776 

Chicago  banks  consolidated  1 

Commercial  reports  by  banks  8 

Comptroller’s  credit  bureau  611 

Congress  and  banking  legislation....  620 
Continental  National  Bank,  Chicago, 
consolidated  with  Commercal  Na- 
tional, Chicago  1 

Cotton  bills  of  lading  460 

Country’s  foreign  trade  289 

Credit  for  farmers  6 

Credit  information  for  examiners 6 

Credit  insurance  612,  623 

Credit,  the  straining  of  291 

Crop  conditions  446 

Currency  reform  at  last  449 

Death  of  eminent  financiers  291 

Department  store  banking  289 

Deposit  guaranty  defended  288 

Division  form  of  bank  organization..  144 
Driving  out  capital  616 

Eckbardt,  H.  M.  P.  (adjusting  branch 

bank  finances)  786 

Eckhardt.  H.  M.  P.  (Canadian  hanking 

and  commerce)  293 

Ellis,  Leonora  Beck  (picturesque  In- 
dustries of  a unique  state)  451 

Express  business,  regulation  of  the...  290 

Forcing  bank  liquidation  146 

“Get  rich  quick”  schemes  613 

Greenbacks,  changing  the  denomina- 
tion of  782 


Harmon,  Gov.,  on  the  passage  of  new 
Irwb  ......  . . ...................  446 

Hopkins,  Prof.  G.,  (the  soli  as  a bank)  776 

Impending  political  changes  286 

Inflation  and  high  prices 618 

Interest  on  deposits,  proposal  to  limit  6 

Is  suspension  the  remedy  in  a crisis..  287 

Lyford,  F.  E.,  on  suspension  in  a crisis  287 

MacVeagh,  Secretary,  on  formation  of 

national  currency  associations  143 

Making  the  corporations  behave  611 

Mexican  centennial  139 

Mexican  railways  listed  in  Paris 5 

National  bank  charters  to  be  limited 

in  number  2 

National  bank  examinations  446 

New  York  bankers’  convention  140 

Obstacles  to  railway  construction 617 

Our  unappeasable  appetite  for  cur- 
rency   445 

Perkins,  Geo.  W.f  on  regulating  big 

corporations  6 

Picturesque  Industries  of  a unique 

state  451 

Politicians  and  the  critics  2 

Postal  savings  bank,  the  145 

President  Taft's  ambition  444 

Prices  and  production  292 

Private  bankers,  regulation  of 286 

Production  and  consumption  143 

Promissory  note,  criticism  of  4 

Republican'  opportunity,  a 619 

Reserve  city  banks  ..  460 

Reserve  lending  power  146 

Smith,  Wm.  Henry  (U.  S.  Treasury).  9,  147 

Soil  as  a bank,  the  776 

Sprague,  Prof.  O.  M.  W.,  on  strength- 
ening the  national  banking  system..  449 

State  bankers’  associations  621 

Stilwell  Arthur  E.t  a plea  for  honest 

business  methods  285 

Stockwell,  Herbert  G.  (bank  atmos- 
phere)   788 

Tainted  money  7 

Taxation  question,  the  ; 627 

The  straining  of  credit  291 

Travelers’  checks  and  bankers’  money 
orders  8 

United  States  Treasury,  the  9,  147 

Value  of  courtesy  618 


II.  BANKING  AND  FINANCIAL  LAW  AND  REPLIES  TO  QUESTIONS 


Accommodation  indorsers — order  of 

liability  15 

Banks  right  of  set-off — deposit  made 
for  special  purpose  20 

Cashier — liability  for  acts  of  assistant 

cashier  18 

Cashier — powers  of  311 

Check  of  corporation  drawn  by  treas- 
urer to  his  own  order— notice  to 
bank  168 


Check  payable  through  a bank — right 
of  a drawee  bank  to  refuse  payment 

when  otherwise  presented  467 

Deposit  slip  made  out  to  wrong  name 

— effect  of  entry  in  pass-book  172 

Discount  procured  by  false  representa- 
tions— right  of  bank  to  rescind  and 

charge  back  178 

Forged  check — duty  of  drawee  bank  to 
know  drawer’s  signature — guaranty 
of  Indorsements  635 


256138 


Digitized  by  t^oooLe 


IV 


THE  BANKERS  MAGAZINE 


Guaranty  of  indorsements — effect  of — 
recovery  money  paid  315 

Negotiable  instruments — necessity  for 
use  of  word  “order”  or  “bearer” — 
construction  of  negotiable  Insruments 
law  793 

Payment  of  check  of  corporation  not 

properly  countersigned  16 

Payment  of  forged  check — notice  by 

depositor— delay — demand  797 

Presentment  of  draft  for  payment — 

effect  of  retention  by  drawee  316 

Promissory  note — bona  fide  holder — in- 
dorsement “without  recourse” — state- 
ment of  consideration  17 

Wrongful  refusal  to  pay  customer’s 
check — amount  of  damages  465 

LIST  OF  CASES. 

Bank  of  Sampson  vs.  Hatcher 17 

Ellis  vs.  Western  Nat.  Bank  et  al  16 

Farmers’  Bank  of  Nashville  vs.  John- 
son, King  & Co 467 

First  National  Bank  of  Omaha  vs. 
Whitmore  316 

Havana  Central  R.  R.  Co.  vs.  Knicker- 
bocker Trust  Co 163 

In  re  McCord  15 

National  Bank  of  RoHa  vs.  First  Bank 

of  Salem  634 

New  York  Produce  Exchange  Bank  vs. 
Twelfth  Ward  Bank  315 

Pensacola  Bank  and  Trust  Co.  vs.  Na- 
tional Bank  of  St.  Petersburg  311 

Pratt  vs.  Union  National  Bank  797 

Rio  State  Bank  vs.  Amondson  19 

Rosalie  Flatow,  admr.,  etc.,  vs  Jeffer- 
son Bank  173 

Schwartz  vs.  State  Bank  172 

Third  National  Bank  of  St.  Louis  vs. 

Ober  465 

Wagner  vs.  Citizens'  Bank  & Trust 


yu.  *w 

Western  Nat.  Bank  vs.  Louisville 

Trust  Co.  et  al  16 

Wettlaufer  vs.  Baxter  et  al  793 


CANADIAN  LAW. 

Banking — security  for  debt — assign- 
ment of  lease — transfer  of  business — 

operation  of  bank  472 

Banks  and  banking— check  initialed  by 
local  manager — cashed  by  another 
bank— first  bank  refused  payment — 
right  to  recover  on  check  from,  first 

bank — custom  of  bankers  475 

Banks  and  banking — insolvent  bank 
taken  over  by  another  bank — agree- 
ment as  to — validity  of  agreement- 
power  of  directors  to  make  agree- 
ment— bank  act.  s.s.  99-111  24 

Bill  9f  exchange — acceptance  for  ac- 
commodation of  third  person — evi- 
dence — admissibility  — rejection  at 
trial — admission  by  affidavits  on  ap- 
peal— indemnity — implied  contract — 
county  court — jurisdiction — removal 


of  action  into  high  court — costs  304 

Cancellation  of  instrument — company 
— winding  up — mortgage  by  insolvent 
company  to  bank  to  secure  existing 

debt  800 

Chose  in  action— assignment  of— notice 
to  debtors — right  of  assignee  to 
moneys  collected  by  assignor  and 


handed  over  to  another  creditor — 
estoppel  by  conduct — duty  of  assignee 
to  notify  other  creditors  of  the  as- 
signment   640 

Contract — construction — sale  of  busi- 
ness— covenant  of  purchasers  to 
make  annual  payments — covenant  of 
vendors  not  to  engage  in  similar 
business — independent  covenants — 


performance  of  substantial  part  of 

contract  176 

Contract — equity  running  with — offset 
— accounting — form  of  action  644 


Promissory  note — accommodation  mak- 
er— liability  of — payee  pledge  note  to 
bank  after  maturity  as  collateral 
security — right  of  bank  to  recover 
amount  due  bank  by  payee — bank 
trustee  for  payee  for  balance  of  note 
— bills  of  exchange  act.  s.s  54  and  70  474 

Promissory  note— incomplete  instru-  . 
ment — delivery — holder  in  due  course 
— bill  of  exchange  act,  secs.  31,  32 — 

leave  to  appeal  320 

Promissory  note — indorser — bills  of 

exchange  act,  R.  S.  C..  1906,  c;  119, 
s.  131 — holder  in  due  course — estoppel  642 

Promissory  note — procurement  of  sig- 
natures of  makers  by  fraud — dis- 
count by  bank — payment  made  on 
account - by  perpetrator  of  fraud  be- 
fore maturity — holder  in  due  course 
— acquisition  by  plaintiffs  from  bank 
— liability  of  makers  confined  to  bal- 
ance paid  to  bank  by  plaintiff — 
notice  of  fraud — circumstances  put- 
ting plaintiffs  on  enquiry — liability  of 
payee  to  indemnify  makers — costs..  27 

Promissory  notes  — consideration  — 
transfer  of  bank  shares — illegal  traf- 
ficking by  bank  in  its  own  shares — 
directors — bond — notes  given  to  re- 
pair wrongdoing  — holder  in  due 
course — acquisition  of  several  notes 
after  maturity — notice  of  Illegality 
to  others — evidence — onus — costs  178 

Succession  duties  — New  Brunswick 
statute — foreign  bank — special  deposit 
in  local  branch — depositor  domiciled 
In  Nova  Scotia — debt  due  by  bank — 
notice  of  withdrawal — enforcement  of 


payment  174 

Suretyship— simple  contract — discharge 
of  due  surety  under  seal — confirma- 
tion of  original  guarantee — death  of 
surety — powers  of  executors — contin- 
uance of  guaranteee  317 

LIST  OF  CASES. 

Bank  of  British  North  America  vs. 

Wood  640 

Farrow  vs.  MacPherson  804 

Graham  vs.  Driver  (1  O.  W.  N.,  p.  767)  27 

Hammond  vs.  The  Bank  of  Montreal..  800 

Hubbard  vs.  Home  Bank  of  Canada . . 320 

Knectel  Furniture  Co.  vs.  Ideal  House 
Furnishers,  Ltd 642 

Lovltt  vs.  the  King  174 

Merchants  Bank  vs.  Thompson  474 

Ontario  Bank  and  the  Bank  of  Montreal  24 

Ontario  Bank  vs.  Chas.  B.  McAllister 
and  Jane  B.  McAllister  472 

Royal  Bank  vs.  Schaffner 644 

Scott  vs.  The  Merchants  Bank  of  Can- 
ada   475 

Stavert  vs.  McMillan  178 

Telford  vs.  Sovereign  Bank  of  Canada  176 

Union  Bank  of  Canada  vs.  Jane  E 
Clark  and  Alexander  Gray  Farrell, 
executors  of  James  Maitland  Clark..  317 


Digitized  by  t^ooole 


INDEX,  JULY  TO  DECEMBER,  1910 


v 


REPLIES  TO  LAW  AND  BANKING  QUES- 
TIONS. 

Deposit  to  meet  outstanding  check — 


charging  off  depositor’s  note  479 

Draft  on  savings  account  with  interest  181 

Giving  information  as  to  depositor's 
account  180 

Obligation  of  endorser  of  check  where 
discrepancy  between  words  and  fig- 
ures occurs  805 


Payment  of  interest  coupons  on  called 


bonds  180 

Promise  over  telephone  to  pay  check..  64$ 

Right  of  administrator  to  deposit  trust 

funds  in  his  own  name  ...... 29 

Right  of  shareholder  to  inspect  books 
of  national  bank  478 

Suit  by  bank  where  draft  indorsed  “for 
collection’’  479 


III.  BANKING  MISCELLANY,  REPORTS,  ETC. 


Adams.  Samuel  G..  portrait  of  

Adverse  influences  

Advertising,  backing  up  

Advertising  criticism  

Advertising,  how  banks  are 

Advertising,  how  banks  are 

Advertising  talks  

Alcorn,  Edgar  G.  (keeping  a record  of 

open  and  closed  accounts)  

Alcorn,  Edgar  G.  (the  rubber  stamp  as 

a time  saver)  

Alvarez.  Bernardino,  sketch  of  with 

portrait  

American  Bankers’  Association,  annual 

convention  of  

American  Bankers’  Association,  annual 

program  of  convention  

American  Bankers’  Association  conven- 
tion   

American  Bankers’  Association  pro- 
gram   

American  dock  article  

American  Exchange  National  Bank  of 

New  York  

American  Institute  of  Banking,  con- 
vention of  

American  Institute  of  Banking.  New 

York  chapter  

Americans  not  conversant  with  South 

American  conditions  

American  Trust  Co.  of  Charlotte,*  N.  C. 

Andrew,  A.  Piatt,  portrait  of  

Andrews,  Wm.  E.,  portrait  of 

Are  bonds  a purchase?  

Art  of  saving  money 

As  to  railroad  dividends  

Atlantic  City  banks  

Attractive  investments  

Auto  and  the  bond  market,  the 


428 

505 

558 

398 

731 

882 

400 


454 

706 

688 

520 

81 

218 

544 

402 

79 

723 

102 

418 

150 

151 
678 
357 

46 

890 

511 

508 


Bacheller,  J.  H.,  portrait  of  

Bailey,  Geo.  E.,  portrait  of  

Banco  de  Coahuila.  building  of  

Bangs.  J.  E.  (the  art  of  saving  money) 

Bank  Advertising,  a broad  view  of 

Bank  advertising  and  its  educational 

value 

Bank  examinations  by  directors  

Banking  and  Financial  Notes 

121,  265,  426,  583,  759  899 

Banking  legislation,  a review  of 714 

Bank  of  British  North  America  895 

Bank  of  Montreal  259 

Bank,  the  employee,  and  the  pension 

and  participation  fund  368 

“Barometer  Industry.”  the  835 

Bass,  J.  H..  portrait  of  408 

BeUamore  armored  bank  car,  the 739 

Bernstein,  Joseph  E..  portrait  of 571 

Blcentral  banking  system,  the  725 

Big  railroad  deal  that  went  wrong. . . . 334 

Bills  of  exchange,  international  con- 
ference on  713 

Black iston,  G.  P.  (a  successful  bank 

advertisement)  232 

Blackiston,  G.  P.  (going  one  better 

than  four  per  cent.  Interest)  881 

Boal.  A.  G.  (seeking  business  from 

shareholders)  165 

Boldt,  Adolph  (Industrial  Houston)  ....  850 

Bond.  Frederic  Drew  (our  overdone 
stock  market)  665 


414 

571 

878 

367 

103 

230 

42 


Booklets  and  house-organs  105 

Book  Reviews  107,  263,  425,  888 

Bowman,  D.  Arthur ' (municipal  bonds 

as  investments)  512 

Bond,  Frederic  Drew  (the  ethics  of 

finance)  198 

Boston  Safe  Deposit  & Trust  Co 263 

Brown,  E.  N.,  portrait  of  875 

Brown,  James  N.,  portrait  of 247 

Budd,  Thomas  J..  portrait  of 274 

Bughman,  Henry  C.,  portrait  of  663 

Bush,  Irving  T.,  portrait  of  370 

Bush  Terminal  Co.,  sketch  of  opera- 
tions   371 

Byllesby,  H.  M.  & Co.  (article  on) 77 

Byllesby,  Henry  M.,  portrait  of  77 


Cabell,  Royal  E.,  portrait  of  

Cad  well,  E.  B.  (some  facts  about  timber 

bonds)  

Calder.  Wm.  M.,  portrait  of 

Colwell,  Chas.  S.,  portrait  of  

Cambell.  8.  S.,  portrait  of 

Cannon,  James  G.,  sketch  of  with  por- 
trait   

Carter,  S.  F.,  portrait  of  

Gastello,  Geo.  E.  (selling  bonds)  

Gastello.  Geo.  E.  ( the  personal  equation 

In  the  bond  business)  

Caverly.  Edward  F..  portrait  of  

Certificate  of  deposit,  a unique  

Chance,  Merritt  O.,  portrait  of  

Clarke,  Courtney  (things  that  are  worth 

while)  

Clarke,  Lewis  L.,  portrait  of  

Clearing  situation,  a 

Clements,  Judson  C.  (railway  regula- 
tion)   

Commercial  and  Continental  National 

banks  of  Chicago  consolidated  

Commonsense  about  the  trade  balance 

Contest  over  railroad  rate  increases 

Continental  Bank  & Trust  Co.,  Shreve- 
port. La 

Copper  accumulation  

Corn  Exchange  National  Bank,  Phila- 
delphia   

Corporation  publicity  

Cotton  bills  of  lading 

Crane.  A.  A.,  portrait  of  

Crawford.  Coe  L,  portrait  of  

Cromwell,  Casper  (as  to  railroad  divi- 
dends ) 

Cromwell.  Casper  (short-term  notes  as 

investments)  

Crop  and  business  situation,  the  

Current  railroad  strategy  

Curtis,  J.  F.,  portrait  of 

Danger  of  current  speculation  in  land 
Darrell,  Chas.  A.  (the  question  of  the 

capital  supply)  

Davidson.  Harold  A.,  portrait  of 

Dawson,  Hon.  Thos.  C.,  portrait  of 

Definitions  that  define  

Diamond  National  Bank  of  Pittsburgh 
Diaz.  General  Porflrio.  portrait  of  .... 

Diaz.  President  of  Mexico  

Diaz.  President  of  Mexico,  annual  mes- 
sage of  

Dillingham,  Chas..  portrait  of  

Domestic  corporations  in  Mexico  


148 

47 

247 

764 

760 

653 

862 

69 

342 

276 

813 

151 

354 

285 

190 

498 

1 

670 

352 

754 

67 

84 

676 

378 

906 

226 

46 


826 

244 

54 

*950 

13’ 

188 


673 

721 

704 

672 

749 

876 

876 


707 

861 

219 


Digitized  by  c.ooole 


VI 


THE  BANKERS  MAGAZINE 


Doty,  p.  B.,  portrait  of 767 

Dunn,  D.  C.,  portrait  of  854 

Earl,  Edward,  portrait  of 762 

Economical  and  efficient  handling  of 

freight  at  terminal  points  371 

Economic  position  of  the  trust  com- 
pany, the  482 

Ekirch,  Arthur  A.  (that  bank  across  the 

way)  396 

Ellet,  John  S.,  portrait  of 437 

Engineering  and  commercial  skill  ap- 
plied to  the  operation  and  manage- 
ment of  public  service  corporations..  77 
Escher,  Franklin  (danger  of  current 

speculation  in  land)  188 

Escher,  Franklin  (the  auto  and  the 

bond  market)  508 

Ethics  of  finance,  the 198 

Europe’s  investment  in  American  se- 
curities   824 

Expert  financial  service  as  applied  to 
business  enterprises  721 


Fairchild,  Julian  D.,  portrait  of  422 

Farnsworth,  Fred  E.,  portrait  of 691 

Fassett,  J.  Sloat,  portrait  of  226 

Finch,  Frnnk  B.  (timely  illustrated  safe 

deposit  advertising)  94 

First  National  Bank  of  Davenport,  Iowa  116 
First  National  Bank  of  Fort  Wayne, 

Ind 405 

First  Nat.  Bank  of  Pittsburgh,  com- 
ment on  house-organ  847 

Folsom,  Clyde  H.,  portrait  of 427 

Foreign  Banking  and  Finance  

30,  166,  310,  480,  656,  788 

Fourth  National  Bank  of  New  York, 

alterations  on  building  114 

Fowler,  Willis  J.,  port! ait  of 14 

Franklin,  A.  (big  railroad  deal  that 

went  wrong)  334 

Franklin,  A.  (current  railroad  strategy)  64 

Freeman,  H.  R.,  portrait  of  409 

French  purchases  of  American  bonds . . 53 

From  a foreign  viewpoint  336 

From  a western  viewpoint  675 

From  the  Rio  Grande  to  Panama 867 

From  the  savings  banks’  point  of  view  196 
Fulton  Savings  Bank,  Fulton,  N.  Y 582 


Gardner,  James  P.  (the  bank,  the  em- 
ployee and  the  pension  and  participa- 
tion fund)  368 

Givens,  J.  A.,  portrait  of  283 

Glendining,  Geo.  R.  (bank  advertising 

and  its  educational  value)  230 

Going  one  better  than  four  per  cent. 

interest  881 

Gorman,  J.  J.,  portrait  of  670 

Guaranteed  stocks  185 

Guarding  against  the  carelessness  of 

safe  deposit  box  renters  844 

Guild,  Curtis,  portrait  of 226 

Gunnison,  Frederic  E.,  portrait  of 246 


Hamburg,  A.  V.,  portrait  of  

Hamilton,  Alexander,  portrait  of  .... 
Hamsher,  C.  F.  (bank  examinations  by 

directors)  

Handling  incoming  dividends 

Harper,  Benj.  F.,  -portrait  of 

Harris,  B.  D.,  portrait  of 

Hasking,  James  G.,  portrait  of 

Hepburn,  Hon.  A.  Barton,  portrait  of.. 
Hepburn,  Hon.  A.  Barton,  portrait  of. . 
Hepburn,  A.  B.  (the  crop  and  business 

situation)  

Herrick,  Clay,  trust  company  articles 

32,  161,  329,  482,  630,  806 

Hill,  Frederick  (guaranteed  stocks)  ....  185 

Hill.  Julien  H.,  portrait  of  437 

Hills,  Chas.  D.,  portrait  of 160 

Hill,  Wm.  M.,  portrait  of 437 

Home  Trust  Co.  of  New  York,  Brook- 
lyn   245 

Hord,  John  S.,  sketch  of  with  portrait  387 
Hotchkiss,  Thomas  W*.  (guarding 
against  the  carelessness  of  safe  de- 
posit box  renters)  844 


416 

888 

42 

661 

J51 

862 

670 

139 

761 


244 


Houston,  Texas,  article  on  860 

Howard,  L.  M.,  portrait  of  767 

Howell,  J.  Flank  (a  clearing  situation)  190 

How  to  find  outstanding  drafts 324 

Human  nature  as  seen  in  a safe  deposit 

vault  216 

Huseman,  L.  E.,  portrait  of  753 

Huttig,  Chas.  H.,  portrait  of 690 


Illustrated  advertisements  737 

Improvement  826 

Increasing  business  by  publicity  847 

Industrial  Houston  850 

Industrial  preferred  stocks  202 

Instalment  plan,  the  368 

Insurance  companies’  dilemma  838 

Interest  rate  on  government  bonds 836 

Investment  of  surplus  funds  192 

Ironbound  Trust  Co.  of  Newark,  N.  J.  413 


Kane,  Thos.  P.,  portrait  of  12 

Keeping  a record  of  open  and  closed 

accounts  809 

Keisler,  Rufus,  Jr.,  portrait  of  415 

Keplinger,  H.  A.,  portrait  of  409 

Kings  County  Trust  Co.  of  Brooklyn..  422 

Kloepfer,  John  A.,  portrait  of  275 

Kniffin,  W.  H.,  Jr.,  savings  bank 

articles  by  36,  153,  297,  457,  648,  814 

Kniffin,  W.  H.,  Jr.  (utility  the  basis  of 

mortgage  loans)  489 

Knowledge  of  investments 346 

Kreeck,  Geo.  L.  (why  not  an  American 
system  of  banking?)  390 

LaFarge,  O.  H.  P.  (a  mortgage  loan 

register  for  savings  banks)  305 

Lavallette,  M.  C.  (Wall  Street  and 

Washington)  486 

Layton,  Caleb,  portrait  of  151 

Little,  Malcolm  C.,  portrait  of  879 

Livingstone,  W.,  portrait  of  689 

Los  Angeles  chapter  A.  I.  B.  show 642 

Lough,  William  H.  (dividend  payments)  831 

Ludlow,  Samuel,  Jr.,  portrait  of  568 

Ludlow,  Walter  W.,  portrait  of  150 


MacFadden,  F.  D.,  portrait  of  

Machado,  Francisco  deP.,  sketch  of 

with  portrait  

MacVeagh,  Franklin  

“Magnificent  unit”  of  $1,000  

Management  of  a safe  deposit  depart- 
ment   

Maturity  guide  for  bankers 

McAllister,  J.  R.,  portrait  of  

McAshan,  J.  E.,  portrait  of  

McCarthy,  J.  T.,  portrait  of  

MtaClung,  Hon.  Lee,  portrait  of  

McConway,  Wm.,  portrait  of  

Mexican  Centennial  commissioners 

Mexican  railways  hitching  up  with  the 

Pan-American  

Mexico,  banking  status  in  

Mexico’s  centennial,  official  program.. 

Miller,  Theo.  8.,  portrait  of  

Mississippi  Valley  Trust  Co.  of  St. 

Louis  twenty  years  old  

Modern  co-operation  at  its  best  

Mtoran,  B.  Nathan  (the  real  bond  mar- 
ket)   

Morrison,  John  W.  (witn  regard  to 

prices)  

Mortgage  loan  register  for  savings 

banks,  a 

Moving  the  crops  

Mundy,  Floyd  W.  (relative  merits  of 

railroad  stocks  and  bonds)  

Municipal  bonds  as  Investments  

Murray,  Lawrence  O.,  portrait  of  .... 


415 

701 

160 

194 

651 

663 

600 

861 

697 

148 

566 

226 

98 

589 

385 

415 

808 

118 

628 

604 

305 

183 

63 

612 

148 


National  Banks  of  twenty-five  million 

dollars  capital  323 

National  currency  association  of  the 

city  of  New  York,  by-laws  of  403 

National  Railways  of  Mexico  buys  Pan- 

American  Ry 638 

National  Rys.  of  Mexico,  comment  on 
earnings  710 


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INDEX,  JULY  TO  DECEMBER,  1910 


vu 


Nelson,  Godfrey  N.,  portrait  of 908 

New  era  in  railway  finance  182 

New  York  savings  banks  show  large 

gains  308 

New  York  trust  companies  806 

Not  too  much  gold 679 

Nolting,  Frederick  E.,  portrait  of 128 

Officers  of  trust  company  section  ....  807 

Orr,  J.  H.,  portrait  of  409 

Our  overdone  stock  market  665 

Our  transit  department 325 

Overman,  Lee  S.,  portrait  of  226 

Palmer,  Col.  Wm.  H„  portrait  of 436 

Paraguay  103 

Patterson,  Brown  A.,  portrait  of 563 

Pennsylvania  Railroad,  New  York  sta- 
tion of  692 

Pennsylvania  terminal,  the  new 359 

Peoples  Trust  Co.  of  Brooklyn  108 

Perils  of  unsound  legislation  211 

Personal  advertising  556 

Personal  equation  in  the  bond  business, 

the  342 

Peru's  resources  379 

Phillips,  W.  O.,  portrait  of  753 

Pierson,  Lewis  E.,  portrait  of  443 

Plainfield  Trust  Co.,  Plainfield.  N.  J...  891 

Postal  savings  bank  soon  to  be  a re- 

ality  463 

Posting  and  proving  methods  in  sav- 
ings banks 457 

Posting  and  proving  methods  in  sav- 
ings banks  816 

Potts,  W.  W.  (a  trust  department  outfit 

for  the  smaller  trust  company)  161 

Price.  Wm..  portrait  of  748 

Prosperous  South  America  635 

Question  of  the  capital  supply,  the....  673 

Railroads  and  the  government,  the 495 

Railway  regulation  498 

Raser,  William  Heyl  (a  trip  to  Alaska 

and  British  Columbia)  86 

Reading  the  financial  page 51 

Readjustment  501 

Real  bond  market,  the  828 

Redfern.  Samuel,  portrait  of 122 

Relative  merits  of  railroad  stocks  and 

bonds  63 

Rendon.  M.  Cervantes  (domestic  cor- 
porations In  Mexico)  219 

Rendon,  M.  Cervantes,  portrait  of 219 

Retrospect  and  prospect  681 

Reynolds,  Geo.  M.,  portrait  or  1 

Rice.  J.  8.,  portrait  of  854 

Ridgely.  Hon.  Wm.  B.,  portrait  of  ....  724 

Robinson,  Chas.  L.,  portrait  of  722 

"Robinson  Crusoe’s  father"  41 

Rogerson,  Chas.  E.,  portrait  of 252 

Rook,  Cot  Chas.  A.,  portrait  of 226 

Rubber  stamp  as  a time  saver,  the....  454 

Sabin,  Chas.  Hamilton  (sketch  of  with 

portrait)  80 

San  Antonio,  a progressive  commercial 

center  521 

San  Francisco’s  notable  new  bank 

buildings  234 

8a\ing»  bank  buildings  as  an  asset....  153 

Savings  bank  men  in  Los  Angeles 648 

Savings  banks  and  the  bond  market  . . 62 

8av4ngs  bank,  the  helpfulness  of  the. . 666 

Savings  deposits,  big  increase  in  ....  309 

Savings  deposits  in  trust  companies  . . 808 

Scaling  down  deposits  in  savings  banks  654 

Schober,  Howard  C..  portrait  of  151 

Schreiner,  Geo.  A.,  portrait  of  521 

Schreiner,  Geo.  A.  (San  Antonio,  a pro- 
gressive commercial  center)  621 

Schumacher,  Chas.  p.  (how  to  find  out- 
standing drafts)  324 

Scott,  Wm.  A.  (a  review  of  banking 

legislation)  714 

Scovll,  C.  L.  (French  purchases  of 

American  bonds)  63 

Bcovil,  Chas.  Lee  (knowledge  of  in- 
vestments)   846 


Scranton  (Pa.)  Savings  Bank  

Second  National  Bank  of  Pittsburgh.. 
Seeking  business  from  shareholders.... 
Segregation  of  savings  deposits,  the.... 

Selling  bonds  

Short-term  notes  as  Investments 

Simmons,  Peter  (corporation  publicity) 

Slnton,  Jas.  W.»  portrait  of  

Sloat,  Homer  (the  new  era  in  railway 

finance)  

Small  bank  and  office  building  

Smith,  Matt  O.,  sketch  of  with  portrait 

Some  facts  about  timber  bonds  

South  Texas  National  Bank  of  Hous- 
ton   

Speculation  In  bank  stocks  

Sperber,  Otto  (Peru’s  resources)  

Sprague.  Charles  E.  (surplus  and  divi- 
dends)   

Stair,  Joseph  P.,  portrait  of  

"Steel”  and  the  tariff  

Stephens,  Geo.,  portrait  of  

Stevenson,  Charles  W.  (speculation  in 

bank  stocks)  

Stilwell,  A.  E.,  on  conditions  abroad... 
Stilwell,  Arthur  E.  (the  railroads  and 

the  governments)  

Stoll,  Horatio  F.  (San  Francisco’s  new 

bank  buildings)  

Successful  bank  advertisment,  a 

Surplus  and  dividends  

Swartz.  Wm.  K.,  portrait  of  

Taylor,  H.  Prentiss  (retrospect  and 

prospect)  

Taylor,  Kendall  (contest  over  railroad 

rate  Increases)  

Teller  and  his  cash,  the  

Teller  and  his  task,  the  

Terret,  John  (Europe’s  investment  in 

American  securities)  

Terret,  John  (moving  the  crops)  

Terret,  John  (readjustment)  

That  bank  across  the  way  

That  safe  deposit  booklet  you’re  plan- 
ning   

Things  that  are  worth  while  

Thomas.  L.  E.,  portrait  of  

Three  billion  bushels  of  corn  

Thrift  experiences  

Thrift  stories  

Timely  Illustrated  safe  deposit  adver- 
tising   

Tinker,  H.  N.,  portrait  of  

Tonsmelre.  A.  C.  (our  transit  depart- 
ment)   

Tonsmelre,  A.  C..  portrait  of  

Trichel,  J.  C..  portrait  of  

Trip  to  Alaska  and  British  Columbia.. 
Trust  companies  and  the  central  bank 
Trust  companies  with  foreign  branches 

Trust  company  forms  

Trust  company  men  at  Los  Angeles  . . . 
Trust  department  outfit  for  the  smaller 

trust  company,  a 

Turn  for  the  better,  a 

Tyler.  Ralph  W.,  portrait  of 

Union  Trust  Co.  of  N.  J.,  Jersey  City, 

N.  J 

Unique  saiety  vault  building 

Utility  the  basis  of  mortgage  loans  . . . 

Vernon.  W.  T..  portrait  of  

Virginia  bankers’  convention  

Vosburgh.  L.  F.,  portrait  of  

Wadsworth.  P.  C.  (the  bicentral  bank- 
ing system)  

Wall  street  and  Washington  

Warehouse  problem,  the 

Watts,  F.  O.,  portrait  of  

Welngarton,  Carl  (the  commonsense 

about  the  trade  balance)  

Welsh,  Thomas  W.  Jr.,  portrait  of 

White,  Chas.  E.,  Jr.,  (a  small  bank  and 

office  building)  

White,  Edward  (modem  co-operation 
at  its  best)  


898 

659 

165 

329 

59 

826 

676 

437 

182 

745 

366 

47 


574 


337 


379 


814 

247 

67 

420 


337 

264 


495 


234 

232 


81 

24 


$ 


567 

552 

489 

148 

73 

686 


725 

486 

544 

688 

670 

663 

746 

118 


Digitized  by  t^ooQie 


Till 


THE  BANKERS  MAGAZINE 


■ Whitlock,  James  P.  (handling  incoming 


dividends)  661 

Why  Mexico  needs  foreign  capital  ....  99 

Why  not  an  American  system  of  bank- 
ing?   390 

•Willoughby,  H.  H.,  portrait  of  906 

Wills,  D.  C.,  portrait  of  749 

Wise  saws  and  modern  instances  510 


With  regard  to  prices 504 

Wood,  W.  H.  portrait  of  420 

Worden,  C.  H..  portrait  of  409 

Young  James  M.,  portrait  of 563 

Youngman,  Elmer  R.  (perils  of  un- 
sound legislation)  211 


Zambrano,  Francisco  de  P.,  portrait  of  878 


BOUND  VOLUMES  OF  THE  BANKERS  MAGAZINE 

Beginning  with  July,  1895,  the  volumes  of  The  Bankers'  Magazine  comprise 
the  numbers-  for  six  months.  Price,  bound  in  cloth  with  leather  backs  and 
corners,  3*  per  volume,  by  mail  or  express  prepaid  40  cents  additional. 


Digitized  by  t^ooQle 


Digitized  by  t^ooQle 


GEORGE  M.  REYNOLDS 

President  Continental  Commercial  National  Bank,  Chicago; 
Former  President  American  Bankers'  Association 


Digitized  by  t^ooQie 


THE 


BANKERS  MAGAZINE 

ELMER  H.  YOUNGMAN.  Edfot 


SIXTY-FOURTH  YEAR  JULY,  1910  VOLUME  LXXXI,  NO.  I 


IMPORTANT  BANK  CONSOLIDATION  AT  CHICAGO 


/k  RRANGEMENTS  have  been  prac- 
tically completed  for  the  merging 
of  the  Commercial  National  Bank  and 
the  Continental  National  Bank  of  Chi- 
cago into  a single  institution,  to  be 
known  as  the  Continental  and  Commer- 
cial National  Bank.  This  consolidation 
also  includes  the  American  Trust  and 
Savings  Bank,  an  institution  owned  by 
the  Continental  National,  and  the  Com- 
mercial Trust  and  Savings  Bank,  owned 
by  the  Commercial  National,  the  suc- 
ceeding institution  to  be  the  Continental 
and  Commercial  Trust  and  Savings 
Bank. 

The  following  financial  statements 
were  used  as  a basis  for  the  merger: 


Continental  (old) 

Stock  dividend 

Continental  (new) 

Commercial  (old) 

New  stock  at  $200  per  share 

Commercial  (new) 

Total  new  bank 


merged  institutions  representing  more 
than  $200,000,000.  The  chief  executive 
officers  of  both  the  old  banks  are  widely 
known  throughout  the  country.  Both 
are  Iowa  men.  Mr.  Reynolds,  presi- 
dent of  the  Continental  National  Bank, 
was  formerly  president  of  the  American 
Bankers’  Association.  It  is  well  known 
that  he  was  offered  the  post  of  Secre- 
tary of  the  Treasury  by  President  Taft, 
but  declined,  preferring  to  remain  in 
the  banking  business.  Mr.  Roberts, 
president  of  the  Commercial  National, 
was  for  several  years  Director  of  the 
United  States  Mint.  He  is  recognized 
as  an  authority  on  banking  and  finan- 
cial subjects. 


Capital. 

$9,000,000 

1,800,000 

Surplus. 

$4,500,000 

1,800,000 

Undivided 

Profits. 

$4,147,000 

$10,800,000 

$2,700,000 

$4,147,000 

8,000,000 

2,200,000 

2,825,000 

1,200,000 

1,200,000 

$9,200,000 

$3,400,000 

$2,825,000 

20,000,000 

6,100,000 

6,972,000 

In  brief,  the  Continental  National 
makes  new  stock  of  $1,800,000  of  its 
surplus  and  the  Commercial  National 
pays  $200  a share  for  $1,200,000  of  ad- 
ditional capital,  in  order  to  equalize  the 
book  values  at  $165  a share  in  the  con- 
solidation. 

This  consolidation  is  one  of  great  im- 
portance, as  the  Continental  Commer- 
cial National  Bank  will  at  once  take 
rank  with  the  very  large  banks  of  the 
United  States,  the  total  resources  of  the 


Mr.  Reynolds  will  be  the  president 
of  the  Continental  Commercial  Nation- 
al, and  it  is  probable  that  most  if  not 
all  those  who  have  been  officially  con- 
nected with  the  old  banks  will  be  re- 
tained in  the  new. 

George  M.  Reynolds,  president  of 
the  Continental  Commercial  National 
Bank  of  Chicago,  is  one  of  the  best 
known  and  the  best  liked  bankers  in 
the  United  States.  Born  on  a farm  in 
Iowa  about  forty-five  years  ago,  he  has 

l 


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2 


THE  BANKERS  MAGAZINE 


risen  through  successive  stages  of  bank- 
ing experience  to  the  head  of  one  of  the 
most  important  banks  in  the  country 
and  has  also  been  honored  with  the 
highest  position  the  organized  bankers 
have  to  bestow.  He  has  attained  these 
places  of  responsibility,  power  and  dis- 
tinction by  the  exercise  of  exceptional 
business  ability  joined  to  a remarkable 
aptitude  for  making  a wide  acquaintance 
among  bankers  and  business  men,  with 
the  result  that  these  acquaintances  de- 
veloped into  friends  of  Mr.  Reynolds 
personally  and  of  his  bank  as  well. 

Perhaps  in  few  banks  in  the  coun- 
try— in  none  anywhere  that  we  recall — 
has  the  spirit  of  genuine  courtesy  be- 
come so  firmly  instilled  into  the  entire 
personnel  of  the  bank  as  it  did  at  the 
Continental  National  Bank  under  the 
presidency  of  Mr.  Reynolds. 

Of  course,  something  more  than  cour- 
tesy is  required  to  make  a successful 
banker,  and  Mr.  Reynolds  is  known  to 
have  the  other  necessary  qualities.  But 
a share  of  his  success — and,  we  believe, 
no  small  share — has  been  due  to  that 
fine  quality  of  consideration  for  others 
which  we  term  courtesy,  and  which  is 
the  surest  mark  of  a gentleman.  Many 
bank  officers  possess  this  attribute  as 
fully  as  does  Mr.  Reynolds.  Few  of 
them  have  succeeded  so  well  as  he  in 
diffusing  it  among  their  associates  and 
in  making  it  an  inviolable  rule  of  the 
bank. 

It  has  been  declared  by  those  in  a 
position  to  know  that  the  failure  of  one 
Chicago  banker  was  largely  due  to  a 
lack  of  courtesy.  And  the  contrast  af- 
forded by  these  two  examples — the  one 
of  failure,  the  other  of  success — may 
well  furnish  a lesson  to  be  profitably 
studied. 

As  was  quite  fully  pointed  out  in  the 
April,  1909,  issue  of  the  Magazine, 
banking  in  Chicago  has  had  a remark- 
able growth  in  the  past  ten  years.  With 
the  development  of  banking  in  the  city 
and  surrounding  territory,  the  consoli- 


dation of  some  of  the  existing  banks 
was  naturally  to  be  expected,  and  the 
present  merger  can  hardly  fail  to  be 
advantageous. 

We  have  frequently  expressed  the  be- 
lief that  a reduction  in  the  number  of 
the  banks  and  an  increase  in  their  cap- 
ital equipment  would  be  beneficial.  Pos- 
sibly, in  time,  by  this  process  a number 
of  banks  will  be  evolved,  properly 
equipped  and  managed,  for  performing 
the  functions  of  reserve  banks. 


LIMITING  BANKING  COMPETI- 
TION 

J^ATELY  announcement  was  made  by 
Comptroller  Murray  that  greater 
care  would  be  exercised  hereafter  in 
granting  charters  for  new  national 
banks  in  places  where  the  need  for 
banking  facilities  appeared  to  be  ade- 
quately supplied  by  the  existing  State 
banks. 

This  decision  will  tend  to  limit  unwise 
banking  competition  and  to  improve 
conditions  generally  among  the  banks, 
for  the  too  eager  bidding  for  business  is 
generally  recognized  as  a fruitful 
source  of  disaster  to  banks  that  engage 
in  it. 

There  is  much  ground  for  believing 
that  the  public  would  be  benefited  just 
now  not  by  multiplying  banks  but  by 
improving  those  we  already  have. 


POLITICIANS  AND  THE  CRITICS 

"FROM  different  sources,  both  of  high 
authority,  come  severe  denuncia- 
tions of  the  critics — those  superior  souls 
who  from  their  serene  retreats  tell  how 
everything  ought  to  be  done  from  gov- 
erning the  country  to  playing  a Bee- 
thoven sonata. 

First,  Colonel  Roosevelt,  in  his  Paris 
lecture,  declared,  “It  is  not  the  critic 
who  counts/'  As  the  Colonel  himself  is 
one  of  the  most  vigorous  critics  the 


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COMMENT 


8 


world  has  ever  produced,  what  he  prob- 
ably meant  to  say  was,  " Other  critics  do 
not  count” 

And  we  suspect  that  Colonel  Roose- 
velt's successor  in  the  White  House 
also  regards  the  critics  as  a low-browed 
lot.  In  the  June  number  of  the 
‘'World's  Work,”  William  Bayard 
Hale  has  an  article  on  “The  President 
at  Work,”  giving,  no  doubt,  a substantial- 
ly accurate  representation  of  the  daily 
routine  at  the  White  House.  Speaking 
of  the  President's  attitude  toward  pub- 
lic sentiment,  Mr.  Hale  says:  “In 

newspaper  criticism  he  takes  no  stock. 
He  puts  his  trust  in  the  good  friends 
around  him  and  the  consciousness  of  his 
own  integrity.”  Possibly,  also,  he  may 
trust  too  implicitly  to  his  own  infalli- 
bility. 

Newspaper  criticism,  especially  of 
persons  of  the  opposite  political  faith, 
is  often  narrow  and  prejudiced;  but  he 
who  “takes  no  stock”  in  it  neglects  one 
of  the  chief  sources  of  gauging  public 
opinion  aright,  and  public  opinion  can 
hardly  be  totally  ignored  in  a republic. 

No  doubt  the  “good  friends”  of  whom 
Mr.  Hale  speaks  generally  try  to  make 
themselves  agreeable.  The  buzzing  of 
the  court  flies  always  tickles  the  ruler's 
ears  though  it  may  dull  his  ability  to 
hear  the  truth. 

Neither  the  indifference  of  the  Presi- 
dent nor  the  denunciation  of  the  ex- 
President  will  deter  the  conscientious 
newspaper  critics  from  pointing  out 
their  conceptions  of  public  dutyi  Should 
they  do  so,  we  are  sure  that  in  the  end 
Mr.  Taft  and  Colonel  Roosevelt  would 
be  as  sorely  grieved  as  the  exploiters  of 
the  public  would  be  elated.  The  pri- 
vate interests  desiring  to  gain  special 
advantages  by  legislation  and  to  put 
their  hands  deep  into  the  public  treas- 
ury would  be  glad  to  see  the  newspaper 
critics  silenced.  But  our  two  most 
illustrious  citizens  have  nothing  to  fear 
from  just  and  honest  criticism  of  their 
acts. 


COMMERCIAL  REPORTS  BY  BANKS 

/"\NE  of  the  many  gratuitous  services 
performed  by  banks  is  that  of 
giving  information  regarding  the  finan- 
cial standing  of  persons  or  firms.  The 
banks  have  come  to  be  regarded  as  a 
sort  of  gratuitous  commercial  agency. 

An  interesting  case,  involving  such 
service,  was  recently  decided  in  Eng- 
land. It  seems  that  one  of  the  London 
banks  addressed  to  a private  banking 
firm  a letter  of  inquiry  as  to  the  finan- 
cial standing  of  a certain  person,  to 
which  the  reply  was  given,  “considered 
good.”  It  turned  out  not  to  be  a good 
guess,  and  the  private  banking  firm  was 
sued  for  damages,  but  escaped  because 
the  answer  to  the  inquiry  did  not  bear 
the  firm's  seal.  But  the  manager  was 
held  liable  in  damages  amounting  to 
£ 1,000.  The  ground  of  the  verdict 
was  that  the  manager  gave  his  opinion 
recklessly  and  carelessly,  without  hav- 
ing fully  satisfied  himself  as  to  the  ac- 
curacy of  his  report.  In  giving  his  de- 
cision the  judge  said  that  he  thought 
banks  “should  not  give  information  at 
all  if  it  was  not  to  be  complete;  they 
were  bound  to  make  a thorough  inquiry 
before  they  answered  the  question,  or 
not  to  answer  it  at  all.” 

Commenting  on  this  decision,  the 
London  “Bankers'  Magazine”  says  that 
if  this  principle  is  upheld  it  will  be 
fatal  to  the  whole  system  of  such  in- 
quiries, “a  system  which,  whatever  its 
defects,  is  of  enormous  use  in  the  fabric 
of  credit.  It  is  perfectly  certain  that 
that  system  is  carried  on,  and  the  in- 
formation obtained  under  it  accepted 
and  acted  on,  on  the  understanding  that 
the  underlying  principle  is  not  the  one 
enunciated  by  Mr.  Justice  Ridley,  but 
the  one  put,  quite  accurately,  by  Mr. 
Bankes,  counsel  for  the  defendants. 
He  said:  ‘This  is  not  a case  of  paying 
an  enquiry  agency  to  make  a thorough 
investigation;  nothing  is  paid  here,  and 
no  one  could  complain  that  the  defend- 


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THE  BANKERS  MAGAZINE 


ant  did  not  make  enquiries;  all  he  was 
bound  to  do  was  to  give  an  honest  opin- 
ion on  such  facts  as  he  had  before  him/ 
A moment's  reflection  will  show  that  no 
other  principle  is  possible." 

As  the  case  is  to  be  further  heard  in 
the  Appeal  Court,  it  is  possible  the  de- 
cision as  above  stated  may  be  set  aside. 

In  this  country  the  practice  of  giving 
information  of  the  character  involved 
in  this  case  is  widespread.  As  the  na- 
tional banks  at  least  have  no  authority 
to  give  a general  guaranty,  they  usually 
escape  legal  responsibility  for  their 
opinions. 


PRESIDENT  NOT  FOR  CENTRAL 
BANK 

VTITHEN  it  was  announced  about  a 
year  ago  as  a result  of  his  speech 
at  Boston  that  the  President  favored  a 
central  bank,  we  said  that  this  was  a 
most  important  piece  of  news,  for  it 
showed  that  Mr.  Taft  had  fallen  under 
the  then  potent  spell  of  Mr.  Aldrich 
and  indicated  that  the  leaders  of  the 
Republican  party  were  preparing  to 
override  public  sentiment  and  push  the 
central  bank  scheme  through.  But  evi- 
dently the  President  has  received  some 
light  on  the  subject.  He  probably  real- 
izes by  this  time  that  neither  the  central 
bank  plan  nor  any  other  plan  which  Mr. 
Aldrich  is  likely  to  favor  will  meet 
with  the  approval  of  the  people. 

Recently  the  Washington  (D.  C.) 
“Post"  published  the  following  inspired 
statement,  coming  from  Mr.  MacVeagh, 
the  Secretary  of  the  Treasury: 

“Mr.  Taft  was  misquoted  in  the  re- 
ports of  his  Boston  address.  The  Presi- 
dent is  not  in  favor  of  a central  bank 
at  the  present  time;  and  he  has  person- 
ally requested  me  to  advise  you  that  he 
is  not  advocating  the  establishment  of 
such  an  institution." 

It  seems  that  the  President  found  it 
necessary  to  make  this  declaration,  as 
many  bankers  and  others  were  of  the 


belief  that  the  central  bank  scheme  had 
the  President's  support  and  was  to  be 
made  a party  measure.  They  did  not 
hesitate  to  express  their  disapproval  of 
such  a course,  hence  the  President's  dis- 
claimer. 

Recent  Washington  dispatches  state 
that  the  central  bank  plan  is  dead.  But 
it  may  be  that  the  advocates  of  this 
plan  are  playing  a waiting  game,  and 
that  the  snake  is  only  scotched,  not 
killed. 

President  Francis  B.  Reeves  of  the 
Girard  National  Bank,  Priladelphia, 
aptly  said  some  time  ago  that  even  if 
the  country  should  get  the  central  bank 
started  it  would  be  short-lived.  As 
Richard  Third  remarked  ungallantly  of 
Lady  Anne:  “I'll  have  her,  but  I'll  not 
keep  her  long." 

To  establish  a bank  as  a conservator 
of  the  public  credit  upon  what  must 
prove  a temporary  foundation,  would 
seem  to  be  an  act  of  supreme  folly. 
Those  who  propose  such  a course  are 
apparently  so  enamored  of  their  own 
opinions  that  they  are  blind  to  actual 
conditions. 


THE  PROMISSORY  NOTE 

REIGN  financial  writers  and  others 
who  have  compared  our  credit  in- 
struments with  those  employed  in 
Europe  have  criticised  the  American 
promissory  note,  which  occupies  so  im- 
portant a place  in  the  portfolios  of  our 
banks. 

Perhaps  the  safety  and  flexibility  of 
our  money  market  might  have  been 
greater  had  our  banks  developed  a 
larger  use  of  the  accepted  bills  so  wide- 
ly used  in  Europe.  Nevertheless,  the 
promissory  note  has  been  of  the  highest 
service  to  the  business  community,  par- 
ticularly to  the  farmers  and  small  trad- 
ers who  might  find  it  difficult  in  provid- 
ing commercial  paper  of  the  character 
required  by  the  European  banks. 

In  this  country  there  are  many  bor- 


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5 


rowers  also  who  can  not  offer  collateral 
in  the  shape  of  stocks  or  securities,  but 
they  need  banking  accommodation  and 
deserve  it.  Indeed,  it  will  probably  be 
found  that  the  payment  of  loans  of  this 
character  occasions  less  disturbance  to 
the  money  market  than  the  call  loans 
which  are  better  secured. 

We  have  no  doubt  that  the  greater 
employment  of  the  accepted  bills  used 
in  Europe  would  be  of  much  advantage 
here,  but  at  the  same  time  it  should 
not  be  forgotten  that  under  conditions 
as  they  exist  the  single-name  promis- 
sory note  is  a credit  instrument  of  great 
usefulness. 


MEXICAN  RAILWAYS  LISTED  IN 
PARIS 

1^’UCH  comment  was  occasioned  b; 

the  recent  announcement  that  the 
second  preferred  stock  of  the  National 
Railways  of  Mexico  had  been  admitted 
to  the  regular  list  of  the  Paris  Bourse. 

While  the  negotiations  that  led  to  this 
result  were  directed  by  Messrs.  Laden- 
burg,  Thalmann  & Co.,  who  with  Kuhn, 
Loeb  & Co.,  Speyer  & Co.,  Hallgarten 
& Co.,  and  other  bankers  were  readjust- 
ment managers  of  the  Mexican  Rail- 
ways, there  is  no  doubt  that  Finance 
Minister  Limantour  greatly  assisted 
in  the  matter.  French  investors  are 
heavily  interested  in  railways  and  bank- 
ing in  Mexico  already. 


LIMITING  INTEREST  ON  DE- 
POSITS 

AT  the  last  annual  convention  of  the 
New  Jersey  Bankers’  Association 
action  was  taken  looking  toward  an 
agreement  to  pay  no  more  than  three 
and  one-half  per  cent,  on  savings  and 
time  deposits  and  to  limit  the  interest 
on  active  accounts  showing  a balance 
of  not  less  than  $500  to  two  per  cent. 

We  believe  that  the  St.  Louis  bankers 
a short  time  ago  took  some  action  of  a 


similar  character,  but  they  were  in- 
formed that  such  an  agreement  would 
be  a violation  of  the  anti-trust  act.  It 
is  hoped  that  Jersey  justice  may  not  be 
invoked  to  prevent  the  bankers  of  New 
Jersey  from  carrying  out  what  is  cer- 
tainly a laudable  purpose. 

Undoubtedly  the  offering  of  high 
rates  of  interest  to  secure  deposits  con- 
stitutes a serious  evil,  and  one  that  it  is 
extremely  difficult  to  cure  except  by 
concerted  action.  For  if  a few  banks 
persist  in  offering  a high  rate,  the  other 
banks  are  almost  forced  to  adopt  a sim- 
ilar policy,  however  much  they  may  dis- 
approve of  it  in  principle. 

The  New  Jersey  bankers  in  this  mat- 
ter have  acted  in  a way  that  will  still 
further  raise  the  already  high  reputa- 
tion borne  by  the  banks  of  that  State. 


REGULATING  THE  BIG  CORPO- 
RATIONS 

DDRESSING  the  Graduate  School 
of  Administrative  Science  of  Har- 
vard University  recently,  Geo.  W. 
Perkins,  of  the  firm  of  J.  P.  Morgan 
& Co.,  said: 

“The  officers  of  great  corporations 
should  realize  that  such  concerns  are 
more  nearly  public  institutions  than  pri- 
vate property.  I firmly  believe  that  sub- 
stantial progress  in  this  direction  is 
being  made.  While  the  agitation  of  the 
last  few  years  has  been  unfair  and 
harmful  in  many  instances,  on  the  other 
hand  it  has  set  business  men  thinking; 
has  awakened  the  business  conscience, 
and  has  brought  a new  realization  of 
the  fact  that  it  is  as  true  of  business  as 
it  is  of  the  individual  that  there  is  no 
permanent  success  unless  it  be  based 
upon  integrity  of  character. 

“Let  those  of  us  who  are  in  business 
be  fair  with  the  people  and  the  people 
will  be  fair  with  us;  let  us  see  and  ac- 
cept the  tendency  of  the  times;  let  us 
realize  our  responsibilities,  and  our 


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THE  BANKERS  MAGAZINE 


problems  will  be  far  easier  of  solution. 
If  we  believe  that  in  our  Republic  the 
people's  word  is  law,  let  us  believe  it  in 
all  things,  and  if  the  people  have  de- 
cided that  the  time  has  come  to  take  a 
hand  in  how  business  shall  be  con- 
ducted, is  it  not  plain  business  sense 
to  meet  the  question  at  least  half  way 
rather  than  fight  it  all  the  way?  Poli- 
tics has  fought  business  and  business 
has  fought  politics  until  both  have  been 
sorely  wounded,  and  in  the  general 
scrimmage  the  public  has  had  a pretty 
hard  time,  and  under  the  circumstances 
has  been  long-suffering  and  patient. 

“Giant  corporations  would  be,  not  a 
menace,  but  a great  public  benefit,  if 
managed  under  laws  that  would  compel 
proper  publicity  and  punish  officers  for 
improper  methods. 

“How  can  this  be  done?  Here  is  the 
problem  for  us  all  to  think  about.  For 
my  part,  out  of  the  multitude  of  sugges- 
tions there  seems  to  be  but  one  possi- 
ble course,  viz.,  national  control,  ac- 
companied by  publicity.  State  control 
is  impossible  because  steam  and  elec- 
tricity have  largely  wiped  out  State 
lines  in  commercial  undertakings." 


CREDIT  FOR  FARMERS 

AN  interesting  suggestion  comes  from 
Rome,  written  by  David  Lubin, 
delegate  of  the  United  States  Interna- 
tional Institute  of  Agriculture.  It  deals 
with  the  provision  of  better  means  of 
supplying  credit  to  cotton-growers  and 
farmers.  Mr.  Lubin  says  that  these 
producers  now  sell  their  product  at  the 
lowest  price  and  procure  their  money  or 
credit  at  the  highest  price.  In  order 
that  the  agriculturists  may  have  access 
to  a cheaper  source  of  obtaining  credit, 
he  proposes  “the  formation  of  coopera- 
tive groups  among  the  farmers,  and  by 
the  syndicating  of  their  individual  as- 
sets into  one  collective  negotiable  bond. 
The  formation  of  such  rural  groups, 


and  the  offering  of  such  bonds  as  secur- 
ity, would  soon  attract  the  serious  at- 
tention of  capital,  direct  from  its  prin- 
cipal and  its  first  sources." 

In  view  of  the  enormous  importance 
of  the  agricultural  interests  of  the 
United  States,  it  is  remarkable  that  Con- 
gress has  not  legislated  for  the  estab- 
lishment of  some  kind  of  an  agricul- 
tural credit  institution.  The  national 
banks  were,  properly  enough,  prohibited 
from  lending  on  real  estate,  but  nothing 
was  done  to  supply  the  need  which  this 
prohibition  was  bound  to  create.  It  may 
be  justly  said  that  the  demands  for 
agricultural  loans  have  been  fully  sup- 
plied by  institutions  originating  under 
State  laws.  But  it  may  be  possible  that 
if  national  institutions  had  been  estab- 
lished the  securities  issued  by  them 
would  have  more  readily  found  access 
to  the  world's  supply  of  capital  than 
has  been  the  case  with  the  mortgages 
negotiated  by  the  State  banks  or  by 
local  mortgage  companies. 

Congress  has  authorized  an  agricul- 
tural bank  in  the  Philippines,  but  has 
not  apparently  been  favorably  im- 
pressed by  the  arguments  looking  to  the 
establishment  of  such  an  institution 
here. 

A national  corporation  designed  espe- 
cially to  make  advances  to  farmers  on 
real-estate  security  might  be  beneficial 
in  relieving  the  State  banks  of  some  of 
the  business  of  this  character,  thus  leav- 
ing their  funds  freer  for  ordinary  com- 
mercial purposes. 


CREDIT  INFORMATION  FOR 
EXAMINERS 

^CCORDING  to  recent  reports,  ex- 
aminers of  national  banks  are  to 
be  supplied  with  information  regarding 
the  credit  of  borrowers  from  these  in- 
stitutions. 

Reports  conveying  information  of 
this  character  are  to  be  made  to  the 


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COMMENT 


7 


Comptroller's  office  semi-annually  after 
the  meetings  held  at  those  periods  by 
the  district  examiners.  They  are  to 
show  the  general  conditions  in  the  dis- 
tricts, the  number  of  examinations  of 
banks  that  have  been  made,  a list  of 
those  requiring  examination  more  than 
twice  a year,  a list  of  defalcations,  of 
financiers  of  “questionable  methods,"  of 
the  “outside  or  foreign"  paper  of  bor- 
rowers whose  principal  headquarters  or 
places  of  business  are  outside  of  the  dis- 
trict covered  by  the  reports,  doubtful  or 
questionable  paper  in  which  officers  or 
directors  or  persons  or  firms  are  inter- 
ested, and  large  or  extended  lines  of 
credit. 

By  having  such  information  available 
the  examiners  will  be  able  to  determine 
the  condition  of  the  banks  more  accu- 
rately than  heretofore. 

It  is  understood  that  a similar  plan 
of  compiling  credit  information  has  been 
in  use  by  the  Banking  Department  of 
the  State  of  New  York  for  some  time, 
and  has  served  a good  purpose. 

Bankers  have  for  many  years  dis- 
cussed the  propriety  of  establishing  a 
central  credit  bureau  to  collect  infor- 
mation about  borrowings  from  the  banks, 
such  information  to  be  available  to  all 
the  subscribing  banks.  While  the  dis- 
cussion has  developed  some  practical 
difficulties  in  the  way  of  the  successful 
working  of  a bureau  of  this  character, 
they  are  not  believed  to  be  insurmount- 
able. Possibly  the  Comptroller's  office 
and  the  State  banking  departments 
might  be  the  proper  channels  through 
which  such  information  could  be  col- 
lected and  disseminated  among  the 
banks  under  proper  restrictions. 

No  doubt  where  the  banks  have  adopt- 
ed clearing-house  supervision  and  ex- 
amination, it  is  now  possible  for  the 
clearing-house  examiners  to  keep  watch 
over  the  borrowings  from  different  local 
banks,  but  this  information  is  very  much 
restricted  in  character.  For  instance, 
the  clearing-house  examiner  of  the  Chi- 


cago banks  would  know  how  much  a cer- 
tain firm  had  borrowed  of  all  the  banks 
of  that  city,  but  might  have  no  means  of 
determining  how  much  the  same  firm 
had  borrowed  of  banks  in  other  cities. 
By  the  system  of  exchanging  informa- 
tion among  the  national  bank  examiners 
this  difficulty  will  be  overcome,  but  un- 
less the  information  is  available  to  the 
banks,  as  well  as  to  the  examiners,  it 
will  fiall  short  of  what  could  be  desired. 

When  the  banks  are  able  to  know  how 
much  their  dealers  are  borrowing,  not 
only  locally  but  generally,  the  possibili- 
ties of  losses  due  to  excessive  borrowing 
will  be  greatly  reduced. 


TAINTED  MONEY 

AS  the  summer  approaches,  the  trou- 
bles of  mankind,  actual  or  pros- 
pective, seem  to  multiply.  No  sooner 
have  we  passed  safely  through  the  tail 
of  the  comet  than  sun-spots  and  other 
dangers  menace  us.  Now  comes  an  en- 
terprising citizen  who  coolly  tells  us 
that  on  a dollar  bill  microscopically  ex- 
amined 92,000,000  germs  were  found,  of 
manifold  variety,  including  smallpox, 
scarlet  fever,  typhoid  fever,  tuberculosis 
and  diphtheria.  On  another  bill  were 
found  13,518,000  living  bacteria. 

Still,  the  presence  of  these  deadly 
germs  on  the  country's  paper  does  not 
seem  to  curtail  the  lives  of  the  re- 
ceiving and  paying  tellers  of  the  banks, 
who  quite  frequently  live  long  enough 
to  become  assistant  cashiers,  cashiers 
and  even  sometimes  vice-presidents  and 
presidents,  and  those  who  handle  the 
dirty  paper  money  in  the  redemption 
division  of  the  Treasury  Department  at 
Washington  are  accounted  pretty  good 
risks  by  the  insurance  companies. 

Many  people  minimize  the  risk  of 
infection  from  this  form  of  tainted 
money  by  keeping  bills  in  their  pos- 
session for  a short  time  only,  pass- 
ing them  on  to  the  landlord,  butcher. 


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THE  BANKERS  MAGAZINE 


milliner  and  others  who  seem  insensible 
of  the  risks  they  assume  in  accepting 
them. 

But  it  would  be  a good  thing  if  it 
were  possible  to  have  only  clean  bills  in 
circulation.  The  “crisp"  money  of 
fiction  should  be  realized  in  fact.  There 
are  so  many  kinds  of  currency  issued 
in  this  country  that  the  problem  is  not 
a simple  one;  still,  great  improvement 
could  be  made  with  a little  more  •deter- 
mined effort. 

If  the  Government  were  to  quit  is- 
suing paper  money  (except  perhaps  the 
gold  certificates)  the  cleanest  and  best 
kind  of  a circulating  medium — bank 
checks — might  be  more  widely  used. 
Even  some  form  of  check  in  denomina- 
tions of  one  and  two  dollars  might  be 
devised,  to  be  promptly  redeemed  and 
not  reissued. 


TRAVELLERS’  CHECKS  AND  BANK- 
ERS’ MONEY  ORDERS 

/^REAT  success  has  attended  the 
travellers'  checks  introduced  by 
the  American  Bankers'  Association. 
These  instruments  have  proven  safe  and 
are  undoubtedly  becoming  deservedly 
popular. 

Similar  success  has  not  resulted  in 
the  attempt  to  provide  what  are  styled 
bank  “money  orders."  It  seems  that 
some  of  the  banks  balked  at  having  these 
money  orders  insured  by  a surety  com- 
pany, and  that  it  has  not  been  practica- 
ble in  all  cases  to  get  the  banks  in  the 
central  reserve  cities  to  cash  the  “or- 
ders" at  par. 

It  is  said  that  the  money-order  busi- 
ness done  by  the  Government  and  by  the 
express  companies  reaches  the  enormous 
sum  of  $700,000,000  annually. 

The  banks  have  it  in  their  power,  at 
any  time  they  choose,  to  get  this  busi- 
ness away  from  the  Government  and  the 
express  companies  by  offering  a cheaper 
and  better  service.  It  is  perhaps  true 


that  the  banks  would  profit  enormously 
if  they  would  furnish  such  orders  with- 
Qut  extra  charge  and  provide  for  cash- 
ing them  at  par  everywhere  throughout 
the  country.  At  first  sight  this  might 
look  like  philanthropy,  but  it  would 
probably  be  found  to  be  excellent  busi- 
ness policy.  The  bringing  of  $700,000,- 
000  annually  into  the  banks  that  now 
goes  to  the  postoffices  and  to  the  ex- 
press companies  would  of  itself  be  no 
small  achievement.  But  the  benefit 
would  not  stop  there,  the  banks  would 
have  many  new  accounts  and  their  de- 
posits would  be  largely  increased. 

As  this  Magazine  stated  several  years 
ago,  if  the  custom  of  charging  on  out- 
of-town  checks  becomes  general,  it  will 
have  the  effect  of  rendering  such 
charges  nugatory.  This  was  admitted 
by  Mr.  Wexler,  the  new  president  of 
the  Clearing-House  Section  of  the 
American  Bankers'  Association,  who 
said,  in  accepting  election  to  that  office 
at  the  Chicago  convention: 

“If  all  the  banks  in  the  country  han- 
dled all  the  items  of  their  customers  en- 
tirely free  of  charge,  it  would  be  an 
ideal  arrangement,  and  would  work  out 
exactly  the  same  result  as  if  each 
charged  a uniform  rate." 

Mr.  Wexler  further  declared,  how- 
ever, that  he  believed  it  almost  utopian 
to  expect  them  to  handle  the  items  free 
of  charge.  The  reason  is,  of  course, 
that  some  banks  hope  by  the  existing 
arrangements  to  be  able  to  get  the  ad- 
vantage of  their  competitors. 

But  it  has  been  shown  by  the  experi- 
ence of  the  “foreign"  clearing  house  at 
Boston  that  it  is  altogether  practicable 
to  carry  out  a plan  which  obviates  the 
imposition  of  these  charges. 

The  banks  can  easily  see  the  direct 
profit  they  derive  in  charging  for  fur- 
nishing exchange  and  in  discounting  out- 
of-town  checks.  They  can  not  so  read- 
ily see  the  larger  profit  that  might  come 
to  them  by  a policy  that  would  make 
bank  checks  more  serviceable  to  the 


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THE  UNITED  STATES  TREASURY 


9 


business  community  and  that  would  im-  Yet  the  $700,000,000  annually  paid 
mensely  increase  the  deposits  of  the  for  money  orders  ought  to  set  the  bank- 
banks.  ers  thinking. 


THE  UNITED  STATES  TREASURY— VII 

By  William  Henry  Smith 


/"\NE  of  the  pleasant  memories  about 
the  bureau  of  the  Comptroller  of 
the  Currency  is  the  fact  that  among  its 
clerks  in  the  early  days  were  two  men 
who  later  won  wide  and  deserved  fame 
in  literary  life — John  Burroughs  and 
William  Douglas  O’Connor,  two  inti- 
mate friends  and  warm  defenders  of 
Walt  Whitman.  Burroughs  did  not 
remain  long,  but  rose  to  be  a bank  ex- 
aminer, and  was  later  made  a receiver 
for  an  insolvent  bank,  and  then  retired, 
to  devote  himself  to  literary  work,  in 
which  he  quickly  won  distinction.  His 
friend,  O’Connor,  remained  in  the  bu- 
reau for  a number  of  years,  and  then 
accepted  a place  with  the  Light  House 
Board,  and  died  in  the  service. 

Mr.  McCulloch,  in  his  “Men  and 
Measures  of  Half  a Century,”  thus 
tells  how  Burroughs  got  into  the  ser- 
vice: “One  day  a young  man  called  at 
my  office  and  said  to  me  that  he  under- 
stood that  the  force  of  the  bureau  was 
to  be  increased,  and  that  he  should  be 
glad  to  be  employed.  I asked  him  if 
he  had  any  recommendations.  T have 
not,'  he  replied;  T must  be  my  own.'  I 
looked  at  his  sturdy  form  and  intelli- 
gent face,  which  impressed  me  so  fa- 
vorably that  I sent  his  name  to  the  Sec- 
retary, and  the  next  day  he  was  at  work 
as  a twelve-hundred-dollar  clerk.  He 
was  an  excellent  clerk,  competent,  faith- 
ful, willing.  Since  then  he  has  been  a 
worker  in  a different  field,  and  become 
a captivating  and  most  instructive 
writer.  I never  see  an  article  from  the 
pen  of  John  Burroughs  which  I do  not 
read  with  pleasure,  and  without  calling 
to  mind  his  appearance  when  he  said 
to  me,  T must  be  my  own  recommenda- 
tion.' " 

Poor  Whitman,  the  friend  of  these 
two  gifted  men,  lived  for  a long  time  in 


a garret  in  Washington,  where  Bur- 
roughs and  O’Connor  spent  many  an 
evening,  while  Whitman  made  his  even- 
ing cup  of  coffee  in  a pint  cup,  and  ate 
his  frugal  meal  off  a board  held  across 
his  knees.  He  later  was  given  a posi- 
tion in  the  office  of  the  Attorney-Gen- 
eral, and  fared  better.  The  three 
friends  were  almost  inseparable  com- 
panions when  not  engaged  in  their  office 
work.  “The  Good  Gray  Poet,”  of 
O'Connor,  written  in  defence  of  Whit- 
man, is  fairly  a flame  of  wit  and  scorn. 
Burroughs  also  wrote  a defence  of 
Whitman,  which  did  much  to  place  that 
erratic  poet  on  the  pedestal  where  he 
rightfully  belonged. 

Mr.  McCulloch  went  out  of  that  bu- 
reau to  become  one  of  the  few  really 
great  Secretaries  of  the  Treasury  the 
country  has  had,  while  Knox  and  Eckels 
and  Dawes  became  classed  among  the 
sound  financial  men  of  the  day.  It  has 
been  a great  school  for  bankers  and 
bankers*  assistants. 

When  the  Monetary  Commission 
finally  makes  its  report  to  Congress  it 
is  probable  it  will  recommend  several 
changes  in  the  law  governing  the  Comp- 
troller’s bureau,  strengthening  his  hands 
very  materially.  If  some  one  would 
compile  the  suggestions  made  by  the 
different  Comptrollers  in  their  reports 
and  put  them  in  book  form,  they  would 
make  a most  admirable  treatise  on  cor- 
rect banking  methods.  Especially  is 
this  true  of  those  of  Mr.  McCulloch, 
Mr.  Knox,  Mr.  Eckels  and  Mr.  Dawes. 
A careful  study  of  those  reports  by  a 
young  man  desiring  to  enter  upon  bank- 
ing as  a business  will  give  him  more 
valuable  information  and  instruction 
than  he  can  get  through  any  other 
means.  Some  day  this  work  will  be 


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10 


THE  BANKERS  MAGAZINE 


done,  and  then  bankers  will  have  a text- 
book of  the  greatest  value. 

Comptroller's  Bureau. 

It  was  the  intention  of  the  framers 
of  the  national  currency  act  of  1863  to 
keep,  as  far  as  possible,  the  office  of 
Comptroller  free  from  political  influ- 


LAWRENCE  O.  MURRAY 
Comptroller  of  the  Currency 


ences;  hence  the  term  of  his  office  was 
fixed  at  five  years,  and  it  was  provided 
he  could  be  removed  only  by  the  Secre- 
tary giving  in  writing  to  the  Senate  the 
cause.*  for  such  removal.  This  is  the 
only  officer  of  the  government  whose  re- 
moval must  be  reported  to  the  Senate 
with  the  causes  therefor.  This  was  done 
several  years  prior  to  the  enactment  of 
what  is  known  in  Congressional  history 
as  the  tenure  of  office  act,  which  was 
passed  to  prevent  President  Johnson 
from  making  removals.  He  is  the  only 
bureau  officer  in  the  government  who 


makes  his  report  direct  to  Congress  and 
not  to  the  head  of  the  Department. 

As  a rule,  the  selections  for  this  im- 
portant office  have  been  wise  and  judi- 
cious ones,  and  its  administration  has 
been  free  from  any  scandals,  and  with 
the  single  exception  of  the  stealing  of 
unsigned  notes,  already  noted,  there 
never  have  been  any  losses.  Where  ex- 
aminers have  acted  as  temporary  re- 
ceivers of  banks,  and  that,  too,  without 
bond,  the  work  has  been  satisfactorily 
and  honestly  performed. 

The  present  Comptroller,  Lawrence 
O.  Murray,  had  an  excellent  training 
before  his  appointment.  He  first  en- 
tered the  government  service  as  private 
secretary  to  Assistant  Secretary  of  the 
Treasury  Curtis,  and  later  was  ap- 
pointed chief  of  the  organization  divi- 
sion in  the  Comptroller's  bureau.  He 
served  for  nearly  a year  as  Deputy 
Comptroller,  when  he  resigned,  to  ac- 
cept the  position  of  trust  officer  in  the 
Trust  Company  of  America,  in  New 
York.  He  remained  with  that  com- 
pany for  three  years  and  was  made 
secretary  and  trust  officer  of  the  Cen- 
tral Trust  Company  of  Illinois,  at  Chi- 
cago. When  the  Department  of  Com- 
merce and  Labor  was  organized  he  was 
tendered  and  accepted  the  assistant  sec- 
retaryship, and  in  April,  1908,  ex- 
changed that  for  his  present  position. 

T.  P.  Kane,  Deputy  Comptroller, 
has  had  twenty-three  years'  experience 
in  the  bureau,  and  is,  perhaps,  the  best 
posted  man  in  the  country  on  the  na- 
tional banking  system.  He  was  private 
secretary  to  one  of  the  Assistant  Post- 
masters General,  when,  in  1886,  he  ac- 
cepted the  same  position  with  Comp- 
troller Trenholm.  He  served  in  the 
same  capacity  during  the  administra- 
tions of  Comptrollers  Lacey,  Hepburn, 
Eckels  and  Dawes,  and  in  1899  be  was 
made  Deputy  Comptroller,  and  has  now 
held  that  office  for  ten  years,  a much 
longer  period  than  any  other  Deputy. 
So  thorough  is  his  knowledge  of  the. 
system  that  in  1908  Secretary  Cortel- 
vou  requested  him  to  prepare  for  sub- 
mission to  the  National  Monetary  Com- 
mission suggestions  as  to  what  amend- 


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THE  UNITED  STATES  TREASURY 


11 


ments  the  law  needed.  He  prepared 
an  elaborate  paper  on  this  subject,  care- 
fully digesting  each  section  of  the  law, 
and  when  the  Commission  met  in  Wash- 
ington he  was  requested  by  Comptroller 
Murray  to  attend  the  sessions  of  the 
Commission,  explain  the  workings  of 
the  law,  and  the  reasons  for  suggesting 
the  various  changes.  He  did  so,  and 
the  Commission  highly  complimented 
him  for  the  manner  in  which  he  had 
furnished  it  with  all  the  information 
called  for. 

Willis  J.  Fowler,  the  Second  Deputy, 
has  been  connected  with  the  bureau 
since  1886.  Early  in  his  office  career  he 
was  assigned  to  work  incident  to  as- 
sembling and  analyzing  statistics  for 
the  Comptroller’s  reports  to  Congress, 
and  by  reason  of  his  knowledge  of  the 
printing  business,  to  a general  super- 
vision of  the  issue  of  the  reports.  In 
1901  he  was  promoted  to  the  position  of 
chief  of  the  organization  division,  and 
in  July,  1908,  to  a Deputy  Comptroller- 
ship,  the  appointment  being  made  by 
the  President,  at  that  time.  In  a later 
act  this  appointment,  like  that  of  the 
First  Deputy,  was  lodged  in  the  Secre- 
tary, and  Mr.  Fowler  was  reappointed. 
In  the  absence  of  the  Comptroller  and 
First  Deputy  Comptroller  he  acts  as. 
the  official  head  of  the  bureau. 

The  working  force  of  the  bureau  is 
divided  into  three  divisions — of  organ- 
ization, of  reports  and  of  redemption, 
each  under  a competent  chief.  To  the 
first  is  assigned  the  work  of  receiving 
all  applications  for  charters  and  the 
issuance  of  certificates;  to  the  second, 
the  handling  and  tabulating  all  re- 
ports of  the  conditions  of  the  associa- 
tions, and  to  the  third,  the  supervision 
of  redemption  of  notes. 

P0WER8  AND  DUTIE8  OF  THE  COMP- 
TROLLER. 

The  office  of  Comptroller  of  the  Cur- 
rency is  one  of  the  most  important  of 
the  minor  offices  of  the  government. 
Upon  his  efficiency  and  watchfulness 
depends,  in  a very  large  degree,  the  in- 
terests of  the  depositors  in  the  national 
banks.  The  bill-holder  is  protected  by 


the  deposit  of  bonds  to  secure  the  circu- 
lation. The  Comptroller  carefully 
watching  over  the  impairment  of  the 
capital  of  the  banks,  from  any  cause, 
whether  it  is  from  excessive  loans,  or 
other  bad  management,  is  guarding  the 
interests  of  the  depositor,  and  by  his 
firmness  in  forcing  the  directors  and 
stockholders  to  promptly  make  good 
any  such  impairment,  he  frequently 
saves  the  depositors  from  loss.  By  tact 
and  good  judgment,  coupled  with  firm- 
ness, on  many  occasions  he  has  been 
able  to  save  banks  from  failing,  and  in 
other  cases  has  materially  aided  in  the 
work  of  reorganization  to  such  a de- 
gree that  no  loss  was  incurred. 

Much  depends  upon  his  exercising 
due  discretion  in  all  cases  where  the 
capital  has  been  impaired  or  where  the 
bank  has  made  excessive  loans.  He  can 
only  intervene  in  a drastic  manner  when 
certain  circumstances  arise,  and  they 
nearly  always  arise  when  it  is  too  late 
to  save  the  bank,  or  the  depositors  from 
meeting  with  loss.  Occasions  arise 
when  if  permitted  by  the  law  to  inter- 
vene he  could  effect  a saving  to  both 
depositors  and  shareholders,  but  as  the 
law  stands,  when  he  finds  a bank  with 
an  impaired  capital,  he  must  give  the 
bank  officers  a certain  time  to  make  the 
capjtal  good,  knowing  from  the  circum- 
stances that  it  cannot  be  done,  yet  un- 
der the  law  he  can  do  nothing  until  the 
expiration  of  the  time,  and  all  the  while 
the  bank  goes  on  receiving  money  from 
its  depositors,  piling  up  its  liabilities. 
He  gives  the  warning,  but  if  the  officers 
fail  to  heed  his  warning,  he  is  power- 
less to  act  with  the  promptness  neces- 
sary. 

An  inefficient  Comptroller,  or  one  lack; 
ing  in  tact  and  judgment,  might  work 
untold  injury  to  a bank,  and  all  con- 
nected with  it.  He  exercises  the  au- 
thority to  look  into  the  security  on 
loans,  and  pass  upon  their  sufficiency, 
and  if  in  his  judgment  the  security  is 
not  sufficient  to  require  the  bank  to  de- 
mand additional  security  or  call  in  the 
loan.  This,  in  the  hands  of  an  incom- 
petent person,  or  one  lacking  in  sound 
judgment,  would  be  a dangerous  power. 


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12 


THE  BANKERS  MAGAZINE 


His  position  fs  that  of  a supervisor  of 
banks  operating  under  the  national  sys- 
tem, and  as  a supervisor  he  should  be 
a man  of  sound  discretion,  neither  hasty 
in  his  conclusions  or  judgments,  nor 
careless  and  indifferent.  He  should 
have  such  a standing  with  the  banks 
that  his  mere  warning  would  be  suffi- 


THOMAS  P.  KANE 
1st  Deputy  Comptroller  of  the  Currency 


cient  to  call  for  active  and  quick  re- 
sponse from  the  banks. 

The  law  is  not  “a  rope  of  sand/*  as 
Comptroller  Murray  seems  to  think.  It 
*may  need  strengthening  in  some  parts, 
but  a Comptroller  has  it  in  his  power  to 
enforce  all  the  regulations  he  may 
adopt  under  the  law,  and  while  the 
banks  may  be  at  fault  sometimes,  they 
are  not  always  in  the  wrong,  and  the 
blame  for  the  non-enforcement  of  the 
law  may  occasionally  rest  on  the  shoul- 
ders of  the  Comptroller.  He  alone 
makes  the  selection  of  the  examiners, 
and  if  they  are  not  the  right  kind  of 
men,  he  is  alone  responsible,  and  not 


the  banks.  If  he,  unfortunately,  as 
officers  will  occasionally  do,  selects  the 
wrong  man,  it  need  take  but  a short 
time  to  convince  himself  of  that  fact,  if 
he  is  in  diligent  touch  with  their  work, 
and  he  can  promptly  remove  the  in- 
efficient or  careless  subordinate. 

It  is  a position  which  requires  the 
head  to  be  in  constant  and  close  touch 
with  every  department  of  its  workings, 
and  the  interests  of  thousands  of  de- 
positors as  well  as  those  of  the  share- 
holders depend  upon  his  vigilance.  It 
is  an  onerous  and  responsible  position, 
and  those  who  lose  through  the  failure 
of  a national  bank  ajre  frequently  too 
quick  to  blame  him  for  the  loss.  If  he 
should  hastily  close  a bank  that  is  really 
solvent,  he  occasions  a very  great  in- 
jury to  the  shareholders;  if  he  gives  a 
bank  a little  too  much  leeway,  and  it 
proves  insolvent,  he  causes  a loss  to 
the  depositors  that  might  have  been 
saved  by  a little  more  promptness  of  ac- 
tion. He  has  the  power  to  have  the 
affairs  of  a bank  examined  at  any  time 
when  he  has  any  reason  for  believing 
that  its  business  is  not  conducted  in  a 
safe  way. 

His  duties  are  not  confined  wholly  to 
issuing  circulating  notes  to  the  banks 
and  redeeming  those  sent  in  for  can- 
cellation, and  watching  the  interests  of 
the  government  to  see  that  it  suffers  no 
loss  from  an  over  issue  of  notes,  or 
through  the  depreciation  of  the  bonds 
deposited  to  secure  the  note-holders.  If 
that  were  all,  his  responsibility  would 
not  be  so  very  great,  for  it  would  be  an 
easy  matter  to  prevent  an  overissue  of 
circulating  notes,  and  as  the  deposited 
bonds  are  those  of  the  government  they 
are  not  likely  to  depreciate  in  value  so 
as  to  cause  a loss  to  the  government  in 
redeeming  the  notes,  for  the  govern- 
ment will  always  have  to  pay  par  value 
for  its  bonds. 

But  by  virtue  of  his  office  he  has,  in  a 
certain  degree,  an  oversight  of  the  in- 
terests of  all  depositors  in  the  national 
banks.  In  fact,  he  is  not  alone  the 
Comptroller  of  the  Currency,  but  is  the 
government's  supervisor  of  all  banks 
doing  business  under  the  national  au- 


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THE  UNITED  STATES  TREASURY 


IS 


thority.  The  fact  that  they  are  or- 
ganized under  government  authority 
gives  them  a certain  credit  and  stand- 
ing with  the  public,  and  it  is  the  duty, 
so  far  as  may  be  possible,  for  the  gov- 
ernment to  see  that  such  credit  and 
standing  is  not  impaired.  Hence  the 
necessity  of  careful  selection  in  naming 
a person  for  this  high  office. 

The  Comptrollers  have  not  always 
been  of  the  same  mind  on  every  ques- 
tion connected  with  the  banking  law,  the 
administration  of  their  office,  or  as  to 
amendments  to  the  law,  but  they  have 
uniformly  favored  the  national  cur- 
rency as  against  that  issued  directly  by 
the  government,  and  have  all  been  in 
favor  of  strengthening  the  powers  of 
the  Comptroller  in  certain  directions, 
and  of  a widening  of  the  opportunities 
for  entering  into  the  National  Bank 
System. 

On  the  question  of  retiring  the  gov- 
ernment notes,  Comptroller  Knox,  in  his 
report  for  1876  called  the  attention  of 
Congress  to  the  heavy  expense  the  gov- 
ernment was  necessitated  to  undergo  in 
maintaining  its  notes  at  par,  and  said 
that  a point  must  finally  be  reached 
when  the  banks  should  issue  all  the 
credit  currency. 

In  1897  Comptroller  Eckels  reviewed 
the  whole  situation  in  an  elaborate  and 
very  able  report,  and  made  a strong 
plea  in  favor  of  retiring  the  govern- 
ment issues.  Unlike  Mr.  Knox  and 
others  of  his  predecessors,  Mr.  Eckels 
favored  a bank  note  currency,  issued  on 
the  assets  of  the  banks,  and  this  has 
found  much  favor  in  certain  quarters, 
but  is  just  as  warmly  opposed  in  other 
sections. 

Mr.  Eckels  was  followed  in  office  by 
Mr.  Dawes,  equally  as  able  a financier, 
but  of  a totally  different  opinion  on  the 
subject  of  asset  currency.  His  argu- 
ment was  peculiarly  able  and  backed  up 
and  supported  by  numerous  carefully 
prepared  tables.  His  contention  was 
that  such  a course  would  result  in  great 
loss  to  the  depositors.  Mr.  Dawes  was 
also  an  advocate  of  the  doctrine  that 
note-holders  should  not  be  preferred 
creditors  of  a bank. 


Powers  and  Duties  of  the  United 
States  Treasurer. 

The  Treasurer  is  the  only  other 
officer  in  the  Treasury  Department  who* 
has  much  to  do  with  the  banks. 

In  the  original  law  establishing  the 
Treasury  Department  it  was  provided 
that  there  should  be  a Secretary,  an  as- 
sistant to  the  Secretary,  a Comptroller, 
a Register  and  a Treasurer.  The 
Treasurer  was  made  the  custodian  of 
all  the  moneys  of  the  government  and 
paid  them  out  on  the  order  of  the  Sec- 
retary. Until  the  administration  of 
President  Jackson  his  duties  and  re- 
sponsibilies  were  not  very  arduous,  but 
when  the  deposits  were  withdrawn  for 
the  United  States  Bank  and  scattered 
around  among  the  “pet”  banks,  his 
cares  and  worries  increased  out  of  pro- 
portion to  the  dignity  of  his  office* 
When  an  independent  treasury  was 
finally  created,  his  office  became  one  of 
great  responsibility  and  great  impor- 
tance. He  became  in  fact,  as  well  as 
in  name,  the  chief  disbursing  officer  of 
the  government,  and  such  he  is  now, 
with  the  added  care  of  the  hundreds  of 
millions  of  money  kept  constantly  in 
the  treasury  vaults. 

He  is  the  trustee  of  the  bonds  held  to 
secure  national  bank  circulation,  and  is 
the  redemption  agent  for  national  bank 
currency,  as  well  as  for  all  United 
States  notes.  His  vaults  are  the  great 
show  place  of  Washington  and  but  few 
visitors  to  that  city  fail  to  go  through 
the  corridors  and  peer  through  the 
grated  doors  and  gaze  on  the  great  piles 
of  coin  and  other  currency  stored  there- 
in. On  days  when  the  building  is  open 
a pretty  constant  stream  of  visitors  can 
be  seen  going  to  look  at  the  vaults. 

There  has  always  been  a sentiment  in 
some  parts  of  the  country  in  favor  of 
retiring  the  national  bank  currency  and 
substituting  therefor  notes  of  the  gov- 
ernment. At  one  period  this  feeling 
was  very  strong  throughout  the  coun- 
try, and  it  found  its  main  help  in  that 
direction  in  the  Treasurer’s  office.  John 
Jay  Knox  in  his  “History  of  Banking,” 
in  referring  to  the  act  of  June  20,  1874, 
says : 


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14 


THE  BANKERS  MAGAZINE 


“The  act  of  June  20,  1874,  was  orig- 
inated through  the  influence  of  certain 
officials  in  the  Treasury  upon  that  por- 
tion of  Congress  who  were  in  favor  of 
the  legal  tender  notes.  This  kind  of 
influence  is  often  very  much  more  po- 
tent than  is  generally  suspected.  The 
tendency  of  all  government  bureaus  is 
to  magnify  their  own  importance.  The 


WILLIS  J.  FOWLER 
Deputy  Comptroller  of  the  Currency 


position  of  the  national  banking  bureau 
in  the  Treasury  Department  was  at  the 
commencement  very  strong.  With  Sec- 
retaries Chase,  Fessenden  and  McCul- 
loch, the  legal  tender  note  was  but  a 
temporary  expedient,  while  the  national 
bank  currency  was  to  be  the  permanent 
money  of  the  country.  With  Boutelle 
and  Richardson  the  importance  of  the 
legal  tender  note  as  a financial  factor 
in  increasing  the  power  of  the  Secre- 
tary, began  to  gain  on  the  national  bank 
note.  This  tendency  began  to  be  felt 
in  the  subordinate  offices. 


“With  legal  tender  notes  the  Treas- 
urer's office,  which  had  charge  of  the 
preparation,  signing,  issuing  and  re- 
demption of  these  notes,  gradually  ac- 
quired more  power.  The  Treasurer 
was  a much  more  important  official  with 
greatly  increased  patronage.  The  hand- 
ling of  the  United  States  notes  caused 
him  to  be  in  more  frequent  consultation 
with  the  Secretary.  The  office  of  the 
Comptroller  of  the  Currency  did  not 
tend  to  establish  such  close  relations. 
In  fact,  there  were  from  a very  early 
day  two  factions  in  the  Treasury  De- 
partment, the  legal  tender  faction  and 
the  national  bank  faction.  The  former, 
whenever  they  had  opportunity,  did 
what  they  could  to  prevent  the  retire- 
ment of  legal  tender  notes  and  the  sub- 
stitution therefor  of  national  bank  cur- 
rency. Many  of  the  most  effective  ar- 
guments against  the  banks  were  fur- 
nished to  members  of  Congress  from 
this  source.” 

Since  the  above  was  written  by  Mr. 
Knox  there  has  been  less  of  that  strife 
between  the  two  offices,  owing,  possibly, 
to  the  fact  that  the  status  of  the  two 
currencies  has  been  more  definitely 
fixed.  The  amount  of  the  outstanding 
legal  tenders  has  been  permanently  de- 
termined, and  that  of  national  bank 
notes  is  now  without  limitation.  There 
may  come  a time  when  the  government 
will  call  in  its  legal  tender  notes,  leav- 
ing the  banks  to  supply  all  the  circula- 
tion except  silver  and  gold  certificates. 

There  will  always  be  some  friction 
between  government  bureaus  whose  du- 
ties are  similar,  and  while  the  govern- 
ment has  a note  outstanding,  unless  they 
are  placed  under  the  same  authority 
which  supervises  the  national  bank  cir- 
culation, this  friction  will  continue  in 
some  degree.  Some  day  Congress  will 
be  wise  enough  to  consolidate  the  cur- 
rency of  all  kinds  under  one  jurisdic- 
tion. 

The  Treasurer  is  very  closely  identi- 
fied, however,  with  the  banks  in  another 
way.  It  is  from  money  under  his  con- 
trol that  they  are  so  frequently  relieved 
in  times  of  money  stringency.  It  is 


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BANKING  LAW 


15 


true  that  he  makes  deposits  or  with- 
draws them  on  the  order  of  the  Secre- 
tary, but  under  the  law  the  Treasurer 
alone  is  the  custodian  of  the  funds  of 
the  government,  and  it  is  possible  he 
might  have  the  right  to  refuse  to  de- 


posit or  to  change  deposits.  Such  a 
question  has  not  yet  arisen,  and  the  au- 
thority of  the  Secretary  in  such  matters 
has  not  been  questioned. 

{To  be  concluded .) 


BANKING  AND  COMMERCIAL  LAW 

Conducted  by  John  J.  Crawford,  Esq.,  Author  Uniform  Negotiable  Instruments  Act 


RECENT  DECISIONS  OF  INTEREST  TO  BANKERS 


ACCMMODA TION  INDORSERS— 
ORDER  OF  LIABILITY. 

In  re  McCORD. 

UNITED  STATES  DISTRICT  COURT,  S.  D., 
NEW  YORK,  FEBRUARY,  1910. 

The  mere  fact  that  indorsers  are  accom- 
modation parties,  and  known  to  one  another 
to  be  such  is  not  sufficient  to  change  the 
general  rule  that  prior  indorsers  are  liable 
to  those  who  are  subsequent;  but  for  this 
purpose  it  is  necessary  to  show  a specific 
agreement  that  they  shall  be  liable  ratably. 

TN  the  matter  of  William  McCord, 
A bankrupt.  On  review  of  decision 
of  referee. 

Holt,  DJI,:  I am  not  able  to  con- 

cur with  the  conclusion  of  the  referee 
referee  in  this  case  in  respect  to  the 
eight  notes  which  remain  in  controversy. 
Seven  of  those  eight  notes  were  made 
by  the  Meers  Artificial  Leather  Com- 
pany, and  were  indorsed  by  McCord, 
the  bankrupt,  by  Frank  Squier,  and  by 
two  or  three  others;  each  indorsing  for 
the  accommodation  of  the  makers.  The 
other  note  was  made  by  H.  & J.  T. 
Slade,  and  indorsed  by  McCord  and 
Squier;  each  indorsing  for  the  accom- 
modation of  the  makers. 

The  money  received  from  the  discount 
of  these  eight  notes  was  paid  either  to 
the  Meers  Artificial  Leather  Company 
or  to  the  Manufacturers*  Mercantile 
Company.  Neither  McCord  nor  Squier 
ever  obtained  any  consideration  or  bene- 
fit for  his  indorsement.  On  each  of 
these  notes  McCord’s  indorsement  was 
prior  to  that  of  Squier. 


At  the  maturity  of  these  notes,  Squier 
was  called  upon  by  the  holders  to  pay 
them,  and  did  pay  them.  He  subse- 
quently went  into  bankruptcy,  and  his 
trustee  in  this  proceeding  has  proved  for 
the  full  amount  of  the  notes  against  the 
estate  of  the  bankrupt. 

The  referee  has  held  that  McCord, 
Squier,  and  the  other  indorsers  were  all 
accommodation  indorsers,  and  that  each 
knew  that  the  others  were  such,  and  for 
that  reason  he  has  held  substantially  that 
all  these  accommodation  indorsers  are 
sureties  as  between  themselves,  and  that 
each  is  liable  only  for  his  proportionate 
share  of  the  amount  due  on  the  notes. 
The  referee  has  accordingly  reduced 
the  claim  of  the  trustee  of  Squier  from 
the  total  amount  paid  on  the  notes,  for 
which  the  claim  was  filed,  to  the  bank- 
rupt’s proportionate  share  of  such 
amount. 

It  is  undoubtedly  well  settled  that  ac- 
commodation indorsers  can,  by  agree- 
ment among  themselves,  restrict  the  lia- 
bility of  each  to  his  proportionate  share, 
or,  indeed,  make  any  other  arrangement 
as  to  their  liability  to  each  other  which 
they  see  fit  to  make.  But  it  is,  of 
course,  fundamental  in  the  law  of  com- 
mercial paper  that,  in  the  absence  of  any 
such  agreement,  an  indorser  who  pays 
a bill  or  note  has  recourse  against  each 
prior  indorser  for  reimbursement. 

I do  not  understand  that  the  mere 
fact  that  indorsers  are  accommodation 
indorsers,  and  known  to  each  other  to 
be  so,  is  sufficient,  without  proof  of  an 


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16 


THE  BANKERS  MAGAZINE 


express  agreement,  to  change  the  gen- 
eral rule  of  law  that  prior  indorsers  are 
liable  in  solido  to  subsequent  indorsers 
who  have  paid  a note.  There  must  be, 
as  I understand  the  rule,  a specific 
agreement,  as  between  the  various  in- 
dorsers, that  they  shall  only  be  liable 
ratably.  If  there  is  no  such  agreement, 
the  law  fixes  their  liability  in  accord- 
ance with  the  order  of  the  names  on 
the  paper.  (McCarty  vs.  Roots,  62  U. 
S.  432;  Easterly  vs.  Barber,  66  N.  Y. 
433;  Kelly  vs.  Burroughs,  102  N.  Y. 
93;  Egbert  vs.  Hanson,  34  Misc.  Rep. 
596,  70  N.  Y.  Supp.  383).  Each  of 
these  accommodation  indorsers  indorsed 
each  of  these  notes  in  the  same  order. 
McCord,  the  bankrupt,  indorsed  first, 
the  others  next,  and  Squier  last.  In  the 
absence  of  evidence  of  a specific  agree- 
ment to  the  contrary,  the  order  of  the 
indorsements  indicates  an  understand- 
ing between  the  indorsers  that  Squier, 
if  he  paid  the  notes,  was  to  be  entitled 
to  recourse  against  each  of  the  others, 
and  that  McCord,  being  the  first  in- 
dorser, in  substance  guaranteed  each 
of  the  other  indorsers  against  loss.  I 
have  read  over  the  evidence,  and  there 
is  no  proof  of  any  specific  agreement 
between  the  indorsers. 

I think,  therefore,  that  under  the 
fundamental  principles  governing  the 
law  of  mercantile  paper  and  the  express 
provisions  of  the  Negotiable  Instru- 
ments Law,  §§  55,  114,  118,  Squier’s 
trrustee  is  entitled  to  prove  his  claim 
against  the  bankrupt’s  estate  for  the 
full  amount  paid  on  the  eight  notes  in 
question. 


PAYMENT  OF  CHECK  OF  CORPO- 
RATION NOT  PROPERLY 
CO  UNTERSIGNED. 

ELLIS  vs.  WESTERN  NAT.  BANKetal. 
WESTERN  NAT.  BANK  vs.  LOUIS- 
VILLE TRUST  COMPANY  et  al. 

COURT  OF  APPEALS  OF  KENTUCKY,  JAN* 

19,  1910. 

Where  the  by-laws  of  a corporation  re- 
quire its  checks  to  be  signed  by  the  presi- 
dent and  countersigned  by  another  officer 
of  the  corporation,  the  drawee  bank,  having 
knowledge  of  the  by-law,  has  no  authority 
to  pay  checks  signed  by  the  president  alone. 


T ASSING,  «/. 
opinion) : 


(Omitting  part  of  the 
The  evidence  in  this 


case  has  taken  quite  a wide  scope,  but 
the  real  issue  is  a comparatively  nar- 
row one,  being  confined  to  the  question 
as  to  whether  or  not  the  check  upon 
which  the  bank  undertook  to  withdraw 
$1,000  from  the  account  of  said  insur- 
ance company  was  so  drawn  that  it  could 
properly  be  held  to  be  the  act  of  said 
insurance  company. 

It  appears  from  the  record  that  in 
order  for  the  insurance  company  to  re- 
ceive the  sanction  of  the  insurance  de- 
partment to  commence  business,  it  was 
necessary  that  it  have  on  hand  a certain 
amount  of  cash,  and,  as  the  company 
did  not  have  this  necessary  amount  of 
money,  an  arrangement  was  made  with 
the  bank  by  J.  V.  Reed  and  Stuart  E. 
Brannon,  two  of  the  promoters  of  said 
company,  by  which  they  executed  their 
joint  note  to  the  bank  for  $1,000,  the 
net  proceeds  of  which  was  placed  to 
the  credit  of  the  insurance  company,  and 
this  sum,  supplemented  by  the  amount 
of  the  discount,  made  up  the  $1,000 
which  the  president  of  the  insurance 
company  attempted  to  pay  by  the  check 
out  of  which  this  litigation  grows. 

The  by-laws  of  the  insurance  com- 
pany provide  that  all  checks  on  the  de- 
posit of  said  company  should  be  signed 
by  the  president  and  contersigned  by 
one  of  two  other  designated  officers. 
The  bank  was  advised  of  the  existence 
of  this  by-law,  and,  in  fact,  had  en- 
tered into  an  agreement  with  the  insur- 
ance company  that  the  checks  were  to 
be  honored  only  when  so  drawn,  signed, 
and  countersigned. 

Under  this  arrangement,  thirty-seven 
checks  were  drawn  by  the  insurance 
company  and  honored  by  the  bank.  The 
check  which  is  the  subject  of  this  litiga- 
tion was  number  thirty-eight,  and  it  was 
signed  by  the  president  of  the  insurance 
company  alone,  and  was  made  payable 
to  the  bank  for  the  purpose  of  paying 
off  and  satisfying  the  Reed  and  Bran- 
non note.  When  presented  to  the  bank 
it  was  honored,  and  the  note  was  paid. 

At  the  time  this  check  was  drawn,  the 
other  officers  of  the  insurance  company. 


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BANKING  LAW 


17 


whose  duty  it  was  to  countersign  it,  re- 
fused to  do  so.  The  fact  that  it  was  not 
signed  and  countersigned  as  all  the  other 
checks  had  been  was  of  itself,  in  the 
absence  of  any  special  contract  and  ar- 
rangement in  regard  to  the  signing  of 
these  checks,  sufficient  to  have  put  the 
bank  upon  notice  that  this  check  was  not 
such  authority  as  would  warrant  it  in 
paying  out  the  funds  of  the  insurance 
company  thereon.  But  here  we  have  a 
positive  agreement  between  the  bank  and 
the  insurance  company  that  the  checks 
were  only  to  be  honored  when  signed 
by  the  president  and  countersigned  by 
one  of  the  other  officers  of  the  insurance 
company,  hence,  no  check  which  failed 
to  measure  up  to  these  requirements  as 
to  the  signatures  of  the  officers  of  the 
insurance  company  could  bind  the  insur- 
ance company  or  protect  the  bank 
against  loss  if  paid  by  it. 

The  note  in  question  was  not  the  debt 
of  the  insurance  company.  It  is  true 
that  certain  of  the  promoters  of  said 
company  had  borrowed  this  money  on 
their  individual  indorsements  for  the 
company  to  enable  it  to  begin  business, 
but  the  name  of  the  insurance  company 
did  not  appear  upon  the  note  which  was 
executed  to  raise  this  money,  for  if  it 
had  it  would  have  left  the  company  in 
no  better  position  than  it  was  (toward 
complying  with  the  requirements  of  the 
law)  before  the  note  was  executed,  for 
the  law  required  that  it  have  so  much 
cash  on  hand  over  and  above  any  lia- 
bility. 

As  between  the  insurance  company 
and  the  bank,  the  insurance  company 
was  not  liable  for  the  payment  of  this 
debt,  and  the  suggestion  that,  even 
though  the  check  was  not  properly 
drawn,  the  bank  should  nevertheless  be 
permitted  to  retain  the  fund  because  it 
had  been  used  to  pay  the  debt  for  which 
the  insurance  company  was  liable,  has 
no  application  here. 

The  bank  had  contracted  with  the  in- 
surance company  that  the  funds  of  the 
latter  should  be  withdrawn  from  the 
former  only  upon  checks  signed  and 
countersigned  in  a certain  particular 
way.  The  check  in  question  not  being 
so  drawn,  the  bank  was  without  author- 


ity to  charge  the  account  of  the  insur- 
ance company  therewith.  The  bank 
was  no  more  authorized  to  charge  this 
account  with  this  $1,000  check,  signed 
by  the  president  of  the  insurance  com- 
pany alone,  than  it  would  have  been  to 
charge  the  account  of  the  insurance  com- 
pany with  the  checks  drawn  by  the  pres- 
ident thereof  in  his  individual  capacity. 
And  when  it  paid  out  the  money  on  this 
unauthorized  check,  it  paid  out,  not  the 
money  of  the  insurance  company,  but 
money  belonging  to  the  bank.  This  be- 
ing true,  the  chancellor  properly  held 
that  it  was  answerable  to  the  receiver 
for  the  benefit  of  the  creditors  of  the 
insurance  company  for  the  full  amount 
thereof. 


PROMISSORY  NOTE— BONA 
FIDE  H O L D E R— INDORSE- 
MENT “WITHOUT  RECOURSE ” 
—STATEMENT  OF  CONSIDER- 
ATION. 

BANK  OF  SAMPSON  vs.  HATCHER. 

SUPREME  COURT  OP  NORTH  CAROLINA, 
DECEMBER  1,  1909- 

The  fact  that  a note  discounted  by  a 
bank  is  indorsed  by  the  payee  “without 
recourse”  does  not  impair  the  bank’s  title 
as  a bona  fide  holder. 

Nor  will  the  fact  that  the  nature  of  the 
consideration  is  stated  on  the  face  of  the 
paper  have  this  effect. 

r I 'HIS  was  an  action  upon  a promis- 
sory  note  executed  by  the  defend- 
ants to  the  order  of  C.  S.  Lothrop  & 
Co.,  and  indorsed  by  the  payees  “with- 
out recourse”  to  the  plaintiff  bank  at  a 
discount  of  ten  per  cent.  The  de- 
fendants alleged  that  the  note  was 
given  in  a transaction  in  which  de- 
fendants had  bought  from  the  payees 
the  right  to  sell  a “safety  cash  lock”  and 
that  there  had  been  a breach  of  war- 
ranty as  to  the  value  and  salability  of 
such  lock,  and  claimed  that  this  de- 
fense was  available  as  against  the  bank. 

Hoke,  «/.:  There  was  no  evidence 

tending  to  establish  any  breach  of  con- 
tract at  the  time  plaintiff  became  in- 
dorsee for  value  of  the  note  sued  on 
the  testimony  showing  that  the  locks 
were  not  ordered  by  defendant  until 


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18 


THE  BANKERS  MAGAZINE 


June  or  July  following,  and  the  defects 
complained  of  were  not  disclosed  until 
some  time  thereafter.  Nor  was  there 
any  testimony  amounting  to  legal  evi- 
dence to  show  that  the  plaintiff  bank 
was  interested  with  the  payees  in  their 
transaction  with  defendants  otherwise 
than  as  indorsees  of  the  notes,  nor  to 
show  fraud  on  the  part  of  the  bank 
in  connection  with  the  matter,  or  any 
knowledge  or  notice  of  it.  On  the 
contrary,  while  the  trade  was  made  in 
the  law  office  of  H.  A.  Grady,  Esq.,  who 
was  at  the  time  vice-president  of  the 
bank,  it  appears  that  said  Grady  and 
the  cashier  of  the  bank  had  made  a con- 
tract with  Lothrop  & Co.,  similar  to 
that  of  defendants,  and  had  taken  the 
precaution  to  inquire  as  to  the  busi- 
ness standing  and  solvency  of  the 
payees,  and  had  received  assurances 
that  both  were  good,  and  there  was  noth- 
ing offered  to  show  that  these  assurances 
were  untrue. 

There  are  several  well-considered 
decisions  of  the  court  which  support  this 
view  of  the  facts  in  evidence,  among 
others,  Farthing  vs.  Dark  111  N.  C. 
243,  and  Applegarth  vs.  Tillery,  105 
N.  C.  407;  and  our  statute  on  the  sub- 
ject (Revisal  1905  § 2205)  is  conclu- 
sive: “Sec.  2205.  Actual  Know- 

ledge Necessary  To  Constitute  Notice 
Of  Infirmity.  To  constitute  notice  of 
an  infirmity  in  the  instrument  or  de- 
fect in  the  title  of  the  person  negotiat- 
ing the  same  the  person  to  whom  it  is 
negotiated  must  have  had  actual  know- 
ledge of  the  infirmity  or  defect  or 
knowledge  of  such  facts  that  his  action 
in  taking  the  instrument  amounted  to 
bad  faith.”  It  has  further  been  held 
with  us  (Evans  vs.  Freeman,  142  N.  C. 
61,)  that  the  form  of  the  indorsement 
“without  recourse”  does  not  affect  the 
question,  and  the  defense  indicated  in 
the  counterclaim  can  only  be  sustained, 
if  at  all,  on  the  ground  that  at  the  time 
of  the  indorsement  the  plaintiff  bank 
was  cognizant  of  the  fact  that  defend- 
ants* obligation  arose  out  of  an  execu- 
tory contract,  and  was  aware  of  its 
terms,  and  when  there  was  nothing  in 
such  contract  restricting  the  negotiabil- 
ity of  the  notes,  nor  to  indicate  fraud  or 


imposition  or  an  existent  breach,  and  the 
correct  doctrine  is  against  the  defense 
suggested  on  the  principle  stated  and 
upheld  in  Mason  vs.  Cotton  Co.,  148  N. 
C.  492.  Even  when  such  a notice  ap- 
pears on  the  face  of  the  note,  the  au- 
thorities are  against  defendants’  posi- 
tion. (Seigel  vs.  Trust  Savings  Bank, 
131  111.  569*  Ferriss  vs.  Tavel,  87 
Tenn.  386.  Bank  of  Commerce  vs. 
Barrett,  38  Ga.  126).  The  only 
decision  we  find  which  tends  to  support 
a contrary  view  is  one  in  our  own  Re- 
port*. (Howard  vs.  Kimball,  65  N.  C. 
175).  An  examination  into  the  facts  of 
that  case  will  disclose  that  the  assignee 
of  a note  which  expressed  upon  its 
face  that  it  was  given  as  purchase 
money  of  a certain  tract  of  land,  not 
only  had  actual  notice  of  the  defect  of 
title  at  the  time  he  purchased,  but 
he  had  taken  a deed  for  such  defective 
title  from  the  original  vendor,  and  held 
same  to  be  conveyed  to  the  vendee  when 
the  note  was  raid.  The  case,  there- 
fore, is  undoubtedly  well  decided,  but 
in  so  far  as  the  opinion  gives  counte- 
nance to  the  position  that  a defect  of 
title  is  available  against  an  indorsee 
for  value  of  a note  for  the  purchase 
money  from  the  fact,  and  from  that 
alone,  that  the  note  on  its  face  is  ex- 
pressed to  be  for  the  purchase  money 
of  land,  or  a given  tract  of  land,  the 
case  is  not  in  accord  with  the  better 
considered  decisions.  As  an  authority 
for  such  a position,  it  was  in  effect  dis- 
approved by  a subsequent  decision  of 
this  court,  in  Bank  vs.  Michael,  96  N.  C. 
53,  in  which  a note  of  that  kind  was 
held  to  be  “negotiable”;  the  term  “ne- 
gotiable” being  used  in  the  sense  that  an 
indorsee  for  value  without  notice  ultra 
became  the  owner  of  the  note  unaffected 
by  the  equities  and  defenses  existent  be- 
tween the  original  parties  to  the  con- 
tract. 

Our  present  statute  on  the  subject 
would  seem  to  put  the  matter  at  rest. 
Revisal  1905,  c.  54  § 2153.  This,  be- 
ing one  of  the  sections  defining  what 
constitutes  negotiability  of  notes,  pro- 
vides: “Sec.  2153.  What  Promise 

Unconditional.  An  unqualified  order 
or  promise  to  pay  is  unconditional  with- 


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in  the  meaning  of  this  chapter,  though 
coupled  with  ( 1 ) an  indication  of  a 
particular  fund  out  of  which  reimburse- 
ment is  to  be  made,  or  a particular  ac- 
count to  be  debited  with  the  amount;  or 
(2)  a statement  of  the  transaction  which 
gives  rise  to  the  instrument.  But  an 
order  or  promise  to  pay  out  of  a par- 
ticular fund  is  not  unconditional/ * 

There  was  no  error  in  the  charge  of 
the  court  or  in  the  trial  of  the  cause, 
and  the  judgment  below  is  affirmed. 

No  error. 

CASHIER— LIABILITY  FOR  ACTS 
OF  ASSISTANT  CASHIER. 

RIO  STATE  BANK  vs.  AMONDSON. 

SUPREME  COURT  OF  WISCONSIN,  DECEM- 
BER 7;  1909. 

The  by-law  of  a bank  provided  that 
“The  cashier  shall  be  responsible  for  all 
the  moneys,  funds,  and  valuables  of  the 
bank,  and  shall  give  bond  with  securi- 
ty ..  . conditioned  for  the  faithful  and 
honest  discharge  of  his  duties  as  such 
cashier,  and  that  he  will  faithfully  apply 
and  account  for  all  such  moneys,  funds  and 
valuables,”  etc. 

II eld.  that  he  was  liable  for  any  shortage 
in  the  funds  of  the  bank,  though  such 
shortage  had  occurred  through  mistakes  or 
malfeasance  of  the  assistant  cashier. 

T^HIS  was  an  action  by  the  Rio 
State  Bank  to  recover  of  its  f orm- 
er  cashier,  $59-80,  alleged  to  have  been 
received  and  never  accounted  for.  The 
defendant  denied  any  shortage,  and 
also  alleged  that  if  shortage  in  fact 
occurred  it  was  in  his  absence,  when 
the  bank  was  in  charge  of  an  assistant 
cashier,  and  hence  that  he  was  not 
responsible  therefor.  The  action  was 
tried  before  a jury.  It  appeared: 
That  the  defendant  became  the  cash- 
ier of  the  bank  upon  its  organization 
in  the  fall  of  1900,  and  remained  such 
until  January  30,  1905.  That  at  the 
time  he  was  elected  and  entered  on 
his  duties  a by-law  of  the  corporation, 
which  was  known  to  him,  provided 
that:  “The  cashier  shall  be  responsi- 

ble for  all  the  moneys,  funds,  and 
valuables  of  the  bank  and  shall  give 
bond  with  security  . . . conditioned 


for  the  faithful  and  honest  discharge 
of  his  duties  as  such  cashier,  and  that 
he  will  faithfully  apply  and  account 
for  all  such  moneys,  funds,  and  valua- 
bles/’ etc.  That  he  gave  a bond  con- 
ditioned in  the  words  of  the  by-law. 
That  another  by-law  of  the  bank  pro- 
vided that  the  assistant  cashier  should 
be  responsible  for  all  such  sums  of 
money,  property,  and  funds  as  might 
from  time  to  time  be  placed  in  his 
hands  by  the  cashier,  or  otherwise  come 
into  his  possession,  and  should  also  give 
bond  for  the  faithful  discharge  of  his 
duties.  That  Charles  Caldwell  was  ap- 
pointed assistant  cashier  and  gave  bond, 
but  that  he  was  in  other  business,  and 
only  acted  when  he  was  requested  to 
take  charge  of  the  bank  during  oc- 
casional absences  of  Mr.  Amondson. 
That  during  the  year  1904,  the  bank 
books  showed  three  shortages  of  cash 
which  have  never  been  and  could  not 
be  explained,  viz.:  January  10th, 

$10.80;  May  31st,  $20;  and  October 
11th,  $29 — making  a total  of  $59-80. 
That  upon  other  days,  distant  in  point 
of  time  from  the  shortages,  there  were 
certain  excesses  of  cash  found,  called 
“longs,”  amounting  to  $74.50,  which 
never  had  been,  and  could  not  be,  ex- 
plained. There  was  evidence  tending 
to  show  that  the  assistant  cashier,  Cald- 
well, was  actually  in  charge  of  the 
bank  on  the  days  when  the  shortages 
occurred,  and,  as  this  was  the  only 
question  of  fact  in  the  case,  the  court 
submitted  to  the  jury,  asking  in  effect, 
as  to  each  shortage,  whether  11  occurred 
while  the  assistant  cashier  was  in 
charge.  The  jury  answered,  “Yes,”  to 
each  question,  and  the  court  upon  mo- 
tion rendered  judgment  for  the  plain- 
tiff for  the  amount  of  the  shortages, 
notwithstanding  the  verdict,  from 
which  judgment  the  defendant  ap- 
pealed. 

Winslow,  C.  J.:  The  action  is 

brought  upon  the  contract  of  employ- 
ment, not  upon  the  bond.  The  trial 
court  granted  judgment  for  the  plain- 


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tiff  non  obstante,  for  the  reason  that  he 
deemed  the  defendant’s  liability  was 
fixed  by  the  by-law,  and  in  this 
conclusion  we  agree.  The  by- 
law whose  terms  he  knew,  and 
which  became  a part  of  his 
contract,  provided  that  he  should  be 
“responsible  for  all  the  moneys,  funds, 
and  valuables  of  the  bank.”  Words  of 
broader  meaning  could  hardly  have 
been  used.  They  indicate  unmistak- 
ably the  intent  of  the  corporation  to 
place  the  whole  responsibility  for  the 
safe  conduct  of  the  bank’s  business 
upon  the  shoulders  of  the  cashier,  whe- 
ther the  actual  transactions  should  be 
carried  on  by  him  or  by  subordinates. 
This  intent  appears  all  the  more 
plainly  by  comparing  the  liability  thus 
placed  upon  the  cashier  witn  the  limit- 
ed liability  placed  upon  the  assistant 
cashier  by  the  other  by-law  referred  to 
in  the  statement  of  facts.  Whether  the 
cashier  is  made  an  insurer  to  that  he 
would  have  to  replace  funds  destroyed 
by  fire  or  taken  by  robbery  is  a ques- 
tion not  involved  in  the  case  and  hence 
not  decided.  We  are  fully  satisfied 
that  the  language  was  intended  to,  and 
does,  fairly  cover  losses  resulting  from 
mistakes  or  malfeasance  of  the  cashier 
or  his  subordinates. 

The  proof  here  showed  that,  accord- 
ing to  the  books  of  the  bank,  kept  by 
the  defendant  and  his  subordinates, 
$59-80  had  been  received  by  the  bank 
which  had  never  been  accounted  for  in 
the  cash.  In  the  absence  of  explana- 
tion (and  none  was  offered),  this  was 
prima  facie  proof  that  moneys  of  the 
bank  to  that  extent  were  missing.  The 
fact  that  on  other  and  different  oc- 
casions there  was  more  cash  in  the 
drawer  than  the  books  called  for  can- 
not affect  the  defendant’s  liability. 
He  does  not  claim  to  have  paid  it  in, 
and,  if  others  paid  it  in  without  re- 
ceiving credit  for  it,  those  others  are 
the  ones  to  whom  the  bank  is  liable  for 
it,  if  to  any  one. 

Judgment  affirmed. 


BANK'S  RIGHT  OF  SET-OFF- 
DEPOSIT  MADE  FOR  SPECIAL 
PURPOSE. 

WAGNER  vs.  CITIZENS’  BANK  & 
TRUST  CO. 


SUPREME  COURT  OF  TENNESSEE,  NOVEM- 
BER is,  1909. 

As  the  relation  between  a bank  and  its 
depositor  is  that  of  debtor  and  creditor,  the 
bank  has  the  right  to  set  off  a balance  due 
the  depositor  against  his  indebtedness  to 
the  bank. 

But  this  right  does  not  exist  where  with 
the  bank’s  knowledge  and  consent  the  de- 
posit is  made  for  a special  purpose. 


' I 'HIS  was  a suit  by  T.  H.  Wagner, 
A as  trustee  in  bankruptcy  of  the 
Wilcox  Furniture  Company,  against  the 
Citizens’  Bank  & Trust  Company  to  re- 
cover the  sum  of  $6,110.98  deposited 
with  it  by  the  bankrupt.  When  the 
bankruptcy  proceedings  were  commenced 
the  furniture  company  was  indebted 
to  the  bank  in  the  sum  of  $7,363,  and 
the  bank  claimed  the  right  to  apply  the 
entire  deposit  to  the  payment  of  this 
debt.  The  court  found  from  the  evi- 
dence that  the  fund  deposi  ed  was  ac- 
cumulated as  the  result  of  auction 
sales  of  the  furniture  of  the  bankrupt, 
and  that  it  was  understood  by  the  bank 
that  this  fund  was  being  deposited  with 
it  as  a special  fund  for  pro  rata  dis- 
tribution among  all  the  crediters. 

McAllister,  J.:  (Omitting  part  of 

the  opinion) : 

The  defendant  bank  bases  its  right 
to  a set-off  on  section  68a  of  the  bank- 
ruptcy act  of  1898  (Act  July  1,  1898, 
c.  541,  30  Stat.  565  [U.  S.  Comp.  St. 
1901,  p.  3450]),  as  follows: 


In  all  cases  of  mutual  debts  or  mu- 
tual credits  between  the  estate  of  a 
bankrupt  and  a creditor,  the  account 
shall  be  stated  and  one  debt  shall  be 
set  off  against  the  other,  and  the  bal- 
ance only  shall  be  allowed  or  paid.” 

In  the  case  of  New  York,  etc..  Bank 
vs.  Massey,  192  U.  S.  138,  the  Supreme 
Court  of  the  United  States,  in  dealing 
with  the  clause  just  mentioned,  says: 
“Section  68a  of  the  bankruptcy  act 
of  1898  is  almost  a literal  ieproduc- 
tion  of  section  20  of  the  act  of  1867.*’ 


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In  Sawyer  vs.  Hoag,  17  Wall,  610, 
in  construing  section  20  of  the  act 
of  1867  (Act  March  2,  1867,  14  Stat. 
526,  c.  176),  the  court  said  as  fol- 
lows: 

“This  section  was  not  intended  to 
enlarge  the  doctrine  of  set-off,  or  to 
enable  a party  to  make  a set-off  in  cases 
where  the  principles  of  legal  or  equit- 
able set-off  did  not  previously  authorize 
it.” 

The  general  rule  is  that  the  relation 
of  the  bank  to  the  depositor  is  that  of 
debtor  and  creditor,  and  the  bank  is  the 
debtor  of  the  depositor.  (Harris  vs. 
Bank,  110  Tenn.  249.) 

“The  bank  holds  a lien  on  the  de- 
posits in  its  hands  to  secure  the  repay- 
ment of  the  depositors  indebtedness, 
and  may  enforce  that  lien  as  the  debts 
mature  by  applying  the  debtor’s  de- 
posits upon  them,  thus  setting  the  two 
off  against  each  other.”  3 Am.  & Eng. 
Ency.  of  Law  (2d  Ed.)  p.  835. 

It  is  also  stated: 

“The  right  of  the  bank  to  apply  de- 
posits to  the  extinguishment  of  the  de- 
positor's indebtedness  as  it  matures 
grows  out  of  the  doctrine  that  relation- 
ship between  the  bank  and  the  deposi- 
tor is  that  of  debtor  and  creditor.”  3 
Am.  & Eng.  Ency.  of  Law  (2d  Ed.) 
p.  835. 

But  it  is  well  settled  that  a bank 
does  not  have  “a  lien  upon  special  de- 
posits or  monies  deposited  for  a specific 
purpose,  as  for  collateral  security,  or 
for  the  payment  of  a particular  debt.” 
3 Amer.  & Eng.  Ency.  of  Law  (2d. 
Ed.)  p.  837,  and  cases  cited. 

Again  it  is  said: 

“The  proposition  that  th°re  is  no 
right  of  set-off  against  a trust  deposit, 
nor  any  lien  for  the  trustee's  personal 
debts,  is  axiomatic.”  3 Am.  & Eng. 
Ency.  of  Law  (2d  Ed.)  p.  837,  and 
oases  cited. 

In  State  vs.  Corning  State  Sav.  Bank, 
128  Iowa,  597,  it  is  said: 

“Where  a bank,  which  was  a creditor 
of  an  insolvent  estate,  received  a de- 
posit of  funds  from  the  receiver,  it 
oould  not  apply  such  funds  on  its 


claims,  nor  plead  such  claims  as  an 
offset  against  the  deposit.” 

In  State  Bank  vs.  McCabe,  135  Mich. 
479,  it  is  said ; 

“Where  the  bank  deals  with  a de- 
positor as  trustee,  and  recognizes  funds 
standing  in  his  name  as  trust  funds, 
knowing  them  to  be  such,  it  cannot  ap- 
propriate them  to  the  payment  of  the 
trustee's  individual  indebtedness  to  the 
bank.” 

This  question  arose  in  Re  Davis 
(D.  C.)  119  Fed.  950,  wherein  an  in- 

solvent partnership  sold  its  stock  of 
goods,  and,  by  its  direction,  the  pur- 
chaser deposited  its  price  in  the  bank, 
taking  a receipt  therefor,  showing  that 
the  money  was  to  be  prorated  among 
the  several  creditors  of  the  firm  as  their 
interests  might  appear.  Subsequently, 
on  petition  of  creditors,  the  partnership 
was  adjudicated  an  involuntary  bank- 
rupt. After  said  adjudication,  the 
bank  undertook  to  apply  the  money  so 
deposited  on  certain  notes  of  the  firm 
held  by  it  and  another  creditor,  with- 
out the  consent  of  the  depositor  or  the 
bankrupt,  and  to  refuse  the  demands 
of  the  trustee  therefor.  Held,  that  the 
bank  held  the  deposit  in  a fiduciary  ca- 
pacity as  a trust  fund,  which  precluded 
it  from  asserting  an  adverse  claim  there- 
to after  the  bankruptcy  as  against  the 
trustee. 

Among  other  things,  the  court  said: 

“Upon  the  merits  of  the  controversy, 
would  the  bank  be  in  position  to  suc- 
cessfully contest  the  right  of  the  trustee 
to  the  money?  Its  ability  to  do  so 
would  depend  upon  its  right  to  apply 
the  fund  to  its  own  use.  While  a gen- 
eral deposit  by  a merchant  of  money  in 
a bank  creates  the  relation  of  debtor 
and  creditor,  and  authorizes  the  bank 
to  use  the  money  as  its  own,  such  re- 
sult does  not  obtain  when  the  deposit 
is  made  for  a special  purpose,  as,  for 
example,  to  be  paid  to  creditors,  as 
was  the  case  here.” 

In  Wilson  vs.  Dawson,  52  Ind.  515, 
it  was  said: 

“It  is  a general  rule  that  funds  de- 
posited in  bank  for  a special  purpose, 
known  to  the  bank,  cannot  be  withheld 


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THE  BANKERS  MAGAZINE 


from  that  purpose,  to  the  end  that  they 
may  be  set  off  by  the  bank  against  a 
debt  due  to  it  from  the  depositor.” 

In  Lynam  vs.  National  Bank,  98  Me. 
448,  it  appeared  that: 

“In  June,  1902,  the  Standard 
Granite  Company  sent  to  each  of  its 
creditors,  including  the  Belfast  Na- 
tional Bank,  a circular  letter,  stating 
that  it  was  unable  to  meet  its  obliga- 
tions. A few  days  later  in  the  same 
month  it  called  a meeting  of  its  credi- 
tors, at  which  meeting  the  Belfast  Na- 
tional Bank  was  represented  by  one 
of  its  directors.  At  this  meeting  a com- 
mittee of  three  creditors  was  appointed, 
with  instructions  to  secure,  if  possible, 
the  discharge  of  certain  attachments 
which  had  been  placed  upon  the  prop- 
erty of  the  granite  company.  On  Sep- 
tember 4th;  following,  the  directors  of 
the  granite  company  passed  a resolu- 
tion, admitting  the  inability  of  the  com- 
pany to  pay  its  debts,  and  its  willing- 
ness to  be  adjudged  a bankrupt  on  that 
ground.  On  the  day  following,  the 
granite  company  sent  to  the  Belfast 
National  Bank  a deposit  of  $800.  At 
that  time  the  granite  company  had  a 
balance  of  $1.04  standing  to  its  credit 
on  the  books  of  the  Belfast  National 
Bank.  The  intention  of  the  Standard 
Granite  Company  in  making  this  de- 
posit of  $800  was  that  it  should  be  held 
by  the  bank  until  a trustee  in  bank- 
ruptcy for  the  granite  company  should 
be  appointed;  but  no  notice  of  such 
intention  was  given  to  the  bank,  and 
the  deposit  was  credited  to  the  account 
of  the  granite  company  and  added  to 
the  balance  of  $1.04  then  standing  on 
the  books  of  the  company. 

“At  the  time  this  deposit  was  made 
the  granite  company  was  indebted  to 
the  bank  to  the  amount  of  several  thou- 
sand dollars.  On  the  day  following 
the  making  of  this  deposit  of  $800,  a 
petition  in  bankruptcy  was  filed  against 
the  granite  company,  and  it  was  duly 
adjudged  a bankrupt,  and  one  Lynam 
was  appointed  and  qualified  as  its 
trustee  in  bankruptcy.  Said  trustee 
made  a demand  on  the  bank  for  the 
$800,  which  demand  was  refused;  the 
bank  claiming  that  it  would  offset  the 


deposit  on  the  past-due  notes  of  the 
granite  company. 

“For  some  time  past,  all  the  efforts 
of  the  granite  company  . . . and 

that  of  its  creditors  had  been  to  ob- 
tain a distribution  of  its  assets  equi- 
tably, and  to  that  end  the  first  attempt 
was  to  discharge  the  attachments. 
Honest  dealing  on  the  part  of  the 
granite  company,  which  is  to  be  pre- 
sumed, required  that  all  of  its  assets 
should  be  husbanded  for  the  benefit  of 
all  of  its  creditors.  Pending  the  ef- 
fort to  obtain  an  assignment  or  ad- 
judication of  bankruptcy,  it  had  $800 
in  money,  which  it  intended  to  retain, 
and  ought  to  retain,  as  part  of  its  gen- 
eral assets.  As  some  time  would  elapse 
before  it  could  be  thus  administered, 
it  was  deposited  in  the  bank,  really  for 
safe-keeping.  All  these  facts  were 
well  known  to  the  bank  when  it  re- 
ceived the  deposit.  It  knew  it  was  not 
intended  as  a payment,  and  did  not 
treat  it  as  such.  The  bank  could  not 
fail  to  understand  that  it  was  intend- 
ed that  this  money  should  be  added  to 
the  other  assets  for  the  general  benefit 
as  it  equitably  ought  to  be.  It  cer- 
tainly understood  that  the  granite  com- 
pany, under  the  then  existing  circum- 
stances, would  not  voluntarily  subject 
this  portion  of  its  assets  to  a set-off 
by  the  bank,  to  the  injury  of  other 
creditors. 

“Upon  consideration  of  all  the  cir- 
cumstances, and  the  situation  of  the 
parties,  we  think  it  a fair  inference 
that  the  bank  understood  that  the  de- 
posit was  intended  only  for  safe-keep- 
ing, to  be  ultimately  appropriated  for 
the  benefit  of  all  the  creditors  of  the 
granite  company,  and  that  in  fact  it 
was  a deposit  in  trust  for  that  purpose. 
And  it  being  charged  with  such  trust, 
the  plaintiff,  as  trustee  in  bankruptcy, 
is  entitled  to  recover.” 

We  are  of  opinion  that  these  authori- 
ties are  applicable  in  the  present  in- 
stance. It  distinctly  appears  on  this 
record  that  the  funds  accumulated  in 
the  defendant  bank  were  deposited  for 
a special  purpose  with  the  knowledge 
and  consent  of  the  president  of  the 
bank;  that  the  funds  could  not  be 


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checked  out  by  the  president  of  the 
furniture  company  without  the  signa- 
ture of  J.  L.  M orison,  representative 
of  the  creditors*  committee.  The  fund 
thereby  became  a trust  deposit  for 
specific  purposes,  with  the  knowledge 
and  consent  of  the  bank,  and  the  latter 
had  no  right  of  set-off  in  said  fund 
against  the  bankrupt's  indebtedness  to 
the  bank. 

Counsel  for  the  bank  relies  on  sev- 
eral cases  as  announcing  a contrary 
doctrine,  namely,  (New  York  County 
Bank  vs.  Massey,  192  U.  S.  138. 
Clark  vs.  Northampton  Nat.  Bank,  160 
Mass.  26.  Lowell  vs.  International 
Trust  Co.,  158  Fed.  781,  86  C.  C.  A. 
137). 

In  Bank  vs.  Massey,  supra,  the  court 
said: 

“It  cannot  be  doubted  that,  except 
under  special  circumstances,  or  where 
there  is  a statute  to  the  contrary,  a 
deposit  of  money  upon  general  ac- 
count with  a bank  creates  the  relation 
of  debtor  and  creditor.  The  money 
deposited  becomes  part  of  the  general 
f unds  of  the  bank,  to  be  dealt  with  by  it 
as  other  monies,  to  be  loaned  to  cus- 
tomers and  parted  with  at  the  will 
of  the  bank,  and  the  right  of  the  de- 
positor is  to  have  this  debt  repaid  in 
whole  or  in  part  by  honoring  checks 
drawn  against  the  deposits.  It  creates 
an  ordinary  debt,  not  a privilege  or 
right  of  a fiduciary  character.” 

But  in  that  case  the  facts  did  not 
show  a deposit  for  a special  purpose, 
with  the  knowledge  and  consent  of  the 
bank,  but  only  a deposit  in  the  ordinary 
course  of  business.  In  such  a case 
the  authorities  are  uniform  that  the 
bank  has  the  right  to  set  off  its  notes 
against  the  deposits. 

In  Clark  vs.  Northampton  National 
Bank,  supra,  the  case  seems  to  have 
turned  on  a finding  of  fact  by  the  lower 
court.  The  court  said  as  follows: 

“The  amount  of  the  notes  is  to  be 
set  off  against  the  balance  due  on  ac- 
count of  the  deposits  at  the  time  of 
the  commencement  of  the  proceedings 
in  bankruptcy,  unless  the  deposits  made 
after  March  8,  1892,  were  to  be  con- 


strued as  made  with  a view  to  give  a 
preference  or  to  effect  a fraudulent 
transfer  of  property,  contrary  to  the 
statute  relating  to  insolvency,  or  as 
made  upon  a trust  for  the  creditors. 
Whether  these  deposits  were  made  in 
violation  of  either  section  96  or  sec- 
tion 98  of  chapter  157  of  the  Public 
Statutes  was  a question  of  fact,  and 
the  court,  trying  the  case  without  a 
jury,  has  found  that  they  were  not  so 
made.  On  the  facts  found  by  the 
court,  the  rulings  on  this  part  of  the 
case  were  right. 

“We  are  not  certain  that  the  excep- 
tions set  out  all  the  evidence.  Enough, 
however,  is  recited  to  show  that  the 
plaintiff  had  some  ground  to  contend 
that  after  March  8th  the  bank  knew 
that  the  business  of  the  Florence  Tack 
Company  was  being  carried  on  with  a 
view  of  converting  its  assets  into  cash 
for  the  benefit  of  its  creditors,  and 
that  the  company  must  either  effect  a 
compromise  with  its  creditors  or  go  into 
insolvency.  The  money  received  after 
March  8th  ought  perhaps  to  have  been 
specially  deposited;  but  this  was  not 
done,  and  the  account  of  the  tack  com- 
pany with  the  bank  continued  unchanged 
in  form.  There  is  evidence  that 
the  defendant's  cashier  understood  that, 
after  March  8,  checks  were  to  be  drawn 
only  to  ‘pay  the  help'  of  the  company; 
but  there  is  also  evidence  that  checks 
were  in  fact  drawn  for  other  purposes 
and  were  paid.  There  appears  to  be 
no  doubt  that  the  officers  of  the  bank 
knew  of  the  insolvency  of  the  company 
on  March  8.  Still  it  is  a question  of 
fact  whether  the  transactions  between 
the  company  and  the  bank  after  March 
8,  were  had  under  an  implied  contract 
or  understanding  on  the  part  of  both 
parties  different  from  that  which  exist- 
ed before.  The  [lower]  court  has  in 
effect  found  that  after  March  8th  the 
money  continued  to  be  deposited  and 
checks  to  be  drawn  on  the  same  under- 
standing as  that  which  existed  before 
that  time;  that  is,  upon  the  understand- 
ing that  the  relation  of  the  parties  con- 
tinued to  be  the  ordinary  one  of  a de- 
positor with  a bank  of  discount  and  de- 
posit. We  cannot  say,  as  a matter  of 


Digitized  by  t^ooQle 


24 


THE  BANKERS  MAGAZINE 


law,  that  this  finding  was  wrong.  It 
was  for  the  court  below  to  draw  the 
proper  inferences  of  fact,  and  the  ex- 
ceptions disclose  no  errors  of  law.” 

In  Lowell  vs.  International  Trust 
Co.,  supra,  it  was  said: 

“Portions  of  the  propositions  submit- 
ted to  us  by  the  trustee  allege  that  the 
bankrupt  had  been  insolvent  for  a con- 
siderable time,  and  that  during  that 
period  it  had  been  struggling  along 
with  its  business,  with  some  support 
from  its  creditors,  and  with  an  under- 
standing between  the  International 
Trust  Company  and  some  other  cred- 
itors, by  virtue  of  which  all  of  them, 
including  the  International  Trust  Com- 
pany, should  receive  certain  pro  rata 
benefits  out  of  whatever  funds  might 
come  from  the  Thomas  & Pike  Coal 
Company.  Therefore,  it  is  claimed 
that  the  funds  now  sued  for  are  held 
by  the  International  Trust  Company  in 
a quasi  trust,  enforceable  by  the 
trustee.” 

The  court  held:  “A  trustee  in  bank- 

ruptcy has  no  interest,  which  he  can 
enforce  for  the  benefit  of  the  general 
creditors,  in  an  arrangement  between 


the  bankrupt  and  certain  creditors,  by 
which  money  deposited  with  one,  which 
was  a bank,  was  to  be  held  in  trust  and 
distributed  pro  rata  between  them,  and 
which  was  not  prohibited  by  the  bank- 
ruptcy statute.” 

The  facts  appearing  in  Lowell  vs* 
International  Trust  Co.  are  very  dif- 
ferent from  the  facts  presented  on  the 
present  record.  There  the  trustee  was 
seeking  to  enforce  a contract  between 
the  bankrupt  and  certain  creditors.  In 
the  present  instance  the  fund  was  ac- 
cumulated in  defendant  bank  for  the 
benefit  of  all  the  creditors,  and  the 
bank  had  become  a party  to  the  ar- 
rangement. In  the  present  case  the 
trustee  clearly  has  a right  to  recover  a 
fund  which  had  been  deposited  by  the 
bankrupt  for  the  benefit  of  all  the 
creditors. 

We  are  therefore  of  opinion  that  the 
bank  is  estopped,  by  its  conduct  and  by 
its  agreement  with  the  other  creditors, 
from  asserting  any  right  to  a set-off 
against  the  funds  derived  from  the  sales 
of  the  stock  of  the  furniture  company, 
and  that  the  decree  of  the  chancellor  so 
holding  was  correct;  and  the  same  is 
affirmed. 


NOTES  ON  CANADIAN  CASES  AFFECTING  BANKERS 

[Edited  by  John  Jennings.  B.A..  L.L.B.,  Barrister,  Toronto] 


BANK  AND  BANKING— INSOL- 
VENT BANK  TAKEN  OVER  BY 
ANOTHER  BANK— AGREE- 
MENT AS  TO— VALIDITY  OF 
AGREEMENT— POWER  OF  DI- 
RECTORS TO  MAKE  AGREE- 
MENT-BANK ACT , 8.s.  99-11L 

IN  THE  MATTER  OF  THE  ONTARIO  BANK 
AND  BANK  OF  MONTREAL  (15  O.  W. 

R.,  p.  913). 

The  Bank  of  Montreal  at  the  request  of 
the  Ontario  Bank  undertook  to  meet  the 
liabilities  of  the  latter  as  they  fell  due,  and 
in  order  to  assist  the  Bank  of  Montreal  to 
do  so  the  Ontario  Bank  agreed  to  hand 
over  its  available  commercial  assets  for  that 
purpose,  the  Bank  of  Montreal  having  full 
authority  to  realize  upon  these  assets  as 
it  might  see  fit.  The  Ontario  Bank  war- 
ranted that  the  assets  handed  over  were 
worth  $16,249,080.46  and  that  the  notes  and 


other  liabilities  of  the  bank  did  not  exceed 
$15,272,271.22.  The  Ontario  Bank  agreed 
to  place  its  office,  staff,  etc.,  at  the  dis- 
posal of  the  Bank  of  Montreal  and  do  all 
in  its  power  to  carry  out  the  terms  of  the 
agreement.  The  advances  of  the  Bank  of 
Montreal  were  to  bear  interest  at  the  rate 
of  six  per  cent.,  and  if  there  were  a sur- 
plus after  payment  of  the  liabilities  it  was 
to  credit  the  Ontario  Bank  on  the  final 
adjustment  of  accounts  with  $150,000  for 
the  indirect  benefit  received.  The  principal 
objection  to  the  validity  of  the  agreement 
urged  was  that  it  was  in  reality  a transac- 
tion of  sale  by  the  Ontario  Bank,  and  a 
purchase  by  the  Bank  of  Montreal,  of  the 
assets  of  the  first  named  bank;  and  that 
it  fell  within  the  provisions  of  secs.  99  and 
111,  inclusive,  of  the  Bank  Act,  and  was 
not  legally  made  or  consummated  in  ac- 
cordance wth  these  provisions,  and  was  ul- 
tra vires. 

The  official  referee  held,  that  the  agree- 
ment was  binding  upon  the  Ontario  Bank 
and  its  shareholders.  Britton,  J.,  affirmed 


Digitized  by  t^ooQle 


BANKING  LAW 


25 


the  referee  in  order  that  an  appeal  might 
be  taken  to  the  Court  of  Appeal. 

The  Court  of  Appeal  held,  that  the 
transaction  was  beneficial  and  advantageous 
alike  to  depositors,  holders  of  bills  and 
notes  in  circulation,  and  to  the  other  credit- 
ors, and  to  the  shareholders,  and  that  in 
the  actual  working  out  it  enabled  the 
property  and  assets  of  that  bank  to  be 
dealt  with  and  realized  without  the  very 
serious  sacrifice,  which  but  for  the  arrange- 
ments made,  would  have  been  inevitable. 

'T'HIS  was  an  appeal  by  the  liquida- 
tor  of  the  Ontario  Bank  and  by 
W.  J.  McFarland  and  others,  share- 
holders, of  the  bank,  from  an  order  of 
the  Hon.  Mr.  Justice  Britton,  whereby 
he  affirmed  the  decision  of  the  official 
referee  with  respect  to  the  mode  of 
proof  of  claim  preferred  by  the  Bank 
of  Montreal  as  a creditor  of  the  On- 
tario Bank.  The  appeal  was  heard 
by  the  Court  of  Appeal  (Sir  Charles 
Moss,  C.J.O. ; Osier,  Garrow  and  Mac- 
laren,  J.J.A.). 

The  judgment  of  the  Chief  Justice  is 
as  follows:  In  course  of  the  enquiry 

by  the  official  referee  into  the  claim  of 
the  Bank  of  Montreal  as  a creditor  of 
the  Ontario  Bank,  a question  was 
raised  as  to  the  form  of  the  claim,  and 
as  to  the  nature  of  the  proof  in  sup- 
port of  it,  turning  upon  the  terms  of  a 
certain  agreement  between  the  banks, 
the  validity  of  which  was  questioned  on 
behalf  of  certain  shareholders.  And, 
as  appears  from  the  referee's  certifi- 
cate, he  with  the  consent  of  counsel 
representing  all  parties  concerned,  pro- 
ceeded to  determine  in  limine  the  ques- 
tion whether  or  not  the  agreement  in 
question  was  valid  and  binding  in  whole 
or  in  part  upon  the  Ontario  Bank  and 
its  shareholders  and  he  determined  and 
found  that  it  was  valid  and  binding  so 
as  to  form  a sufficient  basis  for  taking 
the  account. 

The  principal  and  indeed  the  only 
substantial  objection  to  the  validity  and 
binding  effect  of  the  agreement,  urged 
on  behalf  of  the  appellants,  was  that  it 
was  in  reality  a transaction  of  sale  by 
the  Ontario  Bank,  and  a purchase  by 
the  Bank  of  Montreal,  of  the  assets  of 
the  first-named  bank,  and  that  it  fell 
within  the  provisions  of  secs.  99  to  111, 


inclusive  of  the  Bank  Act,  and  was  not 
legally  made  or  legally  consummated  in 
accordance  with  those  provisions,  and 
was  ultra  vires.  The  referee  was  of 
opinion  that  the  transaction  did  not 
fall  within  tjie  provisions  of  those  sec- 
tions, that  it  was  an  arrangement  which 
was  within  the  powers  of  the  board  of 
directors  to  enter  into ; that  it  was  bind- 
ing, and  that  the  Bank  of  Montreal 
was  entitled  to  make  proof  of  its  claim 
against  the  estate  of  the  Ontario  Bank 
upon  the  footing  of  it. 

It  is  of  course  common  ground  that 
the  transaction  in  question  was  not  car- 
ried through  in  conformity  with  the 
requirements  of  the  above  mentioned 
sections  of  the  Act.  The  question  is 
whether  it  was  of  such  a character  as 
to  call  for  compliance  with  those  re- 
quirements. 

In  considering  the  question  and  view- 
ing the  circumstances  attending  and 
surrounding  the  entering  into  the  agree- 
ment in  question,  the  first  thing  that 
strikes  one  as  very  apparent  is  that 
there  is  no  intention  on  the  part  of  any 
of  the  parties  concerned  to  enter  into 
and  carry  out  a transaction  which  would 
involve  recourse  to  the  provisions  of 
these  sections. 

The  circumstances  under  which  it  was 
entered  into;  the  utter  inability  of  the 
Ontario  Bank  to  make  immediate  pro- 
vision of  meeting  or  redeeming  the  cir- 
culation, the  failure  of  efforts  towards 
an  arrangement  for  amalgamation  with 
the  Royal  Bank  of  Canada,  the  obvious 
impossibility  of  inducing  any  bank 
with  knowledge  of  the  condition  of  af- 
fairs to  enter  into  any  such  arrange- 
ment, and  the  urgent  necessity  for 
speedy  and  effective  action,  the  only 
means  by  which  the  effects  of  the  im- 
pending calamity  could  be  minimized 
and  made  to  entail  the  least  possible  loss 
to  the  shareholders,  repel  any  such  no- 
tion. It  is  manifest  that  nothing  was 
further  from  the  minds  of  the  parties 
than  the  intention  at  this  time  when 
prompt  and  immediate  measures  were 
imperatively  called  for,  to  do  some- 
thing which  would  have  the  effect  of 
tieing  up  all  the  affairs  of  the  bank 
until  the  sanction  of  the  shareholders 


Digitized  by  t^ooQle 


26 


THE  BANKERS  MAGAZINE 


and  the  governor-in-council  could  be 
obtained. 

It  is  abundantly  clear  that  the  trans- 
action was  beneficial  and  advantageous 
alike  to  the  depositors,  the  holders  of 
bills  and  notes  in  circulation  and  the 
other  creditors  and  to  the  shareholders 
and  that  in  its  actual  working  out  it 
has  enabled  the  property  and  assets  of 
that  bank  to  be  dealt  with  and  realized 
without  the  very  serious  sacrifice  that 
but  for  the  arrangements  made  would 
have  been  inevitable.  That  in  enter- 
ing into  it  the  directors  acted  in  good 
faith,  and  in  what  they  believed  to  be 
the  best  interests  of  the  bank  and  its 
shareholders,  seems  beyond  question. 
Was  it  one  within  the  scope  of  their 
powers  and  authority? 

The  arrangement  is  evidenced  by  the 
instrument  dated  October  13,  1906,  un- 
der the  corporate  seals  of  the  respective 
banks.  And  from  it  must  be  gathered, 
if  it  is  to  be  gathered  anywhere,  the  con- 
clusion that  the  transaction  was  as  con- 
tended for  by  the  appellants.  A fair 
reading  of  the  whole  instrument,  giving 
to  each  part  its  proper  effect  in  relation 
to  the  remainder,  and  bearing  in  mind 
the  evident  object  and  intention  of  the 
parties  leaves  no  reasonable  doubt  as  to 
its  meaning  and  effect. 

The  strongest  ground  in  favor  of  the 
appellants'  contention  is  the  use  in  No. 
2 of  the  operative  clauses  of  the  ex- 
pression “purchase  by  way  of  discount 
and  of  rediscount  at  the  rate  of  six  per 
cent."  But  if  these  words  are  incon- 
sistent with  the  general  aim  and  scope 
of  the  instrument,  not  much  force  is  to 
be  attributed  to  them,  and  they  should 
not  be  permitted  to  govern. 

But  in  truth  they  are  not  inconsistent, 
for  they  merely  describe  a species  of 
dealing  with  a particular  class  of  se- 
curities which  is  quite  as  consistent 
with  a pledge  as  an  absolute  sale.  It 
was  just  as  necessary  for  the  purposes 
of  a pledge  for  advances  as  for  the  pur- 
pose of  a sale  out  and  out  that  the  prop- 
erty in  and  control  of  the  securities 
should  be  vested  in  the  Bank  of  Mon- 
treal. And  to  speak  of  a purchase  by 
way  of  discount  is  simply  to  state  the 
effect  in  law  of  discounting. 


In  Hart  on  Banking,  2nd  ed.,  p.  617, 
it  is  said  that  it  is  convenient  to  bear 
in  mind  that  the  word  “discount"  is 
often  used  in  very  elastic  and  compre- 
hensive sense.  This  is  followed  by  a 
quotation  from  the  judgment  of  Mr. 
Justice  Story  in  the  well  considered  case 
of  Flecker  vs.  Bank  of  the  United 
States,  21  U.  S.  R.  (8  Wheaton)  338, 
at  p.  350,  in  which  occurs  the  follow- 
ing passage:  “If  therefore  the  dis- 

counting of  a promissory  note  accord- 
ing to  the  usage  of  banks  be  a pur- 
chase . . . it  is  a purchase  by  way 

of  discount."  In  an  earlier  passage  he 
observed,  “But  in  what  manner  is  the 
bank  to  loan?  What  is  it  to  discount? 
Has  it  not  a right  to  take  as  evidence 
of  the  debt  which  arises  from  the  loan? 
If  it  is  to  discount,  must  there  not  be 
some  chose  in  action,  or  written  evi- 
dence, of  a debt  payable  at  a future 
time  which  is  to  be  the  subject  of  the 
discount?" 

In  these  passages  the  learned  Judge 
appears  to  fairly  describe  what  was 
contemplated  in  the  purchase  by  way  of 
discount  and  rediscount  set  forth  in  the 
second  clause  of  the  agreement.  Every 
other  clause  is  consistent  with  the  idea 
of  advances,  and  some  are  entirely  at 
variance  with  the  notion  of  a sale  of 
assets  and  nothing  more.  Many  of  the 
ordinary  elements  of  a sale  and  pur- 
chase are  not  to  be  found  which  it  is 
inconceivable  would  be  omitted  if  that 
was  the  intention. 

The  power  of  persons  carrying  on 
the  business  of  banking  to  obtain  ad- 
vances and  to  transfer  by  way  of  pledge 
such  assets  and  securities  as  are  re- 
quired, has  been  long  recognized.  It  is 
a necessary  incident  of  the  business  of 
banking.  To  repeat  the  language  of 
the  learned  author  of  Lindley  on  Com- 
panies, at  p.  289,  of  the  6th  ed.,  quoted 
by  the  referee.  “A  power  to  borrow  is 
so  necessary  to  a banking  company  that 
its  directors  can  scarcely  be  deprived  of 
it;  and  there  are  several  cases  in  the 
books  in  which  their  power  was  held  to 
have  been  exercised  so  as  to  bind  the 
company."  Some  of  these  cases  have 
been  referred  to  by  the  referee  and  in 
particular  the  decision  of  the  judicial 


Digitized  by  t^ooQle 


BANKING  LAW 


27 


committee  of  the  Privy  Council  in  the 
case  of  Bank  of  Australasia  vs.  Breillat 
(1847)  6 Moo.  P.  C.  152.  The  plaint- 
iff bank  in  that  case  was  not  consti- 
tuted nor  were  its  powers  defined  by 
statute,  as  in  the  case  of  Canadian 
banks.  But  there  is  nothing  in  the 
Bank  Act  which  affects  or  controls  that 
general  power  which  is  really  a part 
of  the  general  law  merchant. 

As  the  referee  has  pointed  out,  a bank 
in  addition  to  all  the  specific  matters  set 
forth  in  sec.  76  of  the  Bank  Act,  is  au- 
thorized to  engage  in  and  carry  on  such 
business  generally  as  appertains  to  the 
business  of  banking.  And,  by  secs.  19 
and  29,  the  board  of  directors  is  in- 
vested with  wide  and  extensive  powers 
of  management  and  disposition  over  the 
stock,  property,  affairs  and  concerns  of 
the  bank,  and  over  all  such  matters  as 
appertain  to  the  business  of  a bank. 

These  properly  and  naturally  draw 
to  them  the  essential  power  and  au- 
thority to  take  such  steps  as  may  seem 
necessary  to  protect  the  interests  of  the 
bank,  and  amongst  others  to  obtain  such 
advances  as  may  appear  to  be  called  for 
by  the  necessities  of  the  occasion. 

It  was,  therefore,  not  beyond  the 
power  of  the  Ontario  Bank  or  the  au- 
thoritv  of  its  board  of  directors  to  en- 
ter into  an  arrangement  with  the  Bank 
of  Montreal,  whereby  that  bank  should 
advance  the  funds  necessary  to  meet 
the  calls  made  upon  the  other  and  to 
enter  into  such  suitable  and  necessary 
arrangements  as  were  proper  to  secure 
the  reimbursement  of  such  advances. 

And  such  was  and  is  the  nature  of 
the  agreement  in  question.  If  that  be 
so  it  seems  unnecessary  to  enquire 
whether  some  of  its  provisions  were  such 
as  could  be  enforced  against  the  On- 
tario Bank. 

They  appear  to  have  been  designed 
with  a view  of  conserving  the  resources 
of  the  Ontario  Bank  and  disposing  in 
the  most  advantageous  manner  of  the 
available  assets.  The  objections  made 
to  them  appear  to  be  satisfactorily  dealt 
with  and  disposed  of  by  the  referee 


and  there  appears  to  be  no  reason  for 
differing  with  him  in  his  conclusions. 

The  appeal  fails  and  should  be  dis- 
missed. 


PROMISSORY  NOTE— PROCURE- 
MENT OF  SIGNATURES  OF 
MAKERS  BY  FRAUD— DIS- 

COUNT BY  BANK— PAYMENT 
MADE  ON  ACCOUNT  BY  PER- 
PETRATOR OF  FRAUD  BE- 
FORE MA  TURITY— HOLDER 

IN  DUE  COURSE— ACQUISI- 
TION BY  PLAINTIFFS  FROM 
BANK— LIABILITY  OF  MAK- 
ERS CONFINED  TO  BALANCE 
PAID  TO  BANK  BY  PLAINTIFF 
—NO  TICE  OF  FRA  UD— CIR- 
CUMSTANCES PUTTING 
PLAINTIFFS  ON  ENQUIRY- 
LIABILITY  OF  PAYEE  TO  IN- 
DEMNIFY MAKERS— COSTS. 

GRAHAM  VS.  DRIVER  (l  O.  W.  N.,  p. 

767). 

'T'HIS  was  an  action  to  recover  the 
amount  due  on  a promissory  note 
for  $1,500,  made  by  the  defendant,  in 
which  the  defendants  other  than  Fos- 
sett  claimed  indemnity  from  Fawcett 
againsjt  their  liability  to  the  plaintiffs. 
The  note  had  been  discounted  by  Faw- 
cett at  the  Traders  Bank  of  Canada  at 
North  Bay  and  was  obtained  by  the 
plaintiffs  from  that  bank.  The  de- 
fence was  that  the  note  was  obtained 
from  the  defendants  through  the  fraud 
of  Fawcett  and  that  the  defendants 
were  affected  with  notice  of  the  fraud. 
Fawcett  was  the  owner  of  a stallion 
which  he  was  endeavoring  to  sell  to  a 
syndicate  of  farmers  and  obtained  their 
signatures  to  the  note  in  question  by 
fraudulent  representation  in  each  case 
that  they  were  signing  an  application 
for  one  share  of  $100  in  a syndicate  of 
fifteen  persons,  to  be  formed  for  the 
purchase  of  the  horse. 

Judgment  (Teetzel,  J.):  I find 

upon  the  evidence  that  all  the  defend- 
ants (other  than  Fawcett)  were  induced 
to  sign  the  paper  in  question  upon  the 
false  and  fraudulent  representation  of 
Fawcett  and  that  none  of  them  was 


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28 


THE  BANKERS  MAGAZINE 


aware  that  he  was  signing  a promissory 
note  for  $1,500  and  that  by  reason  of 
the  fraud  practiced  by  Fawcett,  the 
paper  which  purports  to  be  a promis- 
sory note  was  not  a valid  promissory 
note  in  his  possession  as  against  any  of 
the  defendants. 

Almost  immediately  after  Fawcett 
had  obtained  the  signatures  to  the  note, 
he  discounted  it  at  the  Traders  Bank 
at  North  Bay,  and  received  the  pro- 
ceeds thereof.  Some  of  the  defendants 
learned  of  this  fact  the  next  day  after 
the  note  was  discounted,  and  immedi- 
ately thereupon  caused  an  information 
to  be  laid  against  Fawcett,  charging 
him  with  obtaining  the  note  by  fraud 
and  false  pretences.  Fawcett  was 
brought  before  the  Magistrate  at  North 
Bay  and,  after  some  evidence  had  been 
given,  the  case  was  adjourned  and  his 
counsel  proposed  to  take  up  the  note 
at  the  bank  and  have  it  surrendered  to 
the  defendants,  and  on  July  9,  1904, 
the  note  being  dated  June  27,  1904, 
payable  ten  months  after  date,  Faw- 
cett paid  to  the  bank  on  account  of  the 
note,  two  sums  of  $599-25  and  $200, 
which  payments  were  indorsed  upon  the 
note  over  the  initials  of  the  acting  man- 
ager, and  Fawcett  promised  that  he 
would,  in  a few  days,  pay  the  balance 
to  the  bank,  so  that  the  note  could  be 
returned  to  the  defendants. 

The  criminal  proceedings  were  ad- 
journed from  time  to  time,  and  were 
eventually  dismissed. 

Instead,  however,  of  Fawcett  paying 
the  balance  upon  the  note,  he  proceeded 
to  arrange  to  have  it  taken  up  by  the 
plaintiffs.  In  September,  1905,  the 
plaintiffs  paid  to  the  bank  the  balance 
of  the  note,  less  the  two  sums  of 
$599-25  and  $200,  and  paid  the 
$799-25,  less  the  discount  charges,  to 
Fawcett. 

The  bank  were  undoubtedly  holders 
in  due  course,  within  the  meaning  of 
section  56  of  the  Bills  of  Exchange 
Act. 

Sec.  57  of  the  Act  provides  that  “a 
holder  whether  for  value  or  not,  who 
derives  his  title  to  a bill  through  a 
holder  in  due  course,  and  who  is  not 
himself  a party  to  any  fraud  or  any 


illegality  affecting  it,  has  all  the  rights 
of  that  holder  in  due  course  as  regards 
the  acceptor  and  all  parties  to  the  bill 
prior  to  that  holder/* 

There  is  no  pretence  for  saying  that 
the  plaintiffs  were  parties  practised 
upon  the  defendants  by  Fawcett,  so 
that  undoubtedly  whatever  rights  the 
bank  possessed  at  the  time  of  the  de- 
livery over  of  the  note  to  the  plaintiffs, 
the  plaintiffs  thereupon  acquired.  The 
only  interest  that  the  bank  had  in  the 
note  at  the  time,  was  the  balance  of 
$700.75  remaining  unpaid. 

The  plaintiffs,  however,  claimed  to 

recover  not  only  the  amount 

they  paid  to  the  bank,  but  the  $799*25 
paid  to  Fawcett.  I think  their  right  to 
claim  the  latter  sum  depends  on 
whether  or  not  they  were  affected  by 
notice  of  the  infirmity  of  Fawcett’s 
rights  under  the  notes,  as  it  does  not 
appear  to  me  competent  for  the  plaint- 
iffs to  rely  upon  the  title  of  the  bank 
to  the  note  for  any  amount  beyond  the 
balance  due  to  the  bank  at  the  time  the 
note  was  delivered  to  the  plaintiffs. 

It  was  Fawcett,  and  not  the  bank, 
who  induced  the  plaintiffs  to  take  over 
and  rediscount  the  note,  and  when  the 
note  was  presented  to  the  plaintiffs 
through  the  agent  of  the  bank  at  Allis- 
ton,  it  bore  the  indorsement  of  the  two 
payments  above  mentioned ; and  the 
examination  of  the  plaintiff,  Knight, 
discloses  that  he  was  made  aware  that 
these  payments  had  been  made  by  Faw- 
cett in  consequence  of  some  trouble 
that  had  arisen  between  himself  and 
the  makers,  and  that  the  payments  and 
indorsement  had  been  made  after  the 
note  was  discounted.  He  said  that  Faw- 
cett had  explained  that  there  had  been 
some  dissatisfaction  by  the  makers,  that 
he  knew  the  note  was  given  in  payment 
for  a horse,  and  that  with  the  luiowl- 
edge  that  the  payments  had  been  made 
in  consequence  of  some  trouble  between 
Fawcett  and  the  makers,  he  caused  his 
solicitors  ...  to  enquire  into  what 
the  trouble  was  . . . and  . . . 

he  learned,  as  he  says,  that  they  were 
trying  to  go  very  far  with  Mr.  Faw- 
cett in  the  matter — “I  understood  the 
makers  were  taking  some  action  against 


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BANKING  LAW 


29 


Mr.  Fawcett.”  He  does  not  say  that 
he  heard  Fawcett  had  been  arrested, 
but  I think  the  fair  inference  is,  that 
both  he  and  his  solicitors  were  aware  of 
this  fact  before  he  paid  over  any  money 
on  the  note.  . . . He  believed  there 

was  no  foundation  for  the  trouble,  as 
he  had  confidence  in  Mr.  Fawcett. 

I think  the  facts  and  circumstances 
. . . establish  that  the  plaintiffs 

before  they  acquired  the  note  were 
aware  that  the  defendants  had  charged 
Fawcett,  in  a criminal  proceeding,  with 
having  obtained  the  note  by  false  pre- 
tences and  fraud,  and  if,  after  that, 
the  plaintiffs  without  communicating 
with  the  alleged  makers  of  the  note, 
chose  to  acquire  it,  I think  it  must  be 
held  that  they  acquired  it  under  such 
circumstances  as  to  affect  them  with 
knowledge  of  the  facts  destroying  the 
validity  of  the  note  as  against  the  de- 
fendants. . . . The  plaintiffs,  when 

they  took  the  note,  were  under  the  cir- 
cumstances under  which  the  note  was 
given,  and  they  therefore  were  affected 
with  notice  of  the  illegality  of  the  note, 
and  therefore  as  to  the  interest  in  the 
note  acquired  from  Fawcett,  the  plaint- 
iffs are  not  holders  in  due  course. 

It  was  urged  by  Mr.  Johnston  that 
the  $799-25  paid  by  Fawcett  was  paid 
as  security  for  his  bail,  and  was  in- 
tended to  be  held  as  bail  for  his  ap- 
pearance before  the  Magistrate;  but  I 
find  . . . that  the  money  was  not 

paid  as  bail,  but  was  paid  directly  to 


the  bank  on  account  of  the  note,  and 
was  intended  to  be  credited  on  the  note 
as  payment  in  part  discharge  of  it. 

Whether  the  payment  was  made  un- 
der such  circumstances  as  would  amount 
to  duress  does  not  seem  to  me  to  affect 
the  question  of  the  plaintiffs*  right  to 
disregard  it  as  a payment  actually 
made  by  Fawcett.  . . . He  never 

pretended  to  them  that  the  payment 
was  void  because  of  duress  or  that  it 
was  a deposit  for  bail. 

As  between  the  plaintiffs  and  de- 
fendants, the  judgment  will  therefore 
be  in  favor  of  the  plaintiffs  for  $700.75 
and  interest  from  June  27,  1904,  at  six 
per  cent,  per  annum  until  April  30, 
1905,  and  at  five  per  cent,  per  annum 
since  that  date. 

Now  as  to  the  claim  by  the  defending 
defendants  against  Fawcett  who  suf- 
fered judgment  in  favor  of  the  plaint- 
iffs by  default,  I am  of  the  opinion 
that,  the  defendants*  loss  having  been 
occasioned  solely  by  the  fraud  of  Faw- 
cett, they  are  entitled  to  judgment 
against  him,  indemnifying  them  against 
the  amount  recoverable  against  them 
under  this  judgment  by  the  plaintiffs 
and  also  against  their  costs  of  defend- 
ing this  action,  together  with  costs  of 
the  issue  between  them  and  him. 

As  between  the  plaintiffs  and  the  de- 
fending defendants,  I think  there 
should  be  no  costs  of  this  action,  as 
each  has  only  had  a partial  success. 


REPLIES  TO  LAW  AND  BANKING  QUESTIONS 

Qiattiom  In  Banking  Law —submitted  by  subscribers — which  may  be  of  sufficient  general  Interest 
to  wsrrant  publication  will  be  answered  in  this  department 


RIGHT  OF  ADMINISTRATOR  TO 
DEPOSIT  TRUST  FUNDS  IN 
HIS  OWN  NAME 

Brooklyn,  N.  Y.,  June  10,  1910. 
Editor  Bankers  Magazine: 

Dear  Sir:  The  following  point  came  up 
■between  a friend  and  myself,  both  of  us 
clerks  in  a bank.  If  John  Brown,  person- 
ally known  to  the  bank,  should  present  let- 
ters of  administration  and  a State  Comp- 
troller’s waiver  for  the  account  of  Mary 
Brown,  and  receive  the  balance  due  in  full 
In  cash  upon  his  receipt  as  administrator, 
and  then  turn  the  cash  back  into  the  bank 


and  open  an  account  in  his  own  name,  can 
the  bank  accept  the  account  and  not  be 
liable  to  the  estate? 

Yours  very  truly, 

J.  G.  L. 

Answer:  An  administrator  has  the 

right  to  the  possession  of  the  funds  of 
the  estate,  and,  while  it  is  customary  for 
executors  and  administrators  to  open 
bank  accounts  in  their  names  as  such — 
and  this  is  always  required  when  a 
surety  company  is  on  the  bond — yet 
there  is  no  rule  of  law  that  makes  this 


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30 


THE  BANKERS  MAGAZINE 


course  indispensable.  An  administrator 
may,  without  violating  any  rule  of  law, 
open  the  account  in  his  individual  name, 
though  he  must  not  mingle  therein  his 
own  funds  with  those  of  the  estate.  And 
in  paying  his  checks  the  bank  may  pre- 
sume that  he  is  discharging  his  duties, 
unless  it  has  some  notice  that  he  is  mis- 
applying  the  trust  fund.  If,  for  ex- 
ample, he  should  make  one  of  his  own 
notes  payable  at  the  bank,  then  very 
plainly  the  use  of  the  money  to  pay  that 
note  would  be  a waste  of  the  estate,  and 


as  this  would  be  obvious  to  the  bank 
itself,  it  would  be  liable  for  any  of  the 
money  applied  by  it  to  that  purpose. 
In  allowing  an  administrator  to  open  an 
account  in  his  individual  name,  the  bank 
would  always  run  the  risk  of  being 
charged  with  notice  of  any  misapplica- 
tion, and  hence  the  only  safe  course  is 
for  it  to  require  that  the  account  be  kept 
in  the  name  of  the  administrator  as 
such.  The  customary  form  is:  Estate 

of  A,  B administrator. 


FOREIGN  BANKING  AND  FINANCE 

Conducted  by  Charles  A.  Conant 


BANKING  AND  HOARDING  IN  INDIA 


' I 'REMENDOUS  sums  of  gold  and 
**■  silver  are  known  to  be  hoarded 
in  India,  and  but  little  use  is  made  of 
these  metals  by  the  natives  as  a basis 
for  bank  credits,  as  it  is  the  custom  with 
the  more  advanced  nations.  Comment- 
ing on  the  conditions  in  India  a recent 
number  of  the  London  Statist  says: 

“The  people  of  India,  speaking  gen- 
erally, are  entirely  devoid  of  all  bank- 
ing facilities.  There  are,  of  course, 
Presidency  banks  which  cater  for  the 
commercial  community,  and  there  are 
exchange  banks  which  serve  the  foreign 
trade.  But,  speaking  generally  and 
broadly,  banking  is  quite  unknown  to 
the  Indians  outside  the  great  towns. 
The  agricultural  population,  which 
practically  is  the  Indian  population,  has 
to  depend  almost  altogether  for  banking 
accommodation  upon  village  usurers, 
though  quite  recently  people's  banks 
have  been  introduced  here  and  there. 
Over  and  above  this,  from  time  imme- 
morial, India  has  hoarded  gold  and  sil- 
ver. Sometimes  immense  sums  in  ac- 
tual coin  are  hoarded,  but  most  general- 
ly the  practice  is,  with  regard  to  the 
small  people,  to  put  their  savings  in  the 
form  of  ornaments  to  deck  out  their 
women-folk.  The  accumulation  of  sav- 
ings or  hoardings  must  be  almost  in- 


credible. On  November  26,  1892,  we 
published  in  this  journal  a table  show- 
ing that  in  the  thirty-three  years  ended 
with  the  preceding  March  there  had 
been  imported  into  India  and  kept  in 
the  form  of  gold  and  silver  the  enor- 
mous aggregate  of  <£356,32 1,000.  Now 
hoarding  had  been  going  on  from  time 
immemorial  before  that,  and  has  been 
going  on  ever  since.  Therefore,  the 
mass  of  gold  and  silver  accumulated  in 
private  hoards  of  all  kinds  must  be  in- 
credibly great.  But  it  is  hardly  neces- 
sary to  point  out  that  this  habit  of 
hoarding  is  uneconomical  in  the  last 
degree.  The  amount  of  gold  and  sil- 
ver accumulated  during  the  thirty- 
three  years  just  referred  to  was  at  the 
rate  of  over  ten  and  three-quarter  mil- 
lions sterling  per. annum.  It  is  obvious 
that  if  that  vast  sum  had  been  laid  out 
in  enterprise  it  would  have  immensely 
improved  the  condition  of  the  people; 
whereas,  hoarded  mainly  as  ornaments, 
it  served  no  other  purpose  than  to 
gratify  feminine  vanity.  Still,  it  is  im- 
portant to  remember  that  there  is  in 
the  country  a hoard  of  the  precious 
metals  and  precious  stones  of  incredi- 
ble amount,  which  if  it  can  be  drawn 
forth,  may  in  the  future  prove  of  in- 
calculable benefit. 


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KNAIflH,  NACHOD  & KUHNE 

BANKERS 

NEW  YORK  LEIPZIG 

■ — MEMBEB8  NEW  YORK  STOCK  EXCHANOE  ■ = 

Dealers  In  High  Grade  Bonds 
Issue  Letters  of  Grodlt  and  Traveler’s  Checks 
Avallahle  Everywhere 
Foreign  Exohange  — Cable  Transfers 
Commercial  Credits 

Interest  Paid  on  Deposits  Subject  to  Check 


PRINCIPAL  CORRESPONDENTS 


ABROAD 

Parr's  Bank  (Limited)  London 
Credit  Lyonnais,  Paris 
Dresdaer  Bank,  Berlin 
Knauth.  Nachod  A Kahne,  Leipzig 


IN  THE  UNITED  STATES 
Corn  Exchange  Bank,  New  York 
Philadelphia  National  Bank,  Philadelphia 
First  National  Bank,  Chicago 
Crocker  National  Bank,  San  Francisco 


The  Elements  of  Foreign  Exchange 

BY  FRANKLIN  ESCHER 

A BOOK  FROM  WHICH  THE  MAN  WITHOUT 
TECHNICAL  KNOWLEDGE  CAN  POST  HIMSELF 


A short,  practical  treatise  on  foreign  exchange  designed  to  supply  the  need  for  a 
book  from  which  a working  knowledge  of  Foreign  Exchange  can  readily  be  obtained. 
Carefully  avoiding  technicalities  and  confusing  terms,  the  author  explains  his  subject 
in  language  so  simple  and  plain  that  it  can  be  understood  by  everybody. 

Why  exchange  rises  and  falls  as  it  does,  what  can  be  read  from  its  movements 
and  how  merchants  and  bankers  take  advantage  of  them,  the  effect  that  these  move- 
ments exert  on  the  other  markets — these  and  like  questions  are  taken  up  in  the  first 
part  of  the  book.  The  second  part  describes  intimately  the  practical  operation  of 
exchange  and  the  exchange  markets,  and  contains  special  chapters  on  arbitrage,  in- 
ternational trading  in  securities,  the  financing  of  export  and  imports,  gold  shipments, 
and  other  important  phases  of  the  subject. 

The  happy  combination  of  a thorough,  practical  training  in  foreign  exchange  and 
long  experience  In  lecturing  on  the  subject  at  New  York  University,  has  made  it 
possible  for  the  author  to  plan  and  write  his  book  In  such  a way  as  to  make  it  of  a 
great  value  both  to  the  practical  business  man  and  the  student. 


The  Bankers  Publishing  Company 


253  BROADWAY 


NEW  YORK 


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Google 


FOREIGN  BANKING  AND  FINANCE 


31 


JAPAN’S  IMPROVED  CREDIT 

'T'HE  success  of  the  new  Japanese 
^ five  per  cent.  $55,000,000  loan, 
which  was  issued  at  ninety-five,  serves 
to  call  attention  to  the  improved  credit 
of  Japan.  A recent  issue  of  the  Lon- 
don “Economist**  gives  the  following 
statistics  regarding  the  various  Jap- 
anese Government  issues,  the  figures 
being  stated  in  pounds  sterling: 


Year 

Rate  of 

Issue 

Present 

Issued. 

Amount.  Interest. 

Price. 

Price. 

1899... 

. 9,000,000 

4 

90 

96% 

1 902 . . . 

5,104,107 

5 

100 

101 

1904... 

4,075,000 

6 

93% 

. . 

1901... 

5,430,000 

6 

90% 

1905... 

13,500,000 

4% 

90 

99% 

1905... 

9,000,000 

4M* 

90 

99% 

1905... 

5,850,000 

4 

90 

96% 

1907... 

11,442,500 

5 

99% 

103% 

1910... 

. 10,450,000 

4 

95 

. . 

From  these  figures  it  will  be  seen 
that  in  addition  to  receiving  a fair  rate 
of  interest,  the  investors  in  Japanese 
Government  securities  have  reaped  a 
substantial  profit  through  the  apprecia- 
tion in  the  prices  of  their  securities. 

The  proceeds  of  the  new  loan  are  to 
be  applied  exclusively  to  the  conversion 
and  redemption  of  the  five  per  cent, 
war  loans  of  1895-96,  amounting  to 
43,000,000  yen,  and  the  50,000,000  yen 
loan  of  1901-02. 


BRITISH  CAPITAL  INVESTMENTS 

A CCORDING  to  the  London  Statist, 
British  investors  subscribed  in 
1909  for  a larger  quantity  of  new  se- 
curities than  in  any  previous  year,  and 
fully  reestablished  Great  Britain’s  po- 
sition as  the  world’s  banker.  In  1910, 
it  is  declared  by  the  same  authorities, 
British  investors  will  -provide  a still 
larger  amount  of  capital  for  new  enter- 
prises throughout  the  world  than  they 
did  last  year. 

The  amount  of  new  capital  sub- 
scribed in  the  whole  of  1907  was  £130,- 
000,000.  In  1908  the  total  rose  to 
$206,000,000,  in  1909  to  about  £214,- 
000,000,  and  now,  in  the  first  four 
months  of  1910,  the  subscriptions  have 
reached  £118,000,000. 

In  the  British  investments  placed  in 


foreign  countries  for  the  first  four 
months  of  the  current  year,  the  United 
States  leads  all  other  countries,  with 
£21,570,496,  or  more  than  one-third  of 
the  total  foreign  investments.  Argen- 
tina and  Brazil  follow  with  a little 
more  than  £7,000,000  each. 


CONVERSION  OF  THE  MEXICAN 
DEBT 

D ECENTLY  the  National  Bank  of 
Mexico  and  a syndicate  of  Ameri- 
can and  European  bankers  presented  to 
Finance  Minister  Limantour  a proposal 
to  convert  the  Mexican  Government’s 
five  per  cent,  foreign  debt  into  a new 
loan  bearing  four  per  cent.  The 
amount  of  the  debt  is  $218,000,000,  and 
it  represents  a consolidation  of  various 
loans  made  between  the  years  1888  and 
1893,  and  bearing  five  or  six  per  cent, 
interest,  the  consolidation  of  these 
loans  having  been  made  in  1899- 

The  conversion  will  effect  a consider- 
able saving  of  interest  and  will  afford 
another  striking  evidence  of  Mexico’s 
improving  credit  under  the  wise  admin- 
istration of  President  Diaz,  efficiently 
seconded  by  Finance  Minister  Liman- 
tour. 


BRITISH  CAPITAL  IN  ARGENTINA 

*T\ISCUSSING  this  subject  lately, 
the  Buenos  Aires  Herald  saysr 
“Many  attempts  have  been  made  in 
recent  years  to  estimate  the  total 
amount  of  British  capital  invested  in 
Argentina.  It  is,  of  course,  impossible 
to  arrive  at  anything  but  an  approxi- 
mate figure ; but  there  is  substantial 
ground  for  the  statement  that  the  ag- 
gregate sum  very  considerably  exceeds 
£300,000,000,  and  that  £350,000,000 
is  probably  nearer  the  mark.  At  the 
end  of  January,  1909,  it  was  calculated 
that  British  money  invested  in  Argen- 
tine securities  quoted  on  the  London 
Stock  Exchange  exceeded  £252,700,- 
000.  The  South  American  Journal  has 
revised  these  figures,  and  estimates  that 
at  the  end  of  last  year  the  total  of 
Argentine  securities  admitted  for  deal- 
ings on  the  London  Stock  Market  had 


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32 


THE  BANKERS  MAGAZINE 


increased  to  £280,722,000,  showing  an 
increment  of  £28,000,000  in  less  than 
twelve  months.  This  total,  naturally, 
does  not  represent  the  full  amount  of 
British  money  which  has  found  its  way 
to  the  Argentine;  but  it  affords  an  ex- 
cellent basis  of  calculation.  As  a mat- 
ter of  fact,  a small  proportion  of  the 
securities  quoted  in  London  may  be  held 
by  foreign  investors,  though  the  per- 
centage is  not  of  sufficient  importance 


to  necessitate  any  appreciable  deduc- 
tion for  present  purposes. 

“Of  the  total  of  £280,722,000,  a sum. 
of  £79,880,300  is  invested  in  the  bonds 
of  the  Argentine  National  Government 
and  the  State  authorities,  £167,014,500 
is  in  railway  stocks  and  bonds,  and 
£33,827,000  is  in  miscellaneous  under- 
takings; and  already  the  total  has  been 
considerably  augmented  since  the  calcu- 
lation was  made.”  - 


TRUST  COMPANIES 

Conducted  by  Clay  Herrick 


TRUST  COMPANIES  AND  THE  CENTRAL  BANK 


"DELIEVING  that  it  would  be  of  in- 
terest  to  the  readers  of  The 
Bankers  Magazine  to  know  the  feel- 
ing of  trust  company  men  regarding 
the  establishment  of  a central  bank,  th£ 
writer  addressed  to  about  fifty  leading 
trust  company  officials  in  different  parts 
of  the  country  letters  asking  their  views 
on  the  question: 

“Is  the  proposed  central  bank  a de- 
sirable thing  from  the  standpoint  of 
the  trust  company?” 

The  responses  to  this  inquiry  devel- 
oped the  fact  that  not  many  of  the  gen- 
tlemen addressed  feel  disposed  at  this 
time  to  commit  themselves  in  print  as  to 
their  opinions  on  the  subject.  Enough 
of  them  have  favored  us  with  their 
views,  however,  to  show  the  various 
opinions  current  in  the  trust  company 
world  and  to  demonstrate  that  this  sub- 
ject is  being  studied  with  interest  and 
with  intelligence  by  the  officers  of  the 
trust  companies.  Following  are  the 
letters  which  we  are  authorized  to  pub- 
lish: 


From  Lawrence  L.  Gillespie,  vice-presi- 
dent Equitable  Trust  Company,  New 
York,  and  chairman  of  the  executive 
committee,  trust  company  section , 
American  Bankers * Association . 

J have  your  favor  of  the  eighteenth  in- 
stant asking  me  to  reply  to  the  question  “Is 
the  proposed  central  hank  a desirable  thing 


from  the  standpoint  of  the  trust  company?” 

In  reply  I would  say  that  I have  read  a 
number  of  recommendations  with  reference 
to  a proposed  central  bank,  but  am  not 
aware  that  any  plan  is  definitely  before 
the  community  to  the  extent  of  distinctly 
specifying  the  conditions  and  methods  by 
which  it  is  to  be  organized,  managed  and 
controlled. 

Furthermore,  there  seems  to  be  some  di- 
vergence of  opinion  as  to  the  exact  form  of 
business  which  it  will  undertake  and  the 
duties  which  it  will  perform.  In  other 
words,  as  I understand  it,  the  question  to 
which  I am  replying  is  “Is  a central  bank 
a desirable  thing  from  the  standpoint  of 
a trust  company?” 

Furthermore,  with  reference  to  “the  trust 
company,”  any  such  discussion  is  likely  to 
become  involved  through  an  ambiguity  of 
terms.  This  is  because  there  is  no  single 
class  of  trust  companies  recognized  in  all 
the  States  except  by  name.  The  trust  com- 
panies with  which  I am  familiar  differ  in 
accordance  with  the  laws  of  the  several 
states  in  which  they  are  respectively  lo- 
cated, and  vary  further  in  accordance  with 
the  class  of  business  offered  to  them  by 
their  communities. 

In  such  a discussion  we  are,  therefore, 
dealing  with  two  uncertain  terms.  Trust 
companies  under  whatsoever  conditions  and 
laws  they  may  be  operating  are  surely  de- 
pendent for  their  success  upon  the  confi- 
dence winch  they  create  in  their  communi- 
ties. As  financial  institutions  any  altera- 
tion of  public  opinion  or  sudden  hazards 
created  by  financial  disturbance  are  cal- 
culated to  injure  them  and  retard  their 
successful  development.  Stability  in  the  fi- 
nancial world  as  stability  in  the  political 
w'orld  necessarily  works  for  their  benefit. 


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TRUST  COMPANIES 


S3 


It  would  seem,  therefore,  that  a central 
bank  so  organized  as  not  to  throw  prepon- 
derance of  influence  or  benefit  in  the  hands 
of  any  one  group  or  class  of  men  in  the 
country,  and  able  to  act  in  the  interest  of 
sound  financial  institutions  throughout  the 
country  at  times  when  they  are  especially 
called  upon  for  expansion  in  their  resources, 
would  be  for  the  benefit  of  the  country  at 
large  and  as  such  would  benefit  the  trust 
companies  which  are  now  playing  such  an 
important  role  in  the  financial  guidance  of 
the  country.  It  would  be  my  judgment, 
however,  that  the  closest  kind  of  scrutiny 
and  study  should  be  devoted  to  the  minute 
consideration  of  the  charter  and  by-laws 
under  which  such  a central  bank  could  un- 
dertake the  extraordinarily  important  du- 
ties which  would  necessarily  devolve  upon  it. 


From  Oliver  C.  Fuller , president  The 
Wisconsin  Trust  Company  of  Mil- 
waukee, and  vice-president  trust  com- 
pany section,  American  Bankers 9 As- 
sociation. 

Replying  to  your  request  for  my  views 
upon  the  question  “Is  the  proposed  central 
bank  a desirable  thing  from  the  standpoint 
of  the  trust  company?”  If  a central  bank 
is  a desirable  thing  from  any  standpoint 
is  a desirable  thing  from  the  standpoint  of 
the  trust  company. 

Any  system  or  agency  through  which  our 
volume  of  currency  can  be  made  to  expand 
and  contract  according  to  the  changing 
needs  of  commerce  would  be  a good  thing 
for  this  country.  In  my  opinion  it  matters 
not  whether  this  be  accomplished  through 
a central  bank,  through  a system  of  clear- 
ing-houses or  by  some  other  method,  so  that 
it  be  accoraplshed,  and  whatever  will 
accomplish  this  will  benefit  every  class  of 
financial  institution. 


From  Breckenridge  Jones,  president 

Mississippi  Valley  Trust  Company, 
St.  Louis. 

Your  question — Is  the  proposed  central 
bank  a desirable  thing  from  the  standpoint 
of  the  trust  company? — is  so  general  that 
it  can  only  be  answered  in  a general  way. 
The  central  bank  idea  in  itself  is  a good 
one,  if  it  can  be  safeguarded  against  poli- 
tics, the  domination  of  any  certain  class, 
and  the  other  obvious  dangers;  but,  if 
under  our  system  of  government  it  is  im- 
possible to  pass  a satisfactory  law,  then 
we  will  have  to  find  some  other  plan  of 
financial  reform.  Unless  I was  presented 
with  a definite  plan  showing  the  details 
worked  out,  I could  not  intelligently  come 
to  a conclusion  as  to  the  desirability  of  the 
central  bank  from  the  trust  company  stand- 


point. I feel  sure  that  any  plan  which  dis- 
regards the  necessary  place  that  the  trust 
company  has  in  the  modern  community  can- 
not succeed. 


From  John  H.  Holliday,  president 
Union  Trust  Company,  Indianapolis. 

I have  yours  of  the  sixteenth,  asking  for 
my  views  on  the  desirability  of  a central 
bank  from  a trust  company  standpoint.  I 
am  much  like  the  old  woman  who  attended 
a revival  and  was  asked  by  the  preacher 
if  she  had  religion.  “Well,  I dunno,  some- 
times I think  I have  and  then  again  I 
tliink  it’s  the  worms.”  I “dunno”  whether 
I have  anv  views  until  I know  what  powrers 
the  bank  will  have  and  as  Dundreary  used 
to  say,  “that’s  what  no  fellow  can  find  out.” 
As  a general  proposition  whatever  will 
make  a stable  and  elastic  currency  will  be 
desirable  for  trust  companies  and  every- 
body else.  That’s  about  as  far  as  I can  go. 


From  John  J.  Gannon,  president  Hiber- 
nia Bank  fy  Trust  Company,  New 
Orleans. 

I regard  the  proposed  central  bank  as  a 
desirable  thing  from  the  standpoint  of  the 
trust  company,  and  personally  I am  very 
much  in  favor  of  same. 


From  William  A.  Wilcox,  secretary  and 
trust  officer  Scranton  Trust  Company, 
Scranton , Pa. 

I regard  the  proposed  central  bank  as  an 
undesirable  thing  from  the  standpoint  of 
the  public.  Our  trust  company  receives 
no  deposits  and  does  no  banking  of  any 
kind  but  confines  itself  to  the  execution  of 
trusts.  I do  not  see  how  it  would  have 
any  special  effect  on  us  as  a trust  company 
except  that  we  would  be  prejudiced  as  the 
public  generally  would  be. 


From  H . C.  Harvey,  president  Ameri- 
can Bank  fy  Trust  Company,  Hunt- 
ington, W.  Va. 

We  arc  in  receipt  of  yours  of  the 
eighteenth  inst.  asking  our  opinion  as  to 
whether  a central  bank  would  be  of  any 
benefit  to  a trust  company.  We  do  not 
see  wherein  a central  bank  could  be  of  any 
benefit  to  either  us  or  the  country  at  large. 
A central  bank  might  work  in  a foreign 
country  where  it  is  no  larger  than  one  of 
our  states,  but  in  a great  nation  like  this 
and  with  our  form  of  government,  we  be- 
lieve a central  bank  would  be  detrimental  to 
us.  We  believe  the  government  alone  should 
issue  all  the  money. 


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THE  BANKERS  MAGAZINE 


E , A,  Wyld,  vice-president  Security 
Savings  fy  Trust  Company,  Portland, 
Oregon, 

In  reply  to  your  question:  Is  the  proposed 
central  bank  a desirable  thing  from  the 
standpoint  of  the  trust  company?  In  the 
different  proposals  and  arguments  cover- 
ing the  central  bank,  there  is  nothing  to 
show  that  the  desirability  or  otherwise 
from  the  standpoint  of  the  trust  company 
has  ever  been  taken  into  consideration, 
and  those  in  favor  of  the  plan  have  ap- 
parently considered  it  only  as  a means  of 
providing  circulation  in  a time  of  emer- 
gency. The  writer  therefore  is  of  the  opinion 
that  a central  bank  would  have  a tendency 
to  create  an  advantage  in  favor  of  national 
and  strictly  commercial  banks,  as  against 
trust  companies.  As  the  matter  has  been 
presented  up  to  the  present  time,  it  seems 
impossible  under  our  present  methods  to 
establish  a central  bank  that  would  prove 
satisfactory  or  creditable  to  the  country 
generally. 


From  P.  C.  Kauffman,  vice-president 

Fidelity  Trust  Company,  Tacoma, 
Wash, 

I am  heartily  in  favor  of  the  enactment 
of  the  necessary  legislation  that  would  pro- 
vide for  the  organization  of  a central  bank 
for  the  following  reasons: 

In  October  1907,  without  a moment's 
warning  the  banks  of  the  Pacific  Northwest 
found  their  reserve  balances  cut  off  entirely, 
and  they  were  forced  to  depend  solely  upon 
the  actual  coin  they  had  in  their  vaults. 
It  was  evident  at  once  that  but  very  few 
days  would  elapse  till  this  coin  would  be  ex- 
hausted and  the  banks  either  obliged  to 
suspend  payment  or  throw  themselves  upon 
the  mercy  of  their  depositors. 

Prompt  action,  however,  was  taken  by  the 
banks  in  the  large  clearing-house  centers, 
providing  for  the  hypothecation  of  their 
liquid  assets  and  issuance  thereon  of  clear- 
ing-house emergency  currency  certificates, 
which  were  used  locally  in  place  of  gold, 
silver,  national  bank  notes  or  legal  ten- 
ders. The  banks  in  the  smaller  cities  and 
interior  counties  followed  the  example  of 
these  clearing-house  associations  and  issued 
a similar  emergency  currency,  and  thereby 
this  most  important  crisis  in  our  financial 
history  was  tided  over  until  confidence  was 
restored  and  the  ordinary  flow  of  business 
was  resumed. 

The  lessons  of  that  period  have  shown  the 
value  of  united  effort,  and  also  pointed  out 
a way  to  the  proper  solution  of  the  currency 
question.  Irregularities  of  the  1907  move- 
ment were  only  condoned  by  the  emergency 
that  called  it  forth.  The  temporary  cur- 
rency certificates  were  poorly  printed,  has- 
tily issued  and  liable  to  counterfeit  and 
possible  overissue.  “I  have  no  lamp,”  said 
Patrick  Henry,  "by  which  my  feet  are 


guided  save  the  lamp  of  experience,”  and  the 
people  of  these  United  States  can  well  take 
the  experience  of  the  trying  times  of  1907 
as  a lamp  with  which  to  guide  themselves 
in  similar  darkened  periods.  One  danger 
of  that  period  was  the  fact  that  the  cur- 
rency was  issued  by  so  many  clearing-house 
associations,  under  different  rules  and  with 
indifferent  protection. 

By  the  establishment  of  a central  bank) 
which  should  be  a bank  of  banks,  with  large 
capital  (not  less  than  one  hundred  millions 
of  dollars)  owned  by  the  banks  of  the  coun- 
try an«  not  individuals,  and  which  should 
not  be  authorized  to  enter  into  direct 
banking  competition  by  receiving  deposts, 
but  which  should  have  full  power  to 
re-discount  the  notes  or  other  securities 
of  the  banks  of  the  country  and  either  give 
credit  therefor  or  issue  currency  thereon  up 
to  an  agreed  upon  amount  (which  currency 
should  be  printed  from  plates  engraved  under 
government  supervision,  with  heavy  penal- 
ties for  counterfeiting)  it  is  scarcely  within 
the  bounds  of  probability  that  a panic  simi- 
lar to  that  of  1907  could  ever  again  visit 
this  country.  The  people  would  have 
thorough  confidence  in  the  currency  so  is- 
sued, as  they  would  know  that  it  would  be 
not  only  secured  by  the  deposit  of  liquid 
collateral,  but  in  addition  would  have  the 
backing  of  the  bank's  enormous  capital. 

It  would,  however,  be  necessary  that  agen- 
cies or  branches  should  be  established  in 
practically  every  large  clearing-house  center 
of  the  country,  agencies  rather  than  branch- 
es, where  the  banks  of  the  respective  dis- 
tricts could  deposit  the  collateral  or  the 
notes  that  they  desired  to  re-discount.  The 
managers  of  these  agencies  would,  of  course, 
be  much  more  competent  to  pass  upon  the 
value  of  the  collateral  than  could  the  officers 
at  the  head  of  the  institution,  and  as  emer- 
gencies of  that  kind  that  would  require 
the  issuance  of  currency  would  also  require 
immediate  action,  local  managers  could  de- 
cide quickly  and  advise  the  central  bank 
of  the  securities  so  deposited,  whereupon 
the  central  bank  could  at  once  give  the 
bank  depositing  the  same,  credit,  or  forward 
the  amount  of  currency  desired. 

Another  reason  calling  for  the  establish- 
ment of  agencies  is  that  without  them  it 
would  be  necessary  to  forward  securities 
or  notes  direct  to  the  central  bank, 
thereby  running  risk  of  loss  by  long  trans- 
mission by  mail,  destruction  by  fire  en 
route,  or  delay  in  their  receipt  and,  possi- 
bly, release  of  indorsers  from  their  lia- 
bility. 

Of  course  the  details  would  have  to  be 
worked  out  thoroughly,  but  I am  satisfied 
that  the  prevailing  sentiment  in  the  Pacific 
Northwest  is  in  favor  of  the  organization 
of  a central  bank,  to  which  should  be  en- 
trusted the  entire  currency-issuing  power  of 
the  country,  and  can  say,  from  conversation 
with  many  of  our  leading  bankers,  that 
the  plan  proposed  by  Geo.  M.  Reynolds,  of 


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TRUST  COMPANIES 


85 


the  American  Bankers’  Association  at  the 
Chicago  convention,  September  19,  1909, 
meets  with  general  approval. 

Care  should  be  taken  in  drafting  the  law 
to  keep  the  central  bank  entirely  free  from 
both  political  and  Wall  Street  influences, 
for  that  reason  I am  satisfied  that  the  best 
location  for  the  central  bank  would  be  in 
the  city  of  Chicago.  I see  nothing  in  the 
history  of  the  First  and  Second  United 
States  Banks  that  should  make  us  fear  to 
take  hold  of  this  important  question.  I am 
satisfied  that  a plan  can  be  drafted  which 
will  eliminate  all  the  faults  attendant  upon 
both  these  organizations.  Those  of  us  who 
favor  a central  bank  must  recognize  that 
we  have  a campaign  of  education  before 
us  in  order  to  remove  the  fear  that  now 
seems  to  pervade  the  country  that  such  a 
bank,  if  formed,  would  either  become  the 
tool  of  one  or  the  other  of  the  great  polit- 
ical parties,  or  a medium  through  which 
the  bankers  of  Wall  Street  would  monopo- 
lize the  finances  of  the  country. 

Variety  of  Opinion. 

The  differences  of  opinion  reflected 
in  these  letters  are  further  apparent  in 
other  replies  to  the  inquiry,  which  were 
not  written  for  publication;  while  a 
number  of  the  latter  indicate  that  the 
writers  do  not  consider  themselves  well 
enough  posted  on  the  subject  to  write 
an  opinion.  Taking  all  the  replies  to- 
gether, about  the  same  number  defi- 
nitely favor  and  definitely  oppose  the 
general  idea,  while  a majority  consider 
it  impossible  to  form  an  opinion  on  the 
general  idea  alone,  believing  that  so 
much  depends  upon  the  particular 
forms  of  the  details  that  it  will  be 
necessary  to  have  the  full  plans  before 
a decision  can  be  reached.  It  is  un- 
doubtedly a safe  inference  that  a large 
number  of  trust  company  officials  are 
holding  open  their  opinions  on  the  cen- 
tral bank  idea  until  such  time  as  a defi- 
nite and  fully  detailed  plan  is  submit- 
ted for  consideration. 

The  Proposition  Too  Indefinite. 

Indeed  the  sentiment  most  common  in 
the  letters  is  that  the  proposition  is  thus 
far  in  too  indefinite  a shape  to  make 
possible  the  forming  of  judgment; 
while  the  opinions  expressed  seem  to 
justify  the  inference  that  the  writers 
regard  the  unknown  details  as  being 
potentially  of  much  more  importance 
than  the  general  idea  itself.  In  other 
2 


words,  the  general  idea  of  a central 
bank  exercises  neither  attraction  nor 
repulsion — it  is  immaterial  in  itself — 
but  the  kind  of  a central  bank  to  be 
proposed  is  the  crucial  question. 

There  appears  no  general  predispor 
sition  to  either  favor  or  oppose  a central 
bank  merely  as  a central  bank.  Sev- 
eral of  the  writers  state  that  they  con- 
sider it  of  little  consequence  whether 
greater  stability  in  our  financial  sys- 
tem, with  elasticity  of  our  currency,  be 
brought  about  through  a central  bank 
or  through  some  other  medium,  so  long 
as  it  is  actually  secured  without  the  in- 
troduction of  new  evils  and  dangers. 
This  suggests  the  query  whether  the 
central  bank  advocates  are  not  wasting 
time  in  endeavoring  to  spread  the  gen- 
eral idea  instead  of  working  out  and 
submitting  a particular  plan.  The  op- 
position appears  to  be  based  mainly  on 
anticipated  details;  while  most  of  those 
who  express  themselves  as  in  favor  of 
the  general  plan  do  so  with  reservations 
as  to  some  of  its  possible  features. 

Effect  on  Trust  Companies. 

The  replies  do  not  indicate  a feeling 
that  the  interests  of  the  trust  companies 
would  be  affected  except  as  the  general 
public  and  the  other  financial  institu- 
tions would  be  affected.  The  interests 
of  the  trust  company  are  identical  with 
the  interests  of  the  community  in  which 
it  is  located.  In  common  with  others  it 
would  profit  by  a more  elastic  currency 
and  a more  stable  system;  and  it  would 
be  harmed  by  any  innovations  detrimen- 
tal to  the  interests  of  the  general  pub- 
lic. Whatever  would  be  good  for  the 
country  would  be  good  for  the  trust 
companies. 

On  the  other  hand,  so  far  as  any  new 
system  may  be  carried  out  through  the 
instrumentality  of  financial  institutions, 
the  important  position  which  the  trust 
company  now  occupies  in  the  financial 
world  cannot  be  overlooked.  As  Mr. 
Gillespie  points  out  in  his  letter  above 
quoted,  there  are  many  varieties  of 
trust  companies,  and  the  direct  interest 
of  a trust  company  in  the  problem  will 
depend  much  upon  the  kind  of  business 
it  does.  If  its  business  is  exclusively 
that  of  executing  trusts,  its  interest  will 


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36 


THE  BANKERS  MAGAZINE 


be  that  indirect  interest  in  which  the 
whole  community  shares.  If  banking 
is  an  important  part  of  its  duties — and 
this  is  the  actual  fact  with  the  vast  ma- 
jority of  trust  companies — then  it  has 
the  same  direct  interest  in  the  problem 
that  any  state  bank  has.  Its  interest 
differs  from  that  of  the  national  bank 
only  because  the  latter  now  issues  cur- 
rency. In  brief,  the  trust  company  is 
an  integral  and  important  part  of  our 
present  financial  system,  and,  as  Mr. 
Jones  puts  it,  “Any  plan  which  disre- 
gards the  necessary  place  that  the  trust 
company  has  in  the  modern  community 
cannot  succeed." 

Deserves  Study  by  Trust  Company 
Officials. 

It  must  follow  that  the  progress  of 
the  central  bank  agitation  ought  to  be 


followed  with  keen  interest  by  trust 
company  officials.  Their  common  inter- 
est with  the  general  public  and  their 
particular  interest  as  officers  of  finan- 
cial institutions  make  it  a duty  to  be 
thoroughly  informed  as  to  what  is  pro- 
posed. The  matter  is  of  quite  as  much 
importance  to  them  as  to  commercial 
bankers.  If  proposed  plans  involve 
dangers  of  political  graft  or  of  control 
and  monopoly  by  special  interests  or 
particular  classes,  the  trust  company 
will  find  it  essential  to  oppose  those 
plans;  and  if  a scheme  be  developed 
which,  unattended  by  such  dangers, 
offers  reasonable  promise  of  giving  us  a 
currency  that  is  at  once  safe  and  elas- 
tic, that  will  meet  the  needs  of  our  ever 
growing  commerce  and  industry,  the 
trust  company  should  be  in  the  van  of 
the  forces  of  reform. 


SAVINGS  BANKS 

Conducted  by  W.  H.  Kniffin,  Jr. 


THE  TELLER  AND  HIS  TASK 

GENERAL  ORDERS  AND  IDENTIFICATION 
By  W.  H.  Kniffin,  Jr. 


iir  I ^*HE  man  with  a camera  eye,"  who, 
A having  once  seen  a face  never 
forgets  it,  and  who  will  pick  his  man 
out  of  a thousand,  and  whom  disguises 
and  the  changes  resulting  from  age 
cannot  deceive,  has  recently  been  ap- 
pointed to  a responsible  position  with 
the  American  Bankers'  Association 
That  “camera  eye"  made  him  a good 
detective,  but  it  would  have  made  him 
an  equally  good  hotel  clerk  or  bank 
teller,  especially  a savings  bank  teller, 
whose  function  it  is  to  deal  with  the 
multitudes  and  not  get  his  people  mixed. 
The  teller  in  the  bank  of  discount  deals 
with  a limited  few,  and  frequently;  the 
savings  bank  teller  deals  with  thousands, 
and  infrequently;  and  to  photograph 
mentally  every  depositor  would  be  a feat 
only  for  those  with  camera  eyes;  and 
these  worthy  gentlemen  are  scarce.  In 


fact,  the  savings  bank  does  not  ask  its 
tellers  to  identify  the  depositor  in  per- 
son, for  back  of  him  is  a cabinet  full  of 
little  drawers,  and  the  drawers  full  of 
cards,  and  with  such  an  outfit  he  is 
ready  for  all  comers. 

It  has  been  suggested  by  some  that  a 
scheme  of  photographing  every  de- 
positor be  devised  so  that,  unconscious- 
ly, the  new  patron,  while  signing  his 
name,  would  also  have  his  picture 
“took."  This  method  is  being  used  by 
large  concerns  like  the  electric  light  and 
telephone  companies,  who  furnish  their 
men  with  cards  upon  which  appear  their 
signature,  the  seal  of  the  company  and 
a photograph  of  themselves,  so  that  in 
making  collections,  the  authority  is 
clear  and  unquestioned.  Finger  prints 
have  also  been  advocated,  similar  to  the 
manner  used  by  the  police,  and  it  is  un- 


Digitized  by  t^ooQle 


SAVINGS  BANKS 


87 


Qfrm 

dd  ieua^/tan  de4e  ^ ' v ^ ' 

*<UdJ± 

my  futme,  tn  fieUan  at  4y  aided  duty  executed,  any  maney  naea 
ad  deteajSlet  due  me  at  tde  Qfa#  (^t&adjS^td  (^ndtttutian  l 
t&avinyt  an  ticcaunt  (2fia.  -^^.~3..J£^2^ . Qfoa  ttand^cl  td  made 

detedy  and  tde  fauoed  ta  act  myte^d  ada  eantinues 


Witness, 


77 


Form  I— Standing  order  for  payment  of  money  without  altering  the  form  of  pass-book. 
New  Bedford  (Mass.)  Institution  for  Savings 


doubted  that  eventually  this  will  be 
adopted  in  banks,  especially  in  dealings 
with  foreigners. 

Identification. 

There  are  other  and  frequently  bet- 
ter methods  of  identification  than  the 


Form  2— General  order  for  withdrawing  funds. 
Card  form  3x5.  East  Side  Savings  Bank, 
Rochester,  N.  Y. 


mere  signature,  as  important  as  this 
may  be.  The  family  history  is  a valu- 
able help,  and  the  one  who  would  and 
could  forge  the  signature  might  not  be 
able  to  furnish  the  other  details  of  fam- 
ily record.  One  large  bank  in  New 
York  requires  all  depositors  upon  with- 
drawing money  to  give  the  present  resi- 
dence at  the  bottom  of  the  order.  When 
the  signature  is  compared,  this  is 
noticed,  and  if  the  address  has  changed, 
note  is  made  of  the  same.  This  is  a very 
good  idea,  for  while  cases  are  on  record 
where  money  was  fraudulently  drawn 


by  answering  all  the  test  questions  and 
signing  the  name  correctly,  it  is  ex- 
tremely doubtful  if  the  holder  of  the 
book  in  these  instances  could  have  given 
off-hand  the  former  addresses  of  the 
depositor,  especially  when  they  have 
frequently  changed.  A fellow  obtained 
possession  of  James  Wall's  book  on  the 
Emigrant  Industrial  Savings  Bank,  and 
by  writing  to  Wall,  ascertained  his 
pedigree,  even  going  so  far  as  to  ask 
the  name  of  the  ship  he  came  over  in. 
This  formed  part  of  the  identification 
questions,  and  thus  fortified,  he  man- 
aged to  get  Wall's  money  by  his  fa- 
miliarity with  these  facts;  but  had  the 
bank  also  required  him  to  name  Wall's 
previous  residences,  it  might  have  pus- 
zled  the  swindler. 

There  are  little  tricks  in  identifica- 
tion that  often  are  safe,  and  save  the 
depositor  considerable  trouble.  In  the 


Form  3 — Permanent  order  for  payment  of 
dividends.  City  Institution  for  Savings, 
Lowell,  Mass. 


Digitized  by  t^ooQle 


38 


THE  BANKERS  MAGAZINE 


&ttoto  All  IKiw  m 

Thai  I 

Depositor  No.  J 6 J with  ike  Western  Sating  Fund  Socutt  Of  Philadelphia, 

have  made,  constituted  and  appointed,  and  bp  three  presents  do  make,  constitute  and  appoint 

to  be  K*y  true  and 

lawful  attorney  for *****  and  in  Keyname  to  ask,  demand  and  receive  from  the  said  Society, 

standing  to  2<*y  credit  on  the  books  of  the  said  Society,  and  upon  receipt  thereof,  or  any  part 
thereof,  in  /e^y  name  to  execute  and  deliver  to  the  said  Society  good  and  sufficient  receipts  or 
acquittances  Jor  the  same. 

IN  WITNESS  WHEREOF \ ^ have  hereunto  set  t^yhand  and  seat 
7 ^ day  of  A.D. 


\9oy 


(Dn^IMw  «t*a  Mn.) 
Seated  and  delivered  m the  pretence  of  at: 

,a^a 


m 


N.  B. — The  pam-book  of  the  depositor  most  be  presented  at  the  office  at  the  time  of  demanding  payment, 
unless  previously  left  thereat  for  settlement. 


Form '4— Power  of  attorney  for  withdrawing  money.  Western  Saving  Fund  Society, 

Philadelphia 


first  place,  where  the  depositor  cannot 
write,  if  he  has  a scar  of  any  sort  that 
is  permanent,  this  is  a good  test;  also 
if  there  is  a peculiarity  about  him  that 
is  noticeable.  Registered  letters  ad- 
dressed to  the  depositor,  initials  in  hat, 
marks  on  clothing,  monograms  on  jewel- 
ry, etc.,  often  play  important  parts  in 
the  process  of  identification. 

But  frequently  other  and  better  tests 
are  desirable,  as  where  the  signature  is 
radically  different  (as  is  often  the  case), 
and  where  other  lines  of  identification 
are  unsatisfactory  or  impossible.  In 


such  cases  it  is  customary  to  ask  other 
banks  in  which  he  might  have  account 
to  verify  his  signature,  and  recognizing 
that  they  may  also  ask  like  favors,  the 
request  is  usually  granted.  Some  banks 
have  proper  forms  for  this  purpose, 
as  will  be  seen  from  Forms  5 and  6.  A 
simple  illustration  will  suffice:  Mr.  B. 
has  a deposit  in  a savings  bank,  and  for 
some  reason  or  other  the  bank  has  not 
obtained  his  signature  (as  often  hap- 
pens unless  accounts  are  refused  where 
this  cannot  be  furnished).  He  wants  to 
draw  some  money.  Upon  comparison. 


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SAVINGS  BANKS 


39 


the  teller  finds  no  signature  recorded  or 
a discrepancy,  and  advises  Mr.  B.  that 
he  will  have  to  furnish  credentials.  Upon 
being  advised  that  a bank  identification 
is  the  most  desirable  and  often  the 
easiest  to  obtain,  he  goes  to  another 
bank  in  which  he  has  deposited  for  some 
time  and  asks  them  to  certify  to  his 
signature.  This  they  willingly  do.  His 
signature  is  taken  in  the  proper  place 
and  he  has  no  further  trouble.  The 
same  is  true  among  banks  of  discount  in 


N*.  . 

Union  Dime  Savings  Institution, 

Brondw*,.  32d  It  S‘«th  Av«nu«. 

Now  York.  N Y /#  4f*/\ 


A CtrtifitaU  it  rtqmtt/ui  from 


si  to  tkt  esmrttmttt  sf  tkt  fotteviug  signal  nr*  of 


•r- 


y 


htrtby  tsrtify  ikst  the  shots  tignsturt 


Form  5 — Identification  form  used  when  sig- 
nature is  in  doubt.  A good  form.  Union 
Dime  Savings  Bank,  New  York 


vouching  for  the  character  of  new  de- 
positors wishing  to  open  accounts.  But 
money  in  hand  being  the  only  credential 
with  savings  banks,  such  introduction  is 
not  required. 

General  Orders. 

There  are  numerous  reasons  why  two 
names  should  be  on  a pass  book.  Rea- 
sons connected  with  death,  sickness, 
absence  from  home,  convenience,  gifts 
of  money,  etc.  And  the  public  has 
been  duly  educated  up  to  the  value  of 


such  accounts.  There  are  also  reasons 
why  the  owner  of  the  property  should 
retain  absolute  control  over  the  same 
as  long  as  he  lives.  There  are  likewise 
good  and  sufficient  reasons  why  one  hav- 
ing a single  name  account  should  per- 
mit another  to  draw  practically  at  will 
against  it,  yet  not  have  any  interest  in 
the  funds  on  deposit  before  or  after 
death.  Frequently  old  people  or  those 
living  at  a distance  from  the  bank  pre- 
fer to  entrust  the  drawing  of  money  to 
some  member  of  the  family,  a relative, 
or  an  attorney. 

In  order  to  vest  another  with  power 
to  draw  money  from  a savings  bank,  one 
of  three  courses  may  be  taken:  First, 

the  change  of  the  account  to  a joint  or 
trust  form,  by  closing  the  old  and  open- 
ing the  new  account,  as  was  discussed 
in  the  April  Bankers  Magazine.  Sec- 
ond, to  file  a general  or  unlimited  order 
with  the  bank.  Third,  and  similar  to 
the  second  method,  is  by  power  of  attor- 
ney. A bank  would  not,  in  law,  be 
bound  to  recognize  a simple  blanket  or- 
der and  allow  the  holder  to  draw  at 
will,  but  would  be  obliged  to  recognize 
such  a wish  by  a power  of  attorney 
properly  drawn. 

A general  order  is  to  all  intents  and 
purposes  an  order  for  the  balance  in 
full,  payable  as  directed  by  the  one  au- 
thorized to  draw.  The  order  is,  of 
course,  revokable.  At  times,  a depositor 
will  be  convenienced  by  giving  another 
power  to  draw  dividends  only.  (Form 
8.)  In  Massachusetts,  under  the  insur- 
ance law,  the  banks  are  permitted  to 
charge  the  premiums  against  the  de- 
positor’s account.  This,  of  course, 
would  necessitate  authority  from  the  de- 
positor to  make  the  charges. 

Powers  of  Attorney. 

But  in  the  matter  of  power  of  attor- 
ney, the  bank  is  bound  to  know  that 
the  power  is  revoked  by  the  death  of  the 
depositor,  and  such  orders  are  neces- 
sarily accompanied  with  some  risk.  In 
the  case  of  Hoffman  vs.  Union  Dime 
Savings  Bank  (New  York  Savings 
Bank  Cases,  p.  62),  probably  the  best 
power  of  attorney  case,  so  far  as  sav- 


Digitized  by  t^ooQle 


40 


THE  BANKERS  MAGAZINE 


ings  banks  are  concerned,  in  the  New 
York  courts,  it  was  held  that  unless  the 
holder  of  the  power  was  vested  with 
some  interest  in  the  fund  that  caused  it 
to  survive  the  death  of  the  principal,  the 
power  was  revoked  instantly  upon  the 
death  of  the  depositor.  The  bank,  there- 
fore, should  have  made  inquiry  if  the 
principal  was  alive  before  making  pay- 
ment, and  in  failing  to  do  so,  assumed 
the  risk  of  establishing  in  the  holder 
such  interest  as  caused  it  to  survive. 

After  a long  contest  in  the  courts,  the 
bank  was  able  to  show  such  an  interest, 
and  payment  was  finally  sustained,  but 
the  case  twice  went  against  the  bank. 
When  such  orders  are  filed,  more  than 
ordinary  care  should  be  taken  to  ascer- 
tain the  fact  of  the  depositor's  still  be- 
ing alive  before  making  payment. 

The  proper  thing  to  do  in  the  matter 
of  powers  of  attorney  is,  of  course,  to 
make  notation  on  the  signature  card, 
“Power  of  Attorney  in  William  Smith. 
See  files."  Filed  among  the  powers  of 
attorney  will  be  this  document.  Banks 
not  having  to  refer  to  the  signature  at 
every  transaction  could  make  notation 
on  the  ledger  account.  And  in  both 
cases  this  might  be  done  on  the  pass 
book  in  lead  pencil.  The  signature  of 
the  one  holding  the  power  should  also 


be  taken,  as  a matter  of  identification. 
Where  the  account  is  closed  by  one 
transaction,  proper  identification  only 
would  be  necessary. 

Where  a general  order  is  filed  in 
“home-made  style,"  as,  for  instance, 
“Please  let  my  sister  Emma  draw  what- 
ever money  she  wants  on  my  account, 
and  oblige,  etc.,"  and  the  bank  cares  to 
recognize  such  orders,  a transparent 
envelope  the  size  of  the  ordinary  check 
would  come  into  play,  and  the  order 
could  be  inserted  therein,  with  reference 
to  the  same  on  the  account.  Where  the 
filing  is  done  by  accounts  and  not  by 
months  and  days,  the  general  order  may 
be  filed  in  its  proper  place  and  all  sub- 
sequent orders  attached  thereto. 

On  account  of  the  annoyance  caused 
by  these  general  orders,  many  banks  re- 
fuse to  honor  them,  and  insist  upon 
changing  the  account.  Powers  of  attor- 
ney, in  the  light  of  the  Hoffman  case, 
surely  ought  to  be  avoided  as  much  as 
possible.  A little  argument  is  all  that 
is  necessary  to  show  the  depositor  the 
wisdom  of  doing  some  things,  and  they 
are  usually  agreeable  to  anything  that 
will  accomplish  the  result  desired.  And 
a joint  or  trust  account  will  usually 
answer  every  purpose  and  fully  protect 
the  bank. 


Form  6 — Verification  of  signature  used  when  references  as  to  correctness  of  signatnre 
are  requested.  A matter  of  courtesy  only.  Bowery  Savings  Bank.  New  York 


Digitized  by  t^ooQle 


“ROBINSON  CRUSOE’S  FATHER” 


NO  piece  of  fiction  that  has  ever  come 
from  the  pen  of  an  Englishman 
is  more  familiar  than  the  story  of  Rob- 
inson Crusoe  and  his  weird  and  inter- 
esting experiences  on  his  lonely  isle. 
Whether  such  a man  ever  had  such  ex- 
periences, or  whether  he  ever  had  a real 
father  or  not,  is  of  no  consequence — he 
certainly  had  a “story  book”  father, 
whose  name  was  Daniel  Defoe 

In  a very  clever  and  highly  creditable 
brochure,  issued  in  commemoration  of 
the  centenary  of  the  founding  of  the 
first  savings  bank  in  Scotland,  mention 
of  which  was  made  in  this  department 
in  the  May  number,  the  Williamsburg 
Savings  Bank  of  Brooklyn  has  ascribed 
the  honor  of  conceiving  the  savings  bank 
idea  to  Robinson  Crusoe's  “literary” 
father. 

Defoe  was  born  in  1661,  and  em- 
barked as  a hosiery  merchant  and  later 
as  a tile  dealer,  failing  in  both  and 
losing  considerable  money,  but  event- 
ually paying  all  debts.  Thereupon 
turning  his  attention  to  literature,  he 
was  imprisoned  for  talking  too  much. 
, Whether  he  conceived  the  savings  bank 
idea  among  other  schemes  while  in 
prison  is  a matter  of  conjecture,  but  his 
fertile  mind  was  working  overtime,  and 
he  is  credited  with  advocating  the  edu- 
cation of  women,  as  well  as  a scheme 
to  modify  the  bankruptcy  laws  and  im- 
prisonment for  debt.  He  saw  the  value 
of  good  roads;  drew  up  a scheme  for  a 
marine  insurance  society,  a friendly  so- 
ciety and  a savings  bank . Just  where 
Robinson  Crusoe  came  in,  is  not  a mat- 
ter of  history,  but  at  any  rate,  when  he 
was  about  28  years  of  age  he  drew  up 
a plan  for  an  organization  similar  to  our 
mutual  savings  bank,  except  that  it  was 
to  be  conducted  by  the  Government. 

The  scheme  provided  that  wage- 
earners  pool  their  weekly  savings  and 
place  them  in  the  control  of  the  Govern- 
ment, receiving  interest  thereon,  and  in 
old  age  an  annuity.  “I  desire,”  said 
Defoe,  “any  man  to  consider  the  pres- 


ent state  of  the  kingdom,  and  tell  me  if 
all  the  people  of  England,  old  and 
young,  rich  and  poor,  were  to  pay  into 
one  common  bank  four  shillings  per  an- 
num a head,  and  that  four  shillings 
duly  and  honestly  managed,  whether 
the  overplus  would  not  in  all  probability 
maintain  all  that  should  be  poor,  and 
forever  banish  beggary  and  poverty  out 
of  the  kingdom?” 

As  a matter  of  fact  and  of  history,  the 
first  savings  bank  in  New  York  (Bank 
for  Savings)  found  it  impossible  to  ob- 
tain a charter  from  a rantankerous  leg- 
islature until  it  was  shown  to  be  a 
scheme  to  ameliorate  the  condition  of 
the  poor,  and  as  such  it  was  authorized 
to  do  business. 

The  savings  bank  of  to-day,  of 
course,  insures  nothing, — it  simply  con- 
serves, and  takes  care  of  a man's  own 
insurance  accumulations,  and  invests 
them  for  his  own  account.  Defoe's 
scheme  did  r.ot  bear  fruit  until  after  his 
death,  but  the  Germans  saw  virtue  in 
the  plan,  and  after  thinking  about  it 
for  fifty  years  (as  Germans  are  wont  to 
do)  they  established  a savings  bank  at 
Brunswick,  which  proved  so  successful 
that  others  were  organized,  both  in  Ger- 
many and  Switzerland.  In  1797  Jeremy 
Bentham  revived  Defoe's  scheme  in 
England,  and  with  some  improvements, 
proposed  to  establish  “frugality  banks.” 
The  Rev.  Henry  Duncan,  of  Ruthwall, 
Scotland,  became  interested  in  the 
movement,  and  the  first  savings  bank  in 
Scotland,  whose  one  hundredth  anni- 
versary was  celebrated  June  8-10,  1910, 
in  Edinburgh,  came  into  being.  The 
movement*  spread  rapidly  and  crossed 
the  Atlantic  in  1816. 

Due  credit  and  honor  therefore  be- 
longs to  this  “dreamer,”  not  only  for 
conceiving  a most  delightful  romance, 
but  also  the  most  efficient  instrument  for 
“encouraging  habits  of  thrift  and  in- 
dustry among  the  masses,”  the  world 
has  yet  known. 

41 


Digitized  by  t^ooQle 


PRACTICAL  BANKING 


BANK  EXAMINATION  BY  DIRECTORS 

By  C.  F.  Hamsher,  Assistant  Cashier  of  the  Savings  Union  Bank  of 

San  Francisco 


“DANK  directors  can  be  held  respon- 
sible  for  their  failure  to  direct. 
Such  is  the  t«ext  of  a decision  handed 
down  by  a New  York  court. 

It  is  not  to  be  expected  that  in  banks 
with  a board  of  directors  composed  of 
the  leading  financiers  of  the  country 
that  these  men  will  lay  aside  their  many 
business  affairs  and  personally  conduct 
periodic  examinations.  Fortunately  the 
modern  audit  by  chartered  accountants 
has  been  established,  and  afTords  them 
relief. 

But  the  banks  in  the  small  commun- 
ity and  distant  from  the  large  city  with 
its  firms  of  chartered  accountants,  can- 
not afford  to  avail  themselves  of  this 
method,  owing  to  the  expense.  In  these 
communities  the  directors  are  seldom 
such  busy  men  that  they  cannot  spare 
the  time  to  make  the  examination.  Even 
then  it  is  difficult  to  get  a good  exam- 
ination by  the  directors.  Why? 

The  writer  believes  it  is  because  they 
do  not  know  how  to  conduct  an  examina- 
tion, with  perhaps  a little  hesitancy  in 
investigating  too  closely  into  the  man- 
agement of  the  officials  they  have  chosen 
to  manage  their  bank.  However,  the 
law  says  the  examination  must  be  made. 

Comptroller  of  Currency  Murray 
found  that  few,  if  any,  directors  have 
ever  read  the  National  Bank  Act.  Such 
would  be  found  true  of  directors  of 
banks  organized  under  State  acts. 

It  should  be  the  duty  of  officials  of  a 
bank  to  acquaint  the  members  of  their 
board  with  the  main  points  of  the  law, 
if  they  have  not  and  will  not  read  the 
act  in  its  entirety. 

For  the  guidance  of  directors  in  their 
examination,  the  following  simple  plan 
might  be  followed: 

The  greater  portion  of  the  time  of  an 
examination  should  be  put  in,  in  a 
proper  counting  of  the  cash,  and  the 

42 


examination  of  the  investments.  Just 
as  far  as  is  possible,  such  an  examina- 
tion should  be  made  without  the  pres- 
ence of  the  managing  officials. 

Count  Cash. 

The  first  thing  to  do  in  examining 
the  bank  would  be  to  take  possession  of 
the  cash,  and  the  best  time  to  do  this 
would  be  after  the  closing  hour  of  the 
day,  or  before  the  opening  hour  in  the 
morning. 

The  amount  of  cash  actually  counted 
would  depend  on  the  size  of  the  bank. 
If  the  bank  were  small,  keeping  per- 
haps twenty  or  thirty  thousand  dollars 
on  hand,  all  should  be  counted,  but  in 
a bank  carrying  hundreds  of  thousands 
of  dollars,  this  would  be  a physical  im- 
possibility without  assistance. 

In  a bank  of  large  size,  the  count 
shown  on  any  sealed  sacks  of  coin  re- 
ceived from  other  banks,  the  clearing 
house,  or  from  sub-treasuries  or  mints 
should  be  accepted.  Of  sacks  not  so 
sealed,  select  occasional  sacks  at  ran- 
dom, verifying  the  bank's  own  count. 
If  this  is  proven  in  a number  of  sacks 
it  would  be  reasonable  to  suppose  the 
marked  contents  of  all  sacks  to  be  cor- 
rect. 

The  value  of  each  sack  may  also  be 
ascertained  by  weighing  the  coin  in- 
stead of  counting  it,  if  accurate  scales 
are  available.  One  thousand  dollars  in 
gold  coin  should  weigh  3 lbs.,  10.971 
oz. ; one  thousand  dollars  in  silver 
should  weigh  58  lbs.,  14.83  oz.,  and  one 
thousand  dollars  in  half-dollars  should 
weigh  55  lbs.,  1.83  oz.,  avoirdupois. 

If  a large  amount  of  bills  is  held, 
occasional  packages  should  be  selected 
at  random,  as  in  the  case  of  the  coin  in 
sacks,  and  the  contents  as  marked  on 
the  strap  verified  by  count. 

After  counting  the  cash,  compare 


Digitized  by  t^ooQle 


PRACTICAL  BANKING 


4 S 


total  with  the  cash  shown  to  be  on  hand 
by  the  books  of  the  bank.  Here  take  a 
copy  of  the  bank's  daily  statement,  and 
check  the  totals  of  all  other  accounts 
against  the  amounts  reported  by  the 
bank.  If  any  discrepancies  were  re- 
vealed, they  should  be  shown  in  the 
report. 

In  the  counting  of  the  cash,  an  op- 
portunity will  be  given  to  learn  the 
practice  of  the  bank  as  to  cash  items. 
Ascertain  if  it  is  the  practice  to  carry 
odds  and  ends  of  memorandums  as  cash 
items;  to  carry  checks  to  prevent  over- 
drafts; by  the  officers  for  personal  ex- 
pense accounts. 

Investments. 

Upon  the  safe  or  unsafe  investment 
of  funds  depends  the  safety  of  deposits 
and  the  profit  to  stockholders,  and  as 
this  represents  about  three-fourths  of 
the  resources  of  the  bank,  nearly  as 
large  a proportion  of  the  time  would  be 
put  in  under  this  heading.  Under  it 
would  come  the  loans,  discounts,  bonds, 
warrants,  etc. 

These  should  all  be  listed  and  ex- 
amined, together  with  all  collaterals  and 
securities,  and  all  mortgages  securing 
loans  should  be  examined  especially  to 
see  if  they  are  properly  recorded,  and 
the  proper  lien  according  to  law. 

If  any  of  the  assets  were  kept  else- 
where than  in  the  vaults  of  the  bank 
being  examined,  the  records  of  the  bank 
should  be  verified  by  mail,  if  imprac- 
ticable for  same  member  of  the  exam- 
ining board  to  do  so. 

Loans  and  Discounts. 

All  large  borrowings  should  be  noted, 
and  inquiry  made  as  to  the  credit  of 
the  makers,  the  value  of  the  collateral 
and  security. 

Note  should  be  made  of  all  excessive 
loans;  loans  to  directors,  officers  and 
employes  especially,  if  contrary  to  law; 
all  companies  having  loans  in  which 
officers,  directors  or  employes  are  inter- 
ested; all  loans  past  due  more  than 
thirty  days,  with  reason  why;  all  loans 
on  which  the  interest  is  unpaid  for 
more  than  six  months  (unless  the  note 


should  specify  annual  payment  of  in- 
terest) ; all  loans  of  such  apparent  age 
as  to  lead  to  suspicion,  and  inquiry  as 
to  why  not  paid,  reduced  in  amount,  or 
renewed;  any  doubtful  or  bad  loans  re- 
vealed by  age,  nonpayment  of  interest 
or  depreciated  security. 

Bonds. 

A comparison  should  be  made  of  the 
book  value,  with  the  market  value,  and 
any  material  depreciation  reported;  as- 
certain if  practice  to  amortize  bond 
premium;  ascertain  if  any  issue  held  in 
an  amount  in  excess  of  that  proscribed 
by  law;  and  if  all  bonds  are  good. 

Warrants. 

Many  banks  buy  warrants  of  towns, 
counties  and  school  districts.  Learn 
how  the  bank  has  acquired  same,  when 
payable ; and  if  any  past  due,  why  pay- 
ment has  not  been  secured. 

Overdrafts. 

By  an  examination  of  the  individual 
ledger,  it  could  be  easily  learned  if 
overdrafts  were  regularly  and  generally 
permitted,  or  to  a favored  few,  and  if 
the  latter,  who  and  why;  giving  par- 
ticular attention  to  the  accounts  of  offi- 
cers and  employes  to  see  if  they  were 
gate  closely  all  expenditures,  and  see 
in  the  habit  of  overdrawing;  and  listing 
all  overdrafts  over  thirty  days  old. 

Due  from  Banks. 

The  amount  shown  to  be  due  from 
banks  can  only  be  verified  by  inquiry 
from  the  banks  on  suitable  blanks,  se- 
curing a detail  of  all  entries  for  several 
days  before  and  after  the  date  of  the 
examination, — the  number  of  days  de- 
pending on  the  distance  of  the  banks 
away. 

Also  the  statements  of  correspondent 
b9nks  should  be  examined  to  see  if  cor- 
rect at  the  close  of  the  previous  month. 

Real  Estate. 

A comparison  should  be  made  of  the 
book  value  and  the  actual  market  value 


Digitized  by  t^ooQle 


44 


THE  BANKERS  MAGAZINE 


of  all  real  estate  owned  by  the  bank 
(and  whether  income  producing  or  not), 
by  comparison  with  adjacent  property; 
if  any  real  estate  was  held  by  the  bank 
in  distant  communities  the  value  should 
be  verified  by  inquiry  through  banks  or 
mercantile  agencies.  If  the  bank  owns 
the  building  in  which  it  does  business,  a 
note  should  be  made  of  the  amount  of 
insurance  carried. 

Furniture  and  Fixtures. 

An  examination  of  the  furniture  and 
fixtures  account  will  show  the  original 
cost,  and  reveal  if  it  is  the  practice  of 
the  bank  being  examined,  as  it  is  in  all 
properly  managed  banks  in  this  day,  to 
regularly  reduce  the  book  value  of  this 
account  to  more  than  correspond  with 
the  depreciation. 

A report  should  also  be  made  on  the 
condition  of  the  furniture  and  fix- 
tures,— if  the  safe  and  vault  are  secure, 
and  the  counter  and  railings  furnish 
proper  protection  from  outsiders. 

Note  here  any  insurance  carried  on 
the  furniture  and  fixtures  and  the 
amount  of  burglary  insurance  carried. 

Expense. 

An  examination  for  the  shareholders 
or  directors,  should  certainly  investi- 
that  no  one  within  the  bank  used  the 
account  for  personal  gain. 

The  principal  items  of  expense  as 
salaries,  rents  paid,  etc.,  should  be 
noted. 

Deposits. 

This  heading  includes  such  a number 
of  heads  that  the  principal  ones  are 
mentioned. 

Due  to  Banks  and  Trust  Companies. 

As  in  the  case  of  amounts  due  from 
banks,  these  amounts  can  only  be  veri- 
fied by  forwarding  a statement  of  the 
balance  shown,  to  each  bank  with  a 
request  for  a report  on  the  correctness. 
The  rate  of  interest  paid  should  be 
noted,  and  any  special  conditions  gov- 
erning the  deposits. 


Due  to  Individuals,  Firms  and  Cor- 
porations. 

The  balance  of  the  individual  ledger 
or  ledgers  should  be  verified,  as  should 
those  of  all  deposit  accounts.  The 
quickest  method  would  be  by  one  of  the 
examining  members  checking  against 
the  ledger  balances  a list  previously 
taken  off  by  an  employe  of  the  bank. 

When  it  comes  to  proving  the  bal- 
ances to  the  credit  of  individual  de- 
positors, the  examiners  are  face  to  face 
with  one  of  the  most  delicate  and  dan- 
gerous items  to  prove  in  the  whole  ex- 
amination. 

If  it  be  the  general  practice  to  mail 
at  regular  periods  to  every  depositor  a 
statement,  asking  for  a report  of  ex- 
ceptions, the  reports  received  from  de- 
positors can  be  examined  upon  their 
return. 

But  there  would  be  a danger  in  send- 
ing out  requests  for  pass  books  to  be 
brought  in  for  balancing,  for  fear  of 
disturbing  confidence  on  the  part  of  de- 
positors. 

At  any  rate,  if  any  officer  or  em- 
ploye is  guilty  of  falsification  or  em- 
bezzlement, it  is  hardly  likely  that  an 
examining  board  in  the  short  time  they 
would  take  would  be  so  fortunate  as  to 
discover  it. 

Note  should  be  made  when,  how,  and 
what  amount  of  interest  was  paid. 

Municipal  Deposits. 

The  amount  of  municipal  deposits 
should  be  verified  by  mail  of  the  official 
controlling  the  deposit.  Any  interest 
paid  and  the  security  held  should  be 
noted. 

Certificates  of  Deposit. 

Outstanding  certificates  should  be 
verified  and  checked  against  stubs  and 
certificate  of  deposits  registers.  Note 
should  be  made  of  demand  and  time 
certificates,  any  special  conditions  gov- 
erning payment,  interest  paid,  and  if 
the  reprehensible  practice  of  making 
partial  payments  on  certificates  is  fol- 
lowed. 


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PRACTICAL  BANKING 


45 


Certified  Checks. 

After  verification,  investigation  should 
be  made  of  the  practice  of  the  bank  as 
to  certification  of  checks.  Does  it  al- 
ways charge  up  the  amount  against  the 
depositor’s  account  when  making  cer- 
tification; does  it  “accept”  such  checks 
as  arc  presented  and  the  drawer  has 
insufficient  funds;  or  does  it  certify  con- 
trary to  law? 

Dividends. 

Examination  should  be  made  if  it  was 
the  practice  of  the  officials  to  recom- 
mend the  payment  of  dividends  only  on 
income  paid  and  earned,  or  upon  that 
not  aerrued,  or  unearned;  also  if  legal 
proportion  of  earnings  was  first  trans- 
ferred to  surplus  before  dividends  were 
paid,  as  required  by  law. 

Capital  Stock. 

All  shareholders  should  be  listed  with 
the  number  of  shares  owned  from  stubs 
of  stock-book  and  compared  with  stock 
register,  watching  on  stock-book  for 
possible  duplicate  certificates  which 
might  have  been  issued  for  originals 
lost  or  destroyed,  and  see  if  a proper 
affidavit  of  loss  and  a bond  were  filed. 

By  reference  to  the  original  entries 
of  the  time  of  organization  an  endeavor 
should  be  made  to  learn  if  authorized 
capital  was  paid  in  full  in  coin,  in  the 
manner  prescribed  by  law,  or  if  any 
shareholders  had  paid  for  the  stock 
with  note  or  received  same  as  gift. 

It  should  be  seen  that  the  capital  was 
sufficiently  large  in  ratio  to  deposits,  if 
any  such  requirement  in  the  act  under 
which  the  bank  was  working. 

Also  learn  if  any  shares  of  the  bank’s 
own  stock  were  held  as  security  for  any 
obligation  owing  to  the  bank. 

If  the  act  required  a stockholder’s 
book  of  records  publicly  exhibited,  see 
if  the  requirement  was  fulfilled. 

Surplus. 

The  amount  of  this  should  be  re- 
ported, but  is  of  no  serious  concern  un- 
less such  an  amount  of  bad  assets  are 
found  as  to  wipe  out  the  undivided 


profits  and  surplus  and  impair  the  cap- 
ital stock. 

Undivided  Profits. 

As  with  the  surplus,  this  account  does 
not  seriously  concern  the  examiners,  ex- 
cept to  see  that  charges  to  it  are  for 
proper  purposes,  and  that  it  be  not 
used  to  cover  excessive  expenses. 

Items  charged  off  for  losses  or  de- 
preciation since  last  examination  should 
be  noted. 

Reserve. 

See  if  the  required  per  cent,  reserve 
was  kept  regularly,  as  well  as  on  the 
date  of  the  examination,  or  if  it  was  the 
practice  to  so  closely  loan  up  as  to  cause 
frequent  declines  below  the  legal  re- 
quirement when  unexpected  withdrawals 
were  made. 

Reserve  Banks. 

By  an  examination  of  the  minutes  of 
the  board  of  directors’  meetings  it  could 
be  learned  if  other  banks  in  which  funds 
were  deposited  had  been  regularly  ap- 
proved by  the  directors,  or  if  any  officer 
for  personal  reasons  was  favoring  cer- 
tain institutions  to  the  disadvantage  of 
the  bank.  Also  ascertain  if  the  reserve 
banks  had  been  approved  by  the  depart- 
ment of  bank  supervision. 

Meetings. 

The  directors  should  know  the  cus- 
tom as  to  elections,  meetings,  etc.,  of 
stockholders  and  directors,  but  it  should 
be  seen  if  dividends  and  other  disburse- 
ments and  transfers  were  properly  au- 
thorized by  the  board  of  directors. 

Officers,  Directors  and  Employes. 

A list  should  be  made  of  each,  length 
of  service,  previous  occupation,  other  in- 
terests, time  given,  salary  received, 
amounts  indebted  to  the  bank,  amounts 
endorsed  for  others,  amount  of  bond, 
and  in  whose  custody,  and  such  knowl- 
edge of  habits,  reputation  and  ability 
as  the  examiners  might  know,  number  of 
shares  owned,  and  in  case  of  directors, 
if  proper  number  required  by  law. 


Digitized  by  CjOOQle 


46 


THE  BANKERS  MAGAZINE 


In  General. 

Give  attention  to  the  general  appear- 
ance of  the  bank;  the  interior  and  ex- 
terior, the  vault,  safe,  desks,  system  and 
books,  the  lobby,  etc.,  if  the  banking 
act  in  general  was  observed;  if  the  af- 
fairs of  the  bank  were  apparently  man- 
aged in  a conservative  manner. 


If  the  examination  revealed  any 
money  borrowed  on  bills  payable,  cer- 
tificates of  deposit  or  re-discounts,  ver- 
ify the  amounts  shown  by  mail;  as  also 
all  items  sent  for  collection. 

After  the  above  program  had  been 
carried  out  faithfully,  the  examining 
board  might  feel  they  had  made  a pretty 
thorough  examination. 


INVESTMENTS 

Conducted  by  Franklin  Escher 


AS  TO  RAILROAD  DIVIDENDS 

BEARING  ON  THE  DIVIDEND  OUTLOOK  OF  WHAT  THE  INTERSTATE 
COMMERCE  COMMISSION  MAY  DECIDE  WITH  REGARD  TO 
FREIGHT  RATES 

By  Casper  Cromwell 


TN  the  big  fight  for  freight  rates,  the 
-*■  shippers  have  had  their  say  and  the 
railroads  have  had  theirs.  We  have 
been  treated  to  full,  free,  and  unlimited 
discussion  of  the  question  from  both 
sides.  For  the  time  being,  the  noise  is 
over.  With  a tact  highly  indicative  of 
the  extent  to  which  his  methods  favor 
the  suaviter  in  rnodo  rather  than  the 
fortiter  in  re,  the  President  met  the 
railroad  men,  and  extracted  from  them 
an  agreement  that  the  whole  matter  of 
higher  freight  rates  should  be  left  to 
the  judgment  of  the  Interstate  Com- 
merce Commission.  The  case  is  in  the 
hands  of  the  jury.  The  whole  country 
is  awaiting  the  verdict. 

It  is  on  account  of  what  the  railroad 
men  themselves  have  said  regarding  the 
dependence  of  dividends  upon  freight 
rates  that  the  verdict  is  waited  with  as 
much  interest  as  it  is.  The  decision,  it 
is  realized,  must  come  in  one  of  three 
ways.  In  the  first  place,  the  Commerce 
Commission  may  rule  the  railroads  en- 
titled to  the  advance  which  they  are  ask- 
ing for,  and  may  grant  them  the  full 
amount  of  increase  of  freight  rates  they 
want.  In  the  second  place,  after  hav- 
ing investigated  the  matter,  the  Com- 


mission may  decide  that  an  increase  in 
rates  is  warranted,  but  not  to  the  ex- 
tent asked  for,  and  may  allow  the  rail- 
roads to  put  up  their  rates  to  the  ex- 
tent of,  say,  one-third  or  one-half  of 
the  amount  they  want.  Then,  again, 
the  Commission  may  decide  that  the 
railroads  are  entitled  to  no  increase  in 
their  rates  at  all. 

If  the  Full  Amount  Is  Allowed. 

With  regard  to  the  effect  upon  divi- 
dends of  a decision  of  the  first  sort, 
where  the  full  increase  is  allowed,  it 
may  be  said  without  hesitation  that 
higher  dividends  all  along  the  line 
would  be  the  inevitable  result — that  is 
to  say,  unless  business  became  depressed 
through  the  imposition  of  the  higher 
rates  and  gross  earnings  began  to  fall 
off.  The  railroads  are  facing  that  dan- 
ger. On  a volume  of  gross  business 
equal  to  what  they  are  handling  at  pres- 
ent, higher  freight  rates  would  mean 
very  largely  increased  net  revenues.  If, 
however,  higher  rates  should  cause  a 
falling  off  in  business,  and  a shrinkage 
in  the  tonnage  they  are  carrying,  it 
might  be  better  for  them  to  do  more 
business  on  a lesser  margin  of  profit 


Digitized  by  t^ooQle 


INVESTMENTS 


47 


In  other  words,  to  have  things  as  they 
arc  now. 

If  a Partial  Increase  Is  Granted. 

In  the  second  case,  allowing  that  the 
Commerce  Commission  decides  that  a 
part  of  the  increase  in  rates  prayed  for 
should  be  allowed,  a resumption  of  divi- 
dend increases  later  in  the  year  (always 
admitting  that  business  keeps  up  as  it 
is  at  present)  would  seem  very  prob- 
able. The  transportation  men  have  in- 
sistently declared  that  an  increase  in 
rates  of,  say,  five  per  cent,  would  be  a 
very  small  offset  as  against  the  wage 
increases  they  have  granted.  The 
country,  however,  refuses  to  look  at  it 
that  way.  The  man  in  the  street  con- 
siders that  on  the  enormous  volume  of 
business  which  the  railroads  are  han- 
dling, even  a very  slight  increase  in 
freight  rates  ought  to  be  productive  of 
a large  gain  in  net  revenues.  There  is 
probably  a good  deal  of  truth  in  the 
idea. 

If  No  Increase  Is  Allowed. 

Suppose,  however,  that  the  Com- 
merce Commission  decides  that  no  in- 
crease at  all  is  warranted  at  the  present 
time,  what  then?  Would  present  divi- 
dends be  maintained?  Judging  from 
present  reports  of  operating  expenses 
and  net  earnings,  probably  not,  but 
present  reports  of  operating  expenses 
and  net  earnings  are  not  being  taken 
very  seriously.  For,  with  this  fight  for 
higher  freight  rates  on  their  hands,  it 
is  realized  that  the  railroads  have  had 
the  strongest  kind  of  a motive  for  mak- 


ing as  poor  a showing  of  net  earnings 
as  they  possibly  could.  Into  the  oper- 
ating expense  account,  there  have  been 
packed  all  sorts  of  items — expenses 
which  should  properly  have  been 
charged  to  capital  account.  Such  a con- 
dition may  not  have  been  entirely  the 
will  of  the  railroad  men  but  to  a certain 
extent  may  have  been  forced  upon  them 
by  the  fact  that  investment  market  con- 
ditions were  so  bad  that  they  could  not 
sell  bonds  and  raise  money,  but  in  any 
case  the  fact  remains  that  in  many  in- 
stances net  earnings,  by  a mere  matter 
of  book-keeping,  have  been  made  to 
show  up  very  much  worse  than  they 
actually  were. 

Dividends  Not  to  Be  Reduced. 

To  the  extent  that  true  conditions 
have  been  portrayed  depends  the  prob- 
ability of  the  maintenance  of  present 
dividend  rates  in  case  the  Commerce 
Commission  rules  against  any  advance 
whatever  in  transportation  charges.  A 
glance  at  the  income  account  of  some  of 
the  leading  systems  for  last  year  is  all 
that  is  necessary  to  see  that  with  freight 
rates  as  they  are  the  railroads  did 
pretty  well  and  that  dividends  in  most 
instances  were  earned  by  a rather  com- 
fortable margin.  The  swollen  expense 
accounts  of  the  past  few  months  are  re- 
sponsible for  the  idea  in  the  minds  of  a 
good  many  shrewd  observers  that,  with 
business  continuing  good  and  the  crop 
satisfactory  this  autumn,  actual  earn- 
ings derived  from  the  present  schedule 
of  freight  rates  will  be  amply  sufficient 
at  least  to  maintain  present  dividends. 


SOME  FACTS  ABOUT  TIMBER  BONDS 


A DISCUSSION  OF  THE  FEATURES  NECESSARY  TO  MAKE  THESE 
BONDS  SATISFACTORY  TO  INVESTORS 

By  E.  B.  Cadwell 


T^HE  agitation  for  the  conservation 
**  of  the  forests  of  the  country  has 
resulted  in  calling  public  attention  to 
the  importance  and  growth  of  the  tim- 
ber and  lumber  industry. 

Certain  changes  have  come  about  in 
in  the  timber  business  in  recent  years  in 


the  manner  of  operating  the  properties. 
As  in  nearly  every  other  industrial  line, 
highly  developed  machinery  has  come  to 
play  a large  part,  thereby  making  possi- 
ble rapid  and  economical  handling  of 
logs  and  lumber.  Equipment  of  the 
kind  necessary  and  of  the  capacity  suffi- 


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of  Established  Gas  and  Electric  Companies 

These  bonds  are  issued  by  prosperous  Companies  of  New  England  and  the 
Middle  West;  companies  whose  business  has  been  developed 
by  years  of  constant  and  growing  service,  whose  credit  is 
firmly  established  and  whose  ability  to  carry  their  bonded 
debt  has  been  proven  through  periods  of  prosperity  and  of 
general  business  depression. 


The  control  of  these  companies  Is  vested  in  the  NATIONAL/  LIGHT,  HEAT  it  POWER 
COMPANY,  New  York,  which,  through  Its  various  sub-companies,  controls  the  lighting 
franchises  of  some  Twenty  Cities  and  Towns. 


DOUBLE  SECURITY 


Each  of  these  Bonds  bears  the  unconditional  Guarantee  of  the  National  Light,  Heat 
& Power  Company  as  to  prompt  payment  of  principal  and  Interest.  This  Guarantee 
means  protection,  insurance  against  loss  and  the  constant,  unremitting  supervision  and  in- 
terest of  a large  and  successful  corporation  which  controls  these  valuable  properties. 

DENOMINATION  $500  AND  $1,000. 

For  offerings  and  full  Information  addreas  Bond  Dept. 

A.  H.  Bickmore  & Co.,  Bankers  30  Pine  Street,  New  York 


cient  to  insure  economy  of  operation 
calls  for  a large  expenditure.  Here  is 
where  the  organization  of  the  corpora- 
tion became  useful,  and  the  issue  and 
sale  of  securities  based  on  timber  en- 
terprises appeared  desirable. 

The  tendency  has  been  toward  a con- 
stant growth  of  large  corporations  with 
ample  capital,  extensive  equipment  and 
a large  and  highly  skilled  organization 
capable  of  managing  the  business  in  the 
most  efficient  manner. 

Such  corporations  have,  through  well- 
known  bankers,  from  time  to  time,  of- 
fered their  securities  to  the  public, 
based  on  their  assets  of  standing  tim- 
ber,  logging  equipment,  mills,  tugs,  log- 
ging railroads,  etc.  The  securities  of- 
fered by  these  corporations  usually  are 
in  the  form  of  first  mortgage  sinking 
fund  serial  bonds. 

The  Value  of  a Timber  Tract. 

The  features  essential  to  make  such 
an  issue  satisfactory  are  entitled  to  first 
attention.  The  value  of  a tract  of 
standing  timber  depends  on  its  kind, 
quality,  total  quantity,  and  also  the 
average  quantity  per  acre ; the  nature  of 
the  land,  whether  level,  rolling  or  moun- 
tainous, thus  affecting  the  accessibility 
of  the  timber;  the  location  of  the  tract 
with  respect  to  water  or  railway  trans- 
portation to  the  important  market  cen- 
ters; whether  there  is  within  easy  reach 
a market  for  the  logs,  and  also  a mar- 
ket for  lumber.  If  the  transportation 

48 


facilities  consist  only  of  railway  con- 
nections, then  freight  rates  become  an 
important  factor  in  the  problem. 

It  is  necessary  to  inquire  whether  the 
expert  timber  cruisers  employed  by  the 
bankers  have  examined  the  tract,  acre 
by  acre,  and  have  certified  to  the 
amounts  and  kinds  of  timber  located 
thereon.  It  is  also  necessary  to  in- 
quire whether  the  bankers*  attorneys 
have  examined  and  furnished  written 
opinions  on  the  company's  title  to  the 
timber,  and  that  the  trust  deed  securing 
the  bond  issue  is  a first  lien  thereon. 
Furthermore,  a feature  never  to  be  lost 
sight  of  by  the  investor  is  whether  or 
not  the  company  is  amply  provided  with 
equipment  of  modern  type  for  the  rapid 
and  economical  handling  of  the  product. 
This  equipment  in  a general  way  con- 
sists of  donkey  engines  for  “skidding," 
“yarding"  and  loading  logs  on  the  rail- 
road cars.  It  also  includes  logging 
railroads  into  the  timber  and  connec- 
tions with  railway  transportation  to 
market,  or  better  yet,  connection  by 
water  transportation  to  the  important 
markets. 

Security  Behind  the  Bonds. 

Conservative  bankers  require  that 
the  actual  value  of  the  standing  timber 
shall  equal  at  least  three  times  the 
amount  of  the  bond  issue,  secured  by 
the  mortgage  or  trust  deed  on  the  tim- 
ber. The  subject  of  the  net  earnings  of 
the  company  is  also  one  of  cardinal  im- 


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Stiff  Union  National  Sank 

CAPITAL  $1,600,000  Cllt  8URPLU8  $900,000 


GEO.  H.  WORTHINGTON,  President 
J.  F.  HARPER,  Vlct- President 
E.  R.  FANCHER,  Vice-President 
a A.  COULTON,  Cashier 
W.  E.  WARD,  Aset.  Cashier 


€J  Organized  in  1884.  More  than 
twenty-five  years  of  service  back 
of  us.  May  we  be  of  use  to  you? 


portance.  The  earnings  should  never  be 
less  than  twice  the  requirements  for 
both  interest  and  sinking  fund  pay- 
ments. Timber  bond  issues  are  always 
sinking  fund  and  serial  issues.  By  this 
is  meant  that  under  the  terms  of  the 
mortgage  or  trust  deed  securing  the 
bonds,  the  company  is  compelled  to  pay 
over  to  the  trustee,  for  the  benefit  of 
the  bond  holders,  a certain  amount, 
ranging  from  fifty  cents  to  two  or  three 
•dollars  per  1,000  feet  of  timber  cut.  By 
this  provision  the  owners  of  the  bonds 
are  absolutely  protected  against  the  pos- 
sible cutting  and  sale  of  the  timber  se- 
•curing  the  bonds  without  providing 
money  to  retire  the  bond  issue. 

The  bond  issues  of  some  lumber  com- 
panies are  on  a basis  as  high  as  two  or 
three  dollars  per  1,000  feet  of  timber, 
while  other  issues  are  as  low  as  twenty- 
five  cents  per  1,000  feet  of  timber.  Of 
•course  the  lower  the  rate  per  1,000  feet 
•of  timber,  the  better  the  security  for 
the  bonds. 

Fixing  Values. 

Timber  varies  in  value,  according  to 
its  kind  and  location.  In  the  far  north- 
west— in  Washington,  British  Columbia 
And  on  the  Island  of  Vancouver — there 
are  great  forests  of  fir,  cedar,  spruce 
and  hemlock,  yielding  from  5,000  to 
20,000  feet  of  timber  to  the  tree.  In 
the  Southern  States  are  enormous  tracts 
of  long-leaf  yellow  pine  as  well  as  oak 
and  poplar.  East  of  the  Rocky  Moun- 
tains the  yield  is  much  less  than  in  the 
Puget  Sound  district.  In  the  British 
Columbia  forests  frequently  a single 
:tree  yields  what  would  be  considered  a 


good  stand  for  an  acre  east  of  the 
Mountains. 

The  estimate  of  the  quantity  and 
value  of  timber  is  a matter  of  judg- 
ment born  of  experience.  Expert  tim- 
ber estimators — commonly  called  cruis- 
ers— are  always  employed  by  banking 
houses  handling  timber  bonds.  These 
cruisers  are  men  who  have  had  frequent- 
ly a lifetime  of  experience,  and  there- 
fore have  become  very  skillful  in  their 
profession.  In  cruising  a tract  of  tim- 
ber they  determine  the  quantity  and 
quality  of  each  kind  of  timber,  and  as 
their  work  proceeds  make  record  of  the 
results  on  each  acre,  forty  or  section  as 
the  case  may  be.  This  record  is  put 
into  the  form  of  a report  covering 
every  acre  of  the  tract  examined. 

It  is  sometimes  thought  that  an  in- 
vestment in  timber  is  exposed  to  con- 
siderable risk,  because  of  fire  hazard. 
By  most  people  this  danger  is  greatly 
over-estimated.  In  the  Canadian  north- 
west— that  is,  in  the  Puget  Sound  dis- 
trict— fires  are  unknown,  because  here 
is  found  the  heaviest  annual  rainfall  on 
the  North  American  continent.  In  the 
South  but  little  underbush  exists  in  the 
forests,  and  therefore  forest  fires  are 
not  numerous,  and  do  but  little  dam- 
age. Reports  of  forest  fires  in  the  pub- 
lic prints  are  frequently  greatly  exag- 
gerated. Large  green  trees  will  not 
burn  readily.  Many  varieties  of  trees 
may  be  manufactured  into  merchantable 
lumber  years  after  being  killed  by  fire. 
Pine  and  hardwood  forests  in  the  North 
Central  States  have  been  severely  dam- 
aged in  places  from  fire,  fed  by  a heavy 

49 


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To  Buy  or  Not  to  Buy 
is  the  ? Most  Puzzling 
to  the  Average  Trader 


But  easily  obviated  by  good  Market  Literature. 
Send  for  dally  letter  and  other  data. 

J.  FRANK  HOWELL  Stiff 

34  NEW  STREET  NEW  YORK  CITY 


growth  of  underbrush.  At  present  in  all 
sections  great  care  is  being  exercised  to 
prevent  fires,  and  both  private  and  gov- 
ernment patrols  are  maintained  for  this 
purpose. 

Convertibility  of  Timber  Bonds. 

The  true  test  of  the  value  of  a secur- 
ity behind  a loan  is  whether  or  not  that 
security  can  be  converted  into  cash  if 
necessity  requires,  to  pay  to  the  bond 
holders  the  money  called  for  by  their 
bonds.  A tract  of  standing  timber  need 
not  be  sold  as  a unit.  It  can  be  divided 
up  and  sold  in  such  sized  tracts  as  buy- 
ers may  desire.  It  is  salable  for  cash, 
and  the  market  for  timber  lands  is  such 
that  there  are  always  large  operators  and 
wealthy  buyers  who  are  ready  to  pick 
up  bargains  at  any  time,  and  are  pre- 
pared to  pay  cash.  Therefore,  holders 
of  timber  bonds,  secured  by  a properly 
selected  and  located  tract,  can  always 
rely  on  the  fact  that  the  timber  securing 
their  bonds  could  be  turned  into  money 
in  a very  short  time  if  it  became  neces- 
sary to  do  so.  In  other  cases,  like  that 
of  an  electric  railway  or  gas,  or  electric 
light  plant,  if  the  interest  is  not  paid 
on  the  bonds,  and  a default  occurs,  the 
property  can  rarely  be  sold  for  cash  to 
an  independent  buyer,  but  must  be  bid 
in  by  the  bond  holders  for  their  protec- 
tion. A tract  of  standing  timber  is  im- 
mediately salable  for  cash. 

In  the  selection  of  timber  bonds,  as 
in  the  selection  of  any  other  security, 
discrimination  must  be  shown.  It  is 
customary  for  corporations  that  desire 
to  raise  capital  in  the  open  market  to  do 
so  through  banking  houses  that  are  well 
known.  Because  of  the  large  volume 
of  business  handled  by  such  houses  they 

50 


can  well  afford  to  employ  the  necessary 
timber  experts,  lawyers  and  accountants 
to  thoroughly  examine  every  detail  in 
connection  with  the  various  issues  of- 
fered to  them.  It  is  therefore  desirable 
for  the  investor  to  make  his  purchases 
through  such  banking  houses  whose 
reputations  are  established,  and  in 
whom  he  has  confidence. 

There  is  no  doubt  that  the  popularity 
of  timber  bonds  is  steadily  increasing, 
and  the  certainty  of  constantly  increas- 
ing value  for  standing  timber,  due  to 
the  growing  consumption  and  rapidly 
diminishing  supply,  makes  timber  an  at- 
tractive security  for  the  investor. 

Some  Timber  Facts. 

Last  year  over  fifty-five  billion  feet 
of  timber  were  cut  in  the  United  States. 
More  than  18,000  acres  of  timber  are 
cut  in  the  United  States  every  working 
day.  At  the  present  rate  of  consump- 
tion the  desirable  and  accessible  timber 
of  the  country  will  be  exhausted  in  be- 
tween twenty-five  and  thirty-five  years. 

To  supply  a paper  like  the  Chicago 
Tribune  with  paper  for  one  year  re- 
quires over  2,000  acres  of  timber. 

We  use  7,300,000  cubic  feet  of  cedar 
per  year  for  lead  pencils. 

Our  consumption  of  timber  is  increas- 
ing much  more  rapidly  than  our  in- 
crease in  population. 

When  the  Panama  Canal  is  completed 
more  than  ten  dollars  per  1,000  feet 
can  be  saved  in  freight  rates  from  the 
Pacific  coast  to  our  Atlantic  cities. 

There  is  no  other  great  staple  as  in- 
dispensable to  civilization  as  timber,  the 
consumption  of  which  is  rapidly  in- 
creasing, while  the  supply  is  constantly 
diminishing. 


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and  receive  suggestions  for  investment  or  speculation  through  our  weekly 
"Market  Letter  on  Stocks.” 


Swartwout  & Appenzellar,  Bankers 

Members  New  York  Stock  Exchange 

40*42-44  PINE  STREET,  NEW  YORK  CITY 

Axricaltnral  Nat.  Bask  Bldg.  First  Nat.  Bask  Bldg. 

Ftttsfleid.  Mass.  Chicago.  ILL 


READING  THE  FINANCIAL  PAGE 

HINTS  TO  HELP  INVESTORS  IN  SEPARATING  THE  WHEAT  FROM 

THE  CHAFF 

This  article  comes  to  us  from  a member  of  the  financial  staff  of  one  of  the 
big  dailies . For  obvious  reasons  the  author's  name  is  withheld. — Ed. 


'T'HE  average  man  interested -in  finan- 
cial  affairs  wades  through  an  ap- 
palling amount  of  useless  matter  in  his 
reading  of  the  money  pages  of  the 
newspapers.  Wanting  to  keep  well  in- 
formed, when  he  gets  to  the  financial 
part  of  his  paper,  he  is  apt  to  read  it 
right  through — reading-articles,  para- 
graphs, gossip  and  all.  In  his  desire 
not  to  miss  anything  and  usually  being 
unable  to  pick  out  at  sight  what  is  im- 
portant and  what  is  not,  he  is  apt  to 
swallow  the  whole  business.  The  whale 
does  the  same  thing,  but  he  has  sense 
enough  to  blow  out  what  he  doesn't 
want.  The  average  investor  is  more  apt 
to  try  to  digest  all  he  has  taken  in. 

If  for  the  sake  of  saving  time  alone, 
the  average  financial  page  of  the  aver- 
age newspaper  ought  to  be  read  with 
discrimination.  Assuming  now  that  the 
man  who  is  reading  it  is  an  investor  and 
not  one  of  the  deluded  ones  engaged  in 
rainbow-chasing  after  fluctuations,  most 
of  the  market  conditions  of  the  day  are 
of  no  earthly  interest  to  him  whatever. 
"About  two  o’clock  some  good  selling 
was  noticed,  but  banking-house  support 
appeared  and  the  bears  quickly  with- 
drew”— Allowing  that  such  a state- 
ment represents  what  actually  did  hap- 
pen in  the  market  at  two  p.  m.  (the 
chances  are  fifty  to  one  that  it  doesn’t) 
of  what  possible  use  can  it  be  to  the 
investor  to  be  apprised  of  the  fact? 
"Stocks  ran  off  sharply  at  noon,  but 


again  the  very  best  sort  of  buying  was 
noticed,  the  list  soon  righting  itself  and 
higher  quotations  being  made  all  along 
the  line  to  the  extent  of  a point  or  so” — 
Interesting,  but  in  all  probability,  very 
far  from  being  correct.  "Banking  sup- 
port” when  it  appears  in  the  market  is 
not  apt  to  be  labelled  that  way.  If  it 
were,  the  financial  reporter,  running 
around  the  street  for  news,  would  hard- 
ly be  in  a position  to  see  it. 

Gossip. 

Of  little  more  use  is  the  gossip  which 
appears  every  day  concerning  railroad 
consolidations  and  other  matters  of  that 
kind.  Most  news  items  of  this  sort — 
they  can  hardly  be  called  news  items — 
are  "planted,”  that  is  to  say,  are  al- 
lowed to  trickle  out  from  what  are  re- 
garded as  good  sources  of  information 
for  the  purpose  of  influencing  senti- 
ment. The  variations  in  which  this  news 
is  dished  up  are  something  remarkable. 
It  is  hardly  possible  at  times  to  recog- 
nize the  account  given  by  two  different 
newspapers  as  relating  to  the  same 
thing.  Here  imagination  holds  sway. 
The  paper  whose  reporter  has  the  most 
of  that  useful  quality  is  able  to  present 
the  story  in  the  most  interesting  form. 
Investors  like  it  that  way.  It  reads 
better. 

Comment. 

Then,  again,  there  is  the  so-called 
comment  appearing  in  the  daily  papers. 

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TELEPHONES 
•7901 
6791 

6799  } BROAD 
6799 
6794 


Uaion  Ferry 
Stock  and  B'l 
Mew  Amsterdam 
Gas  5’s 


WILLIAMSON  A SQUIRE 

MEMBERS  N.  T.  STOCK  EXCHANGE 

INVESTMENT  SECURITIES 

SS  BROAD  ST.,  NEW  TORE  RITY 

All  Local  Street  Railway,  Gas,  Electric  and  Ferry 
Companies  Boagkt,  Sold  and  Qnoted 


Economy  Light  A 
Power  8’s,  1966 


Llfht- 
7s,  1*51 
Del*.,  Lack.  A 
Western  Coal 
Pacific  Gao  and 
Electric 

Kina's  Ooiaty 
EL  Lt.  A Power 


An  event  such  as  the  recent  injunction 
against  the  raising  of  railroad  freight 
rates  comes  up,  and  the  same  afternoon 
or  the  next  morning  the  papers  are  filled 
with  learned  comment  showing  exactly 
how,  when  and  to  what  degree  the  situa- 
tion is  going  to  be  affected  thereby. 
The  news  is  out — the  public  wants  to 
know  what  it  means.  There  has  been 
no  time  to  digest  the  situation  or  to  get 
it  in  right  perspective.  But  that  makes 
no  difference.  "What  does  it  mean  to 
the  market?" — readers  want  to  know 
that,  or,  at  least,  they  want  to  know 
what  the  paper  they  read  thinks  it 
means  to  the  market.  As  a matter  of 
fact,  the  writer  of  the  comment  has  had 
no  time  to  make  up  his  mind  about  it 
one  way  or  the  other.  He  has  had  to 
slap  down  the  first  thing  that  comes  into 
his  mind  on  the  subject,  often  a snap- 
judgment  and  not  worthy  of  very  seri- 
ous consideration. 

What,  then,  is  left  of  the  financial 
page — to  what  part  of  it  is  the  in- 
vestor’s serious  attention  entitled? 

The  Facts  That  Count. 

Broadly  speaking,  to  three  parts  of 
it — the  actual  quotations  and  earning 
statements,  the  real  news  items,  and  the 
summaries.  If  the  man  who  wants  to 
keep  well  informed  on  financial  affairs 
would  give  close  attention  to  these,  rely- 
ing upon  getting  his  comment  on  the 
financial  situation  out  of  some  authori- 
tative periodical,  weekly  or  monthly,  he 
would  be  better  off  than  at  present, 
burdening  his  mind  with  all  sorts  of 
hastily  prepared  material. 

The  quotations  and  the  reports  of 
earnings  are  exceedingly  important.  By 
reading  them  over  each  day,  a man  with 
a good  retentive  memory  is  enabled  to 
picture  in  his  mind  the  general  condi- 
tion of  the  financial  markets  in  the  most 
correct  manner  possible.  Perhaps  he 


watches  two  or  three  stocks,  perhaps  a 
dozen  or  twenty.  If  they  are  the  lead- 
ers, the  mental  chart  is  apt  to  be  cor- 
rect. He  will  know  more  about  the 
drift  of  the  market  than  if  he  is  told  by 
twenty  writers  of  financial  "dope"  that 
stocks  went  up  to-day  or  went  down 
yesterday. 

Of  earning  statements,  it  is  only  nec- 
essary to  say  that  they  are  the  light  by 
which  the  true  investor  is  guided.  Edi- 
tors and  commentators  on  large  finan- 
cial affairs  find  it  necessary  to  look  over 
the  earning  statements  of  practically  all 
the  important  roads,  but  for  the  individ- 
ual investor  it  is  usually  necessary  to 
keep  in  touch  only  with  the  statements 
of  those  properties  in  which  he  is  di- 
rectly interested.  It  will  pay  him  de- 
cidedly to  do  that. 

The  financial  news  items  are  of  great 
importance  in  getting  before  the  intelli- 
gent investor  the  material  on  which  he 
bases  his  own  judgment  as  to  the  drift 
of  things.  It  is  not  always  easy  to 
pick  out  a real  news  item  from  a rumor 
dished  up  in  that  form,  but  practice 
will  enable  the  investor  to  do  it,  so  that 
after  a while  the  genuine  item  of  news 
will  stand  out  from  the  mass  of  com- 
ment in  which  it  is  usually  embodied,  as 
though  it  were  printed  in  big  block  let- 
ters. It  is  not  the  fact  that  rumor  has 
it  that  the  Eastern  & Southern  is  going 
to  buy  the  Northern  & Western  that 
he  wants — it  is  the  fact  that  the  East- 
ern & Southern  has  actually  bought  the 
Northern  & Western — when  he  reads  it 
that  way,  it  is  worth  while  going  ahead 
and  try  and  figure  out  what  the  consoli- 
dation means. 

The  summaries  of  earning  statements, 
quotations,  etc.,  can  be  called  the  mile- 
stones in  the  financial  pathway  by 
which  the  investor  is  enabled  to  find  out 
just  where  he  is.  However  retentive 
his  memory  or  however  clearly  there 


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•Hudson  * Manhattan  B.  B.  Co.  First  Mt*e.  4%%  Bonds 

• Hudson  M il  B.  Co.  Conunot  Stock 

Hudson  i Manhattan  B.  B.  Co.  Preferred  Stock  Equities  in  Beal  Estate 

OBLIGATIONS  CON8IST  OPi 

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•Hudson  Cos.  Preferred  Stock  Hudson  Cos.  Common  Stock 

* I will  buy.  sell  or  quote  these  securities 
DETAILED  INFORMATION  FURNISHED  UPON  BEQUEST 

t«i.  himtit  eo7s  Briggs  C.  Keck  45  w«n  *tr««t 


may  be  aligned  in  his  mind  the  figures 
he  has  read,  it  always  helps  greatly  to 
come  upon  a first  class  summary  of 
facts  and  figures.  Investors  get  to 
know  where  these  summaries  appear 
and  go  to  them  the  way  the  trout  in 
sluggish  rivers  go  to  the  clear  water 
holes. 

With  these  suggestions  in  mind,  it 


will  be  found  that  the  financial  page 
can  be  read  every  day  intelligently  and 
very  quickly.  The  financial  page  of  the 
average  newspaper  is  one  of  the  most 
important  it  contains.  A working 
knowledge  of  the  facts  which  appear 
upon  it  is  absolutely  essential  to  the 
man  who  claims  to  be  well  informed  on 
current  events. 


FRENCH  PURCHASES  OF  AMERICAN  BONDS 

By  C.  L.  Scovil,  of  Spencer,  Trask  & Co. 


T>ARIS  bankers,  who  are  largely 
guided  by  the  exigencies  of 
French  foreign  politics,  have  recently 
unloosed  the' floodgates  of  the  people's 
savings,  and  American  securities  are 
now  being  absorbed  in  large  quantities 
in  their  market,  which  has  hitherto  been 
particularly  chary  of  American  invest- 
ments. This  is  a matter  of  much  great- 
er importance  than  can  be  measured  by 
the  spurt  of  a few  points  with  which 
the  stock  market  first  greeted  this  fa- 
vorable announcement.  In  the  first 
place,  French  bankers  are  generally 
recognized  as  being  among  the  most 
conservative  in  the  world.  The  ordi- 
nary swings  of  the  markets  are  of  no 
importance  to  them,  because  they  ex- 
amine fundamentals  most  carefully,  and 
consequently  their  readiness  to  buy 
largely  of  American  securities  at  a time 
when  a spirit  of  pessimism  is  permeat- 
ing our  markets,  is  an  indication  that 
they  view  our  situation  as  inherently 
sound,  notwithstanding  the  occasional 
setbacks  to  which  we  are  subjected. 


In  the.  next  place,  these  French  pur- 
chases lift  a burden  from  our  shoulders 
at  a most  opportune  time,  as  our  rail- 
road systems  are  in  urgent  need  of 
funds  for  betterments  and  improve- 
ments, and  conditions  still  reigning  in 
our  bond-markets  would  certainly  have 
made  the  terms  over  here  very  expen- 
sive, if  not  altogether  prohibitive.  Cor- 
porations generally  have  recognized  this 
situation  to  such  an  extent  that  the  only 
offerings  of  importance  in  the  month 
just  passed  were  made  by  the  Pennsyl- 
vania and  the  Baltimore  8c  Ohio  Rail- 
roads. Municipalities,  however,  do  not 
seem  to  have  properly  gauged  the  signs 
of  the  times,  or  if  they  did,  thought 
they  could  disregard  them,  and  conse- 
quently we  see  such  important  cities  as 
Philadelphia,  Baltimore,  Chicago,  Mil- 
waukee and  Portland,  Ore.,  fail  one  af- 
ter another  in  their  efforts  to  place 
bonds.  Since  all  these  widely  separated 
municipalities  enjoy  good  credit,  it  is 
but  reasonable  to  assume  that  the  cause 
for  their  failures  is  due  to  factors  that 

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INTERNATIONAL  NICKEL  00.  SECURITIES 

Ba-PONT  POWDER  GO.  SECURITIES 

OIL  FIELDS  OF  MEXICO  00.  STOCK 

STANDARD  PAINT  GO.  STOCK 

S.  H.  P.  PELL 

& CO. 

Members  New  York  8 took  KxehtBfe  Members  New  York  Cotton  Exchange  1 

Dealers  In 

Tel.  7865-8-7-8-8  Hanover 

Unlisted  and  Inactive  Securities 

43  EXCHANGE  PLACE,  N.  Y. 

are  national  rather  than  local.  The 
principal  factors  seem  to  have  been  the 
unattractive  yield  of  the  offerings  (be- 
tween four  per  cent,  and  four  and  one- 
half  per  cent.),  and  the  already  large 
amount  of  undigested  securities  seeking 
final  lodgment. 

There  is  another  reason  which  con- 
tributes to  the  general  apathy  toward 
the  bond-market.  Our  people,  never  of 
a particularly  economical  disposition, 
have  been  carried  away  by  the  auto- 
mobile craze,  and  thousands  are  run- 
ning cars  who  cannot  afford  to  do  so 
without  mortgaging  property,  while 
thousands  of  others  are  now  investing 


in  motors  who  formerly  invested  in 
bonds.  It  is  calculated  that  upwards  of 
$300,000,000  will  be  absorbed  by  the 
automobile  industry  this  year,  which 
represents  the  interest  on  about  two- 
thirds  of  our  entire  prospective  crops 
of  the  present  year.  This  is  a phase  in 
our  political  economy  which  deserves 
more  consideration  than  is  usually  given 
to  it. 

To  the  above  causes  should  be  added 
the  unsatisfactory  outlook  for  money 
during  the  second  half  of  the  year, 
which  in  itself  would  tend  to  keep  the 
market  in  a more  or  less  quiescent  con- 
dition. 


CURRENT  RAILROAD  STRATEGY 

DEALS  PRESENT  AND  PROSPECTIVE  SIMMERING  BENEATH  THE 

SURFACE 

By  A.  Franklin 


'T'HE  time  to  buy  is  when  the  other 
fellow  wants  to  sell.  The  time 
when  big  railroad  deals  are  arranged  is 
when  public  interest  in  the  markets  is 
at  a low  ebb  and  stocks  are  for  sale. 
These  are  the  times  when  it  is  possible 
for  an  Edwin  Hawley  to  get  control  of 
a Chesapeake  & Ohio  or  a Canadian 
Pacific  to  take  over  a Wisconsin  Cen- 
tral. Consummation  of  a railroad  deal 
usually  requires  accumulation  of  stock. 
When  the  markets  are  active  and  the 
outlook  is  bright,  people  want  to  buy 
stocks — not  sell  them.  It  is  in  times 
when  public  sentiment  is  depressed, 
therefore,  that  the  big  interests  who  are 
trying  to  put  through  deals  are  most 
active. 

The  present  is  a time  when  public  in- 
terest in  the  market  is  at  a low  point — 
when  investors  who  have  been  holding 
on  to  their  stocks  for  a long  time  seem 
willing  to  let  go  of  them — when  it  is 


possible  for  some  strong  interest  which 
wants  to  get  control  of  a property  to 
buy  in  the  open  market  the  shares  it 
needs.  Below  the  surface  there  is  a 
good  deal  going  on — far  more  than  the 
eye  of  the  ordinary  investor  can  see. 
How  quietly  it  is  possible  for  the  big 
men  to  work  and  with  how  little  an  ad- 
vance in  the  price  of  the  shares  they 
are  accumulating,  can  be  seen  from  the 
deadly  dull  market  often  existing  in  the 
very  stocks  which  are  being  accumu- 
lated. 

Below  the  Surface. 

It  is  not  easy  to  look  below  the  sur- 
face and  see  what  is  going  on  in  the 
way  of  accumulation  by  strong  inter- 
ests, but  here  and  there,  situations  are 
constantly  developing  which  make  it 
well  worth  while  to  study  carefully 
what  is  going  on.  At  the  present  time, 
here  in  the  East,  the  main  points  of 


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Miners  Bank,  Joplin,  Mo. 

We  cordially  invite  correspondence  relative  to  opportunities  and  investments,  the  advan- 
tages of  Joplin  as  a manufacturing  point,  etc.  Accounts  and  collections  also  invited. 

Capital,  $100,000  Surplus,  $100,000  Deposits,  $750,000 


interest  are  in  the  situation  which  is 
developing  with  regard  to  the  control 
of  the  Wabash  and  the  arrangement 
which  has  just  been  made  between  the 
New  York  Central  and  the  Western 
M ary  land.  Out  in  the  Middle  West, 
the  attempt  by  the  Chesapeake  & Ohio 
system  to  get  an  outlet  to  the  Great 
Lakes  is  a strategic  feature  of  great  im- 
portance. In  the  Southwest,  the  Kan- 
sas City,  Mexico  & Orient  is  pushing  its 
way  from  Kansas  City  steadily  down 
towards  the  Gulf  of  Mexico,  and  is 
bound  to  become  a factor  of  immense 
importance  in  the  transcontinental  situ- 
ation. North  of  that,  there  is  the  West- 
ern Pacific,  with  all  the  importance 
which  its  control  involves,  as  well  as  the 
Denver,  Northwestern  & Pacific,  one  of 
the  most  important  connecting  lines  in 
the  country,  and  surely  slated  for  the 
treasury  of  one  of  the  big  systems. 
Further  up  in  the  Northwest,  there  is 
the  whole  question  of  the  competition 
between  the  great  lines  stretching  west- 
ward from  Chicago  to  the  Pacific 
Ocean,  particularly  the  Hill  invasion  of 
the  Harriman  territory  and  the  attempt 
by  the  Hill  forces  to  push  their  way 
down  toward  San  Francisco. 

Who  Owns  Wabash? 

The  situation  with  regard  to  control 
of  the  Wabash  seems  to  have  been  be- 
coming more  and  more  acute  during  the 
past  four  months.  Who  owns  the  Wa- 
bash? Is  it  still  a Gould  property? 
There  are  those  who  claim  that  it  is, 
and  that  George  Gould's  ill-starred  at- 
tempt to  get  into  Pittsburgh,  while  it 
may  have  cost  him  a good  deal,  did  not 
cost  him  control  of  this  property.  That, 
however,  remains  to  be  seen.  It  is  a 
fact  that,  during  the  past  few  months, 
the  Rock  Island  interests  have  come  ab- 
solutely to  control  the  Lehigh  Valley. 
It  is  also  a fact  that  the  Wabash  forms 


a connection  between  the  Western 
terminus  of  the  Lehigh  Valley  at  Buf- 
falo and  the  Eastern  terminus  of  the 
Rock  Island  at  Chicago,  and  that  con- 
trol of  Wabash  would  give  the  Rock 
Island  people  what  they  have  so  long 
sought — an  entrance  into  New  York 
City.  For  a long  time,  the  story  has 
been  in  the  air.  It  has  been  denied  and 
affirmed  and  denied  again,  but  behind 
the  story  there  seems  to  be  so  much 
reason  backed  up  by  so  much  circum- 
stantial evidence  that  it  will  not  down. 
The  plan  of  the  Rock  Island  people 
to  force  their  way  into  the  East  is  more 
than  a dream.  By  those  in  a position 
to  know,  it  is  declared  a positive  real- 
ity. Control  of  the  Wabash  is  the  key 
to  the  whole  situation. 

What  it  would  mean  to  the  Wabash 
were  it  to  be  controlled  by  the  Rock 
Island  interests  and  made  a vital  part 
of  the  route  into  New  York  is  plain 
enough. 

In  the  Cumberland  Mountains. 

Work  on  the  80-mile  connection  be- 
tween the  Western  end  of  the  Western 
Maryland  and  the  New  York  Central 
system  near  Pittsburgh  is  now  begun, 
and  within  sixteen  months  the  Vander- 
bilt line  will  have  a direct  outlet  from 
Buffalo  to  Baltimore.  WTiat  this  means 
to  the  New  York  Central  system  can 
easily  be  seen.  Coal  from  the  Pennsyl- 
vania coal  fields,  bound  for  the  Atlantic 
seaboard,  has  at  present,  first  to  be 
taken  Northward  to  Buffalo  and  then 
transferred  East.  By  the  new  line 
which  will  now  be  established  for  the 
Western  Maryland,  the  distance  from 
the  Pennsylvania  coal  fields  down  to 
tide  water  will  be  very  greatly  short- 
ened. The  New  York  Central  system 
will,  indeed,  be  placed  on  a competitive 
basis  with  regard  to  traffic  of  this  kind 

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THE  BANKERS  MAGAZINE 


John  Mvir  & To. 

THE  SPECIALISTS  IN  ^ ■ 

ODD  LOTS 

If  you  have  limited  capital  and 
wish  to  deal  in  stocks;  if  you  have 
ample  capital  and  wish  to  be  con- 
servative-trade in  odd  lots.  First, 
communicate  with  us. 

Send  for  “ Odd  Lot  Clrcnlar  L” 
Members  New  York  Stock  Exchange 

71  BROADWAY,  NEW  YORK 


with  Pennsylvania  and  Baltimore  & 
Ohio. 

On  the  Great  Lakes. 

With  regard  to  the  Northward  exten- 
sion of  the  Chesapeake  & Ohio  to  reach 
Toledo  in  one  case  and  Chicago  in  the 
other,  not  very  much  need  be  said.  It 
has  been  the  Hawley  idea,  as  is  well 
known,  from  the  very  beginning,  to 
make  a trunk  line  of  the  Chesapeake 
by  getting  a connection  with  Toledo  on 
Lake  Erie  and  with  Chicago.  To  this 
end.  Northward  connections  from  Cin- 
cinnati have  long  been  sought.  Control 
of  the  Hocking  Valley  which  furnishes 
the  desired  connection  in  one  case  has 
been  secured.  Nor  is  the  legal  wrangle 
now  going  on  likely  in  any  way  to  dis- 
turb the  Chesapeake's  ownership  of  this 
property.  On  the  other  hand,  it  is  only 
a question  of  a short  time  before  con- 
trol of  the  Chicago,  Cincinnati  and 
Louisville,  which  connects  Cincinnati 
and  Chicago,  goes  to  the  Chesapeake 
and  Ohio. 

The  Chesapeake,  as  a trunk  line  sys- 
tem, running  from  Newport  News,  on 
the  Atlantic  Coast,  up  to  Chicago,  on 
the  Great  Lakes,  may  be  regarded  as 
an  assured  faet.  Considering  what 
earnings  the  Chesapeake  is  able  to  show 
under  the  present  conditions,  it  will  pay 
the  careful  investor  to  watch  the  pro- 
gress certain  to  be  made. 

The  “Orient.” 

In  the  Southwest,  the  Kansas  City, 
Mexico  & Orient,  the  road  which  Arthur 


E.  Stillwell  and  his  associates  are  build- 
ing from  Kansas  City  down  to  the  Gulf 
of  California  on  the  Pacific  Coast,  is 
well  over  half  finished.  On  the  part  of 
the  line  already  completed,  earnings  are 
making  a very  satisfactory  showing, 
while  the  support  which  the  project  is 
meeting  both  from  the  territory  through 
which  the  road  runs  and  in  Eastern 
financial  markets  almost  guarantees  its 
success.  Who  will  get  the  Kansas  City, 
Mexico  & Orient?  Nobody  probably. 
The  road  is  not  being  built  for  sale.  It 
is  being  built  as  a short  connection  be- 
tween the  Middle  West  and  the  Pacific 
Coast,  built  with  a far-sighted  view  to 
the  good  effects  to  be  derived  from  the 
completion  of  the  Panama  Canal. 
Strategically  located  as  it  is,  the  Orient 
has  more  than  a chance  to  hold  its  own 
with  its  older  competitors  and  to  share 
abundantly  in  the  business  which  they 
enjoy. 

To  the  Coast. 

To  the  Northward,  two  important 
propositions  meet  the  eye  looking  for 
strategic  possibilities.  In  the  first 
place,  there  is  the  Western  Pacific,  a 
road  which  has  been  put  through  at 
such  high  cost  from  Salt  Lake  City  to 
San  Francisco  that  individual  control 
can  hardly  be  expected  to  remain  long 
with  its  present  owners.  Western  Pa- 
cific was  a part  of  the  visionary  Gould 
transcontinental  plan,  a proposition  far 
too  big  for  what  is  left  of  that  scheme. 
As  an  outlet  to  the  Gould  roads  of  the 
Middle  West,  the  Western  Pacific  will 
be  useful.  There  are  too  many  other 
roads,  however,  to  which  it  would  be 
useful  as  an  outlet  to  the  Pacific  Coast 
for  it  long  to  remain  as  at  present. 
Rumor  has  had  it  that  the  Hill  system, 
by  buying  largely  into  the  Denver  and 
Rio  Grande,  has  made  itself  very  strong 
in  the  affairs  of  the  Western  Pacific, 
and  the  Burlington,  on  several  occa- 
sions, has  been  reported  as  having  come 
into  absolute  ownership  of  the  road. 
But  whether  it  is  the  Burlington  or  the 
Rock  Island,  or  one  of  the  other  great 
systems  of  the  Middle  West,  it  may  be 
taken  as  a foregone  conclusion  that 
Western  Pacific  will  find,  if  not  a pur- 
chaser, at  least  some  great  system 


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50  Congress  Street,  Boston 


which  will  share  its  control  with  the 
present  owners. 

In  this  connection,  too,  the  Denver, 
Northwestern  & Pacific,  the  new  line 
which  is  being  run  West  from  Denver 
to  Salt  Lake  City,  plays  an  exceedingly 
important  part.  While  it  can  in  no 
sense  be  said  that  this  new  road  which 
is  being  built  at  such  engineering  trou- 
ble and  expense  is  being  constructed  for 
the  purpose  of  selling  it  out  to  some- 
body else,  it  is  nevertheless  illogical 
that  such  a property  should  remain  long 
independent.  Constructed  as  it  is  and 
traversing  the  territory  it  does,  the  Den- 
ver, Northwestern  and  Pacific  will  prob- 
ably turn  out  to  be  a profitable  enter- 
prise— a money-maker.  At  the  same 
time,  in  the  hands  of  the  Burlington, 
with  the  Western  Pacific  as  a connection 
for  through  traffic,  it  would  turn  out  to 
be  a good  deal  more  of  a money-maker. 
Eventually,  the  property  will  be  taken 
over  by  one  of  these  roads.  They  will 
be  forced  to  it. 

Lastly,  there  is  the  ever  interesting 
situation  in  the  Northwest — the  Hill  in- 
vasion of  the  Harriman  territory,  about 
which  so  much  has  been  said  and  writ- 
ten. From  the  Northward,  extensions 
of  the  Hill  system  are  being  steadily 
pushed  down  through  Oregon,  with  San 
Francisco  as  the  objective  point.  It 
will  be  some  time  yet  before  the  Hill 
lines  make  direct  connection  with  the 
Golden  Gate  city,  but  from  the  way 
things  are  shaping  up  at  present,  that, 
in  the  long  run,  seems  bound  to  come. 
If  it  ever  happens  that  the  Burlington 
gets  control  of  the  Western  Pacific  and 
that  a line  is  projected  Southward  from 
Seattle  to  San  Francisco,  it  will  mean 
practically  thajt  the  entire  Harriman 
empire  will  be  girdled  with  Hill  lines. 

Whether  that  will  ever  take  place 
still  remains  to  be  seen.  It  can  be  said 
with  confidence,  however,  that  had  the 

58 


great  Genius  of  Railroads  lived,  such 
progress  toward  the  completion  of  this 
ambitious  project  could  never  have  been 
made. 


TOWARD  THE  END  OF  THE  YEAR 

VETITH  money  conditions  as  easy  as 
* * they  are  at  present,  it  seems 
rather  strange  that  forecasts  as  to  the 
autumn  money  market  should  agree 
that  rates  are  bound  to  be  high.  On  this 
point,  dissenting  opinion  is  rare.  Every- 
one seems  to  have  made  up  his  mind 
that  the  last  few  months  of  the  year 
will  be  marked  by  decided  firmness  of 
money,  if  not  by  positive  stringency. 

The  reason  seems  to  be  that,  while 
“money”  is  cheap,  “capital”  is  scarce. 
The  man  who  owns  good  active  stock 
exchange  collateral  and  who  wants  to 
borrow  money  finds  no  trouble  in  get- 
ting the  bank  to  lend  it  to  him  at  a low 
rate  of  interest.  The  man  who  wants 
to  build  an  extension  on  his  factory, 
however,  finds  it  a very  different  prop- 
osition— if  he  is  able  to  get  a capital 
at  all  he  finds  that  he  has  to  pay  a good 
stiff  rate  for  it.  That  is  just  the  dif- 
ference. Bankers’  surplus  capital  is 
available  where  collateral  is  perfect  and 
the  money  can  readily  be  withdrawn. 
But  where  it  is  a question  of  sinking 
money  into  some  enterprise  and  having 
the  safety  of  that  money  depend  to  a 
certain  extent  upon  the  success  of  the 
enterprise,  the  proposition  is  altogether 
different. 

Why  Capital  Is  Scarce. 

There  seems  to  be  three  reasons  why 
this  is  so.  In  the  first  place,  uncertain- 
ty is  in  the  air — uncertainty  over  the 
political  situation,  over  the  legislation 
which  may  be  passed  at  Washington  and 
over  the  possibility  of  a further  row 


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We  have  good  markets  In  unlisted  and  Inactive 
securities  and  respectfully  Invite  Inquiries. 
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over  the  tariff.  Secondly,  high  prices 
for  things  have  tied  up  very  large  sums 
of  money.  Thirdly,  the  land  specula- 
tion which  has  swept  the  country  from 
Maine  to  Lower  California  has  “fixed" 
hundreds  of  millions  of  dollars  which 
would  otherwise  have  been  available  for 
business  enterprise. 

Of  these  three  considerations  it  will 
readily  be  seen  that  the  first  two  may, 
at  any  time,  change  materially.  Prices 
have,  indeed,  already  gone  a long  way 
back,  and  very  large  amounts  of  capital 
have  been  thereby  realized.  Uncertain- 


ty is  bound  to  continue  for  some  months 
more,  but  gradually  we  seem  to  be  get- 
ting over  the  idea  that  the  safe  and 
sane  administration  at  Washington  is 
bent  upon  wrecking  the  industry  of  the 
country.  Land  speculation  as  a factor 
remains.  The  amount  tied  up  in  it,  even 
though  the  other  two  conditions  ma- 
terially better  themselves  during  the 
next  few  months,  is  in  itself  a pretty 
good  guaranty  that  capital  will  com- 
mand a fairly  high  rate  for  the  rest  of 
the  year.  M.  G.  E. 


SELLING  BONDS 

AN  OCCUPATION  IN  WHICH  VERSATILITY  IS  AT  A PREMIUM 
By  George  E.  Gastello 


OLISSVILLE  is  one  of  the  most 
beautiful  towns  on  earth.  I wish 
I could  tell  you  its  real  name,  but  any 
bond  man,  and  many  who  are  not  bond 
men,  will  guess  before  long.  I am  par- 
ticularly partial  to  it,  because  the  streets 
are  laid  out  according  to  the  cardinal 
points  of  the  compass.  And  such  streets ! 
Great  wide  thoroughfares,  the  side 
walks  over-arched  by  the  boughs  of 
magnificent  trees — and,  way,  way  back 
from  the  walks,  the  most  comfortable 
looking  houses  you  ever  saw!  (I'm  get- 
ting warmed  up  now,  but  the  Editor  has 
just  remarked  “Cut  the  descriptive — we 
want  live  stuff — not  paying  for  mush 
padding" — so  I deem  it  advisable  to 
slow  down  a bit.) 

To  continue — On  the  nicest  of  these 
nice  streets  is  set  one  of  the  most  com- 
fortable of  the  comfortable  houses,  and 
in  this  house  lives  a clergyman,  who,  I 


was  advised,  could  buy  fifty  thousand 
bonds  without  having  to  go  into  his 
wallet.  It  sounded  like  a good  pros- 
pect. So  I called  without  delay. 

The  Burnt  Child  Dreads  the  Fire. 

“Are  you  the  Rev.  Dr.  William  W. 
Williamson,  Jr?"  I asked. 

“I  am  neither  Doctor  nor  Junior,"  he 
replied,  frigidly,  with  the  accent  of 
conscious  rectitude  upon  the  “nor." 

“I  thought  I had  the  name  and  trim- 
mings right,"  I explained. 

“You  have  the  name  right,"  he  an- 
swered, smiling,  “but  it  is  just  a trifle 
over  dressed.  I am  not  a Doctor  of 
anything,  and  I used  to  be  Junior,  but 
I have  dropped  it.  Don't  you  think  I 
have  enough  to  carry  as  it  is?" 

I agreed;  then  we  began  to  talk  shop 
a bit.  The  extreme  conservatism  of  his 
investments  was  dwelt  upon  at  length. 

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THE  BANKERS  MAGAZINE 


Three,  and,  at  the  most,  three  and  one- 
half  per  cent,  was  all  the  yield  looked 
for,  and  my  suggestions  anent  buried 
talents,  also  a financial  application  of 
St.  Paul's  admonition,  “Be  ye  not  over- 
righteous,”  were  of  no  avail. 

I had  a glimmering  consciousness  of 
being  on  the  wrong  tack,  and  was  about 
to  change  my  method,  when  the  Rev. 
W.  W.  W.  suddenly  transfixed  me  with 
a wrathy  glare. 

“Look  here,  young  man!  You're  a 
very  good  talker  and  an  excellent  sales- 
man. Your  firm  should  be  proud  of 
you.  If  you're  as  smart  as  you  sound , 
you're  pretty  wise;  but  there  are  others 
just  as  smart  as  you,  and  I have  reason 
to  know  this  by  my  own  experience. 
Six  years  ago,  a young  man,  very  much 
on  your  style,  came  in  here,  and 
wheedled  me  into  buying  some  bonds 
which  I knew  were  no  good,  and  which 
have  proved  to  be  worth  less  than  the 
market  value  of  the  paper.  Yes,”  he 
continued,  his  wrath  rising  at  the  recol- 
lection, “I  was  bamboozled  into  buying 
that  stuff  against  my  better  judgment, 
and  my  judgment  stands  vindicated,  for 
the  things  are  not  worth  a Damn !” 
(The  expletive  was  explosive  in  its  in- 
tensity.) 

“May  I ask  the  name  of  the  bonds  ?” 
I queried. 

The  first  response  was  an  emphatic 
refusal  to  tell  any  more,  but  I finally 
got  the  whole  story,  though  with  no  lit- 
tle difficulty. 

“What  did  you  pay  for  these?”  I 
asked,  looking  them  over. 

“Four  thousand  dollars,”  was  the 
grim  response. 

“I'll  give  you  five  thousand  for  the 
lot,”  I replied. 

“Wh-wh-wh  what's  that?”  he  splut- 
tered. 

“I'll  give  you  five  thousand  for  the 
lot,  and  make  money.  How  long  is  it 
since  you  have  looked  at  these  ?” 

“Not  since  the  concern  went  to  smash 
— six  years  ago.” 

“And  have  you  had  no  communica- 
tion from  or  with  the  officers  of  the 
company  since  then?” 

“Yes;  I think  I had  a few  letters, 
but  I thought  they  were  just  schemes  to 


get  me  to  throw  good  money  after  bad, 
At  least,  that  is  how  the  first  one  read. 
So,  as  soon  as  I found  out  where  the 
others  came  from,  I just  pitched  them 
in  the  waste  basket.” 

“Well,”  I said,  “you  may  be  inter- 
ested to  know  that  these  bonds  have 
never  really  defaulted  on  their  interest. 
They  took  advantage  of  an  extension 
clause,  which  appears  very  plainly  here 
(showing  him  the  bond),  and  the  con- 
cern, instead  of  going  to  smash,  pulled 
through  beautifully — so  beautifully,  in 
fact,  that  the  bonds  are  now  selling  at 
a nice  juicy  premium  of  ten  points.” 

The  above  is  one  instance  of  the  “con- 
servative investor.”  Sure  that  he  had 
been  duped,  he  would  confide  in  no  one, 
to  save  his  amour  propre. 

Those  Who  Know  It  All. 

The  “Omniscients”  are  in  a class  all 
by  themselves.  Things  of  beauty,  and 
a joy  forever.  Speaking  of  Omniscients 
— from  the  far  distances  of  the  dim, 
religious  past,  there  comes  to  me  a pic- 
ture of  dear  old  “Holy  Joe.”  Joe  was 
a great  character,  great  of  heart,  head, 
and  capacity.  His  father  was  a clergy- 
man, and  Joe  had  studied  for  the  min- 
istry— hence  his  soubriquet.  He  knew 
the  Canticles  by  heart,  and  his  parodies 
were  blood-curdling  in  their  blasphemy. 
One  of  his  favorites  was  a version  of 
the  Te  Deum,  a portion  of  which  ran: — 

“The  Glorious  Company  of  the  Omnis- 
cients, 

Knock  me.” 

It  is  of  the  Omniscients  that  I would 
sing.  Wiseacres  have  told  me  things 
about  my  own  offerings  that  I myself 
had  never  heard.  One  of  the  type 
weighed  close  to  four  hundred  pounds, 
and  I swiftly  christened  him  Omnibus 
Flestrin.  (Get  the  pun?  Solution  in 
next  number.) 

According  to  O.  F.,  the  country  was 
in  a ghastly  state.  Everything  was 
either  too  high  or  too  low — poor  stuff 
way  up,  good  things  thrown  away.  Fol- 
lowing his  argument,  I said: — “Yes, 
you  certainly  can  make  some  fine  buys 
at  the  moment.  What  do  you  think  of 
X ?” 


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“Too  high — too  high !” 

“Earning  ten  per  cent.,  isn’t  it?” 
“All  on  paper — all  on  paper!” 

“Well,  how  about  Z ? Selling  at 

sixty-five,  and  it  paid  five  per  cent,  last 
year,  with  prospects  of  six  per  cent, 
this  year.” 

“Now,  lookyher,  young  man,  I 
learned  this  game  before  your  pa  and 
ma  was  born,  and  let  me  tell  you  one 
thing — I know  what’s  what  in  the 
Street,  and  don’t  you  forget  it!  When 
I make  a buy,  it’s  something  with  an 
equity  behind  it!” 

“What  about  this  bond  I'm  offer- 
ing?” said  I.  “It  pays  six  per  cent., 
and  has  an  equity  of  ten  millions  mar- 
ket value  in  securities  behind  the  mil- 
lion bonds.  What’s  the  matter  with 
that  for  an  equity?” 

“ Equity  !"  he  snorted,  in  fine  disdain. 
“Equity ! Why,  that9 9 no  equity ! Show 
me  a road  with  securities  for  seventy 
millions  outstanding  on  a capitalization 
of  seventy-five  millions,  and  I’ll  show 
you  an  equity!  That' 9 what  I call  an 
equity !” 

Meeting  a Man  on  His  Own  Ground. 

“Out -West,  y’  know,  out  West,”  as 
the  Rev.  Billy  Wilkinson  (God  bless 
him!)  says,  lives  a man  who  owns  mills 
— also  millions.  (Cause  and  effect.) 
He  is  ten  years  older  than  he  was  in 
1900,  has  a round,  ruddy  face,  adorned 
by  a white  mustache. 

I had  just  ridden  over  three  hundred 
miles  in  a Pullman,  enjoying  the  so- 
ciety and  conversation  of  one  of  the 
finest  men  I ever  met.  He  was  a past 
master  in  salesmanship,  and  I have 
since  profited  greatly  by  his  teaching. 
One  of  his  strong  points  was,  “Always 
meet  a man  on  his  own  ground,”  and 
he  cited  numerous  instances  of  how  well 
the  idea  worked  out.  I thought  it  over 
a whole  lot,  but  concluded  that  there 


was  so  much  up  and  down  work  in  my 
line  that  I would  soon  be  a one-ended 
human  see-saw  if  I adopted  the  plan. 
If  a man  sells  clothes,  he  sells  to 
clothiers — canned  goods  to  grocers,  etc., 
etc.,  ad  nauseam;  but  a bond  man  has 
to  try  to  sell  to  everybody,  ergo,  his 
transitions  to  and  from,  or  his  vacilla- 
tions between,  zeniths  and  nadirs  of 
caste  and  cash  conditions  are  “powerful 
an’  tremenjous,”  as  old  Butch  Hender- 
son used  to  say. 

I knew  that  Mr.  Mills  owned  half  a 
million  bonds,  that  he  had  bought  twen- 
ty thousand  the  week  previous,  and  that 
he  had  enough  ready  cash  to  buy  my 
whole  list,  had  he  felt  so  inclined.  Aho, 
my  traveling  companion’s  precept  was 
fresh  in  my  mind. 

When  I told  Mr.  Mills  I would  like 
to  talk  bonds,  he  gave  the  poor  old 
mustache  three  or  four  vicious  tugs, 
yanked  it  into  place,  then  turned  it  up- 
side down  with  one  swoop  of  his  hand. 
After  which  he  glared  at  me  for  a mo- 
ment, and  said: — 

“I’ve  never  bought  a bond  in  my  life, 
don’t  want  to  buy  any,  have  no  money 
to  buy  with,  if  I wanted  to,  and  haven’t 
time  to  talk!” 

“You’re  a liar!”  slipped  out  so 
smoothly  that  I never  felt  it  coming — 
or  going.  It’s  what  I was  thinking,  but 
I had  thought  out  loud!  I had  “met 
him  on  his  own  ground,”  all  right,  but 
it  was  a “chance  affair,”  so  to  speak, 
and  I was  almost  paralyzed  with  fright. 

Mills  stared — then  he  stared  again — 
and  then  some!  All  the  while  I was 
trying  to  remember  just  how  I had  come 
in,  and  to  figure  the  quickest  way  out, 
but  I couldn’t,  for  my  life. 

There  was  Mills,  “a’  swellin'  wisibly 
afore  my  wery  eyes,”  like  Mr.  Stiggins. 
Lordv ! he  was  mad ! Then,  all  at  once, 
something  released  the  tension.  He 
laughed  out  loud,  stuck  out  his  hand, 

61 


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62 


THE  BANKERS  MAGAZINE 


and  said:  “Well,  my  boy,  you’ve  got  a 
hell  of  a gall,  but,  by  the  Great  Budda, 
you’re  the  first  chap  with  real  man’* 
talk  I’ve  stacked  against  in  many 
moons!  Come  in  here,  where  we  can 
sit  down,  and  tell  me  your  little  tale.” 

Mr.  Mills  certainly  was  a “rare  old 
bird.”  I went  home  with  him,  and  he 
did  his  best  to  make  me  harmless.  I 
never  wasted  so  much  wine  in  my  life! 
My  host  swore  I had  hollow  legs ! I do 
not  know  whether  or  not  vintage  cham- 
pagne is  very  good  for  mahogany 
tables,  Persian  rugs,  and  parquet  floors, 
but,  should  this  meet  Mr.  Mills'  eye,  let 
it  be  my  apology  for  disposing  of  my 
“fizzy  stuff”  in  the  manner  calculated 
to  do  the  least  harm  to  the  next  day’s 
work ! 

’Twas  a wild  night!  .1  felt  fair  to 
middlin’  as  I walked  hotel- ward,  but  I 
called  it  a day’s  work,  and  had  no 
qualms  about  the  morning  after  the 
preceding  evening — and  there’s  a whole 
lot  in  that,  should  any  one  enquire ! 


THE  SAVINGS  BANKS  AND  THE 
BOND  MARKET 

ANNOUNCEMENT  by  several  im- 
portant  savings  banks  of  a reduc- 
tion in  the  rate  paid  to  depositors  from 
four  per  cent,  to  three  and  one-half  per 
cent,  makes  the  movement  toward  lower 
rates  so  general  as  to  raise  the  question 
of  its  influence  upon  the  bond  market. 

The  lower  rate  means  the  adding  to 
the  surplus  of  the  savings  banks  of  a 
good  many  million  dollars,  but  on  ac- 
count of  present  conditions  will  prob- 
ably not  exert  as  much  of  an  influence 
upon  the  market  as  might  be  expected. 
It  is  true  of  course,  that,  having  to  pay 
depositors  only  three  and  one-lialf  per 
cent.,  where  they  formerly  paid  them 
four  per  cent.,  the  savings  banks  will 
be  in  a better  position  to  pay  a higher 
price  for  the  bonds  they  buy,  but,  after 
all,  the  real  reason  for  the  apathy  of 
the  savings  banks  toward  the  bond  mar- 
ket has  very  little  to  do  with  the  high 
price  of  bonds.  Falling  prices  for 
bonds  which  cut  into  the  banks’  sur- 
plus was  what  was  at  the  bottom  of 


this  movement  toward  lower  rates  on 
deposits. 

In  the  long  run,  the  lower  rate  will 
operate  to  rectify  this  condition  and 
help  the  bond  market,  but  that  will  take 
time.  It  will  take  a good  while  for  the 
difference  of  one-half  of  one  per  cent, 
in  the  amount  paid  depositors  to  build 
up  the  surpluses  of  the  banks,  depleted 
as  they  have  been  through  the  awful 
shrinkage  in  the  value  of  investments 
held.  It  may  be,  however,  that  the  sur- 
plus will  not  have  to  be  made  up  in  that 
way.  In  spite  of  the  ranting  of  the 
gold  depreciation  theorists,  the  bond 
market  will  not  improbably  get  on  its 
feet  again  and  savings-bank  bonds  come 
back  to  the  price  which  the  savings- 
banks  paid  for  them.  In  that  case,  the 
reduction  in  interest  paid  depositors  will 
immediately  begin  to  exert  a salutary 
effect.  The  bond  men  now  admit  that 
the  attitude  of  the  savings  banks  toward 
what  they  have  to  offer  is  indifferent  in 
the  extreme,  but  are  anything  but  hope- 
less as  to  what  the  situation  will  be  six 
months  or  a year  from  now. 

M.  G.  E. 


A TURN  FOR  THE  BETTER 

TN  view  of  the  way  in  which  the  in- 
*■*  crease  in  the  consumption  power  of 
the  country  has  reduced  the  surplus  of 
agricultural  products  available  for  ex- 
port, any  influence  bearing  upon  an  in- 
crease in  the  amount  of  wheat  or  corn 
raised  is  of  great  economic  impuortance. 
Much  h'as  been  made  of  the  immigration 
across  the  Canadian  frontier  of  very 
large  numbers  of  American  farmers, 
who  find  Canadian  agricultural  condi- 
tions more  favorable  than  those  pre- 
vailing in  the  United  States.  As  an 
offset  to  this,  however,  there  is  a de- 
velopment in  the  immigration  from 
Europe  which  deserves  notice. 

The  incoming  tide  of  aliens  is  not 
quite  up  to  the  high  water  mark  estab- 
lished two  or  three  years  ago,  but  is 
largely  on  the  increase  and,  best  of  all, 
shows  a decided  improvement  in  the 
component  parts  of  which  it  is  made 
up.  In  April,  for  instance,  the  number 
of  immigrants  coming  in  from  the 


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Helping  the  Small  Investor 


The  moderate  or  small  investor  is  entitled  to  as  much  con* 
sideration  from  an  investment  broker  as  a larger  one. 

We  are  specialists  in  inactive  stocks  and  bonds  and  at  present 
have  some  offerings  of  particular  interest  and  value  to  the 
small  investor. 

We  will  be  pleased  to  give  full  description  upon  request. 

J.  HATHAWAY  POPE  & CO. 

67  Exchange  Place  g£one  Rector  3486  New  York  City 


British  Isles  alone  was  over  16,000,  a 
very  much  greater  number  than  have 
come  in  from  that  locality  in  one  month 
during  many  years.  The  Scandinavian 
immigration,  too,  is  largely  on  the  in- 
crease, and  lately  there  has  been  a dis- 
position for  the  number  of  aliens  com- 
ing in  from  France  and  the  Netherlands 
to  rise  steadily. 

All  this  has  a very  decided  bearing 
upon  the  future  status  of  agriculture 
here.  According  to  James  J.  Hill  and 
the  other  experts  who  have  studied  the 
situation  thoroughly,  our  great  need  is 
for  intensive  farming — for  the  kind  of 
farming  that  makes  every  acre  grow 


the  amount  of  wheat  or  corn  that  it 
ought  to  grow.  Comparison  of  the  per- 
acre  yield  of  the  farms  in  this  country 
and  abroad  shows  how  much  better  they 
understand  these  things  on  the  other 
side  than  they  do  here.  Of  the  immi- 
grants coming  in  from  Northern  Eu- 
rope, not  all  go  to  the  tilling  of  the 
fields,  but  a great  many  of  them  do, 
and  those  that  do  know  how  to  do  it.  If 
the  improvement  noted  in  the  character 
of  the  immigration  continues,  the  effects 
upon  our  present  slip-shod  farming 
methods  may  in  the  long  run  become 
very  decided.  MERLE  AMES. 


RELATIVE  MERITS  OF  RAILROAD  STOCKS  AND 

BONDS 

By  Floyd  W.  Mundy,  of  Jas.  H.  Oliphant  & Co. 


'T'HE  investor  is  afforded  little  pro- 
tection  in  the  long  run  by  reason 
of  the  fact  that  his  investment  is  called 
a "bond.”  The  name  "bond”  does  not 
carry  with  it  any  guarantee  of  quality. 
So  far  as  the  term  is  accepted  as  a 
synonym  of  protection  or  safety,  it  is, 
in  this  day,  a misnomer.  In  recent 
years  so  many  new  kinds  of  railroad 
bonds  have  been  introduced  into  our 
market,  that  the  investor  must  use  great 
care  lest,  in  purchasing  a bond,  he  finds 
himself  possessed  of  a security  far  in- 


ferior in  grade  to  many  railroad  stocks 
in  which  he  would  not  choose  to  invest. 

Various  Kinds  of  Bonds. 

There  are  outstanding  to-day  various 
kinds  of  collateral  bonds ; bonds  the 
joint  obligation  of  two  or  more  rail- 
roads; bonds  the  joint  obligation  of 
railroad  and  coal  companies ; partici- 
pating bonds ; convertible  bonds ; de- 
benture bonds  with  no  security ; de- 
benture bonds  collaterally  secured;  de- 
benture bonds  to  be  secured  by  mort- 

63 


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gage  in  the  event  of  a new  mortgage 
being  placed  upon  the  property  in  the 
future.  The  names  of  bonds  vary,  as 
prior  lien,  general  lien,  divisional,  con- 
solidated, unified,  first  consolidated, 
first  mortgage,  second  mortgage,  third 
mortgage,  extension  mortgage,  plain 
“bonds,”  etc.  Needless  to  say,  a third 
mortgage  bond  of  one  company  may  be 
infinitely  more  secure  than  a first  mort- 
gage or  prior  lien  mortgage  bond  of  an- 
other company.  “Bond”  is  a generic 
term  as  “bird,”  “plant,”  “flower.” 

The  value  of  a bond  therefore  must 
rest  to-day,  more  than  ever  before,  upon 
the  earning  capacity  and  the  character 
of  the  management  of  the  issuing  com- 
pany. A bond  may  be  a first  mortgage 
on  property,  the  value  of  which  is  much 
greater  than  the  face  value  of  the  bonds 
issued  against  it,  yet  this  bond  may 
suffer  considerably  in  the  market,  ow- 
ing to  the  fact  that  the  issuing  company 
has  outstanding  other  bonds  issued 
against  insufficient  security,  the  result 
being  that,  if  such  company’s  credit  be- 
comes impaired,  all  the  bonds  of  the 
company,  good  and  bad  alike,  will  suffer 
depreciation.  The  value  of  a bond  is 
based  upon  the  value  of  the  security  be- 
hind it  and  this  value  depends  largely 
upon  revenue-producing  capacity. 

Advantages  of  Good  Railroad  Stocks 
Over  Low-Grade  Bonds. 

Some  stocks  are  far  safer  investments 
than  many  bonds.  There  are  stocks 
which  are  infinitely  better  investments 
than  scores  of  bonds  which  are  second- 
grade.  If  intrinsic  value  is  determined 
by  earning  capacity,  or  the  ability  to 
pay,  and  if  an  investment  is  to  be  chosen 
or  discarded  because  of  its  value  or  ab- 
sence of  value  so  determined  and  not  by 
the  interest  or  dividend  producing 
quality,  then  there  can  remain  no  ques- 
tion of  the  permanent  advantage  as  an 
investment  possessed  by  good  railroad 
stocks  over  a large  class  of  railroad 
bonds.  I refer  to  the  second,  third  and 
fourth  grade  bonds,  etc. 

A large  class  of  investors  has  been 
educated  over  a long  period  of  years  to 
place  reliance  upon  bonds  to  such  an 
extent  that  they  look  askance  at  stocks. 


Bonds  of  inferior  grades  are  issued  to- 
day in  tens  of  millions  to  investors  in 
recognition  of  their  attitude  toward  this 
class  of  security.  The  investor  natural- 
ly demands  a steady  income  and  is  not 
willing  to  contemplate,  much  less  suffer, 
a temporary  withholding  of  his  income, 
a risk  which  naturally  attaches  itself  to 
stocks.  Owing  to  this  disposition  on 
his  part  he  at  once  places  in  the  hands 
of  the  shrewd  (not  to  say  unscrupulous) 
capitalist,  a weapon  which  is  frequently 
used  against  him. 

Bonds  Usually  Issued  After  Earn- 
ing Power  Is  Demonstrated. 

It  is  well  known  that  the  capitalist 
who  conceives  the  idea  of  building  a 
railroad,  or  of  erecting  a manufacturing 
establishment,  first  invests  his  own 
money,  together  with  that  of  his  imme- 
diate friends  and  associates.  After  he 
has  expended,  say  a million  dollars,  to 
develop  the  enterprise  to  a point  where 
it  is  earning  money  and  can  “make  a 
showing,”  he  at  once  issues  bonds  to 
cover  the  cost  of  the  plant.  This 
money  is  not  returned  directly  to  the 
original  promoters,  but  is  used  for  the 
further  development  of  the  business. 
If  the  business  is  at  all  profitable,  the 
chances  are  that  the  money,  which  is 
subscribed  by  the  investing  public,  will 
bring  in  a return  not  of  four  or  five  per 
cent.,  which  is  the  amount  of  interest 
which  the  bonds  bear,  but  more  likely 
fifteen  or  twenty  per  cent,  upon  the 
cost.  The  equities  thus  established  and 
the  enlarged  income  thus  created  accrue 
to  the  benefit  of  the  original  promoters, 
who,  of  course,  control  the  enterprise 
through  the  ownership  of  all  or  a large 
majority  of  the  capital  stock. 

Knowing  that  originally  many  stocks 
represented  merely  an  equity  in  the 
future  and  that  frightful  losses  have 
been  suffered  by  stockholders,  often* 
as  a result  of  insufficient  knowledge, 
the  investor  is  slow  to  recognize,  the  in- 
vestment qualities  which  many  stocks 
to-day  represent.  During  the  last  ten* 
to  fifteen  years  the  railroads,  as  a rule, 
have  pursued  a most  conservative  policy 
in  devoting  a considerable  portion  of 
profits  each  year  to  the  improvements. 


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Many  of  the  leading  Financial  Institutions  are  using  its  advertis- 
ing columns  and  the  returns  have  been  larger  than  those  received 
from  any  other  publication. 

One  Banking  House  has  secured  a list  of  over  8,000  names  from 
its  advertisement  and  over  400  profitable  accounts. 

With  a distribution  of  over  250,000  copies  weekly,  scattered 
throughout  the  country  in  its  most  prosperous  sections,  Leslie’s 
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than  any  other  publication. 

The  Financial  Department  is  edited  by  Jasper  who  has  made  a 
high  reputation  for  good  judgment  in  giving  advice  to  investors  and 
who  is  recognized  as  one  of  the  leading  financial  writers  of  the  coun- 
try. His  advice  is  sought  by  thousands  who  are  placing  investments. 

Over  a Quarter  Million  Copies  Weekly 

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ment in  the  investment  world. 

What  Some  of  Our  Advertisers  Say: 

“ We  have  sold  over  1200,000  worth  of  the  securities  we  advertised  in  Leslie’s  Weekly.” 

“ This  is  our  second  year  of  advertising  In  Leslie’s  Weekly.  The  wonder  to  us  is  that 
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the  returns  from  Leslie’s  Weekly.” 

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are  about  three  to  one  over  any  other  publication  used.” 

The  Financial  Advertising  Department  of  Leslie’s  Weekly  is  bring- 
ing greater  results  to  its  advertisers  than  ever  before. 

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of  their  properties,  the  purchase  of 
equipment,  etc. 

Many  railroad  stocks  to-day  repre- 
sent more  than  bonds  used  to  represent; 
that  is,  they  represent  cash  paid  in  at 
par.  The  past  ten  years,  years  of  pros- 
perity, have  witnessed  an  altogether  new 
method  of  financing  by  the  prominent 
railroad  companies.  During  this  period 
hundreds  of  millions  of  dollars  have 
been  secured  by  the  railroad  companies 
through  the  sale  of  capital  stock  at  par 
value  or  higher.  The  larger  part  of 
the  money  so  raised  has  been  used  for 
strictly  railroad  purposes,  that  is,  in  the 
purchase  of  equipment,  the  building  of 
double  tracks,  sidings  and  extensions, 
etc. 

Dividend  Policy. 

As  already  stated,  many  investors  are 
deterred  from  investing  in  stocks  owing 
to  their  recognition  of  the  fact  that 
dividends  can  be  paid  or  withheld  large- 
ly at  the  discretion  of  the  management, 
whereas  interest  payments  must  be  met 
or  the  property  reverts  to  the  bondhold- 
ers. Allowing  for  the  fact  that  rates 
of  dividends  are  subject  to  change  in 
accordance  with  the  conditions  of  gen- 
eral business  and  the  growth  or  diminu- 
tion in  the  earning  capacity  of  the  par- 
ticular company,  and  likewise  in  accord- 
ance with  the  changes  in  the  policy  of 
the  directors,  the  high  grade  stocks  of 
railroads  must  be  considered  by  far  the 
safer  and  more  promising  investments 
than  scores  of  bonds  which  are  acknowl- 
edged to  be  good  bonds. 

Of  course  the  stock  of  any  one  rail- 
road cannot  be  safer  than  that  railroad's 
bonds,  yet  it  may  be  far  safer  than  any 
bond  of  another  railroad.  And  refer- 
ring again  to  that  matter  of  discretion 
which  directors  are  privileged  to  exer- 
cise in  the  payment  of  dividends  on 
stock,  is  it  not  manifest  that  this  very 
discretion,  if  fairly  and  honestly  exer- 
cised, contributes  to  the  permanent  value 
of  the  stock?  Many  companies  have 
been  crippled  financially  and  physically 
because  the  directors  could  not  reduce 
the  payments  for  interest,  etc.,  at  times 
when  the  temporary  withholding  from 
the  investor  of  his  income  would  have 


kept  the  company  in  funds  to  meet  its 
other  obligations. 

Income  and  Increment. 

The  large  majority  of  this  investor 
class,  however  (reference  is  made  to 
those  who  are  bona  fide  investors  and 
mean  to  be  prudent),  are  constantly 
seeking  securities  which  yield  a return 
of  from  five  per  cent,  upwards  and 
which  they  believe  have  a fair  chance 
to  appreciate  in  price.  It  is  upon 
these  investors  that  large  losses  fall;  I 
refer  not  only  to  the  direct  losses  which 
result  from  unwise  investments,  but  also 
to  the  indirect  losses  which  result  from 
their  failure  to  overcome  certain  preju- 
dices. By  indirect  losses  is  meant  the 
fact  that  these  investors  often  fail  to 
receive  the  security  and  the  amount  of 
income  and  profit  which  might  readily 
be  secured  were  they  less  influenced  by 
surface  conditions  when  choosing  their 
securities,  or  in  other  words,  were  they 
less  ignorant  as  to  the  proofs  required 
of  worthy  investments. 

Most  investors  are  willing  to  assume 
a reasonable  degree  of  risk  in  the  hope 
that  their  principal  invested  may  be  in- 
creased. There  are  today,  and  for 
years  to  come  there  will  be,  in  this  coun- 
try and  in  Canada,  abundant  opportuni- 
ties offering  for  the  safe  and  profitable 
investment  of  money.  I believe  that 
the  average  investor,  who  invests  for  the 
most  part  in  bonds,  does  not  receive 
from  his  investments  the  income  return 
and  profit  to  which  he  is  entitled.  He 
receives  a very  small  benefit  from  the 
equities  and  profits  which  are  created 
and  are  made  possible  only  by  the 
use  of  his  money.  For  years  to  come 
the  demand  will  be  constant  and  ever 
increasing  for  capital  wherewith  to  de- 
velop the  resources  of  this  country,  and 
this  demand  should  readily  permit  of 
the  investment  of  capital  safely,  to  re- 
turn to  the  conservative  investor  not 
only  an  average  income  considerably 
higher  than  he  is  wont  to  receive,  but 
also  a larger  profit. 


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INVESTMENTS 


67 


“ STEEL”  AND  THE  TARIFF 

Editor  “Investments” : 

Sih:  There  is  so  much  talk  going  on  as 
to  the  possible  reduction  of  the  tariff  that, 
as  a holder  of  Steel  common,  I am  begin- 
ning to  get  somewhat  worried.  Talking  the 
matter  over  recently  with  a friend,  the 
point  was  made  that  if  the  tariff  on  steel 
should  be  reduced  by  the  next  Congress, 

Steel  stock  would  not  be  worth  a . 

According  to  my  way  of  looking  at  it,  the 
tariff  is  going  to  be  reduced.  Do  you 
think  there  is  any  cause  for  worry  about 
the  effect  on  Steel  common?  C.  K.  L. 

"D  EFERRING  to  the  above,  the  best 
answer  is  probably  contained  in 
the  remarks  recently  made  by  a promi- 
nent steel  man  to  the  editor  of  ‘ ‘Invest- 
ments/' “The  officials  of  the  Steel 
company,"  he  said,  “are  not  lying 
awake  nights  worrying  over  what  is  go- 
ing to  happen  in  case  the  tariff  is  re- 
duced. In  the  first  place,  the  extent  to 
which  our  business  depends  on  the  pro- 
tection afforded  by  the  tariff  is  ques- 
tionable; in  the  second  place,  it  is 
doubtful  if  the  tariff  is  going  to  be  re- 
duced; and  in  the  third  place,  it  is  a 
good  deal  of  a question  whether  such 
reduction  would  help  or  hurt  us.  Con- 
sider the  fact  that,  on  account  of  the 
conservative  policy  pursued  by  the 
Steel  Corporation  ever  since  its  foun- 
dation, we  have  an  enormous  cash  sur- 
plus and  are  in  an  infinitely  stronger 
position  to  stand  a set-back  than  any  of 
our  rivals.  Should  a reduction  in  the 
tariff  lead  to  the  bringing  in  of  a lot  of 
foreign-made  steel,  it  would  mean  a 
whole  lot  more  to  the  independents  than 
it  would  to  us.  We  should  be  able  to 
stand  it.  They  would  not.  Their  loss 
would  be  our  gain.  There  would  be  a 
ruction  for  a while,  probably,  but  when 
the  smoke  all  cleared  away,  we  would 
be  in  a stronger  position  than  ever.  At 
least,  that  is  the  way  it  looks  to  me." 

THE  COPPER  ACCUMULATION 

Editor  “Investments” : 

Sib:  I am  somewhat  disturbed  about 
some  copper  stock  that  I own.  From  what 
I can  see,  the  accumulation  of  copper  is 
going  steadily  on  and  the  producers  don’t 

s 


seem  to  be  able  to  sell  what  they  are  taking 
out  of  the  mines.  What  do  you  think  of 
the  copper  outlook?  C.  N.  D. 

TJiT'HILE  it  is  impossible  in  the 
’ * limited  space  allotted  here  to  go 
into  any  real  discussion  of  the  copper 
situation,  we  may  say  at  once  that  the 
accumulation  of  copper  which  has  been 
going  on  for  so  long  and  which  is  still 
going  on  is  a dangerous  feature  in  the 
situation,  which  can  probably  only  be 
settled  by  some  drastic  movement.  The 
intensely  active  business  conditions  of 
last  Fall  for  a while  cut  into  the  accu- 
mulation of  copper  but  did  not  serious- 
ly reduce  the  amount  on  hand.  Now, 
we  are  running  into  a time  when  things 
are  quieter  again,  and  when  real  con- 
sumption is  not  what  it  might  be,  but 
production  continues  on  the  same  or  a 
larger  scale — it  seems  to  be  the  idea  of 
the  mine  owners  to  dig  as  much  copper 
out  of  the  ground  as  they  possibly  can, 
regardless  of  whether  they  can  or  can- 
not sell  it.  As  a result,  the  price  of 
copper  has  fallen  back  almost  to  the 
low  point  made  three  years  ago.  If 
production  is  to  continue  at  the  pres- 
ent rate,  it  seems  as  though  the  price 
would  have  to  fall  back  still  further. 

The  copper  situation  looks  so  bad 
that  it  seems  hardly  possible  that  it  can 
be  as  bad  as  it  looks. 


INVESTMENT  NEWS  AND  NOTES 

— Messrs.  Bigelow  & Company  are  at 
present  offering  at  par  the  cumulative  seven 
per  cent,  preferred  stock  of  MacArthur 
Brothers  Company,  a contracting  firm 
which  during  the  eighty-four  years  of  its 
existence  has  carried  to  a successful  com- 
pletion over  $100,000,000  worth  of  public 
works. 

The  most  notable  among  these,  executed 
in  whole  or  in  part  are: 

Erie  Canal  for  the  State  of  New  York, 
large  portions;  Chicago  drainage  canal, 
several  sections;  World’s  Fair  Grounds, 
Chicago,  and  several  of  the  buildings; 
Sault  Ste.  Marie  Water  Power  Canal; 
Wachusetts  Dam  for  the  City  of  Boston; 
Katonah  Dam  for  the  City  of  New  York; 
Ashokan  Dam  and  Reservoir  for  the  City 
of  New  York,  and  many  thousands  of  miles 
of  railroad  comprised  in  the  principal  trunk 
lines  of  the  United  States  and  Canada. 


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During  its  entire  history  this  company  has 
never  failed  to  meet  an  obligation  or  fulfill 
a contract. 

The  company  has  contracts,  now  on  hand, 
amounting  to  over  $£2,000,000;  and  has 
under  negotiation  contracts  approximating 
$30,000,000  more.  The  amount  of  this  work, 
together  with  the  promise  of  the  future  as 
evidenced  by  the  number  of  great  public 
works  projected,  have  made  desirable  ad- 
ditional working  capital,  to  handle  the 
large  share  of  these  undertakings  tendered. 
The  company,  therefore,  authorized  an  in- 
crease of  capitalization  from  $1,000,000  pre- 
ferred stock  and  $9,000,000  common  stock, 
to  $3,000,000  preferred  stock  and  $3,000,000 
common  stock. 

The  average  annual  net  earnings  $961,- 
269.17  for  seven  years  have  been  over  three 
and  one-half  times  the  amount  required  to 
pay  the  seven  per  cent,  dividends  on  the 
$1,000,000  preferred  stock,  authorized  and 
outstanding. 

— The  arrangement  of  the  circular  of  in- 
vestment offerings  just  put  out  by  the  Mer- 
cantile Trust  Company  of  Saint  Ix>uis  is 
about  the  best  we  have  seen  in  a long  time. 
First  comes  the  list  of  bonds  offered — divided 
into  corporation  and  municipal — and  ar- 
ranged in  the  order  of  the  yield  they  give. 
Following  that  come  descriptions  of  each  of 
the  bonds,  the  essential  features  in  every 
case  being  given. 

The  advantage  of  a circular  arranged  in 
that  way  is  that  it  enables  the  investor 


quickly  to  see  what  it  contains  in  the  way 
of  bonds  in  which  he  may  be  interested 
He  is  interested  in  municipal  bonds  yield* 
ing,  say,  between  four  and  one-half  and  five 
per  cent.  By  looking  at  the  part  of  the 
list  containing  bonds  yielding  about  that 
amount,  he  is  able  to  see  almost  at  a glance 
if  there  is  anything  there  which  he  would 
be  likely  to  buy.  If  so,  he  has  only  to  turn 
to  the  following  pages  and  find  a compact 
descripton  of  the  bond  which  has  attracted 
his  attention. 

The  circular  is  one  of  the  kind  that  bring 
business. 

— From  a rather  close  study  of  the  service 
offered  by  the  Financial  Graphic  Company 
it  is  our  opinion  that  the  installation  of 
the  service  will  go  a long  way  toward  taking 
the  place  of  the  cumbersome  and  expensive 
statistical  departments  now  maintained  by 
so  many  banks  and  bankers. 

This  is  the  age  of  specialization  and  con- 
centration— of  profiting  by  the  experience 
and  work  of  others.  We  get  our  political 
news  out  of  one  kind  of  a newspaper  and 
our  sporting  news  out  of  another.  Every- 
body makes  a specialty  of  something.  To 
get  the  best  we  have  to  go  to  the  man  who 
makes  a specialty  of  it. 

The  Financial  Graphic  Company  is  the 
very  epitome  of  this  idea.  The  aim  of  the 
service  is  to  provide  boiled  down  information 
— facts  and  figures  which  it  would  take  any- 
one but  an  expert  weeks  and  months  to 
get  at. 


INVESTMENT  AND  MISCELLANEOUS  SECURITIES 

[Corrected  to  June  20,  approximate  yield  as  figured  July  1.] 


Quoted  by  J.  Hathaway  Pope  & Co.,  brokers 
in  investment  securities  and  dealers  in  un- 
listed and  Inactive  railroad  and  industrial 
securities,  67  Exchange  pi.  New  York. 

GOVERNMENT,  STATE  AND  CITY  BONDS. 


Name  and  Maturity.  Price.  Yield. 

U.  8.  Gov.,  reg.  2s.  1930 100% -101  1.66 

U.  8.  Gov.,  reg.  3s.  1918 101%-102%  2.60 

Panama  Canal,  reg.  2s,  1936  100% -100%  1.96 

Dist.  of  Columbia  S-66s  106  -106 

Alabama  4s,  July.  1956  101  -104%  3.77 

Colorado  4s,  '22  (op.  *12)....  95  -100  4.00 

Connecticut  3%s.  Apr..  *30 99  -102  3.37 

Georgia  4%s,  July,  1915 104  -105  3.40 

Louisiana  4s,  Jan.,  1914 96  -101  3.72 

Massachusetts  3%s,  1940 94  %-  95  8.75 

New  York  State  3s,  *69 101%-103  2.88 

North  Carolina  6s,  Apr.,  '19.  .114%-116%  3.80 

South  Carolina  4%s,  1933 103  -104  4.22 

Tenn.  New  Settlement  3s,  ’13.  . 96  - 96  4.40 

Va.  6s.  B.  B.  & Co.  ctfs.,  1871  40  - 45 

Boston  3%s,  1929  95  - 96%  3.85 

New  York  City  4%s,  1957 106%-107  4.10 

New  York  City  4%s.  1917 102%-103  3.92 


New  York  City  4s.  1959 99  -99%  4.01 

New  York  City  4s.  1955 98 %-  99  4.03 

New  York  City  3%s,  1954 87  %-  88%  4.07 

New  York  City  3%s,  1930  90  - 91%  4.12 

New  York  City  rev.  6s.  1910.. 101  -101%  1.30 

Philadelphia  4s,  Jan..  1938...  100  -101%  3.96 

St.  Louis  4s,  July,  1928 100  -101%  3.92 


SHORT  TERM  SECURITIES. 

[Corrected  to  June  20.] 

Quoted  by  J.  Hathaway  Pope  & Co. 

Folowing  are  current  quotations  for  the 

principal  short-term  railway  and  industrial 

securities.  Date  of  maturity  is  given,  be- 

cause of  the  importance  of  those  dates  in 
computing  the  value  of  securities  with  so 
near  a maturity.  All  notes  mature  on  the 
first  of  the  month  named  except  where  the 
day  is  otherwise  specified;  interest  is  semi- 
annual on  all.  Accrued  interest  should  be 
added  to  price. 

Name  and  Maturity.  Price.  Yield. 

Am.  Cig.  4s,  "A”  Mar.  15,  'll  98 %-  99%  4.92 

Am.  Cig.  4s,  “B”  Mar.  15.  ’12  97  %-  98%  5.10 

Am.  Locomotive  5s,  Oct.,  '10..  99%-100%  4.25 

Bethlehem  Steel  6s.  Nov.,  '14..  97  - 98  6.20 

“Big  Four”  5s.  June,  ’ll 100  -100%  4.35 

B.  R.  & P.  Equip.  4 %s 99  -100% 

Chic.  St  Alton  6s,  Mar.  15,  ’13  98%-  99%  5.25 

C.  H.  & D.  4s.  July.  '13  96 %-  97%  5.05 

Diamond  Match  5s,  July,  '12  98% -100  5.00 

Hudson  Co.  6s.  Oct.,  ’ll 98%-100  6.00 

Interboro  6s,  May,  ’ll 101% -101%  3.92 

K.  C.  R.  & L.  6s,  Sept.,  '12..  98%-  98%  6.50 

Maine  Central  4s,  Dec.,  '14....  98  -100  4.25 

Minn.  & St.  Louis  5s,  Feb.,  ’ll  98 %-  99%  5.58 

New  Orl.  Term.  6s,  Apr.,  '11..  99% -100  3.45 

N.Y.C.  Equip.  6s,  Nov.,  '10.. 100  -101%  4.16 

N.Y.C.  Equip.  5s.  Nov.,  *14 . .102%-103%  4.15 


Digitized  by  t^ooQle 


INVESTMENTS 


69 


Name  and  Maturity.  Price.  Yield. 
N.Y.C.  Equip.  5a.  Nov.,  '16.  .103%-104%  4.15 

N.Y.C.  Equip.  5a,  Nov.,  '19.  .104%-106%  4.15 

N.Y..N.H.&H.  5a.  Jan..  '11 100  -100%  8.70 

N.Y..N.H.&H.  5a.  Jan.,  *12 100%-101  8.93 

No.  American  5a,  May,  '12..  99  -100  5.00 

St.  L.  A S.  F.  4%s,  Feb.,  '12..  95%-  96%  6.00 

St.  L.  & S.  F.  5a.  Apr.,  '13 96  %-  97%  5.45 

Southern  By.  5a.  Feb..  1913 98  - 98%  5.45 

Tidewater  6a,  June.  *13 100%-101%  5.85 

Westlnghouse  6a.  Aug.,  '10 100  -100%  4.25 

Wood  Worsted  4%a  Mar.,  *11  99%-  ..  4.50 

Weatern  Tel.  5a.  Feb..  1912..  99  - 99%  6.20 

INACTIVE  RAILROAD  STOCKS. 

[Corrected  to  June  20.] 

Quoted  by  J.  Hathaway  Pope  & Co. 


Ann  Arbor,  pref 

Arkanaaa,  Oklahoma  & Western . . . 

Atlanta  A Weat  Point  

Atlantic  Coast  Line  of  Conn  

Buffalo  A Susquehanna,  pref 16 

Central  New  England  IS 

Central  New  England,  pref 23 

Chicago,  Indianapolis  & Louisville.  50 
Chicago,  Ind.  A Louisville,  pref....  63 
Cincinnati,  Hamilton  A Dayton...  30 
Cincinnati,  Ham.  A Dayton,  pref. . 65 

Cincin.,  N.  O.  & Tex.  Pac 120 

Cincin.,  N.  O.  A Tex.  Pac.,  pref..  103 

Cincinnati  Northern  60 

Cleveland,  Akron  & Columbus 75 

Cleve.,  Cin.,  Chic.  A St.  L.,  pref.  .101% 

Delaware  47 

Des  Moines  & Ft.  Dodge,  pref.  ...  60 

Detroit  & Mackinac  65 

Detroit  A Mackinac,  pref.... 

Grand  Rapids  A Indiana  45 

Georgia,  South.  A Florida  27 

Georgia.  South.  A Flor.,  1st  pref..  95 
Georgia,  South.  A Flor,  2d  pref.  . 73 

Huntington  A Broad  Top 7 

Huntington  & Broad  Top.  pref....  25 
Kansas  City,  Mexico  A Orient....  20 
Kansas  City.  Mex.  A Orient,  pref.  25 
Louisville,  Henderson  & St.  Louis.  14 
Louisville.  Hend.  & St.  L.,  pref...  34 

Maine  Central  200 

Maryland  A Pennsylvania  15 

Michigan  Central  165 

Mississippi  Central  38 

Northern  Central  128 

Pitts.,  Cin.,  Chic.  A St.  L.,  pref.. 107 

Pittsburg  & Lake  Erie 

Pittsburg.  Shawmut  A Northern.. 

Pere  Marquete  27 

Pere  Marquette,  1st  pref.  54 

Pere  Marquette,  2d  pref 3‘ 

St.  Louis.  Rocky  Mt.  A Pac.,  pref.  . 

Seaboard  1st  pref 

Seaboard  2d  pref 

Spokane  A Inland  Empiro  .. 

Spokane  A Inland  Empire,  pref. . . 60 

Texas  Central  45 

Texac  Central,  pref 76 

Virginian  19 

Vandalia  80 

Williamsport  A North  Branch....  1 


Bid. 

Asked. 

. 66 

73 

. 5 

8 

.165 

180 

.235 

248 

. 16 

20 

. 18 

18 

. 23 

28 

. 50 

56 

. 63 

68 

. 30 

50 

. 65 

75 

.120 

127 

.103 

107 

. 50 

65 

. 75 

85 

.101% 

105 

. 47 

49 

. 60 

80 

. 65 

. . 

. 85 

96 

. 46 

55 

. 27 

35 

. 95 

. 73 

77 

. 7 

10 

. 25 

35 

. 20 

25 

’.  26 

30 

\.  14 

18 

. 34 

40 

.200 

220 

. 15 

21 

.165 

172 

. 38 

40 

.128 

131 

.107 

115 

.800 

. 1 

. 27 

34 

. 54 

60 

. 34 

40 

f.  .. 

45 

. 70 

80 

. 40 

45 

. 85 

45 

. 60 

70 

. 45 

. . . 

. 76 

. . . 

. 19 

28 

. 80 

. 1 

*3 

GUARANTEED  STOCKS. 

[Corrected  to  June  20.] 

Quoted  by  J.  Hathaway  Pope  A Co. 

(Guaranteeing  company  In  parentheses.) 

Bid.  Asked. 

Albany  A Susquehanna  (D.  A H.)..280  300 

Allegheny  A West’n  (B.  R.  I.  & P.).138  146 

Atlanta  A Charlotte  A.  L.  (So.R.R.)  .180 
Augusta  & Savannah  A.  L.  (Cen. 

of  Ga.)  107  115 

Beech  Creek  (N.  Y.  Central) 96  102 

Boston  A Lowell  (B.  A M.)  215  225 

Bleecker  8t.  A F.  Ry.  Co.  (Met. 

St.  Ry.  Co.)  10  20 

Boston  A Albany  (N.  Y.  Cen.) 210  230 

Boston  A Providence  (Old  Colony). 290  298 

Broadway  A 7 th  Av.  R.  R.  Co. 

(Met.  St.  Ry.  Co.)  120  135 

Brooklyn  City  R.  R.  (Bk.  H.  R.  R. 

Co.)  160  165 

Camden  A Burlington  Co.  (Penn. 

R.  R.)  140  150 

Catawlssa  R.  R.  (Phlla  A Read.)..  112  120 

Cayuga  A Susquehanna  (D.L.AW.)  .215  228 

Cent.  Pk.  N.&E.  R.R.  (Met.  St.  Ry.)  30  40 

Christopher  A 10th  St.  R.  R.  Co. 

(M.  S.  R.)  80  100 


Bid.  Asked. 


Cleveland  & Pittsburg  (Pa.  R.  R.K.170  176 

Cleveland  A Pittsburg  Betterment. . 99  101 

Columbus  & Xenia  (Pa.  R.  R.)....201  206 

Commercial  Union  (Com'l  C.  Co.)..  105  120 

Commercial  Union  of  Me.  (Com.  C. 

Co.)  110 

Concord  & Montreal  (B.  A M.)  ....160  170 

Concord  A Portsmouth  (B.  A M.)...165 
Conn.  A Passumpsic  (B.  A L.)....185  145 

Conn.  River  (B.  & M.)  260  270 

Dayton  & Mich.  pfd.  (C.  H.  A D. ) . . 1 85  193 

Delaware  & Bound  B.  (Phlla.  & R.)  .193  205 

Detroit,  Hillsdale  A S.  W.  (L.  S.  A 

M.  &)  95  100 

East.  Pa.  (Phlla.  A Reading)  180  140 

Eighth  Av.  St  R.  R.  (M.  S.  R.  Co.). 260 
Elmira  A Williamsport  pfd.  (Nor. 

Cen.)  186  150 

Erie  A Kalamasoo  (J.  S.  A S.) 225  240 

Erie  A Pittsburg  (Penn.  R.  R.) 140  160 

Franklin  Tel.  Co.  (West.  Union)..  40  50 

Ft.  Wayne  A Jackson  pfd.  (L.  S.  & 

M.  8.)  134  140 

Forty-second  St.  A G.  St.  R.  R. 

(Met.  St.  R*r.)  200 

Georgia  R.  R.  & Bk.  Co.  (L.  A N. 

A A.  C.  L.)  250  260 

Gold  A Stock  Tel.  Co.  (W.  U.)....107  115 


Grand  River  Valley  (Mich.  Cent.)... 120  125 

Hereford  Railway  (Maine  Central)..  85  92 

Inter.  Ocean  Telegraph  (W.  U.) 90  100 

Illinois  Cen.  Leased  Lines  (111.  Cen.)  95  100 

Jackson,  Lans.  & Saginaw  (M.  C.)..  84  90 

Joliet  A Chicago  (Chic.  & Al.) 168  174 

Kalamazoo,  Al.  A G.  Rapids  (L.  S. 

& S.)  140  150 

Kan.  C..  Ft.  Scott  & M.  pfd.  (St. 

L.  A S.  F.)  70  78 

K.  C.  St.  L.  A C.  pfd.  (Chic.  A Al.).130  140 

Lake  Shore  Special  (Mich.  S.  & N. 

Ind.)  330  360 

Little  Miami  (Penn.  R.  R.) 210  216 

Little  Schuylkill  Nav.  A Coal  (Phil. 

& R.)  110  120 

Louisiana  A Mo.  Riv.  (Chic.  A At!.). 160  172 

Mine  Hill  A Schuylkill  Hav.  (F.  & 

R.)  120  126 

Mobile  A Birmingham  pfd.  4%  (So. 

Ry.)  72  78 

Mobile  A Ohio  (So.  Ry.)  78  84 

Morris  Can.  pfd.  (Lehigh  Valley).. 170  

Morris  A Essex  (Del.  Lack.  A W.).175  184 

Nashville  A Decatur  (L.  A N.) 184  190 

N.  H.  A Northampton  (N.  Y..  N.  H. 

A H.)  100 

N.  J.  Transportation  Co.  (Pa.  R.R.) . 250  255 

N.  Y.,  Brooklyn  A Man.  Beach  pfd. 

(L.  I.  R.  R.)  110  120 

N.  Y.  A Harlem  (N.  Y.  Central) 300 

N.  Y.  L.  A Western  (D.  L.  & W.)..120  125 

Ninth  Av.  R.  R.  Co. (M.  St.  Ry.  Co.)  .140  190 

North  Carolina  R.  R.  (So.  Ry.).156  165 

North  Pennsylvania  (Phlla.  A R.) . .198  203 

North.  R.  R.  of  N.  J.  (Erie  R.R.)  87  97 

Northwestern  Telegraph  (W.  U.)...107  115 

Nor.  A Wor.  pfd.  (N.Y..N.H.&H.)  . . 206  215 

Ogden  Min.  R.R.  (Cen.R.R.  of  N.J.) . 96  102 

Old  Colony  (N.Y..N.H.&H.) 190  200 

Oswego  & Syracuse  (D.  L.  & W.)..210  225 

Pacific  & Atlantic  Tel.  (W.  U.) 66  75 

Peoria  A Bureau  Val.  (C.R.I.&P.)  .186  195 

Philadelphia  A Trenton  (Pa.  R.  R.)245 
Pitta  B.  A L.  (P.  L.  E.  & C.  Co.)..  S3  36 
Pitta,  Ft.  Wayne  & Chic.  (Pa.R.R.)  .168  173 

Pitta,  Ft.  Wayne  A Chic,  special 

(Pa.  R.  R.)  162  170 

Pitts.  A North  Adams  (B.  A A.).. 127  134 

Pitta,  McW'port  A Y.  (P.  A L.  E. 

M.  S.)  120  130 

Providence  A Worcester  (N.  Y.,  N. 

H.  A H.)  260  290 

Rensselaer  A Saratoga  (D.  & H.).  .190  200 

Rome  & Clinton  (D.  & H.) -..140  150 

Rome,  Watertown  A O.  (N.  Y.  Cen.)  118  125 


Saratoga  A Schnectady  (D.  A H.)..169 
Second  Av.  St.  R.  R.  (M.  S.  R.  Co.).  20  50 

Southern  Atlantic  Tel.  (W.  U.) 87  97 

Sixth  Av.  R.  R.  (Met.  S.  R.  Co.) 110  130 

Southwestern  R.  R.  (Cent,  of  Ga.)..108  115 

Troy  A Green  bush  (N.  Y.  Cent.).  .168  176 

Twenty-third  St.  R.  R.  (M.  S.  R.)..200  275 

Upper  Coos  (Maine  Central)  135  145 

Utica  A Black  River  (Rome,  W. 

A O.)  171  178 

Utlda.  Chen.  A Susqueh.  (D.  L. 

& W.)  144  155 

United  N.  J.  A Canal  Co.  (Pa.R.R.) . 244  260 

Valley  of  New  York  (D..  L.  A W.)..120  125 

Ware  R.  R.  (Boston  A Albany)  ....160  ... 

Warren  R.  R.  (D.,  L.  A W.)  168  175 


Digitized  by 


Google 


70 


THE  BANKERS  MAGAZINE 


EQUIPMENT  BONDS. 

[Corrected  to  June  20.] 

Quoted  by  Blake  & Reeves,  dealers  In  Invest- 
ment securities*  S4  Pine  at..  New  York. 
Quotations  are  given  In  basis. 


Atl.  Coast  Line  4%,  Mar.,  *17. 


Central  of  N.  J.  4%,  Apr.,  ’13., 

Ches.  A Ohio  4%.  Oct.,  *16 

Chic.  & Alton  4%,  June,  '16 

Chic.  & Alton  4%%.  Nov.,  '18. 
Chic.,  R.  I.  A Pac.  4%%.  Feb., 


Erie  4%.  Dec.,  *14  

Erie  4%,  Dec.,  '15  

Erie  4%,  June,  '16  

N.  Y.  Cent.  6%,  Nov.,  '11 

N.  Y.  Cent.  5%,  Nov.,  '13  

No.  West  4%,  Mar.,  '17  

Pennsylvania  4%,  Nov.,  '14... 
Seaboard  Air  Line  6%,  June,  '1 
So.  Ry.  4%%,  Series  E,  June, 


FERRY  COMPANY  BONDS  AND  STOCKS. 


Bid. 

Asked. 

4% 

4% 

27 

4% 

4% 

17 

6 

6 

19 

6% 

6 

16 

5 

4% 

4% 

4% 

4% 

4% 

6% 

6 

5% 

5 

17 

5% 

4% 

4% 

4% 

ii 

5% 

4% 

5% 

5 

6% 

6 

5% 

4% 

6% 

4% 

5% 

4% 

4% 

4% 

4% 

4% 

4% 

4% 

4% 

4% 

i! . 

5 

4% 

14 

5 

4% 

rf 

GAS 

AND 

[Corrected  to  June  20.] 


Quoted  by  Williamson  & Squire,  members  New 
York  Stock  Exchange,  brokers  and  dealers  In 


Investment  securities.  25  Broad  street.  New 


York. 

Bleecker  St  A Ful  Fy 

1st  4s  1950 

Bway  Surf  Ry  1st  5s.  .1924 

Bway  & 7th  Av  stock 

Bway  & 7th  Av  Con  5s. 1943 
Bway  A 7th  At  2d  5s.  .1914 
Col  A 9th  Av  1st  5s...  1993 

Christopher  A 10th  St 

Dry  Dk  E B A Bat  5s.  1932 
Dry  Dock  E B A Bat 

Ctfs  5s  1914 

4 2d  St  M A St  N Av  6S.1910 
Lex  Av  A Pav  Fy  5s.. 1922 

Second  Av  Ry  stock 

Second  Av  Ry  1st  5s.. 1909 
Second  Av  Ry  Cons  5s.  1948 

Sixth  Av  Ry  stock 

South  Ferry  Ry  1st  58.1919 
Tarryt’n  W P A M 5s. 1928 

Union  Ry  1st  5s 1942 

Westchester  El  Ry  5s. 1943 

Yonkers  Ry  1st  5s 1946 

Central  Union  Gas  5s..  1927 
Equitable  Gas  Light  5s.  1932 
New  Amat  Gas  Cons  6s.  1948 
N Y A E R Gas  1st  5s. 1944 
N.  Y & E R Gas  Con  6s.  1946 
Northern  Union  Gas  6s.  1927 
Standard  Gas  Light  6s. 1930 
Westchester  Light  5s..  1960 
Brooklyn  Ferry  Gen  6s. 1943 
Hoboken  Fy  1st  Mtg  5s. 1946 
NY  A Bkn  Fy  1st  Mt  68.1911 
NY  A Hobok  Fy  Gen  5s.  194 6 

NY  A East  River  Fy 

10th  A 23d  St  Ferry 

10th  A 23d  St  Fy  1st  5s. 1919 

Union  Ferry  

Union  Ferry  1st  5s....  1920 


Bid. 

Asked. 

JAJ 

50 

60 

JAJ 

102 

104 

120 

135 

JAJ 

100 

108 

JAN 

99 

100% 

MAS 

96 

100 

Q J 

80 

90 

JAD 

96 

100 

FAA 

40 

49 

MA  1 

S 99% 

100% 

MAS 

95 

98 

8 

15 

MAN 

97% 

99 

FAA 

50 

68 

120 

136 

A AO 

88 

91 

MAS 

60 

80 

FAA 

100 

102 

JAJ 

65 

86 

AAO 

70 

85 

JAJ 

99 

101 

MAS 

102 

106 

JAJ 

98% 

100 

JAJ 

100 

103 

JAJ 

95 

98 

MAN 

99 

101 

MAN 

100 

108 

JAD 

108% 

106 

24 

37% 

MAN 

102 

105 

JAJ 

93 

97 

JAD 

96% 

98% 

Q M 

34 

39 

AAO 

86 

■ . . 

JAD 

65 

70 

QJ 

30 

33 

MAN 

96 

99 

ACTIVE  BONDS. 


[Corrected  to  June  20.] 


Quoted  by  Swartwout  A Appenzellar,  bankers, 
members  New  York  Stock  Exchange,  44  Pine 
street.  New  York. 

Bid.  Asked. 

Amer.  Agrl.  Chem.  5s  100  101 

Amer.  Steel  Foundries  4s,  1923...  65  70 

Amer.  Steel  Foundries  6s,  1935...  99  103 

Balt.  & Ohio,  Southwest.  Dlv.  4%®*  89  90 

Bethlehem  Steel  5s  86  88 

Chi.,  Burlington  A Quincy  Gen.  4s.  98  98  4 

Chi.,  Burl.  & Quincy  111.  Dlv.  4s..  94  95 


Bid.  Asked. 

Chi.,  Burl.  A Quincy  111.  Dlv.  3 4®.  87  88% 

Cin.,  Hamilton  A Dayton  4s 96%  97% 

Denver  & Rio  Grande  Ref'ng  5s. . 91  92 

Louis.  A Nashville  unified  4s 97%  98 

Mason  City  A Ft.  Dodge  4s 81  8S 

Norfolk  A West.  Dlvlslonals  4s...  91  91% 

Savannah.  Florida  & Western  6s.  .121  126 

Va.  Carol  In  Chem.  1st  5s 98  99 

Western  Maryland  4s  83  84 

Wheeling  A Lake  Erie  cons.  4s 79  80 

Wls.  Central,  Superior  & Duluth  4s  89  90 

Western  Pacific  5s  93  94 

COAL  BONDS. 

[Corrected  to  June  20.] 

Quoted  by  Frederick  H.  Hatch  A Co.,  dealers  in 
investment  securities,  30  Broad  street.  New 
York. 

Bid.  Asked. 

Beech  Creek  C.  A Coke  1st  5s,  1944.  70 
Cahaba  Coal  Min.  Co.  1st  6s.  1922.105 
Clearfield  Bltum.  Coal  1st  4s,  1940.  8 
Consolidated  Indian  Coal  1st  Sink- 
ing Fund  5s.  1935  90 

Continental  Coal  1st  6s,  1952 95 

Falrmount  Coal  1st  5s,  1931 93 

Kanawha  A Hocking  Coal  A Coke 

1st  Sinking  Fund  5s,  1961  99% 

Monongahela  River  Con.  Coal  & 

Coll.  Tr.  6s.  1947  95 

New  Mexico  Railway  A Coal  1st  A 

Coll.  Tr.  6s.  1947 95 

New  Mexico  Railway  A Coal  Con. 

& coll.  Tr.  5s,  1961  94 

Pittsburg  Coal  Co.  1st  A Coll.  Tr. 

Sinking  Fund  5s.  1964  106 

Pleasant  Val.  Coal  Co.  1st  5s.  1928.  90 
Pocohontas  Consol.  Collieries  1st 

5s.  1957  80 

Somerset  Coal  Co.  1st  5s,  1932....  90 
Sunday  Creek  Co.  Coll.  Tr.  5s,  1944  60 

Vandalia  Coal  1st  6s.  1930  100 

Victor  Fuel  1st  5s,  1953  85 

Webster  Coal  & Coke  1st  5s.  1942..  88 
West  End  Coll.  1st  6s.  1913  96 


POWER  COMPANY  BONDS. 

[Corrected  to  June  20.] 

Quoted  by  Wm.  P.  Bonbrlght  A Co.,  bankers, 
members  of  the  New  York  Stock  Exchange, 
24  Broad  street,  New  York. 

Bid.  Asked. 


Guanajuato  Power  A Electric  Co. 

Bonds,  6%.  due  1932  (Int.)  96  99 

Guanajuato  Power  A Electric  Co. 

Pref.,  6%,  cumulative  (ex  com. 

stk.  dlv.)  74  76 

Guanajuato  Power  A El.  Co.  Com.  30  33 

Arizona  Power  C..,  bonds  6%,  due 

1933  87  91 

Arizona  Power  Co.  pref 44  50 

Arizona  Power  Co.  com 21  23 

Great  Western  Power  Co.  bond®, 

5%.  due  1946  93  96 

Western  Power  Co.  pref 61  53 

Western  Power  Co.,  com 28%  29% 

Mobile  Elec.  Co.  bds.,  5%,  due  1946  88  93 

Mobile  Electric  Co.  pref.  6% 75 

Mobile  Electric  Co.  com 25  30 

Amer.  Power  & Lt.  Co.  pref.,  6%..  79  81 

Amer.  Power  A Lt.  Co.  com 45  46% 


MISCELLANEOUS  SECURITIES. 
[Corrected  to  June  20.] 

Quoted  by  J.  K.  Rice,  Jr.,  A Co.,  brokers  and 
dealers  In  miscellaneous  securities,  33  Wall 


street,  New  York. 


American 

Brake  Shoe  A F.,  com. 

Bid. 
. 88 

Asked. 

92 

American 

Brake  Shoe  A F„  pref. 

.128 

126 

American 

Brass  

.117 

122 

American 

Chicle,  com 

.216 

220 

American 

Chicle,  pref 

. 102 

106 

American 

Coal  Products  

..96% 

, n 

American 

Gas  A Electric,  com... 

. 42% 

46% 

American 

Gas  A Electric,  pref... 

. 40 

43 

Adams  Express  

.260 

270 

American 

Express  

.240 

260 

American 

Light  A Traction,  com. 

.279 

284 

American 

Light  A Traction,  pref. 

.102 

106 

80 

110 

85 

93% 

100 

95 

101 

97 

97 

96% 

110 

95 

85 

93 

65 

*87 

92 


Digitized  by  t^ooQle 


INVESTMENTS 


71 


Bid.  Asked. 


American  District  Tel.  of  N.  J. ..  49  51 

Babcock  ft  Wilcox  100  104 

Borden's  Condensed  Milk,  com. ...112  115 

Borden's  Condensed  Milk,  pref....l02  106 

Bush  Terminal  97  110 

Conn.  Ry.  ft  Ltg.,  com 74  76 

Conn.  Ry.  ft  Ltg.,  pref 78  88 

Cripple  Creek  Central,  com 20  30 

Cripple  Creek  Central,  pref 40  50 

Del.,  Lack.  & Western  Coal 210  225 

Du  Pont  Powder,  com 134  138 

Du  Pont  Powder,  pref 84  88 

E.  W.  Bliss,  com 120  180 

E.  W.  Bliss,  pref 125  136 

Empire  Steel  & Iron,  cbm 13  20 

Empire  Steel  ft  Iron,  pref 72  77 

Hudson  ft  Manhattan,  com 18  20 

International  Nickel,  com 132  140 

International  Nickel,  pref 92  97 

International  Silver,  com 60  90 

International  Silver,  pref 110  113 

Int.  Time  Recording,  com 140  160 

Int.  Time  Recording,  pref 100  105 

Kings  Co.  E.  L.  ft  P 122  125 

Lackawanna  Steel  42  45 

Oil  Fields  of  Mexico  70  80 

Pacific  Gas  ft  Electric,  com 53  56 

Pacific  Gas  ft  Electric,  pref 84  87 

Phelps,  Dodge  ft  Co 196  215 

Producers  Oil  145  150 

Royal  Baking  Powder,  com 185  195 

Royal  Baking  Powder,  pref 104  107 

Safety  Car  Heating  ft  Lighting 126  129 

Sen  Sen  Chiclet  120  125 

Singer  Manufacturing  660  670 

Standard  Coupler,  com 35  50 

Texas  Oil  Company  205  210 

Texas  ft  Pacific  Coal  100  104 


Bid.  Asked. 


Tri-City  Railway  ft  Light,  com....  21  25 

Tri-City  Railway  ft  Light,  pref....  90  96 

U.  S.  Express  100  105 

U.  S.  Industrial  Alcohol,  com 15  20 

U.  S.  Industrial  Alcohol,  pref 85  90 

Union  Typewriter,  com  47  52 

Union  Typewriter,  1st  pref 105  110 

Union  Typewriter,  2d  pref 105  110 

Virginian  Railway  20  24 

Wells  Fargo  Express  160  166 

Western  Pacific  15  20 

Worthington  Pump,  prof 105  109 


FOREIGN  AND  MUNICIPAL  BONDS. 

[Corrected  to  June  20.] 


Reported  by  Zimmerman  & Forshay,  9-11  Wall 
street.  New  York. 


Bid.  Asked. 


German  Gov.  3%s  ... 

German  Gov.  3s  

Prussian  Consols  4s  . . 
Bavarian  Gov.  4s  .... 
Russian  Gov.  3 Ha  . ... 

Saxony  Gov.  3s  

Hamburg  Gov.  3s  .... 

City  of  Berlin  4s  

City  of  Cologne  

City  of  Augsburg  4s  . . 
City  of  Munich  4s  ... 
City  of  Frankfurt  3 %s 
City  of  Vienna  4s  .... 

Mexican  Gov.  6s  

Russian  Gov.  4s  

French  Gov.  Rente  3s 
British  Consols  2%s  .. 


. 92% 

93% 

. 83% 

84% 

.101% 

102% 

.100% 

101% 

. 91% 

92% 

. 88 

84 

. 82 

83 

.100 

101 

.100 

101 

. 99% 

100 

. 99% 

ine  *• 

. 91% 

92% 

. 96 

97 

.100 

101 

. 92 

93 

. 97% 

98’A 

. 81% 

82% 

BANK  AND  TRUST  COMPANY  STOCKS 

[Corrected  to  June  20,  1910.] 


NEW  YORK  BANK  STOCKS. 


Reported  by  Hornblower  ft  Weeks,  members 
New  York  and  Boston  Stock  Exchanges,  42 
Broadway,  New  York. 


Dlv 

Rate. 

Bid. 

Asked. 

Aetna  National  Bank  . . . 

8 

170 

180 

Amer.  Exchange  Nat.  Bk. 

10 

235 

245 

Audubon  Bank  

115 

125 

Bank  of  America  

26 

600 

640 

Bank  of  the  Manhattan  Co 

11 

325 

837 

Bank  of  the  Metropolis. . . 

16 

880 

410 

Bank  of  N.  Y..  N.  B.  A... 

14 

S20 

380 

Bank  of  Washington  Hts. 

8 

280 

... 

Battery  Park  Nat.  Bank. . 

115 

Bowery  Bank  

12 

-380 

Bronx  Borough  Bank.... 

300 

. . . 

Bryant  Park  Bank 

165 

165 

Butchers  & Drovers  Bank. 

140 

150 

Century  Bank  

6 

160 

175 

Chase  National  Bank  

. 6 

435 

... 

Chatham  National  Bank.. 

16 

320 

. . . 

Chelsea  Exchange  Bank... 

8 

200 

. . . 

Chemical  National  Bank. . 

15 

436 

450 

Citizens  Central  Nat.  Bk.. 

6 

165 

162 

City  Bank  

400 

41# 

Coal  ft  Iron  Nat.  Bank... 

6 

145 

155 

Colonial  Bank  

10 

890 

. . . 

Columbia  Bank  

12 

320 

360 

Commerce  Bank  

210 

215 

Corn  Exchange  Bank.... 

i6 

320 

830 

East  River  Nat.  Bank 

6 

110 

125 

Fidelity  Bank  

6 

165 

175 

Fifth  Avenue  Bank  

100 

4000 

4600 

Fifth  National  Bank  

12 

300 

. . . 

First  National  Bank  

32 

880 

900 

Fourteenth  Street  Bank... 

10 

155 

Fourth  National  Bank  . . . 

8 

i86 

190 

Gallatin  National  Bank... 

14 

380 

350 

Garfield  National  Bank... 

12 

300 

. . . 

Gerroan-American  Bank  . . 

6 

140 

150 

German  Exchange  Bank. . 

20 

450 

. . . 

Germania  Bank  

20 

500 

. . . 

Greenwich  Bank  

10 

250 

265 

Hanover  National  Bank... 

16 

620 

640 

Importers'  ft  Traders  Nat 

Bank  

24 

560 

670 

Irving  Nat.  Exchange  Bk 

8 

200 

210 

Jefferson  Bank  

10 

165 

185 

Liberty  National  Bank  . . . 

20 

600 

. . . 

Lincoln  National  Bank  ... 

10 

400 

430 

Manhattan  Co 

Bid. 

830 

Asked. 

346 

Market  ft  Fulton  Nat.  Bk. 

ii 

260 

260 

Mechanics  ft  Metals  Nat. 
Bank  

12 

255 

265 

Mercantile  Nat.  Bank  

8 

150 

166 

Merchants  Ex.  Nat.  Bk... 

6 

160 

Merchants’  Nat.  Bank  .... 

7 

170 

180 

Metropolis  Bank  

390 

410 

Metropolitan  Bank  

8 

206 

. . . 

Mount  Morris  Bank  

10 

250 

Mutual  Bank  

8 

276 

Nassau  Bank  

8 

240 

260 

Nat.  Bk.  of  Commerce 

8 

210 

215 

Nat.  Butchers  & Drovers'.. 

6 

138 

145 

National  City  Bank  

10 

375 

485 

National  Park  Bank  . ... 

16 

325 

840 

National  Reserve  Bank  . . . . 

100 

110 

New  Netherlands'  Bank 

5 

210 

T t - 

N.  Y.  County  Nat.  Bank... 

40 

960 

. . . 

New  York  Bkg.  Assn 

t . 

320 

330 

N.  Y.  Produce  Ex.  Bank... 

8 

166 

175 

Night  ft  Day  Bank  

Nineteenth  Ward  Bank  . . . 

, , 

- . • 

230 

270 

Northern  Bank  

*6 

100 

Pacific  Bank  

8 

230 

240 

Park  Bank  

460 

470 

People's  Bank  

io 

260 

285 

Phenlx  National  Bank 

6 

190 

205 

Plaza  Bank  

20 

625 

... 

Seaboard  National  Bank.. 

12 

390 

. . . 

Second  National  Bank 

12 

875 

Sherman  National  Bank... 

125 

. . . 

State  Bank  

io 

. . . 

800 

Twelfth  Ward  Bank  

6 

150 

Twenty-Third  Ward  Bk.... 

6 

i 85 

. . . 

Union  Ex.  Nat  Bank 

10 

165 

180 

Washington  Heights  Bank. 

275 

. . . 

West  Side  Bank  

i2 

600 

... 

Yorkvllle  Bank  

20 

525 

. . . 

NEW  YORK  TRUST  COMPANY  STOCKS. 


Dlv. 

Rate. 

Bid. 

Asked. 

Astor  Trust  Co 

. 8 

350 

370 

Bankers'  Trust  Co 

. 16 

650 

675 

Brooklyn  Trust  Co 

. 20 

436 

. . . 

Carnegie  Trust  Co.  ..... 

. 8 

180 

Central  Trust  Co 

. 46 

1000 

1030 

Columbia  Trust  Co 

. 8 

290 

300 

Commercial  Trust  Co.  . . . 

110 

126 

Empire  Trust  Co 

! io 

300 

310 

Digitized  by  ^.ooQle 


72 


THE  BANKERS  MAGAZINE 


Farmers’  Loan  A Trust  Co. 
(par  $26)  


Fulton  Trust  Co.  . . 
Guaranty  Trust  Co.  . 
Guardian  Trust  Co. 


International  Bank’s  Corp. 

Kin ss  Co.  Trust  Co 

Knickerbocker  Trust  Co. . . . 

Lawyers’  Mortgage  Co 

Lawyers’  Title  Insurance  & 

Trust  Co 

Lincoln  Trust  Co 

Long  Isl.  Loan  A Trust  Co. 
Manhattan  Trust  Co.  (par 

$30)  

Mercantile  Trust  Co 

Metropolitan  Trust  Co 

Mutual  AUance  Trust  Co. . 
Nassau  Trust  Co 


N.  Y.  Mtg.  A Security  Co.. 

New  York  Trust  Co 

People’s  Trust  Co 

Queens  Co.  Trust  Co 

Savoy  Trust  Co 


Trust  Co.  of  America 
Union  Trust  Co 


Van  Norden  Trust  Co. 


Williamsburg  Trust  Co. 
Windsor  Trust  Co. 


Rate. 

Bid. 

Asked. 

24 

... 

490 

50 

1725 

1775 

6 

200 

210 

8 

210 

• • • 

8 

215 

• • • 

10 

290 

82 

840 

860 

. . . 

176 

ii 

270 

. . • 

4 

105 

. . . 

6 

170 

90 

ios 

16 

600 

. . . 

12 

805 

315 

12 

240 

260 

12 

275 

285 

120 

150 

ii 

200 

... 

12 

876 

20 

726 

. . . 

24 

. 

636 

115 

130 

*8 

175 

8 

240 

260 

45 

1100 

1120 

12 

205 

82 

640 

660 

12 

285 

. . . 

116 

126 

• • • 

100 

i6 

400 

20 

475 

490 

10 

240 

352 

60 

1325 

1360 

24 

470 

480 

60 

1200 

1226 

210 

i6 

865 

..." 

. . 

80 

100 

6 

110 

125 

BOSTON  BANK  STOCKS. 


Reported  by  Homblower  A Weeks,  members 
New  York  and  Boston  Stock  Exchanges.  $0 
Congress  St.,  Boston. 


Name. 

Atlantic  National  Bank  

Boylston  National  Bank  

Commercial  National  Bank  

Eliot  National  Bank  

Fourth  National  Bank  

Merchants  National  Bank  

Metropolitan  National  Bank  

National  Bank  of  Commerce  

National  Market  Bank,  Brighton.. 
Nat.  Rockland  Bank,  Roxbury.... 

National  Shawmut  Bank  

National  Union  Bank  

National  Security  Bank  

New  England  National  Bank  .... 

Old  Boston  National  Bank  

People’s  National  Bank,  Roxbury. . 

Second  National  Bank  

South  End  National  Bank  

State  National  Bank  

Webster  & Atlas  National  Bank... 
Wlnthrop  National  Bank  


Dlv. 

Last 

Rate. 

Sale. 

6 

151ft 

4 

103ft 

6 

140 

8 

226 

7 

173ft 

10 

274 

6 

122 

6 

173ft 

6 

102 

8 

167 

10 

370 

7 

204 

12 

• 

6 

162 

6 

127ft 

6 

122ft 

10 

265 

5 

104ft 

7 

182 

7 

185 

10 

826 

• No  public  sales. 


CHICAGO  NATIONAL  BANK  STOCKS. 


Reported  by  Homblower  A Weeks,  members 
New  York  and  Boston  Stock  Exchanges,  152 
Monroe  St.,  Chicago. 

Dlv.  Rate.  Bld.Asked. 


Calumet  National  Bank  . . . 
City  National,  Evanston... 
Commercial  National  Bank. 
Continental  National  Bank. 
Corn  Exchange  Nat.  Bank. 
Drovers  Deposit  Nat.  Bank. 

First  National  Bank  

First  Nat.  Bk.  of  Englewood 
Fort  Dearborn  Nat.  Bank.. 
Live  Stock  Exchange  Nat. 

Bank  

Monroe  National  Bank  .... 
Nat.  Bank  of  the  Republic. 

National  City  Bank  

National  Produce  Bank  . . . 
Prairie  National  Bank  .... 


CHICAGO  STATE 
Dlv. 

Ashland  Exchange  Bank. . 

Austin  State  Bank  

Central  Trust  Co  

Chicago  City  Bank  

Chicago  Savings  Bank  .... 

Citizens  Trust  Co 

Colonial  Tr.  & Sav.  Bank. . 

Drexel  State  Bank  

Drovers  Tr.  A Sav.  Bank... 
Englewood  State  Bank.... 

Far  well  Trust  Co 

Hibernian  Banking  Assn... 
Illinois  Tr.  & Sav.  Bank... 

Kaspar  State  Bank  

Kenwood  Tr.  & Sav.  Bk. 
Lake  View  Tr.  & Sav.  Bk. 
Merchants  Loan  A Tr.  Co.  . 
Metropolitan  Tr.  & Sav.  Bk. 

Northern  Trust  Co 

North  Avenue  State  Bank.. 

North  Side  State  Bank 

Northwest  State  Bank  .... 
Northwestern  Tr.  & Sav.  Bk- 
Oak  Park  Tr.  & Sav.  Bank 
Peoples  Stock  Yards  State 

Bank  

Prairie  State  

Pullman  Loan  A Tr.  Bank. 
Railway  Exchange  Bank... 

Security  Bank  

Sheridan  Tr.  & Sav.  Bank 
South  Chicago  Sav.  Bank.. 
South  Side  State  Bank.... 
State  Bank  of  Chicago.... 

State  Bank,  Evanston  

Stockmen’s  Trust  Co 

Stock  Yards  Savings  Bank 

Union  Bank 

Union  Trust  Co 

West  Side  Tr.  A Sav.  Bank 

Western  Trust  

Woodlawn  Trust  


6 

160 

. . . 

12 

815 

. . . 

8 

242 

244 

10 

295 

16 

4U 

418 

10 

228 

229 

16 

420 

10 

250 

8 

208 

2ii 

10 

220 

228 

4 

180 

134 

8 

199 

203 

6 

200 

212 

4 

137 

140 

140 

BANKS. 

Rate. 

Bid. 

Asked. 

109 

114 

io 

280 

. . . 

7 

168 

161 

10 

174 

180 

6 

148 

147 

4 

100 

111 

10 

196 

201 

6 

150 

165 

8 

175 

180 

6 

112 

116 

6 

119 

123 

8 

198 

202 

20 

506 

505 

10 

250 

7 

134 

iis 

6 

136 

138 

12 

416 

426 

6 

120 

122 

8 

320 

323 

6 

183 

139 

G 

126 

4 

114 

iis 

6 

138 

142 

808 

312 

10 

200 

6 

260 

. . . 

8 

158 

. . . 

4 

125 

6 

168 

i?i 

6 

112 

114 

6 

146 

149 

132 

160 

12 

334 

337 

10 

278 

. . . 

5 

113 

116 

8 

215 

6 

i27 

180 

8 

325 

160 

6 

158 

156 

8 

135 

140 

BOSTON  TRUST  COMPANIES. 


Dlv. 

Last 

Name. 

Rate. 

Sale. 

American  Trust  Co 

8 

326 

Bay  State  Trust  Co 

7 

• 

Beacon  Trust  Co 

. . . . s 

185 

Boston  Safe  D.  A T.  Co.  . . . 

14 

369 

City  Trust  Co 

12 

463 

Columbia  Trust  Co 

120 

Commonwealth  Trust  Co.  . . . 

6 

205 

Dorchester  Trust  Co 

105 

Exchange  Trust  Co 

Federal  Trust  Co 

• • • • ( 

iss 

International  Trust  Co 

16 

£00 

Liberty  Trust  Co 

Mattapan  D.  A T.  Co 

....  6 

ioi 

Mechanics  Trust  Co 

6 

110 

New  England  Trust  Co 

15 

309 

Old  Colony  Trust  Co 

20 

749 

Puritan  Trust  Co 

....  6 

190 

8tate  Street  Trust  Co 

8 

• 

United  States  Trust  Co 

16 

226 

• No  public  sales. 


PRACTICAL  BANKING  CONTRI- 
BUTIONS WANTED 

HELPFUL  articles  relating  to  the  every- 
day work  of  hanks,  savings  banks 
and  trust  companies  are  desired  for  publi- 
cation in  The  Bankers  Magazine. 

Short,  bright  paragraphs,  telling  in  a clear 
and  interesting  way  of  some  of  the  methods, 
systems  and  ideas  employed  in  the  most 
progressive  banks  of  the  country,  will  be 
especially  welcome. 

Contributions  accepted  by  the  editor  will 
be  paid  for  on  publication. 


Digitized  by  t^ooQle 


VIRGINIA  BANKERS  HOLD  ANNUAL  CONVEN- 
TION 


OLD  POINT  COMFORT  entertained  the 
seventeenth  annual  convention  of  the 
Virginia  Bankers’  Association  on 
Thursday,  Friday  and  Saturday,  June  9, 
10  and  11. 

The  sessions  were  of  exceeding  interest 
and  well  attended,  there  being  a goodly 
sprinkling  of  out-of-the-state  bankers, 
present.  Some  of  those  present  from 
a distance  were:  J.  D.  Ayres,  the 

newly  elected  vice-president  of  the  Bank 
of  Pittsburgh,  Pittsburgh,  Pa.;  Wm. 


dress  of  Secretary  N.  P.  Gatling,  in  the 
nature  of  his  annual  report,  another  by 
George  Bryan  of  Richmond,  attorney  for 
the  association. 

Robert  E.  James,  president  of  the  Easton 
Trust  Company  of  Easton,  Pa.,  addressed 
the  convention  on  the  negative  of  the  cen- 
tral bank  question,  maintaining  that  the 
present  baking  system  is  the  best  obtain- 
able. Prof.  Royal  Meeker,  of  Princeton 
University,  upheld  the  central  bank. 

As  part  of  the  entertainment  features,  the 


After  the  Boat  Ride 


McK.  Reed,  assistant  cashier  of  the 
First  National  Bank,  of  Pittsburgh,  Pa.; 
H.  S.  Zimmerman,  assistant  cashier  of  the 
Mellon  National  Bank,  of  Pittsburgh,  Pa.; 
F.  J.  Woodworth,  vice-president  First  Na- 
tional Bank,  of  Cleveland,  Ohio;  J.  A. 
Ward,  assistant  cashier  of  the  Cleveland 
National  Bank,  of  Cleveland,  Ohiof  Arthur 
H.  Titus,  assistant  cashier  National  City 
Bank,  of  New  York  City;  Alex.  D.  Camp- 
bell, assistant  cashier  Hanover  National 
Bank,  New  York  City;  Leslie  M.  Shaw, 
president  First  Mortgage  Guarantee  and 
Trust  Company,  Philadelphia,  Pa.;  Charles 
W.  Warden,  president  of  the  United  States 
Trust  Company,  of  Washington,  D.  C.; 
Snowden  Hoff,  assistant  cashier  of  the  Third 
National  Bank  of  Baltimore,  Md.;  and  F. 
V.  Baldwin,  of  New  York. 

Many  speeches  of  interest  to  the  dele- 
gates were  delivered,  among  them  the  ad- 


delegates  and  visitors  took  a trolley,  ride  to 
Newport  News  and  inspected  the  shipbuild- 
ing yards. 

J.  W.  Miller,  cashier  of  the  Peoples  Bank 
of  Pulaski,  was  elected  president  of  the 
association,  succeeding  Henry  A.  Walker 
of  Staunton,  who  was  presented  on  his  re- 
tirement with  a silver  loving  cup. 

The  other  officers  elected  were:  Vice- 

presidents,  E.  P.  Miller,  president  of  the 
First  National  of  Lynchburg;  Tench  F. 
Tilghman,  vice-president  of  the  Citizens 
Bank  of  Norfolk;  W.  M.  Addison,  cashier 
of  the.  National  Bank  of  Richmond;  R.  G. 
Vance,  vice-president  of  the  First  National 
of  Waynesboro;  J.  W.  Bell,  president  of 
the  First  National  of  Abingdon;  secretary, 
N.  P.  Gatling,  cashier  of  Eagle  Rock  Bank; 
treasurer,  Julian  H.  Hill,  assistant  cashier 
of  the  National  State  Bank  of  Richmond. 

7S 


Digitized  by  t^ooQle 


Digitized  by  t^ooQle 


Digitized  by  t^ooQle 


Mr.  and  Mrs.  W.  M.  Addison,  of  Richmond  Secretary  Gatlin?  resting  a j0Hy  party  in  front  of  the  Chamberlain 


76 


Digitized  by  t^ooQle 


ENGINEERING  AND  COMMERCIAL  SKILL  APPLIED 
TO  THE  OPERATION  AND  MANAGEMENT 
OF  PUBLIC  SERVICE  CORPORATIONS 


THE  operation  of  gas,  electric  and 
street  railway  properties  in  the 
United  States  is  comparatively  a 
new  business.  The  use  of  gas  for  fuel  and 
lighting  purposes  is  something  more  than 
one  hundred  years  old,  yet  for  most  of 
the  United  States  it  is  less  than  half  this 


many  utility  properties  failed  to  pay  and 
not  a few  lost  money. 

Expert  Service  Needed. 

It  has  been  abundantly  demonstrated  that 
the  success  of  public  utility  corporations 
purveying  gas  and  electric  service  and 


PHOTO  BY  MATZENK 

Henry  M.  Byllesby 


age.  The  first  electric  plant  was  built  in 
1882.  Application  of  electricity  for  mo- 
tive power  is  still  younger. 

Up  to  the  last  decade  the  pressing  need 
for  expert  engineering  and  commercial  skill 
in  the  operation  and  management  of  these 
branches  of  public  utilities  was  not  general- 
ly recognized.  Local  business  men  who 
had  made  successes  out  of  their  respective 
callings  were  usually  not  only  the  owners, 
but  the  active  managers  of  the  plants. 
What  they  knew  about  gas,  electricity  and 
transportation  was  only  such  knowledge  as 
they  were  forced  to  acquire  in  order  to  car- 
ry on  the  business.  As  a natural  result 


urban  transportation  depends  very  largely 
upon  the  character  of  the  management.  It 
was  recognized  quite  a number  of  years 
ago  that  the  successful  operation  of  these 
industries  required  the  close  application 
of  experienced  specialists. 

As  a natural  sequence,  organizations  came 
into  existence  predicated  on  the  theory  of 
expert  attention.  There  are  several  or- 
ganizations of  this  type  now  performing 
valuable  functions  for  the  public,  the  bank- 
er, the  capitalist  and  the  small  investor. 

So  far  their  careers  have  shown  the  theory 
upon  which  they  proceeded  to  be  correct. 

Among  the  organizations  of  this  charac- 

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ter,  H.  M.  Byllesby  & Co.  is  notable  both 
for  the  large  number  of  properties  under 
its  direction  and  the  great  success  that  has 
attended  its  operations. 

It  is  believed  that  an  outline  of  the 
Byllesby  organization  cannot  fail  to  be  of 
interest  to  anyone  concerned  with  public 
utilities,  and  particularly  to  the  banker  who 
makes  loans  on  the  securities  based  upon 
this  form  of  property  and  to  the  investor 
who  buys  them. 

An  Organization  of  Engineers. 

The  firm  is  primarily  an  organization  of 
engineers  specializing  in  the  design,  con- 
struction, operation  and  management  of 
public  utility  properties.  Its  home  office 
Is  at  Chicago  and  it  has  branch  offices  at 
Portland,  Ore.,  San  Diego,  Cal.,  Oklahoma 
City,  Okla.,  and  Mobile,  Ala. 

By  combining  the  general  management 
of  a number  of  properties  in  cities  of  less 
than  100,000  population,  it  has  been  found 
possible  to  pay  the  high  salaries  necessary 
to  obtain  technical  and  commercial  ability 
truly  responding  to  the  term  “expert.” 
Specialists  should  be  employed  in  lines  of 
business  where  specialization  is  absolutely 
essential,  owing  to  the  exacting  professional 
demands.  All  this  Byllesby  & Company 
has  done,  and  the  results  achieved  in  the 
operation  of  the  numerous  public  utility 
properties  under  its  control  is  proof  of  the 
wisdom  of  the  plan. 

Application  of  Modern  Methods  Illus- 
trated. 

As  an  illustration  of  what  the  applica- 
tion of  modem  methods  has  accomplished, 
figures  taken  from  the  records  of  the  Ok- 
lahoma Gas  & Electric  Company,  Oklahoma 
City,  Okla.,  are  in  point.  Byllesby  & Com- 
pany took  over  the  management  of  the 
Oklahoma  City  properties  in  1904,  and  the 
following  facts  indicate  the  rapidity  of  de- 
velopment: 


Capacity  Electric  Station 

Mileage  Electric  Distribution  System 

Mileage  Gas  Mains 

Number  Electric  Customers 

Number  Gas  Customers 

Although  Oklahoma  City  has  grown  very 
rapidly  during  this  time,  the  increase  in  the 
population  shows  nothing  like  the  percen- 
tages in  the  growth  of  the  gas  and  electric 
business.  During  1909  alone  the  number  of 
electric  consumers  at  Oklahoma  City  in- 
creased fifty  per  cent,  and  the  number  of 
gas  consumers  thirty-five  per  cent,  although 
during  the  year  the  growth  in  population 
could  hardly  have  exceeded  15,000  people. 

At  San  Diego,  Cal.,  and  in  the  other 
properties  managed,  the  results  of  the 
Byllesby  management  are  quite  as  striking. 
At  the  present  time  the  electric  street 


railway,  gas  and  electric  properties  which 
the  organization  controls  are  serving  some 
forty-five  cities  and  towns  throughout  the 
West  and  South.  Various  properties  have 
their  separate  corporate  organizations,  but 
all  are  under  the  direct  control  and  super- 
vision of  the  central  directing  force  in  the 
home  office. 


Scope  of  the  Firm's  Operations. 

As  outlined  by  Mr.  Byllesby,  in  his  ad- 
dress at  the  last  annual  convention  of  H.  M. 
Byllesby  & Co.  and  affiliated  companies, 
the  business  of  the  firm  embraces  the  fol- 
lowing main  features: 

(а)  Making  examinations  and  reports, 
audits,  and  appraisals  of  utility  properties 
for  banks,  corporations  and  individuals. 

(б)  The  managing  of  local  utility  prop- 
erties. 

( e ) Acting  as  consulting  engineers  and 
the  designing  and  superintending  of  all 
classes  of  engineering  work. 

(d)  Dealing  in  stocks  and  bonds  of 
local  utility  properties.  The  purchase  and 
sale  of  such  properties  and  from  time  to 
time  their  refinancing. 

Relations  to  Banks  and  Investors. 

The  relation  of  Byllesby  & Company  to 
banks,  financial  houses  and  investors  is  one 
comprising  several  capacities.  In  the  first 
place  the  firm  stands  as  a source  of  ex- 
pert knowledge,  whose  opinions  on  public 
utility  questions  are  rendered  with  great 
care  and  only  after  exhaustive  investigation. 
Secondly,  the  firm  represents  a conserving 
force,  exerting  an  influence  for  stability 
upon  the  properties  trusted  to  its  manage- 
ment. In  the  third  place,  the  Byllesby 
organization  represents  the  highest  type  of 
engineering  skill,  this  meaning  that  proper- 
ties operated  are  constructed  and  main- 
tained according  to  the  best  standards. 
Lastly,  H.  M.  Byllesby  & Company  has 


1904. 


700  kilowatts 
20  miles 
13  miles 
1,400 
577 


1910. 

3,650  kilowatts 
121  miles 
109  miles 
6,801 
7,296 


proven  that  it  possessses  the  commercial 
ability  not  only  to  make  public  utility 
properties  profitable  to  the  investor,  but 
to  so  manage  these  properties  as  to  please 
and  satisfy  the  public. 

High  Standard  Maintained. 

This  organization  is  one  which  believes 
that  the  responsibilities  laid  upon  organiza- 
tions of  the  class  to  which  it  belongs  are 
ethical  and  binding  to  the  highest  degree. 
It  conceives  itself  hi  the  attitude  of  a phy- 
sician or  lawyer,  answerable  to  its  clients 
for  the  wisdom  of  its  opinions  and  morally 


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MANAGEMENT  OF  PUBLIC  SERVICE  CORPORATIONS 


79 


liable  to  redeem  its  statements  by  full  and 
complete  performance.  Conforming  to  this 
attitude,  the  firm  bos  been  extremely  con- 
servative and  cautious  in  all  of  its  rela- 
tions with  investors. 

Modern  and  Progressive  Methods  Fol- 
lowed. 

The  leaders  in  public  utilities  for  some 
years  have  agreed  that  broader  methods 
must  be  adopted  in  dealing  with  the  public 
if  utility  properties  are  to  be  maintained 
on  a secure  and  profitable  basis.  H.  M. 
Byllesby  & Company  stands  for  modern 
ideas  and  for  progressive  methods  in  public 
utility  operations.  It  believes  there  is  no 
excuse  whatever  for  unfair  or  crooked  work 
in  public  utilities,  but  that  investment  in 
such  enterprises  should  be  permanent  and 
secure. 

Fair  Treatment  of  the  Public. 

In  order  to  insure  the  security  of  capital 
invested  in  utilities  Byllesby  & Company  be- 
lieves that  efficient  and  adequate  service 
must  be  given  at  the  lowest  rates  consistent 
with  sound  management.  The  history  of 
the  firm  in  the  various  cities  in  which  it  is 
interested  is  distinguished  by  the  following 
characteristics: 

Reductions  in  the  price  of  service. 

Great  improvement  in  the  quality  and 
scope  of  service. 

Full  faith  in  the  city. 

The  heavy  investment  of  new  capital. 

Great  improvements  in  the  physical  prop- 
erty. 

It  is  a fixed  principle  of  the  organisation 
to  cooperate  with  other  commercial  inter- 
ests and  with  the  public  toward  the  healthy 
development  and  growth  of  communities. 
Obviously  the  gas  and  electric  company 
can  grow  only  as  the  city  grows.  There- 
fore the  utility  company  must  do  its  utmost 
toward  making  conditions  attractive  for  in- 
dustrial enterprises  and  for  residency 

This  policy  of  entering  heartily  into  the 
community  affairs  of  cities  has  proven  to  be 
highly  desirable.  The  Byllesby  companies 
display  an  eagerness  to  join  in  all  plans 
calculated  to  oenefit  local  conditions  and 
believe  thoroughly  in  the  merits  of  frank 
dealing  with  the  public. 

Probably  no  group  of  utility  companies 
in  the  United  States  has  expended  more 
effort  and  money  in  the  much-needed  work 
of  educating  the  people  to  a true  concep- 
tion of  the  modem  public  service  corpora- 
tion than  have  the  Byllesby  companies.  As 
a result  the  public  is  found  to  be  both 
enlightened  and  friendly  toward  the  oper- 
ating organizations,  freely  bestowing  the 
commendation  due  highly  efficient  service 
and  admitting  that  the  prices  charged  are 
reasonable. 

New  business  departments  are  maintained 
for  the  express  purpose  of  studying  the 


exact  needs  of  the  consumers  and  the  pub- 
lic generally,  and  to  devise  ways  and  means 
of  meeting  these  demands  so  that  advan- 
tages will  accrue  to  both  consumer  and 
company. 

The  operation  of  a utility  company  neces- 
sarily has  to  satisty  both  the  investors  on 
one  hand  and  the  public  on  the  other.  That 
this  can  be  accomplished  thoroughly  and 
well  has  been  proven  by  the  success  of  the 
Byllesby  organization  and  the  confidence  it 
has  inspired  among  bankers  and  investors. 


AMERICAN  INSTITUTE  OF  BANK- 
ING-EIGHTH ANNUAL  CON- 
VENTION 

THE  eighth  annual  convention  of  the 
American  Institute  of  Banking,  held 
at  Chattanooga,  Tenn.,  June  8,  9 and 
10,  proved  to  be  the  most  important  and 
best  attended  one  in  the  history  of  the  or- 
ganization. Three  days  were  devoted  to  the 
various  sessions,  including  outings  and  enter- 
tainments for  the  enjoyment  of  the  young 
bankers.  Two  or  three  business  sessions 
were  held  daily  and  many  speeches  were 
made  of  general  and  local  interest 

President  N.  D.  Ailing,  of  the  Nassau 
Bank,  New  York  City,  presided  over  the 
various  business  sessions.  Mr.  Ailing’s  ad- 
dress and  that  of  J.  W.  Burns,  of  the  pro- 
tective department  of  the  American  Bankers’ 
Association,  took  up  the  greater  part  of  the 
first  session,  of  which  the  remainder  was  de- 
voted to  routine  business.  In  the  afternoon 
of  the  first  day  the  young  bankers  visited 
the  National  Military  Park,  and  in  the  even- 
ing danced  at  the  Country  Club. 

Edward  B.  Vreeland,  of  the  National 
Monetaiy  Commission,  addressed  the  con- 
vention on  the  morning  of  the  second  day. 
F.  O.  Watts  also  made  a speech,  and  two 
prize  papers  were  read  on  the  central  bank 
question.  The  delegates  then  took  up  for 
discussion  a number  of  topics  of  current 
interest. 

In  the  evening  of  the  second  day  (Thurs- 
day) there  was  a special  session  to  hear 
the  papers  in  the  Chapman  contest,  the 
prize  being  awarded  by  Joseph  Chapman,  Jr. 

On  Friday  morning  there  was  an  address 
by  Logan  C.  Murray,  president  of  the  Amer- 
ican National  Bank  of  Louisville,  Ky.,  after 
which  the  annual  election  was  held.  It  re- 
sulted as  follows: 

President,  Ralph  H.  MacMichael,  of  the 
Mellen  National  Bank  of  Pittsburgh;  vice- 
president,  L.  C.  Humes,  of  the  First  Na- 
tional Bank  of  Memphis,  Tenn.;  secretary, 
C.  H.  Marston,  of  Boston,  Mass;  treasurer, 
R.  J.  Taylor,  of  Savannah,  Ga. 

New  members  of  the  executive  council 
elected:  Herbert  H.  Owens,  of  Baltimore; 
George  A.  Brown,  of  Denver;  Harry  F. 


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THE  BANKERS  MAGAZINE 


Pratt,  of  Cleveland,  O.,  and  H.  J.  Mergler 
of  Cincinnati. 

George  E.  Allen  was  re-elected  education- 
al director. 

Of  the  eighteen  prize  essays  submitted, 
the  first  prize  was  awarded  to  J.  E.  Rovens- 
ky,  of  the  First  National,  Pittsburgh,  and 
the  second  to  A.  M.  Dickinson  of  the  Chat- 
tanooga Savings  Bank.  Among  the  promi- 
nent men  who  addressed  the  convention  were: 
Logan  C.  Murray,  president  American  Na- 
tional, Louisville;  Chas.  M.  Preston,  repre- 


senting the  Tennessee  Barkers*  Association; 
F.  O.  Watts,  president  of  the  First  National 
of  Nashville,  and  vice-president  of  the  Amer- 
ican Bankers*  Association;  Hon.  Edward  B. 
Vreeland,  vice-chairman  of  the  National 
Monetary  Commission  and  chairman  of  the 
committee  on  banking  and  currency  of  the 
National  House  of  Representatives;  Secre- 
tary Farnsworth  of  the  American  Bankers* 
Association  and  others. 

Rochester,  N.  V.,  was  awarded  the  1911 
convention. 


PHOTO  BY  PIRIE  MACDONALD,  N.  Y. 

CHARLES  HAMILTON  SABIN 

Newly  Elected  Vice-President  Guaranty  Trust  Company  of  New  York 


CHARLES  HAMILTON  SABIN,  n 
vice-president  of  the  Mechanics  and 
Metals  National  Bank  of  New  York, 
was  on  June  22,  elected  vice-president  of 
the  Guaranty  Trust  Company  of  New  York, 
to  succeed  Charles  H.  Allen,  the  new  treas- 
urer of  the  American  Sugar  Refining  Com- 
pany. Mr.  Sabin  was  born  in  1868  in  Wil- 
liamstown,  Mass.,  and  was  graduated  from 
the  Greylock  Institute  in  1885.  For  two 


years  he  was  in  the  flour  commission  busi- 
ness in  Albany  and  the  rest  of  his  life 
since  then  has  been  devoted  to  banking. 

He  became  a clerk  in  the  National  Com- 
mercial Bank  of  Albany  in  1887  and  after- 
ward took  higher  positions  with  other  in- 
stitutions in  that  city.  In  1902  he  was  made 
vice-president  and  general  manager  of  the 
National  Commercial,  which  had  been  en- 
larged. In  May,  1907,  he  was  called  to  New 


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AMERICAN  BANKERS’  CONVENTION 


81 


York  to  become  president  of  the  Nation- 
al Copper  Bank,  and  he  built  that  institu- 
tion up  rapidly.  Several  months  ago,  when 
the  National  Copper  was  absorbed  by  the 


Mechanics  and  Metals,  Mr.  Sabin  was  taken 
into  the  latter  institution  as  vice-president. 
He  was  president  of  the  New  York  State 
Bankers’  Association  in  1904. 


AMERICAN  BANKERS’  CONVENTION 

TOUR  OF  THE  EASTERN  AND  SOUTHERN  BANKERS 


FOLLOWING  its  custom  for  several 
years  past,  the  New  York  State 
Bankers’  Association,  through  its 
committee  on  transportation  and  arrange- 
ments, has  arranged  for  a special  tour  to 
the  Thirty-Sixth  Annual  Convention  of  the 
American  Bankers’  Association,  which  will 
be  held  at  Los  Angeles,  California,  October 
3 to  7.  Bankers  from  all  sections  of  the 


Leaving  Los  Angeles  over  the  Southern 
Pacific  for  the  return  journey  on  the  morn- 
ing of  October  8,  stops  will  be  made  at 
Santa  Barbara,  Paso  Robles,  Hotel  Del 
Monte,  Santa  Cruz,  the  gigantic  redwood 
forests,  and  San  Jos6,  arriving  at  the  New 
Palace  Hotel  on  Tuesday  morning,  October 
11,  leaving  there  over  the  Shasta  Route 
the  following  morning,  stopping  at  Shasta 


Gentlemen’s  Club  Car 


country,  and  from  the  East  and  South,  es- 
pecially, have  been  invited  to  join  in  this 
delightful  tour. 

The  special  train  bearing  the  bankers 
will  leave  New  York  over  the  New  York 
Central  Lines,  Monday,  September  26,  ar- 
riving at  Chicago  the  following  afternoon. 
From  Chicago  to  Kansas  City  the  Chicago, 
Milwaukee  and  St.  Paul  will  be  used,  and 
for  the  remainder  of  the  journey  to  Los 
Angeles  the  Atchison,  Topeka  and  Sante 
Fe.  Arrangements  have  been  made  for 
visiting  all  the  most  desirable  attractions 
en  route,  including  the  famous  Grand  Canon 
of  Arizona.  The  special  train  will  ar- 
rive at  Los  Angeles  on  the  evening  of 
October  2,  where  the  convention  will  be 
in  session  from  October  3 to  7,  with  head- 
quarters at  the  Alexandria  Hotel. 


Springs,  and  arriving  at  Portland,  Oregon, 
Friday,  October  14.  In  the  afternoon  the 
special  will  leave  over  the  Northern  Pa- 
cific for  Seattle,  Washington,  arriving 
there  about  8.30  the  same  evening.  About 
11  o’clock  on  the  evening  of  October  15  the 
train  will  start  for  Vancouver,  B.  C.,  ar- 
riving there  the  following  morning.  Turn- 
ing eastward  over  the  Canadian  Pacific  the 
special  train  will  leave  Vancouver  at  noon 
on  Saturday,  October  16,  stopping  at  Bauff 
Hot  Springs  and  the  other  principal  points 
of  interest  in  the  Canadian  Rockies.  Leav- 
ing Bauff  at  6.25  p.  m.  on  October  18,  St. 
Paul  and  Minneapolis  will  be  reached  at 
10.30  a.  m.,  October  20.  Leaving  St.  Paul 
at  6.30  on  that  date,  via  the  Chicago  and 
Northwestern,  direct  connection  will  be 
made  at  Chicago  with  the  New  York  Cen- 


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THE  BANKERS  MAGAZINE 


Mount  Shasta,  near  Sissons 


tral  Lines  for  the  return  to  New  York  The  highest  grade  of  Pullman  equipment 

arriving  there  about  10  a.  m.  Saturday  Oc-  will  he  assigned — drawing-room  and  open 

tober  22,  after  having  travelled  a distance  section  sleeping  cars;  state  room,  observa- 
of  8,196  miles.  tion  and  dining  cars;  the  drawing  rooms 

The  special  will  be  a counterpart  of  the  accommodate  three  persons,  and  staterooms, 
world-famous  Twentieth  Century  Limited.  two  persons,  each  room  containing  complete 


Grand  Foyer.  Hotel  Alexandria,  Los  Angeles 


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AMERICAN  BANKERS’  CONVENTION 


83 


toilet  conveniences.  A combination  buffet- 
smoking-library  car,  with  barber  shop  and 
bath,  will  be  known  as  the  Gentlemen's 
Club  Car,  and  the  observation  car  will  be 
known  as  the  I^adies'  Club  Car,  in  which 
will  be  placed  an  upright  player-piano. 
There  will  be  a stenographer  in  the  ob- 
servation car  whose  services  will  be  free  to 
members  of  the  party. 

The  entire  train  will  be  electric-lighted 
and  there  will  be  individual  electric  read- 
ing lamps  in  each  drawing-room,  stateroom 
and  section.  Sunray  water  will  be  served 
with  the  compliments  of  Mr.  Milton  C. 
Roach. 

To  insure  the  prefect  carrying  out  of 
every  detail  of  the  trip  and  assure  the 
members  of  the  party  personal  attention 
Mr.  G.  W.  Higgins,  passenger  agent  of  the 
New  York  Central  Lines  will  accompany 
the  special  on  the  entire  trip. 

The  scenic  attractions  of  this  tour  will  be 
the  equal  of  any  offered  on  the  American 
Continent,  and  the  equipment  and  arrange- 
ments, together  with  the  social  advantages 
offered  will  combine  to  make  this  a most 
delightful  trip.  The  cost  of  the  tour  is 
inclusive  of  all  necessary  expenses  except 
hotel  accommodations  at  Los  Angeles. 

Those  desirous  of  joining  the  tour  should 
promptly  send  their  names  to  Chas.  Elliot 
Warren,  chairman,  committee  on  transpor- 
tation and  arrangements,  Lincoln  National 
Bank,  New  York  City,  or  to  M.  L.  Vos- 
burgh,  assistant  general  passenger  agent. 
New  York  Central  Lines,  1216  Broadway, 
New  York  City. 


GOLD  OUTPUT  AND  PRICES 

1600  Hamilton  Street, 
Philadelphia,  Pa., 
June  16,  1910. 

Editor  Bankers  Magazine: 

Sir:  I notice  in  the  Iron  Age  of  this  date 
a synopsis  of  a report  of  the  Massachusetts 
committee  on  “Increased  Cost  of  Living,” 
taken  from  advance  sheets,  in  which  the 
“primary  cause”  is  didactically  stated  to  be 
the  increased  production  of  gold,  this  hav- 
ing bad  the  effect  of  decreasing  its  value 
and  thus  impairing  its  value  as  the  stand- 
ard of  values.  I regard  this  as  a fallacy, 
which  appears  to  be  spreading  rapidly,  and 
it  seems  unfortunate,  for  if  implicit  confi- 
dence in  the  stability  of  the  practically  uni- 
versal standard  of  values  is  destroyed  a re- 
adjustment of  business  laws  and  customs 
must  follow,  sooner  or  later,  accompanied 
by  great  disturbance,  if  not  panics. 

In  1906  I gave  an  address  before  a scien- 
tific association  on  “Recent  Progress  in 
Metallurgy,”  in  which  I referred  to  the 
large  increase  in  production  of  gold.  To 
my  surprise  I received  letters  from  stran- 


gers, who  had  read  extracts  in  daily  papers, 
asking  my  opinion  as  to  the  probable  effect 
upon  gold  as  a standard  of  values.  I de- 
voted some  time  to  a study  of  the  question 
and  embodied  my  conclusions  in  a brief 
paper  on  “The  Increasing  Production  of 
Gold  and  Its  Relation  to  the  Standard  of 
Values,”  which  appeared  in  Cassiei^s  Maga- 
zine, New  York,  March,  1907,  the  editor 
having  asked  me  for  a contribution. 

The  circulation  of  this  magazine  is  chiefly 
among  mechanical  engineers,  and  I suppose 
my  paper  was  not  seen  by  financiers  to  any 
extent. 

The  fact  that  some  articles  have  declined 
in  price,  while  others  have  risen,  and  that 
there  has  been  no  uniform  change  and  no 
commensurate  rise  in  prices  in  many  Eu- 
ropean countries,  compared  with  this  coun- 
try, seems  to  me  evidence  of  the  fallacy  of 
this  idea.  A.  E.  Outerbridoe,  Jr. 


FOREIGN  EXCHANGE 

IT  was  conceded  in  many  quarters  that 
the^  foreign  exchange  market  is  ab- 
normally low  for  this  time  of  year 
and  not  justified  by  conditions.  It  is  ar- 
gued that  the  bulk  of  our  exports  of  this 
year's  crops  is  practically  over,  so  that  not 
much  material  influence  can  be  derived 
now  from  lower  prices. 

Money  and  stock  market  considerations 
will  exercise  the  greatest  Influence  in  for- 
eign exchange  in  the  immediate  future.  The 
former  at  present  undoubtedly  is  in  favor 
of  this  market,  but  the  latter  is  a factor 
upon  which  it  is  not  so  easy  to  base  cal- 
culations. English  politics  are  likely  to 
be  kept  in  an  unsettled  state  for  some  time 
after  the  present  election,  in  which  case 
heavy  buying  of  securities  in  this  market 
on  the  part  of  English  investors  cannot  yet 
be  safely  counted  upon  as  an  influence 
making  for  lower  exchange. 


BANK  COUNTER  ROBBER 

AN  Englishman  named  Galoway  was 
. arrested  in  Paris  on  the  sixth  of  last 
February  for  an  ingenious  crime. 
He  was  well  dressed  and  carried  a gold- 
headed cane,  and  was  caught  pocketing 
£800  in  bank  notes  which  did  not  belong 
to  him.  For  some  time  past  the  Paris 
police  had  been  trying  to  find  out  how 
large  numbers  of  bank  notes  disappeared 
from  the  counters  of  several  banking  es- 
tablishments in  Paris.  The  notes  always 
vanished  as  the  clerk  was  counting  them, 
and  their  disappearance  was  the  more  re- 
markable as  no  stranger  was  ever  noticed 
near  the  bundle.  But  on  the  sixth  of  Feb- 
ruary two  detectives  noticed  a man  at  a 
desk  several  yards  away  from  the  clerk  who 


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was  counting  notes.  Apparently  he  was 
very  busy  with  some  calculations,  and  on 
the  desk  lay  his  gold-knobbed  cane,  with 
the  ferrule  under  Galoway’s  hand.  The 
detectives  were  surprised  to  notice  a spring 


issue  from  the  gold  handle  of  the  cane  and 
tuck  itself  into  the  band  round  a parcel  of 
notes  which  were  then  quietly  drawn 
towards  Galoway. — Bankers  Magazine  of 
Australia. 


OFFICIAL  CHANGES  IN  CORN  EXCHANGE 


NATIONAL  BANK 

CHARLES  S.  CALWELL,  the  well- 
known  cashier  of  the  Corn  Exchange 
National  Bank  of  Philadelphia,  has 
been  promoted  to  the  office  of  first  vice- 
president,  to  succeed  Wm.  W.  Supplee,  who 


OF  PHILADELPHIA 

1891  in  the  capacity  of  an  assistant  to  the 
receiving  teller. 

His  advancement  from  one  department 
to  another,  and  from  the  position  of  cashier 
to  that  of  cashier  and  vice-president,  and 


CHARLES  S.  CALWELL 

Who  has  succeeded  Wm.  W.  Supplee  as  First  Vice-President  of  the  Corn  Exchange 
National  Bank  of  Philadelphia 


is  retained  as  second  vice-president  and 
chairman  of  the  board.  W.  N.  Wiilits,  Jr., 
becomes  cashier  and  is  replaced  as  assistant 
cashier  by  Newton  W.  Corse.  The  announce- 
ment of  these  important  changes  has  been 
received  with  expressions  of  approval  every- 
where. 

Mr.  Calwell  is  a native  Philadelphian  and 
came  to  the  Corn  Exchange  National  in 


first  vice-president,  has  been  rapid,  and 
due  solely  to  his  natural  aptitude  for  the 
work  of  banking. 

As  first  vice-president  he  will  be  enabled 
to  put  forth  more  strenuous  efforts  in  be- 
half of  the  institution  he  has  been  serving 
so  faithfully  and  thereby  strengthen  its 
present  high  standing. 


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Steamship  Spokane  in  Taku  Bay 


A TRIP  TO  ALASKA  AND  BRITISH  COLUMBIA 

By  William  Heyl  Raser 


A CRUISE  through  the  inland  waters 
of  Alaska,  may  be  made  in  these  days 
with  as  much  comfort  and  enjoyment, 
if  not  quite  as  luxuriously,  as  a cruise 
through  the  Fjordes  of  Norway;  and  to  view 
the  scenic  wonders  of  this  great  northwest 
region,  and  to  see  and  study  at  close  range 
Lie  ethnology  of  its  aboriginal  people,  is 
even  more  instructive  and  interesting. 

Beginning  the  Journey. 

Taking  passage  by  the  S.  S.  Spokane  of 
the  Pacific  Coast  Steamship  Company  in 
the  month  of  June,  we  steamed  out  of  the 
harbor  of  Seattle  and  up  Puget  Sound,  the 
bustling  and  rapidly  growing  city  gradually 
receding  from  view,  and  with  the  pictur- 
esque shores  of  Washington  State  on  our 
right,  and  the  majestic  snow-capped  Olym- 
pic range  rising  to  lofty  heights  fringing  the 
horizon  on  our  left,  the  scene  was  an  en- 
chanting one,  ns  the  glowing  red  sun  sank 
from  view  over  these  titanic  peaks. 

The  Capital  of  British  Columbia. 

On  awaking  next  morning  we  found  our 
steamer  moored  at  the  dock  at  Victoria, 
Vancouver  Island,  the  capital  of  British 
Columbia.  Tally-ho  coaches  were  drawn  up 
at  the  dock  to  take  us  on  a sight-seeing 
tour  through  the  city  and  its  environs;  em- 
bracing many  beautiful  streets  and  a large 
and  handsome  public  park.  The  provincial 
capitol  building  is  quite  imposing,  and  its 


architectural  lines  would  attract  attention 
in  any  of  the  greater  cities  of  the  East,  or 
of  Europe. 

Our  first  impression  of  the  city  was  that 
it  seemed  to  be  more  really  English  in  char- 
acter and  appearance  than  any  other  place 
we  had  seen  in  the  British  American  pos- 
sessions, not  even  excepting  Toronto,  which 
is  conceded  by  many  to  be  decidedly  more 
English  than  American  in  its  general  char- 
acteristics, and  the  reason  probably  is,  that 
a large  contingent  of  the  population  of 
Victoria  is  made  up  of  retired  officers  of 
the  army,  navy  and  civil  “ service  of  Eng- 
land, who  with  their  families  have  been 
drawn  there  by  favorable  climatic  conditions 
and  the  comparatively  lower  cost  of  living, 
and  have  stamped  the  impress  of  old  Eng- 
land upon  the  home  of  their  adoption. 

Being  the  capital,  Victoria  is,  socially 
speaking,  more  preeminent  and  aristocratic, 
it  is  said,  than  its  sister  city  of  Vancouver 
on  the  Mainland  just  across  Puget  Sound; 
the  latter,  however,  being  the  larger  and 
commercially  more  important  place. 

Continuing  the  Northward  Journey. 

From  Victoria  the  prow  of  our  ship  was 
again  turned  northward  through  British 
waters,  with  the  mountainous  shore  of  Van- 
couver Island  on  our  left  for  the  rest  of 
the  day,  and  on  our  right  a succession  of 
beautiful  verdure-clad  and  thickly-wooded 
islands,  with  many  picturesque  bays  or 

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Metlakatla,  Alaska,  built  entirely  by  Indians,  showing  Father  Duncan’s  Church 


small  arms  of  the  sea  indenting  the  Brit- 
ish Columbia  shores.  Thus  we  proceeded 
for  two  full  days,  never  but  once  striking 
the  open  sea,  which  we  did  at  the  head  of 


Sir  Donald  Glacier,  B.  C. 


Vancouver  Island,  but  only  for  three  or 
four  hours,  so  that  few  if  any  of  the  ship’s 
passengers  suffered  from  the  effects  of  mal 
de  mer;  not  indeed  until  our  return  trip, 
when  we  crossed  this  same  stretch  of  open 
sea,  with  a high  wind  athwart  our  beams. 
Father  Neptune  stirred  up  a little  commo- 
tion, and  some  of  the  less  hardy  of  our 
company  paid  him  tribute.  But  no  one  con- 
templating the  Alaska  cruise  need  fear  sea- 
sickness as  an  obstacle  to  his  or  her  enjoy- 
ment, for  at  most  it  will  be  but  a passing 
cloud.  Fogs,  however,  are  often  prevalent, 
and  cause  disappointment  by  shutting  out 
from  view  some  of  the  loftier  mountains  and 
finest  scenic  beauties  of  the  cruise.  But  wc 
were  fortunate  in  that  we  had  very  little 
fog  during  the  entire  fortnight  we  were  on 
board,  and  from  what  we  learned,  believe 
that  the  best  chances  for  continued  good 
weather  are  in  the  earlier  cruises,  ».  e.f  in 
June  or  the  first  part  of  July;  for  later 
in  the  summer  the  fogs  are  apt  to  prevail 
to  a greater  extent. 

The  Spokane  may  truthfully  be  termed  a 
pleasure  yacht,  being  of  small  tonnage  and 
light  draft,  she  is  able  to  steam  into  com- 
paratively shallow  waters  and  get  in  to 
many  interesting  points  that  a larger  boat 
could  not  reach;  and  she  does  no  other  bus- 
iness than  to  make  these  summer  cruises, 
having  been  built  solely  with  that  object  in 
view,  carrying  no  freight  other  than  her 
own  supplies,  nor  any  passengers  other  than 
those  booked  for  the  cruise.  Her  state- 
rooms are  comfortable  and  well  appointed; 
the  sendee  good  and  the  table  quite  as 
bountifully  supplied  as  on  most  trans- At- 
lantic liners. 


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87 


Landing  a Salmon  Catch— Alaska 


An  Interesting  Alaskan  Town. 

The  third  day  out  from  Seattle  we  crossed 
the  international  boundary,  and  entering 
Clarence  Strait  were  again  in  American 
waters,  and  soon  reached  Metlakatla,  Alas- 
ka, a purely  Indian  Settlement,  but  one  in 
a very  advanced  stage  of  civilization,  num- 
bering? some  2,000  souls,  with  a sort  of  com- 
munal or  paternal  government,  presided  over 
by  the  Rev.  Wm.  Duncan,  a hale  Scotch 
Presbyterian,  who  with  his  family  are  the 
only  white  people  living  in  the  settlement. 
Father  Duncan — as  he  is  affectionately  called 
by  his  community — literally  taking  his  life 
in  his  hands,  and  against  the  protests  of 
bis  friends,  went  among  the  Siwash  Indians 
more  than  forty  years  ago,  when  they  were 
blood-thirsty  savages  in  their  feuds  with 
other  tribes,  practicing  cannibalism  in  their 
rites  of  war  and  religion,  much  as  did  the 
early  Aztecs  in  Mexico.  Not  without  great 
peril  to  himself  on  many  occasions  he  finally 
succeeded  in  winning  the  hearts  of  these 
savage  people,  and  has  christianized  and 
civilized  them  in  a surprising  and  truly  prac- 
tical way,  so  that  now  they  are  a well  or- 
ganized community  with  a large  church,  town 
hall,  school  houses,  a large  fish  cannery,  saw 
mill  and  other  industries,  and  with  a well 
administered  civil  government.  Most  of  the 
present  generation  read  and  write,  and  all 
children  must  attend  school.  They  live  in 
well-constructed  houses,  lining  clean  and  or- 
derly streets.  They  dress  and  act  like  their 
white  brethren,  and  labor  is  recognized  as 
the  good  and  profitable  portion  of  life. 

This  wonderful  change  in  the  condition  of 
a savage  people  his  been  brought  about  by 


the  good  sense,  courage  and  untiring  zeal 
of  one  man  under  most  discouraging  earlier 
conditions.  Father  Duncan  is  now  nearing 
four  score,  but  is  still  ruddy  and  hearty. 


Totems  at  Fort  Wrangel,  Alaska 


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Arrival  at  Ketchikan. 

Several  hours  further  sailing  to  the 
northward  brought  us  to  Ketchikan,  an  old 
Indian  settlement  with  an  enterprising 
American  annex,  which  has  sprung  up  in 
the  past  decade  or  two.  The  American  town- 
numbers  about  2,000  population,  with  proba- 
bl}r  half  as  many  comprising  the  squalid 
Indian  village  adjoining.  These  Indians  live 
mainly  by  fishing  and  earning  to  the  mining 
camps  in  the  interior  country.  They  are 
semi-civilized,  not  comparing  favorably  with 
Father  Duncan’s  community. 


to  have  one  of  the  best  public  water  supply 
systems  to  be  found  anywhere. 

A Deserted  Indian  Village. 

Steaming  on  Northward  through  Clarence 
Strait,  we  arrived  in  a few  hours  at  old 
Kasaan,  the  deserted  totem  pole  village. 
Here  are  clustered  probably  more  totems 
than  at  any  other  point  in  Alaska;  by  actual 
count  over  sixty  large  ones,  to  say  nothing 
of  numerous  smaller  ones  in  the  adjacent 
burying  ground.  The  village  comprises  a 
goodly  number  of  fairly  well  built,  one- 


Taku  Bay  Icebergs 


The  Indian  section  of  Ketchikan  has  a 
number  of  interesting  totem  poles,  and  these 
were  the  first  specimens  of  this  singular  In- 
dian architecture  that  we  saw.  There  were 
none  at  Metlakatla,  where  the  people  in 
their  enlightenment  have  got  beyond  the 
totem-pole  era,  though  they  still  use  their 
family  and  tribal  symbols,  such  as  a bear, 
a bird  or  a fish,  on  marble  tombstones  in 
their  burying-grounds. 

Modern  Ketchikan  is  a thriving  American 
frontier  town,  with  extensive  fish  canneries, 
saw  mills,  etc.,  and  is  an  outfitting  place  for 
the  miners  of  the  inland  country.  It  has 
a number  of  good  stores,  one  or.  two  fair 
hotels,  churches,  schools,  a creditable  public 
library  and  well  organized  law  courts,  is  in 
fact,  a self-respecting,  law-abiding  Ameri- 
can community,  enjoying  many  of  the  lux- 
uries and  refinements  of  life,  such  as  electric 
lights,  telephones,  steam  heat,  open  plumb- 
ing and  porcelain  bath  tubs;  and  claims 


story,  wooden  shacks,  but  all  are  de« 
serted  and  in  a state  of  dilapidation  and 
decay.  Each  house  has  one  or  more  totems 
in  its  front  yard,  some  at  the  sides  and 
rear  of  the  buildings,  and  planted  along 
what  was  once  a street  or  highway,  now 
overgrown  with  rank  weeds. 

It  is  some  years  since  the  village  was 
deserted  by  its  tribe.  Various  stories  are 
current  as  to  the  reason;  the  one  generally 
accepted  is  that  an  epidemic  of  small 
pox  carried  off  so  many  of  the  tribe  in  a 
short  space  of  time,  that  the  survivors,  be- 
lieving the  place  to  be  bewitched,  or  under 
the  ban  of  the  Great  Spirit,  hurriedly 
moved  away,  leaving  many  of  their  lares 
and  penates  behind,  as  the  quantity  of 
broken  crockery,  rusting  utensils,  and  crude 
furnishings  within  the  houses  will  attest. 
These  houses  comprise  but  one  large  room, 
with  bunks  and  shelving  around  the  four 
sides,  the  fireplace  in  the  centre,  with  an 


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opening  in  the  roof  just  above  it,  one  door- 
way and  few  or  no  windows.  The  bright 
colors  of  the  totems  are  pretty  well  faded 
out;  but  though  weather-beaten,  they  are 
mostly  in  sound  condition,  being  carved  out 
of  cedar  and  such  other  woods  as  best 
resist  decay. 

SlOXIFICAXCE  OF  THE  TOTEM  POLES. 

The  totem  poles  of  Alaska  and  British 
North  America  are  a matter  of  curious  in- 
terest to  the  traveler.  They  are  the  tra- 
ditions of  a primitive  people,  graven  in 
wood,  illustrating  their  social  condition,  a 
sort  of  heraldic  symbol  of  tribal  and  fami- 
ly life  and  legendary  lore,  easily  read 
among  the  tribes  of  this  far  north  country. 
Prominent  among  the  symbols  depicted  on 
totems  are  the  bear,  the  wolf,  the  whale, 
the  salmon,  the  raven  or  crow,  and  many 
grotesque  delineations  of  the  human  visage, 
and  also  human  forms  with  animal  faces. 
These,  in  their  various  combinations,  all 
have  a meaning  to  the  Indian.  The  crests 
and  symbols,  among  other  things  define  the 
bonds  of  consanguinity ; a bear  may  not 
marry  a bear,  but  may  marry  a whale  or 
a raven,  and  so  on.  The  existing  order  of 
things  among  civilized  nations  is  reversed, 
for  the  son  takes  the  crest  and  name  of  his 
mother’s  family,  while  the  girl  belongs  to 
the  father’s  house. 

From  Kasaan  we  continued  on  through 
Clarence  Strait  and  through  Wrangel  Nar- 
rows, and  next  morning  found  us  anchored  at 
Wrangel,  formerly  Fort  Wrangel,  one  of  the 
first  military  posts  established  by  the 
United  States  when  Russia  ceded  Alaska  to 
us.  As  a military  headquarters  it  has  been 
abandoned,  but  quite  an  important  Ameri- 
can town  has  sprung  up  in  its  place.  It  is 
much  like  Ketchikan,  but  commercially  is 
of  less  consequence.  Its  adjoining  Indian 
village  contains  some  of  the  best  totems  to 
be  seen  in  Alaska. 

The  First  Russian  Setti.ement  in  Alaska. 

Another  twenty-four  hours’  sail,  with 
almost  perpetual  daylight  and  through  most 
beautiful  regions  with  awe-inspiring  snow 
caps  the  prominent  feature  in  the  landscape, 
brought  us  to  Sitka,  the  first  Russian  set- 
tlement in  Alaska  (about  1804),  which 
to-day  bears  the  stamp  of  its  Muscovite 
origin,  the  Greek  church  being  the  most 
prominent  building  in  the  town,  while  its 
older  houses  bear  striking  resemblance  to 
such  as  one  sees  in  towns  and  villages  of 
Russia,  notably  in  the  vicinity  of  Moscow. 

The  Indians  in  and  about  Sitka  are  large- 
ly of  the  Greek  faith*  but  American  mis- 
sionaries have  also  been  active  since  our 
occupation,  and  there  is  quite  a large  and 
influential  industrial  school  and  college 
with  a substantial  church,  all  under  Pres- 
byterian control.  The  school,  which  is  doing 
incalculable  good,  was  founded  and  endowed 


by  the  late  Hon.  Elliot  F.  Shepard  of  New 
York  City.  The  Catholics  and  Episcopa- 
lians also  have  reared  very  nice  little 
churches  here. 

Sitka  is  also  a United  States  military 
post,  garrisoned  by  one  or  two  companies 
of  marines.  It  possesses  a large  and  beautiful 
public  park,  on  the  outskirts  of  the  town, 
in  which  has  been  grouped  an  interesting 
collection  of  totems  in  all  the  splendor  of 
new  paint,  in  varied  and  brilliant  colors, 
giving  one  a vivid  picture  of  how  the  more 
ancient  and  weather-worn  totems  once  ap- 
peared. 

Sitka  has  lost  much  of  its  importance 
since  the  seat  of  the  territorial  government 
has  been  removed  to  Juneau,  now  the  capi- 
tal of  Alaska. 

Visiting  Muia  Glacier. 

Returning  from  Sitka  through  Peril 
Strait,  thence  northward  again  through 
Chatham  Strait,  the  character  of  the  scenery 
ever  growing  more  bleak  and  arctic,  with 
not  more  than  three  or  four  hours  between 
sunset  and  sunrise,  and  an  almost  unbroken 
twilight  during  those  three  or  four  hours, 
we  were  soon  carried  to  Glacier  Bay,  at  the 
head  of  which  is  the  renowned  Muir  Glacier, 
with  a number  of  smaller  glaciers  or  arms 
of  the  Muir  sloping  into  the  bay  on  either 
side  of  it.  The  summer  of  1908  was  the 
first  in  nine  years  that  vessels  have  been 
able  to  navigate  Glacier  Bay,  owing  to  the 
great  mass  of  pack  ice  filling  it,  due  to 
the  continuous  and  rapid  sliding  of  the 
Muir  Glacier,  breaking  off  large  masses  of 
glacial  ice,  which  the  tides  were  unable  to 
carry  out  to  sea  from  season  to  season,  re- 
sulting in  an  enormous  accumulation  of  bergs. 
When  the  glacier  ceased  its  active  move- 
ment, the  summer  suns  of  a few  more  sea- 
sons sufficiently  cleared  the  bay,  to  make 
navigation  again  practicable  and  safe.  At 
the  present  time  there  is  very  little  move- 
ment of  the  Muir,  hence  it  is  now  termed 
a “dead”  glacier. 

Steaming  as  near  to  its  base  as  was 
deemed  prudent,  we  cast  anchor,  and  were 
landed  in  the  ship’s  small  boats  at  the  foot 
of  a steep  moraine  at  the  left  of  the  glacier, 
and  after  an  irksome  climb  of  several  hun- 
dred feet  over  loose  stones  and  gravel,  we 
reached  the  surface  of  the  glacier,  which, 
excepting  the  numerous  crevices  and  hum- 
mocks to  be  avoided,  and  the  dampness  of 
the  melting  surface  in  the  sunlight,  was 
not  very  difficult  fboting,  especially  as 
much  gravel  and  small  rock  was  scattered 
over  the  glacial  surface.  What  met  the 
eye  was  a vast,  irregular,  slightly-inclined 
and  very  bleak  plain,  extending  for  miles 
and  miles,  bordered  by  high  and  jagged 
peaks  whose  sides  and  summits  were  mantled 
in  perpetual  snow,  white  glinting  and  spark- 
ling in  the  sunlight,  with  extensive  bare 
patches  of  gray  and  purple  rock,  but  not 


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a vestige  of  green  or  a living  thing  to  be 
seen  in  any  direction.  Here  was  indeed  a 
picture  of  Arctic  desolation,  forbidding  and 
awful,  yet  beautiful  and  fascinating  to  the 
eye  with  the  blue  vault  of  the  heavens  above 
and  the  varied  opalescent  hues  of  the  ice 
and  scintillating  white  snow. 


mean  the  end  of  all  earthly  things  for  the 
castaway. 

Splendors  of  the  Arctic  Scenery. 

Returning  southward  through  Glacier 
Bay,  we  had  a distant  view  off  to  the  north- 


Main  Street,  Winnipeg, 
Manitoba 


Empress  Hotel,  Victoria.  B.  C.  Canadian 
Pacific  Railway  Hotel  System 


Native  Curio  Dealers,  Killisnoo, 
Alaska 


Indian  Houses.  KUlisnoo, 
Alaska 


The  Beautiful  Lake  Louise 


After  tramping  three  or  four  miles  over  the 
glacier’s  surface,  we  were  carried  back  to  the 
ship  and  as  each  passenger  came  up  the 
ladder  to  the  deck,  his  or  her  name  was 
carefully  ticked  off  by  a ship’s  officer,  a 
proceeding  not  deemed  necessary  at  any 
other  landing  we  made  in  Alaska;  but  to 
be  marooned  at  the  Muir  Glacier  would 


west  of  the  Mount  St.  Elias  or  Fairweather 
range  of  lofty  and  forbidding  snow  peaks, 
so  splendid  and  white  and  varied  with  beau- 
tiful tints  of  rose  and  pale  blue,  from  re- 
flections of  the  afternoon  sun  and  the 
ethereal  blue  sky.  There  is  something  so 
awful,  grand  and  inspiring  in  such  a picture 
as  to  defy  mere  word  painting. 


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Skagway  and  the  White  Pass  and  Yukon 
Railway. 

From  Glacier  Bay,  turning  northward 
through  Icy  Strait,  we  entered  the  Lynn 
Canal  and  steamed  up  this  beautiful  sound 
or  fjord  at  the  head  of  which  is  the  city  of 
Skagway.  The  Lynn  Canal  is  the  finest 
stretch  of  inland  water-landscape  in  Alas- 
ka, and  quite  equals  the  beauty  and 
grandeur  of  the  noted  Hardanger  Fjord  of 
Norway;  its  lofty  and  precipitous  snow- 
capped cones,  and  its  verdant,  rocky  slopes 
falling  boldly  into  the  sound. 

Skagway  is  the  starting  point  over  the 
White  Pass,  for  those  bound  inland  to  the 
Yukon  river  and  the  regions  of  the  Klondike. 
It  is  but  a few  years  since  the  White  Pass 
was  the  terror  and  peril  of  the  miner  and 
prospector  striking  out  in  search  of  the 
earth’s  hidden  treasure,  and  many  a poor 
fellow  dropped  by  the  wayside  and  perished 
on  the  White  Pass  trail.  In  these  days 
the  traveller  goes  over  this  dreaded  pass 
in  a comfortable  car  on  a well  built  rail- 
road, and  reaches  its  summit  in  less  than 
two  hours  from  Skagway.  The  international 
boundary  line  passes  over  the  summit  of 
White  Pass,  and  there,  not  a hundred  yards 
apart,  are  planted  two  tall  flagstaff s,  one 
floating  the  Stars  and  Stripes  and  the  other 
the  Union  Jack,  and  midway  between  them 
a tablet  marking  the  boundary  between  the 
two  great  Anglo-Saxon  nations. 

'The  railway  continues  on  to  a settlement 
named  White  Horse  at  the  head  of  Yukon 
river  navigation,  but  the  summit  of  the  pass 
was  the  most  northerly  point  of  our  journey, 
whence  we  returned  to  Skagway  and  the 
ship.  The  ride  over  the  White  Pass  was 
a vivid  reminder  of  the  Simplon  across  the 
Swiss  Alps,  which  it  greatly  resembles.  Un- 
til the  building  of  the  White  Pass  and  Yukon 
Railway,  the  Chilkoot  Pass,  no  great  dis- 
tance to  the  westward,  divided  honors  with 
the  White  Pass  as  a trail  to  the  interior 
country,  and  at  its  base  was  the  then  lively 
town  of  Dyea,  but  the  White  Pass’  bands 
of  steel  put  the  Chilkoot  route  out  of  busi- 
ness, and  Dyea  had  no  further  raison  d'etre, 
and  is  now  but  a memory.  Skagway  has 
survived  only  to  be  outclassed  and  out- 
rivalled  by  the  newer  city  of  Juneau,  the 
capital  of  Alaska,  where  Uncle  Sam  has 
erected  a rather  imposing  capitol  or  court 
building. 

Retracing  our  course  through  the  Lynn 
Canal,  we  turned  northward  again  into  its 
western  arm  to  have  a sight  of  the  Davidson 
Glacier  at  its  bead.  Though  not  so  large, 
the  Davidson  has  more  points  of  beauty  than 
the  Muir  Glacier,  its  surface  being  whiter 
and  cleaner  and  showing  more  of  the  varied 
shades  of  translucent  blue  and  green  so 
characteristic  of  glacial  ice. 

Heading  Southward. 

Turning  our  prow  about,  our  course  from 
this  time  was  steadily  southward.  Further 


on,  taking  an  eastern  estuary  leading  into 
Taku  Bay,  where  we  steamed  cautiously  for 
several  hours  among  floating  icebergs,  view- 
ing two  more  great  glaciers,  the  Windham 
and  the  Taku,  the  latter  from  its  form  and 
surroundings  being  the  most  beautiful  of 
ad  the  Alaskan  glaciers  visited.  In  Taku 
Bay  we  saw  a number  of  seal  sporting  about 
on  the  ice,  also  a party  of  Indian  seal 
hunters  paddling  in  canoes. 

Minimal  and  Other  Wealth  op  Alaska. 

Our  next  point  was  the  famous  Treadwell 
Mine,  with  its  extensive  stamping  mills  for 
the  reduction  and  concentration  of  the 
precious  ores  before  being  shipped  to  the 
great  smelter  plants,  where  the  gold,  silver, 
lead,  etc.,  are  finally  reduced  to  their  ele- 
mental state.  The  Treadwell  is  said  to  be 
the  richest  mine  in  the  world  and  out  of 
the  noted  “glory-hole,”  where  the  first  dig- 
gings were  made,  a hole  some  900  feet  deep 
by  300  to  400  feet  in  irregular  diameter, 
more  than  forty  millions  of  the  precious 
metals  have  been  extracted,  and  this  hole  is 
but  a small  part  of  the  workings  of  the 
Treadwell. 

It  may  be  remarked  here  that  in  1867  Gen. 
B.  F.  Butler,  then  in  Congress,  in  his  speech 
against  the  ratification  of  the  Seward  treaty 
with  Russia,  for  the  purchase  of  Alaska  for 
$7,900,000,  said  to  his  colleagues:  “Gen- 

tlemen, if  you  wish  to  donate  $7,900,000 
to  his  Imperial  Majesty  the  Czar  of  Russia, 
vote  him  the  gift,  but  let  him  keep  his  land 
of  icebergs  and  polar  bears.  We  do  not 
want  this  Alaskan  wilderness.”  And  to 
think  of  extracting  $40,000,000  from  one 
hole  covering  only  a few  acres  of  ground, 
to  say  nothing  of  the  hundreds  of  millions 
taken  from  the  Yukon  country,  from  Nome, 
Fairbanks,  Valdez  and  other  sections  of 
the  territory  in  the  past  twenty  years,  and 
of  the  countless  millions  that  still  lie  buried 
in  the  womb  of  mother  earth.  The  entire  vast 
tract  of  Alaska  cost  the  United  States  an  av- 
erage of  less  than  one  cent  an  acre.  In  many 
of  its  milder  sections  are  rich  agricultural 
lands  only  awaiting  settlement  and  develop- 
ment. Look  on  the  map  and  you  will  note 
that  the  settlements  of  southern  Alaska  are 
about  In  the  same  general  latitude  as  Chris- 
tiania, Stockholm,  Helsingfors  and  St.  Pe- 
tersburg. The  climate  along  the  South- 
eastern coast  is,  comparatively  speaking,  a 
temperate  one  the  year  round.  At  the  coast 
settlements  such  as  Ketchikan,  Juneau, 
Skagway  and  Sitka  the  thermometer  rarely 
drops  lower  than  ten  or  fifteen  degrees  Far- 
enheit  below  zero,  and  is  most  of  the  time 
above  these  marks.  Colder  temperatures 
frequently  prevail  in  Northern  New  York, 
and  forty  degrees  below  is  not  uncommon 
in  Minnesota  and  the  Dakotas.  But  the 
Alaskan  coast  winters  if  not  so  severe  are 
long,  the  snowfall  abundant  and  the  days 
short. 


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This  climatic  mildness  so  far  north  is 
due  to  the  warm  Japan  currents  that  sweep 
across  the  Pacific,  tempering  the  climate 
much  as  the  British  Isles  are  benefited  by 
the  Gulf  Stream. 

A soldier  of  the  Sitka  garrison  told  us 
that  he  suffered  less  from  cold  at  that 
post  last  winter  than  he  usually  did  at  his 
home  in  Indiana.  The  winters  are,  however, 
much  more  severe  in  the  interior  and  on  the 
coast  farther  North.  Nome,  the  most 
Northern  settlement  of  consequence,  is  al- 
most within  the  Arctic  Circle.  Yet  we  are 
told  that  the  “Sourdoughs”  (i.  e.  the  sea- 
soned inhabitants)  of  Nome,  Fairbanks, 
Dawson  in  the  Klondike,  and  other  Yukon 
settlements,  now  pass  very  comfortable  win- 
ters in  good  health,  contentment  and  much 
social  enjoyment,  as  the  climate  though  in- 
tensely cold  is  a dry  one,  and  the  people 
are  equipped  for  its  conditions. 

Caring  for  the  Indians. 

The  welfare  of  the  Alaska  Indians  is 
being  well  looked  after.  Besides  the  work 
of  church  missions,  our  government  has  es- 
tablished schools  in  many  of  their  villages. 
At  Kilisinoo,  a purely  Indian  settlement, 
we  saw  a model  school  presided  over  by  a 
middle-aged  American  and  his  wife  who  are 
much  interested  in  their  work.  They  told  us 
that  all  of  the  children  and  many  of  the 
adults  attended  school  daily,  and  that  they 
are  anxious  to  acquire  a white  man’s  educa- 
tion, and  to  live  much  as  a white  man  does. 

A brass  band  of  fifteen  or  twenty  instru- 
ments, all  played  by  Indians,  came  to  the 
dock  at  Kilisinoo  to  welcome  us,  playing  a 
Sousa  March,  Star  Spangled  Banner,  Yan- 
kee Doodle  and  Dixie  quite  as  well  as  many 
of  the  rural  bands  in  the  States. 

A Favorite  Alaskan  Industry. 

A great  industry  of  the  women  of  the 
Alaskan  tribes  is  the  making  of  baskets. 
These  are  of  various  forms  and  colors,  and 
some  of  them  of  great  beauty,  fineness  and 
flexibility  and  almost  as  skiifully  wrought 
as  many  of  the  noted  laces  of  Europe  or  the 
drawn-work  of  the  Mexicans.  Good  speci- 
mens are  quite  expensive,  and  are  greedily 
sought  after  by  the  connoisseurs  and  collec- 
tors who  have  the  basket  mania,  and  very 
extravagant  prices  are  paid,  some  rare  spe- 
cimens bringing  as  much  as  $50  and  $100, 
and  even  more.  They  are  not  made  of 
sweet  grass  like  the  Canadian  Indian  bas- 
kets, but  of  the  fibres  of  roots  of  the  spruce 
tree,  which  undergo  a laborious  process  of 
preparation  and  dyeing  before  becoming 
ready  for  the  hands  of  the  weaver. 

The  Eastward  Trip. 

The  last  stop  on  the  cruise  was  made  at 
Vancouver,  where  we  disembarked,  and  after 
spending  a day  in  looking  about  this  bright, 


active  and  well-built  little  city,  we  entrained 
via  the  Canadian  Pacific  for  the  East  The 
scenic  beauties  of  this  route  are  not  ex- 
celled if  indeed  equalled  by  any  other  line 
across  the  continent  beginning  about  the 
time  the  train  strikes  the  shore  of  the 
Southern  arm  of  Shuswap  Lake,  which  it 
skirts  for  many  miles,  giving  one  a variety 
of  vanishing  views  of  mountain  and  vale 
mirrored  in  its  crystal  waters.  Reaching 
Revelstoke  (some  fifteen  hours  from  Van- 
couver), where  double  engines  are  attached 
to  the  train,  we  start  on  our  winding  way 
into  the  heart  of  the  great  Selkirks,  and  it 
is  not  difficult  to  imagine  one’s  self  travel- 
ling over  the  great  St  Gothard  route 
across  the  Swiss  Alps,  so  strikingly  similar 
are  the  physical  characteristics  of  the  two 
regions. 

Our  first  stopover  was  at  Glacier.  There, 
directly  before  us,  stood  the  mighty  bulk 
of  Mount  Sir  Donald,  rearing  its  gigantic 
form  of  bald  granite  to  a height  of  over 
10,000  feet,  in  form  and  contour  bearing  a 
striking  resemblance  to  the  Swiss  Matter- 
horn. To  the  right  of  it  as  if  to  carry 
the  illusion  farther,  curving  down  from 
another  lofty  height,  was  the  great  glacier 
of  the  Selkirk  (or  Illecillewaet  Glacier,  as 
it  is  officially  named),  and  it  too  bearing 
quite  a resemblance  to  the  Gomergrat, 
so  that  one  in  facing  about,  would  almost 
expect  to  see  the  counterpart  of  Zermatt  and 
the  Riffle  Alp.  On  all  sides  we  were 
hemmed  in  by  mighty  snow-capped  peaks; 
a veritable  cttl  de  sac.  Other  striking  fea- 
tures of  the  sky  line  were  two  sharp-pointed 
rocks  of  great  height  and  boldness,  named 
Castor  and  Pollux,  and  beyond  them  the 
snowy  Hermit  Range.  By  another  turn  one 
views  at  some  greater  distance  the  expansive 
glacier  of  the  Asulkan.  So  illusive  are  these 
titanic  forms  of  nature,  that  what  appear 
so  close  at  hand  require  miles  of  rough 
tramping  to  actually  reach.  We  spent  a 
most  delightful  day  and  night  at  the  com- 
fortable Glacier  House,  set  in  the  midst  of 
this  amphitheatre  of  lofty  peaks.  To  the 
eye  there  seemed  no  way  out;  but  as  our 
train  came  rumbling  and  snorting  around 
the  great  steep  curve,  we  saw  our  deliver- 
ance. Snorting  in  very  truth  with  two 
engines  pulling;  one  in  the  center  of 
the  long  train  to  keep  it  from  “buck- 
ling,” and  one  more  pushing  from  be- 
hind; for  some  of  the  grades  over  these 
mighty  mountains  are  prodigious.  It  is  all 
so  amazing  in  its  immensity,  its  grandeur 
and  in  its  forbidding  and  inhospitable  as- 
pect. 

Coursing  along  the  swirling  Kicking  Horse 
River,  through  the  mighty  Canon  of  the 
same  name,  the  rails  seemingly  touching  the 
very  edges  of  deep  gorges,  through  whose 
black  depths  below  the  boiling  raging  river 
bores  its  onward  way  to  lower  levels,  our 
train  in  a few  hours  amid  such  wild  inspir- 


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Muir  Glacier,  Alaska 


ing  scenes  drew  up  at  Field,  situated  at  the 
base  of  Mount  Stephen,  rock-ribbed  giant  of 
striking  form,  rising  to  a height  of  over  10,- 
000  feet.  At  Field  is  another  of  the  Cana- 
dian Pacific  Company’s  chain  of  excellent 
hotels  and  the  starting  point  for  delightful 
excursions  to  Emerald  Lake,  the  Yo-ho  Val- 
ley and  other  interesting  points.  The  ride 
eastward  from  Field  to  Laggan  was  a con- 
tinuation of  the  stupendous  mountain 
scenery  of  the  day  before;  through  great 
rifts  in  lofty  mountain  heights,  at  one  mo- 
ment looking  down  into  abysmal  depths, 
then  turning  the  eye  upward  ever  to  see 
hoary  peaks  rearing  their  imperishable  caps 
of  snow  into  the  etherial  blue. 

On  this  stretch  of  our  journey  we  reach 
the  highest  point  on  the  road  at  the  “Great 
Divide,”  marked  by  a rustic  arch  stretching 
across  a purling  little  mountain  brook,  which 
here  close  by  the  track,  branches  into  two 
separate  streams;  the  one  flowing  towards 
the  East  and  finding  its  Outlet  in  the  waters 
of  Hudson’s  Bay  and  the  Atlantic,  the  other 
coursing  Westward,  mingling  its  waters  with 
the  great  Columbia  and  so  finding  its  outlet 
to  the  Pacific. 

At  Lake  Louise. 

Arriving  at  Laggan  we  enter  a stage 
coach,  and  a stiff  ascending  drive  of  some 
three  miles  lands  us  at  the  chalet  on  Lake 
Louise.  The  chalet,  another  of  the  Canadian 
Pacific’s  hotels,  is  one  of  the  most  delight- 
ful hostelries  to  he  found  on  either  side  of 
the  Atlantic.  From  its  front  veranda  the 
traveller  finds  one  of  the  most  entrancing 
of  views;  an  opalescent  little  lake  backed 
by  the  whitest  of  white  glaciers  glistening  in 
the  sunlight.  The  Victoria  Glacier  is  so 
very  white  and  brilliant,  that  in  the  bright 


light  of  the  midday  sun,  it  is  impossible  to 
train  the  naked  eye  upon  it  for  more  than 
a minute  or  two,  at  a time;  but  in  the  even- 
ing twilight  or  the  early  dawn  it  is  a sub- 
lime and  never-to-be-forgotten  picture. 

A ride  of  a mile  and  a half  in  a rowboat, 
or  a walk  of  two  miles  around  the  side  of 
the  lake,  brings  one  to  the  foot  of  the 
glacier,  which  is,  however,  so  precipitous  that 
only  the  most  hardy  mountain  climbers,  as- 
sisted by  Swiss  guides  (of  which  there  are 
several  at  the  chalet)  and  hook  and  staff 
make  the  attempt  to  scale  it.  A good  trail 
leading  up  the  mountain  to  the  right  of  the 
lake  by  gradual  ascent  for  several  miles, 
part  way  through  a mosquito-infested  forest, 
leads  to  the  “Lakes  in  the  clouds,”  t.  e.,  Mir- 
ror Lake  at  an  altitude  of  1,200  feet  above 
the  Chalet,  and  Lake  Agnes  200  feet  higher, 
going  over  a wide  field  of  hard  crusted 
snow  (not  a glacier)  to  reach  the  latter. 
Words  can  hardly  convey  an  idea  of 
the  beauty  of  these  two  virginal  little 
lakes,  nor  the  grandeur  and  extent  of  the 
view  into  the  great  valley  of  the  Bow;  the 
distant  view  of  the  Ten  Peaks,  perpetually 
capped  with  snow,  and  the  far-away  entrance 
into  the  beautiful  Paradise  Valley  on  their 
right.  The  loveliness,  the  charm  and 
majesty  of  it  all  must  be  seen  to  be  ap- 
preciated. No  one  should  leave  Lake  Louise 
without  making  this  excursion.  For  those 
who  are  not  inclined  to  foot  it,  sure  footed 
mountain  ponies  and  guides  are  provided 
at  moderate  cost. 

The  Chief  Resobt  of  the  Canadian 
Rockies. 

The  ride  from  Laggan  to  Banff  was  an- 
other enjoyable  experience,  with  an  ever- 
changing  panorama  of  mountain,  valley. 


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lake  and  stream.  Banff  is  the  most  popu- 
lar resort  of  the  Canadian  Rockies,  many 
going  there  to  take  the  warm  sulphur  baths, 
claimed  to  possess  great  healing  properties. 

The  Banff  Springs  Hotel  (another  of  the 
Canadian  Pacific's  chain),  a large,  well- 
conducted  house,  is  finely  situated  on  a 
high  bluff,  almost  surrounded  by  lofty 
mountains,  some  of  them  densely  timbered, 
others  bald,  rocky  crags;  but  from  one 
side  a wide  open  expanse  overlooks  the 
great  Bow  Valley,  the  Bow  River  here 
making  a wide  graceful  curve  or  bow, 
hence  the  name.  The  view  of  the  valley 
and  winding  river  with  its  madly  tumbling 
waterfall  and  the  surrounding  lofty  heights, 
is  from  this  bluff  one  of  great  beauty,  charm 
and  sublimity.  Fine  driving  roads  have 
been  constructed  in  all  directions,  for  Banff 
is  in  the  heart  of  the  great  Canadian  Na- 
tional Park. 

Ax  Ixdiax  War  Daxce. 

We  happened  at  Banff  on  July  1,  Domin- 
ion Day,  and  had  the  rare  pleasure  of  see- 
ing a real  Indian  war  dance  for  a band 
of  more  than  a hundred  braves,  with  their 


squaws,  papooses  and  ponies  had  come  into 
the  village  to  celebrate  the  Canadian  Na- 
tional holiday  in  all  the  panoply  of  war 
painty  feathers,  buckskin,  tomahawk,  calu- 
met and  tom-tom.  It  is  needless  to  say 
that  the  Canadian  mounted  police  were  also 
in  evidence,  to  maintain  order  and  to  see 
that  the  “red  brother”  did  not  get  outside 
any  of  the  white  man’s  fire  water;  but  did 
freely  permit  him  to  barter  his  bead  moc- 
casins and  other  wares  for  cash,  and  candy, 
cake  and  ginger  beer,  for  “Lo,”  like  his 
white  brother,  has  acquired  a sweet  tooth. 

A few  hours  after  leaving  Banff  we  were 
out  of  the  mountains  and  soon  down  among 
those  vast  rolling  prairies,  known  in  these 
days  as  the  great  wheat  belt,  and  so 
travelled  two  nights  and  a day  before 
reaching  the  thriving  city  of  Winnipeg,  not 
so  much  unlike  in  character  the  bustling 
twin  cities  to  the  South  on  our  side  of  the 
border,  St.  Paul  and  Minneapolis.  From 
Winnipeg  to  Fort  Wiliam  and  a fine  trip 
through  Lake  Superior,  the  great  canal  locks 
at  Sault  Ste.  Marie  and  i».fo  Lake  Huron 
was  but  a pleasant  incident  on  .rjr  return 
trip  to  good  old  Manhattan. 


SAFE  DEPOSIT 


TIMELY  ILLUSTRATED  SAFE  DEPOSIT  ADVER- 
TISING 


By  Frank  B.  Finch,  Advertising  Manager,  Commerce  Trust  Company, 
Kansas  City,  Missouri 


DON’T  you  believe  in  timely  advertising, 
the  kind  that  hits  the  mark  at  the 
proper  time — the  logical  moment;  that 
which  reminds  your  reader  that  “right  now” 
is  the  best  time  for  him  to  consider  your 
service  ? 

Then  talk  to  him  about  something  in  which 
he  is  likely  to  be  interested  at  the  present 
moment;  and  you  will  come  nearer  getting 
results  than  by  advertising  something  nmo 
that  he  will  want  next  fall. 

Local  Timely  Advertising. 

Timely  advertising  can  be  brought  even 
closer  than  that.  There  may  be  something 
in  your  part  of  the  country,  or  your  own 
city,  which  is  of  special  interest  to  your 
people;  it  has  their  undivided  attention;  it 
is  the  subject  of  most  every  conversation. 
Better,  if  it  has  been  discussed  in  vour  news- 
papers. 

Ax  Excellent  Example. 

Do  you  read  newspapers  carefully  for 
these  local  items?  You  should.  Here  is  an 


excellent  example  of  it.  The  morning  paper 
was  just  placed  on  my  desk.  One  of  the 
first  page  head-lines  is  “Burglar  Waves  Big 
Knife.”  That  word  “Burglar”  is  all  yon 
want.  You  know  an  attempt  to,  or  an  ac- 


Tin  THE  SAFETY I 


A genuine  burglary  Inspired  this  copy 


Digitized  by  L^OOQle 


SAFE  DEPOSIT 


95 


tual  robbery  has  been  committed.  You  have 
a fine  chance  to  advertise  the  quality  of 
your  safe  deposit  vaults  and  probably  other 
departments. 

“He  grabbed  her,  and  after  throwing  her 
to  one  side,  took  her  pocketbook  containing 
985  in  cash,  and  $300  worth  of  diamonds.” 

Isn’t  that  a strong  opening  paragraph  for 
my  to-day’s  advertisement,  with  these  head- 
lines? 

“DIAMONDS  STOLEN  THAT  SHOULD 
HAVE  BEEN  IN  OUR  VAULTS.” 

However,  this  ad.  would  not  be  complete 
without  an  illustration  showing  the  robber. 
Therefore,  this  will  be  done. 

The  fact  that  your  copy  is  timely,  covers 
the  most  important  points,  but  the  arrange- 
ment may  be  such  that  it  will  not  catch 
the  eye.  It  may  consist  largely  of  the  same 
set-up  as  the  remainder  of  the  page;  if  so, 
it  loses  its  identity — its  real  individuality. 

Value  op  Newspaper  Items. 

This  matter  of  timely  advertising  from 
newspaper  items  is  carried  out  extensively  in 
even'  department  in  our  bank,  but  we  ob- 
tained the  best  results  March  25,  1909.  The 
office  of  the  Lemp  Brewing  Company  had 
been  robbed  the  night  of  the  twenty-third, 
and  the  large  office  safe  was  demolished.  Its 
contents  were  blown  into  atoms. 

Morning  papers  contained  one-half 
column,  and  everyone  was  talking  about  it. 
I got  a good  photograph  of  the  office, 
showing  the  walls  and  ceiling  blown  out 
We  used  it  in  the  noon  edition,  in  a six- 
inch  double,  making  the  picture  three  by 
four  inches.  We  rented  that  day  more  safe 
deposit  boxes  than  we  had  on  any  previous 
day. 

The  Cuts  Compel  Attention. 

We  realize  in  all  advertising  that  type 
alone  will  not  catch  the  eye.  There  must 
be  some  kind  of  a picture — something  out 
of  the  ordinary.  Therefore,  we  use  strong 
attention-compelling  cuts.  They  place  the 
subject  so  it  stands  out  above  everything. 
It  was  this  picture  that  caught  the  eye 
and  brought  results. 

The  Summer  Traveler. 

Are  you  appealing  to  families  that  will 
take  their  regular  vacation?  Have  you 
warned  them  of  the  danger  of  leaving  val- 
uable papers — bonds,  notes,  certificates, 
policies,  pension  documents,  leases,  con- 
tracts, deeds,  wills  and  abstracts — as  well 
as  jewel rv,  silverware,  boxes,  heirlooms,  etc., 
in  the  home  during  their  absence? 

Don’t  you  know  this  is  one  of  the  best 
appeals  to  feature  now?  That  cut  drew 
the  eye;  it  made  them  think,  and  realize 
their  danger. 


Value  of  Storage  Vaults. 

Your  storage  vaults  are  of  special  in- 
terest at  present.  You  can  illustrate  their 
value  now  more  than  any  other  season. 


WHAT?ARE  YOU  GOING 


Good  summer  copy 


And  do  you  know  there  are  hundreds  and 
thousands  of  people  in  your  city  who  don’t 
know  the  value  of  this  department? 

Always  emphasize  the  low  costs  of  stor- 
ing boxes,  trunks  and  packages.  So  many 
people  have  this  idea — if  a certain  steel 
box  three  by  three  inches,  in  the  individual 
box  vault,  costs  $5  a year,  it  would  cost 
$25  to  $50  to  store  their  box  or  trunk. 

Psychology  of  Storage  Vault  Copy. 

The  mind  is  the  most  important  part  of 
the  human  body  to  be  acted  upon  in  getting 
a favorable  decision  for  your  safe  deposit 
vaults,  over  others.  Certain  illustrations 
will  attract  attention  always;  but  to 
strengthen  this  attention,  it  is  necessary 
that  interest  be  increased  in  some  way.  The 
important  thing  is  the  copy.  It  matters 
not  how  good  your  illustrations  are,  if  the 
copy  is  not  right  in  line,  it  will  not  clinch 
your  readers. 

Realizing  this,  we  have  planned  an  extra 
method  of  getting  our  storage  vaults  be- 
fore the  public,  which  is  as  follows:  There 
is  a cut  on  each  side  of  a slip  of  fine 
quality  enamel  paper  that  just  fits  into 
the  envelope.  Each  cut,  alone,  practically 
tells  its  own  story.  One  is  that  of  a woman 
who  is  ready  to  leave  her  home,  and  don’t 
know  what  to  do  with  her  trunk  and  box 
of  valuables.  The  other  tells  of  her  hus- 
band who  has  come  to  our  vaults,  and  ex- 
amined the  storage  department. 

While  each  piece  of  copy  is  educational, 
the  first  of  the  above  mentioned  is  sugges- 
tive. It  certainly  tells  her  what  to  do. 
It  is  just  the  information  she  needs.  The 
second  gives  the  result  of  investigating  our 
vaults.  She  naturally  decides  with  her 
husband  that,  “Seeing  is  Believing,”  and 
wants  our  sendee.  One  of  the  strong  points 


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96 


THE  BANKERS  MAGAZINE 


in  the  copy  is  that  the  storage  rates  are 
stated  plainly. 

These  slips  are  mailed  in  every  letter, 
also  placed  in  every  pass-book,  in  both  the 
savings  and  checking  departments  of  the 
bank. 

There  are  few  persons  whose  attention  you 
cannot  get,  if  you  approach  them  in  a per- 


Study  Your  Words. 

The  head-lines  in  your  advertisement  can 
amount  to  more  than  you  may  think,  in  this 
particular.  Do  you  study  them  carefully? 
Do  you  get  the  words  that  will  command 
every  one’s  attention,  and  yet  each  one  be- 
lieve they  are  meant  for  him? 


Cut  used  on  one  side  of  an  attractive  card  sent  out  to  awaken  interest  in  the 
Storage  Vaults  of  the  Commerce  Trust  Company.  Kansas  City.  Mo. 


Reverse  of  the  storage  vault  card 


sonal,  verbal  conversation.  And,  after  all, 
this  is  what  we  should  aim  to  do  in  our 
copy — make  it  just  as  personal  as  possible. 
The  speaker  who  addresses  his  audience  in 
that  “you”  and  “your”  style  of  individual- 
ity, will  have  better  attention  than  if  he 
addresses  it  as  a mere  body,  and  refers  to 
it  as  just  so  many  people. 

Then  cut  out  the  coldness  in  your  adver- 
tising. Get  right  down  on  a level  basis  in 
your  copy,  using  words  any  one  can  under- 
stand, and  make  yourself  feel  that  you  are 
talking  directly  to  prospective  customers- - 
not  just  at  random. 


Never  forget  this  fact;  your  prospect,  Mr. 
Brown,  is  always  more  interested  in  himself 
than  in  you  or  vour  vaults;  therefore,  ap- 
peal to  him  directly. 

Don’t  use  this  in  tomorrow’s  head-liner 
“Our  Vaults  Protect  Valuable  Papers.”  He 
is  not  interested  in  that  word  “our”  as  he 
would  be  in  the  little  word  “your.”  And  he 
may  not  think  of  his  valuable  papers  until 
you  call  them  to  his  direct  attention.  Let 
this  be  vour  head-line  instead:  “Your  Con- 
tracts, Insurance  Policies  and  Receipts  are 
Valuable.  Our  Vaults  Protect  Them.”  Isn’t 
that  better?  Doesn’t  that  remind  him  of 


Digitized  by  t^ooQle 


SAFE  DEPOSIT 


97 


exactly  which  papers  are  really  valuable; 
and  doesn’t  it  suggest  your  protection? 
Never  play  on  some  papers  that  many  peo- 
ple, and  probably  Mr.  Brown,  may  not  have, 
such  as  certain  pension  documents,  wills, 
naturalization  papers,  etc. 

Probably  you  have  this  form  in  mind: 
rtOur  Vaults  Withstand  Earthquakes.”  fee- 
fore  you  use  it,  change  it  thus:  “Your  Jew- 
els and  Valuables  are  Protected  from  Earth- 
quakes in  Our  Vaults.”  It  is  stronger,  of 
course,  since  it  makes  him  think  of  his  own 
property,  or  a woman  think  of  her  precious 
little  articles  that  she  “simply  can’t  afford 
to  lose.” 

A few  weeks  ago  you  used  something  like 
this:  “Our  Storage  Vaults  Mean  Safety.” 
See  what  a difference  a slight  change  will 
make:  “Your  Valuables  Stored  Here,  Means 
Safety  to  You.” 

Perhaps  you  emphasize  the  smalll  cost  in 
this  style:  “The  Cost  is  Small  for  Our  Vault 
Sen  ice.”  Wouldn’t  this  head-line  indicate 
to  Mr.  Brown  that  you  think  of  his  side  of 
the  question:  “Your  Expense  is  a Trifle — 
You  Need  the  Service.” 

You  didn’t  think  this  was  too  fine  a point 
to  consider,  did  you?  If  so,  try  it  once, 
anyway,  and  be  convinced.  They  are  little 
things,  that’s  true;  little  words — little  forms 


Hie  Safest  Place  Tb 
KEEP  "YOUR  MONEY  IS  IN 
THE  BANK.  THE  BANK 
HAS  IT  .SAFE  FOR  YOU. 


— little  changes;  but  it’s  just  the  little  things 
that  count.  Remember  the  quacking  of 
geese  (such  a little  thing,  you  know)  saved 
Rome. 


RESPONSIBILITY  FOR  SAFE  DE- 
POSIT BOX 

THE  authority  that  a bank  may  maintain 
over  the  contents  of  its  safe  deposit 
boxes  will  be  tested  in  the  California 
courts,  as  the  result  of  a suit  brought  against 
tne  Western  National  of  San  Francisco  by 
Helen  M.  Finch,  wife  of  Paul  Finch.  In 
1907  litigation  was  pending  between  Finch 
and  his  wife,  in  which  the  latter  sued  for  an 


accounting  of  property  interests.  An  at- 
tachment was  brought  against  Finch’s  com- 
mercial deposit  of  $2,000,  and  also  against 
the  money  in  his  safe  deposit  box,  which  was 
said  to  contain  $5,500.  When  judgment  was 
obtained  by  Mrs.  Finch  she  was  able  to  re- 
cover only  the  $2,000  in  the  deposit  account, 
as  Finch,  according  to  the  allegation,  had 
removed  the  coin  from  the  safe  deposit  box. 
The  bank  is  charged  with  responsibility  for 
allowing  him  to  do  so. 


TRACING  BOX  RENTERS 

WE  quote  the  following  paragraph  from 
a paper  read  at  the  last  convention 
of  the  California  Bankers’  Associa^ 
tion  by  John  F.  Cunningham,  manager 
Crocker  Safe  Deposit  Vaults,  San  Fran- 
cisco : 

“When  a prospective  customer  becomes  a 
renter  of  a box  to  which  he  and  ‘no  one 
else’  is  to  have  access,  we  require  him  to  give 
the  name  and  address  of  his  nearest  relative 
or  intimate  friend.  When  the  rental  of  the 
box  is  again  due,  we  mail  him  the  bill  and  if 
it  is  returned  by  the  post  office  because 
owner  caimot  be  located,  we  communicate 
with  his  relatives  or  friends,  if  the  relative 
has  moved,  and  endeavor  to  get  his  new 
address.  In  this  way  we  have  located  quite 
a number  who  otherwise  would  probably 
have  never  paid  their  rent. 

“When  we  are  told  upon  inquiry  that  the 
sought  customer  is  dead,  we  advise  his  rela- 
tives to  get  an  order  from  court  to  search 
for  a will  or  authorize  us  to  do  so  in  the 
presence  of  an  officer  of  the  bank,  and  if  a 
will  is  found,  to  communicate  with  the  ex- 
ecutor or  one  of  the  legatees,  and  have  him 
furnish  proof  of  death.  If  this  is  sent  us, 
then  the  usual  course  of  legal  action  is  taken 
by  the  executor  or  legatee. 

“Where  it  is  impossible  to  locate  a renter, 
we  mail  a registered  letter  to  the  last  ad- 
dress given  us,  notifying  him  that  unless  he 
calls  and  pays  his  rent,  we  shall,  after  sixty 
days  from  that  time,  in  presence  of  an  of- 
ficer of  the  bank  and  a notary,  order  the  box 
broken  open  and  hold  all  contents  subject  to 
payment  of  all  indebtedness.  In  nearly  all 
cases,  where  a box  is  broken  open,  nothing 
is  found,  so  we  immediately  surrender  the 
acccount,  change  the  lock  and  keys,  and  put 
the  box  into  commission  again.” 


THIS  TOWN  NEEDS  A BANK 

DD.  HERFORD,  mayor  of  DeQuincey, 
• Calcasieu  Countv,  Louisiana,  writes 
us  as  follows:  “Find  parties  who  de- 
sire a location  for  a small  institution — we 
have  the  locality.  No  other  bank  here.” 


Digitized  by  t^ooQle 


LATIN  AMERICA 


MEXICAN  RAILWAYS  HITCHING  UP  WITH  THE 

PAN-AMERICAN 

DEVELOPMENT  OF  GREAT  ENTERPRISE  THAT  WILL  EVENTUALLY 
CONNECT  ALASKA  WITH  SOUTH  AMERICA 


THE  Pan-American  Railroad  for  many 
miles  of  its  course  is  paralleled  by  the 
Sierra  Madre  mountain  range,  back  of 
which  lie  valleys  of  unsurpassing  richness  of 
soil  and  productivity — regions  now  reached 
only  by  the  ox  cart  or  pack  train.  Lately 
reconnoitering  parties  of  civil  engineers  and 
capitalists  have  traversed  these  valleys,  the 
result  of  such  examination  being  the  pro- 
jecting and  early  contemplated  building  of 
a railroad,  on  the  recommendation  that  rail- 
road building  into  those  regions  is  pro- 
nounced practicable,  the  route  favored  being 
from  Jalisco  station,  Chiapas,  a convenient 
point  on  the  Pan-American  Railroad  to  the 
port  of  Frontera,  Tabasco,  on  the  Gulf  of 
Mexico,  via  the  capitals  of  the  States  of 
Chiapas  and  Tabasco. 

Connecting  With  the  Guatemala  North- 
ern. 

It  is  reported  that  the  work  of  grading, 
preparatory  to  connecting  the  point  of 
union  between  the  Pan-American  Railroad 
and  the  Guatemala  Northern  Railroad, 
which  will  extend  from  Ayutla,  Guatemala, 


dbxiratt 

iffinanripr 

Only  Weekly  FbumcUd  Joumel 
Published  in  Mexico 

COMPLETE  QUOTATIONS  OF  ALL 
BANK,  INDUSTRIAL  AND  MINING 
STOCKS 

READING  MATTER  OF  VITAL  INTEREST 
TO  ALL  INVESTORS  IN  MEXICO 

$5,00  U.  S.  Currency  per  Annum,  post- 
Age  pAid 

JOHN  R.  SOUTHWORTH.  F.  R.  G.  S. 

Managing  Director 

CALLE  DEL  ELISEO  . MEXICO.  D.  F. 
Cable  Addmt,  Col-Soutb.  P.  O.  Box  1172. 
Mexico  City 


91 


on  the  Mexican  frontier,  to  the  town  of 
Caballa  Blanco,  on  the  Guatemala  Northern 
Railroad,  has  been  commenced.  Ayutla  is 
located  just  beyond  Mariscal,  across  the 
River  Suchiate,  over  which  a great  interna^ 
tional  bridge  will  be  constructed.  This  line 
will  be  about  twenty-five  miles  long,  and 
will  be  one  of  the  links  in  the  Pan-American 
system  which  in  course  of  time  will  extend 
from  Alaska  to  Panama,  and  eventually  to 
South  America.  Within  a year  or  sixteen 
months  at  the  latest  it  is  hoped  that  through 
Pullman  cars  from  the  United  States  and 
Mexico  will  enter  Guatemala  City  via  the 
Pan-American  and  Guatemala  Northern 
Railroads.  On  the  conclusion  of  the  lines 
between  Ayutla  and  Caballo  Blanco,  Guate- 
mala, and  that  in  Salvador,  there  will  be 
established  an  ample  freight  service  from 
Salvador  across  Guatemala,  Mexico,  and 
the  United  States  to  eastern  and  w’estern 
Canada. 

Results  of  the  Pan-American  System. 

The  future  potentiality  of  the  Pan- 
American  system  can  be  foreseen.  Among 
many  factors  will  be  the  diverting  of  the 
movement  of  the  Guatemala  coffee  export 
trade,  reaching  30,000,000  pounds,  not  to 
speak  of  the  greater  part  of  freight  for  the 
United  States  and  Europe  from  Guatemala 
and  other  Central  American  countries,  from 
water  routes  out  of  Guatemalan  and  other 
Central  American  ports  to  the  rail  route 
over  Central  American  railroads  to  Ayutla, 
Guatemala,  across  the  international  bridge 
to  be  built  over  the  Suchiate  River,  thence 
to  Mariscal,  Chiapas,  on  the  Guatemala 
frontier,  and  over  the  Pan-American  Rail- 
road to  Gamboa,  Oaxaca,  transfer  being 
made  to  the  Tehaun tepee  National  Railroad 
for  carriage  across  the  Isthmus  of  Tehuan- 


Vera  Cruz  Banking  Company,  Lti. 

(Cia.  B&nquera  Veracruzana,  8.  A.) 
VERA  CRUZ,  MEXICO 

Capital  and  Surplus  - - $650,000.00 

▲ General  Banking  Business  Transacted 
Collections  Promptly  Handled 


Digitized  by  t^ooQle 


Banco  de  Nuevo  Leon 

MONTEREY,  N.  U9  MEXICO 

ESTABLISHED  OCT.  1.  1892 

Capital  paid  ap,  $2,000,000  Rasarvas,  $747,831.86  Deposits,  $2,889,986.98 

OENERAL  BANKING  BU8INE88  TRANSACTED 

Principal  Correspondents : — NEW  YORK.  National  Park  Bank,  National 
Copper  Bank:  LONDON,  Dresdner  Bank.  Credit  Lyonnais;  BERLIN, 

Deutsche  Bank.  Berliner  Handels  Gesellschaft:  PARIS,  Credit  Lyon- 
nais. Comptolr  National  d'Escompte;  HAMBURG,  Deutsche  Bank  Fill- 
ale  Hamburg.  Commers  und  Dlsconto  Bank:  MADRID,  Banco  Hls- 
pano  Americano,  Banco  de  Castilla;  HABANA,  Banco  de  la  Habana. 

RODOLFO  J.  GARCIA,  Manager 

ARTURO  MANRIQUE,  Accountant  AMADOR  PAZ,  Cashier 


tepee  to  Puerto  Mexico  (Coatxacoalcos),  on 
the  Gulf  of  Mexico,  or  to  Salina  Crus,  on 
the  Pacific  coast.  The  Department  of  Fi- 
nance of  Mexico  has  provided  for  the  con- 
struction of  a frontier  custom  house  and 
warehouse  at  Mariscal. 

New  Equipment  Needed. 

Both  freight  and  passenger  traffic  on  the 
Pan-American  Railroad  have  already  in- 
creased so  rapidly  as  to  necessitate  new  lo- 
comotives and  passenger  coaches. . The  road 
is  undergoing  many  improvements,  being 
rehabilitated  with  new  ties,  steel  rails  and 
steel  bridges,  the  roadbed  raised  and 
strengthened  wherever  needed,  so  that  in  the 
next  rainy  season  it  is  assured  that  there 
will  be  *no  interruption  of  train  service. 
New  concrete  railroad  stations  are  being 
constructed  along  the  line  and  iron  tele- 
graph posts  substituted  for  wooden  poles. 
The  railroad  is  about  to  build  its  shops  in 
Tonola,  Chiapas,  on  lands  donated  by  the 
municipality  of  that  town.  The  government 
of  the  State  of  Chiapas  has  granted  a con- 
cession to  install  an  electric  light  and  mo- 
tive power  plant,  to  furnish  the  town  of 
Tonola  with  illumination  and  motive  power 


for  the  operation  of  the  Pan-American  com- 
pany’s shops. — United  States  Consul  A . W. 
Brickwood,  Tapachula,  Mexico , 


WHY  MEXICO  NEEDS  FOREIGN 
CAPITAL 

(Boletin  de  la  Aaociacion  Financiers  Inter-  * 
nacional) 

THE  question  has  frequently  been  asked 
why  Mexico,  being  the  first  silver  pro- 
ducing country  in  the  world,  should  so 
urgently  seek  foreign  capital  for  the  devel- 
opment of  her  natural  resources.  While  it 
is  true  that  Mexico  has,  in  the  past,  pro- 
duced billions  of  silver,  yet  it  must  be  re- 
membered that  millions  of  Mexican  silver 
have  gone  into  the  coffers  of  China,  Japan, 
India,  the  Philippines  and  the  Islands  of 
the  Sea;  indeed,  Europe  has  taken  a great 
deal  of  Mexican  silver,  so  that  one  reading 
the  statistics  of  the  production  of  silver 
during  the  past  350  years  would  naturally 
wonder  why  there  is  not  a greater  amount 
of  silver  in  circulation  in  Mexico.  The  fact 
just  mentioned  is,  in  part,  the  answer. 

On  the  other  hand,  when  it  is  understood 


BANCO  MERCANTIL  DE  MONTEREY 

MONTEREY,  N.  L„  MEXICO  A Corporation 

OFFICIAL  DEPOSITORY  FOR  THE  GOVERNMENT  OF  THE  STATE  OF 

NUEVO  LEON 

Capital  Desources,  $2,500,000.00  Deserves,  $232369.49 

Manager,  MR.  JOSE  L.  GARZA  Cashier,  MR.  ENRIQUE  MIGUEL 

Accountant,  MB.  EMETERIO  VELARDE 

Buys  and  cells  domestic  and  foreign  drafts.  Issues  letters  of  credit.  Takes  charge  of  any  collec- 
tions entrusted  to  it  en  a moderate  rate  for  commission  and  remittance.  Buys  and 
sells  for  account  of  others,  government,  municipal,  banking,  and  mining  stocks  and  bonds. 

Principal  Correspondents- National  Park  Bank,  Now  York  CUyt  Borneo  Hispano  Americans, 
Madrid , Spain;  Credit  Lyonnais*,  Paris,  Francs,-  Credit  Lyonnaise,  London,  England;  Hamburger 
FfHale  der  Drutschen  Bank,  Hamburg,  Germany. 


4 ?9 


Digitized  by 


Google 


ADOLFO  BLEY, 

President. 


MAX  MULLER, 

Vice  Pres. 


LUIS  BRAUER, 
Manager. 


BANCO 


CHIHUAHUA,  MEXICO 


SONORA 


MAIN  OFFICE: 


HERMOSILLO,  MEXICO 


Capital  - - - - $5,000,000.00 
Surplus  Fund  - - 1,701,087.12 


BRANCHES  IN 


Guaymas,  Nogales,  Chihuahua, 
Alamos 


Transacts  a General  Line 
of  Banking  Business. 

Drafts  and  Letters  of  Credit  on 
Europe,  United  States  and 
Mexico. 

Collections  on  any  part  of 
Mexico  Given  Prompt  and 
Careful  Attention. 


CORRESPONDENCE  INVITED 


Nexu  York  Correspondent,  NATIONAL  PARK  BANK 


Capital,  paid  up,  $1,500,000 
Surplus,  $1,000,000 


We  have  Agents  in  almost  every 
place  and  mining  camp  in 

SONORA  AND  SINALOA 


A General  Banking 
Business  Transacted 


Foreign  Exchange,  Gold  and  Silver  Bul- 
lion bought  and  sold.  Collections 
carefully  made  and  promptly 
accounted  for. 

OUR  LAND  DEPARTMENT 
Will  furnish  upon  application  reliable  in- 
formation on  farm,  ranch  and  timber  lands 


JUAN  A.  CREEL 

Gmiral  Manager 


E.  C.  CUILTY 


Deposits  reeelved  In  American  and 
Mexican  money 

Member  of  American  Bankers  Aseoetatlom 


Digitized  by " 


THHBE  ABB  THRBB  T^-m^^T^«TTwr-misrnnf=i  OB’  TH1 


Ct.  Bucarta  di  Fomaate  y Bints  Rains,  de  Mexico,  S.  A. 


REAL.  ESTATE 

This  department  buys  and 
sells  all  kinds  of  land  in  every 
part  of  the  Republic— City  or 
Country.  Houses  bou  at  tat,  sold 
and  constructed.  Ranches 
subdivided  into  smaller  ones. 
V.  SL  Garees,  Manager. 


PUBLIC  WORKS 

This  department  does  paving 
work,  makes  surveys,  con* 
structs  sewerage  systems,  etc. 
It  has  improved  the  Cities  of 
Mexico,  Puebla,  Guadalajara, 
Durango  and  others. 

Manuel  Elga  ere,  Managmr. 


BANKING 

This  department  finances  the 
other  two  departments  and 
does  all  kinds  of  business  in 
relation  to  banking. 


Xavier  loan  y Lands,  Jfgr. 


CORRESPONDENCE  IS  INVITED 


Compufei  Bancaria  de  Fomento  y Bienes  Calces,  de  Mexico,  S.  A. 

MEXICO,  D.  F. 

President— F.  PIMENTEL  T 7AGOAGA 

1st  Tice- Pree,— P.  MACEDO  ted  Ylce-Pres.-LUIS  BARROSO  ARIAS 


that  the  natural  resources  of  Mexico  are 
very  immense,  and  that  formerly  there  were 
only  a few  thousands  of  Mexican  people 
who  were  capable  of  handling  large  sums  of 
money  devoted  to  the  development  of  the 
resources  of  this  country,  and  that  these 
few  probably  were  thoroughly  content  with 
their  condition  in  life,  the  cause  for  the 
laxity  in  the  development  of  Mexico  by  the 
Mexican  may  be  readily  understood. 

Taking  into  consideration  the  vast  amount 
of  work  in  hand  necessary  for  the  develop- 
ment of  this  great  country  and  the  condi- 
tion of  the  country  at  large  and  the  govern- 
ment in  particular  at  the  time  that  Presi- 
dent Diaz  took  charge,  less  than  thirty  years 
ago,  it  will  be  noted  that  the  Mexican  has 
wrought  well.  He  has  not  been  an  idler, 
though  he  has  not  labored  with  that  activity 
which  is  so  characteristic  of  the  Anglo- 
Saxon  and  some  other  races  of  people. 

Though  old  in  years,  Mexico  is  new  com- 
mercially. Her  temples  bespeak  the  lan- 
guage of  centuries  past,  her  libraries  and 
archives  are  filled  with  records  of  centuries 
ago;  yet  commercially  Mexico  is  new.  Pre- 
vious to  forty  years  ago,  Mexico  had  no  rail- 
roads, no  telegraphs,  no  telephones,  no  elec- 
tric lights,  no  electric  power,  no  scientific 
mining,  and  within  these  two-score  years 
Mexico  has  built  up  a great  system  of  rail- 
roads, constructed  immense  electric  light 
and  power  plants,  discarded  the  ancient 
methods  of  mining,  and  erected  large  fac- 
tories for  converting  her  crude  materials 
into  manufactured  products. 

Hitherto  the  Mexican  spent  his  time  and 
energy,  in  part,  in  a very  indifferent  form 
of  agriculture,  but  the  principal  object  of 
his  toil  was  mining,  and  during  the  past  few 
years  his  attention  has  been  called  to  other 
lines  of  effort,  so  that  today  the  Mexican  is 
found  in  almost  every  kind  of  commercial 
enterprises.  Notwithstanding  the  increased 
activity  of  the  Mexican,  yet  the  immense 
possibility  for  the  development  of  Mexico’s 
natural  resources  is  too  great  for  the  na- 
tive’s financial  ability.  There  is  not  enough 
capital  in  Mexico  for  the  development  of 
Mexico.  To  date  it  has  been  necessary  to 


bring  into  Mexico  a little  less  than  $2,000,- 
000,000  of  foreign  capital.  The  work  of  the 
development  of  Mexico  has  scarcely  begun. 
Every  line  of  activity  is  open  wide  to  the 
honest  foreigner  who  desires  to  come  to 
Mexico  for  the  investment  of  liis  time  and 
energy  and  to  the  capitalist  for  the  invest- 
ment of  his  money. 

While  Mexico  stands  at  the  head  of  the 
list  of  silver  producing  countries  and  third 
in  the  list  as  a copper  producer,  yet  even  in 
the  production  of  these  two  great  metals 
Mexico  is  but  in  her  infancy.  During  the 
past  few  months  properties  valued  at  many 
millions  of  dollars  have  exchanged  hands, 
and  the  new  owners  are  installing  the  latest 
improved  machinery  at  enormous  expense, 
in  order  to  greatly  increase  the  output  of 
their  mines. 

Irrigation,  dry-land  farming,  stock  rais- 
ing, manufacturing,  timber,  rubber,  railway 
building,  and  various  other  enterprises  call 
for  large  capital,  so  great  that  Mexico 
stands  staggered  at  the  immense  amount  of 
wealth  necessary  to  bring  her  natural  re- 
sources up  to  that  high  plane  of  which  they 
are  capable.  Consequently  the  government 
opens  wide  her  gates  and  invites  capital  and 
labor  from  the  world  to  enter  in  and  assist 
the  Mexican  people  in  making  of  Mexico  ail 
that  she  is  capable  of  becoming. 

Naturally,  some  jealous-minded  natives 
object  to  the  coming  of  the  foreigner,  dis- 
placing the  hovel  and  the  hut  with  magnifi- 
cent structures,  relegating  the  mule  car  and 
sending  electrically  driven  trains  rapidly 
through  the  streets,  displacing  the  old 
method  of  mining  by  modern  machinery,  in- 
stead of  the  tallow  candle  using  the  latest 
electrical  appliances.  But  these  are  few, 
and  the  majority  of  the  natives  of  the  coun- 
try extend  a hand  of  welcome  to  all  who 
come  to  engage  in  honest  business  and  who 
desire  only  a fair  profit  upon  the  time  and 
money  which  he  may  invest.  The  day  of 
prejudices  and  enmity  toward  foreigners  is 
fast  disappearing,  and  foreign  and  native 
join  hand  in  hand  and  stand  shoulder  to 
shoulder  for  the  one  purpose — the  develop- 
ment of  Mexico.  The  law  of  supply  and 

101 


Digitized  by  t^oooLe 


MERCANTILE  BANKING  COMPANY,  Ltd. 

Avenlda  San  FranoUoo  No.  12 

CITY  OF  MEXICO  

Capital,  $500,000.00  Surplus,  $100,000.00 

Members  sf  the  American  Bankers*  Association 
GEO.  J.  McCARTY,  President  K.  M.  VAN  ZANDT,  Jr.,  Vlce-Pres.  & Mgr. 

H.  C.  HEAD,  Cashier  SHUR  WELCH,  Assistant  Cashier. 

A Gentral  Banking  Bailaeu  Traasaotad  Forsigi  Enhaaia  Boaght  aad  Sold 
Tolographlo  Transfers  Lattars  of  Credit 

Unsurmissed  collection  facilities.  Correspondence  solicited.  Accounts  of  Banks,  Bank- 
ers, Merchants  and  Individuals  solicited. 


demand  is  apparent  everywhere  in  Mexico. 
The  demand  for  large  capital  for  every 
class  of  enterprise  is  apparent.  The  foreign 
investor  sees  the  demand  and  the  opportu- 
nity for  reaping  good  profits  from  his  in- 
vestment, is  supplying  the  capital  with 
which  to  develop  and  beautify  the  wonderful 
country  of  Mexico. 


AMERICANS  NOT  CONVERSANT 
WITH  SOUTH  AMERICAN 
BUSINESS  CONDITIONS 

JAMES  H.  SPENCER,  an  American  who 
is  in  the  importing  business  in  Santiago, 
Chile,  and  whose  father  went  down 
there  to  found  the  business  forty-five  years 
ago,  was  a recent  visitor  in  New  York  City. 
He  was  interviewed  by  a reporter  for  the 
New  York  Sun  as  follows: 

“If  our  capitalists  and  our  enterprising 
manufacturers  would  dedicate  the  time,  at- 
tention and  money  to  steamships,  to  banks 
and  to  looking  into  South  American  condi- 
tions that  the  Germans,  English  and  Eu- 
ropeans do  generally,  they  could  get  all  the 
trade  they  desire  down  there/’  said  Mr. 
Spencer.  “As  it  is,  the  Europeans  have 
been  for  many  years  meeting  the  conditions 
exacted  by  the  Soutn  American  governments 
and  the  public,  and  they  have  profited. 

“As  for  shipping,  the  Americans  know 
little  about  the  export  business.  They  turn 
over  their  consignment  to  an  express  or  a 
steamship  company,  get  a little  receipt  for 
it  and  expect  it  to  go  to  its  destination  all 


right,  whereas  it  is  the  case  that  no  goods 
can  be  extracted  from  the  customs  down 
there  without  a consular  invoice  and  a bill 
of  lading. 

‘Then  the  American  shipper  knows 
nothing  about  packing,  apparently.  He 
packs  for  a local  business  and  for  short 
transportation.  After  a journey  of  10,000 
miles  his  packages  arrive  with  the  contents 
either  smashed  or  stolen. 

“To  my  mind  the  German  diplomatic  ser- 
vice is  managed  on  a basis  that  is  superior 
to  that  of  any  other  country.  In  all  its  le- 
gations are  commercial  attaches  who  do 
nothing  but  visit  around  in  the  trades,  study- 
ing conditions  and  getting  samples,  and  send 
voluminous  reports  back  home,  where  they 
are  distributed  to  the  manufacturers.  These 
make  a special  study  of  the  requirements  of 
the  country  to  which  they  are  going  to  ship, 
and  the  result  is  that  they  send  the  South 
American  merchants  what  they  want  and 
the  orders  are  repeated. 

“What  is  needed  in  South  America  is 
American  banks.  AJ1  the  collections  in 
Chile,  so  far  as  business  with  the  United 
States  is  concerned,  are  made  through  the 
German  banks  there. 

“The  general  belief  down  there  is  that 
once  the  Panama  Canal  is  opened,  American 
business  and  enterprise  will  be  extended  in 
Chile.  If,  for  instance,  the  Americans  went 
into  the  nitrate  business  down  there  instead 
of  leaving  it  to  the  English  and  Germans 
and  did  things  on  the  big  scale  they  work 
upon  at  home,  it  would  mean  big  profits  for 
the  Americans  as  well  as  for  the  Chilean 
Government.” 


Mexico  City  Banking  Company,  S.  A. 

AVENIDA  SAN  FRANCISCO  No.  14 

Capital  and  Surplus  91*000,000 

COLLECTIONS  AMD  ILL  81111116  MATTERS  CIVEW  PROMPT  AND  OIBEFUL  ATTENTION 

102 


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BANKING  PUBLICITY 


103 


PARAGUAY 

Early  Connection  With  Argentine  Railways 

THE  linking  up  of  Paraguay  with  Ar- 
gentina by  ra*i  is  described  in  the  fol- 
lowing report  by  Consul  Cornelius 
Ferris,  Jr.,  of  Asuncion: 

“The  extension  of  the  Paraguay  Central 
Railway  from  Pirapo  to  Encarnacion,  on 
the  Parana  River,  is  progressing  steadily, 
the  rails  being  laid  into  Encarnacion  by  the 
end  of  March.  Ferryboat  connection  will 
be  made  with  Posadas,  on  the  Argentine 
side  of  the  river,  to  which  point  the  Argen- 
tine Northeastern  Railway  is  being  extended. 
This  will  give  Paraguay  its  first  connection 
with  the  outside  world  by  railroad,  although 
the  Paraguay  Central  is  the  oldest  road  in 
South  America.  Through  service  is  ex- 


pected between  Asuncion  and  Buenos  Aires 
by  the  end  of  1910. 

“For  through  service  the  wider  gauge  of 
the  Paraguay  line  is  to  be  changed  to  that 
of  the  Argentine  Northeastern,  and  the  old 
rolling  stock  entirely  replaced  by  new  equip- 
ment, which  has  just  arrived  from  England. 
It  consists  of  twenty  locomotives,  one  of- 
ficers’ car,  22 3 freight,  two  dining,  three 
parlor,  two  compartment,  two  sleeping  and 
twelve  day  cars,  eight  baggage,  mail  and 
express  cars,  one  wrecking  car  and  one 
twenty-ton,  flat-bottom  boat  with  steam 
winch.  Of  the  $1,410,000  additional  stock 
issued  by  the  Paraguay  Central  Railway, 
$1,070,000  was  taken  by  the  Argentine  Gov- 
ernment, which  also  secures  the  old  rolling 
stock  for  use  on  Patagonia  railways.  Ar- 
gentina also  appropriated  $10,000,000  for 
the  extension  of  the  railway  to  the  north.” 


BANKING  PUBLICITY 

Conducted  by  T.  D.  MacGregor 


A BROAD  VIEW  OF  BANK  ADVERTISING 


THE  editor  of  this  department  recent- 
ly contributed  the  following  arti- 
cle to  “The  Bank  Advertiser”: 

The  general  adoption  of  modern  adver- 
tising methods  by  the  banks  of  this  country 
would  result  very  beneficially,  not  only  to 
the  business  of  the  financial  institutions 
themselves,  but  also  to  the  people  at  large. 

While  ft  Is  true  that  in  the  past  few 
years  there  has  been  marked  improvement 
in  the  advertising  done  by  banks,  the  great 
majority  of  the  banks  and  trust  companies 
of  the  country  are  still  falling  short  of  their 
opportunities  in  the  matter  of  developing 
new  business  by  advertising. 

It  is  interesting  to  consider  some  of  the 
broader  aspects  of  bank  advertising,  and 
if  from  a perusal  of  these  general  ideas  any 
reader  can  deduce  something  specific  for 
the  needs  of  his  own  institution,  so  much 
the  better. 

A great  deal  is  heard  now-a-days  about 
the  proposed  Postal  Savings  Bank  system. 
The  present  indications  are  that  some  such 
system  will  be  established  by  the  United 
States  Post  Office  Department  In  the  near 
future.  Legislation  on  the  subject  is  to  be 
expected  during  the  present  administration. 
The  effect  of  the  Postal  Savings  Bank  upon 
existing  banks  is  problematical,  but  there  is 
little  reason  to  believe  that  the  results  will 
be  disastrous  to  private  institutions. 

Did  you  ever  stop  to  think  why  the  Postal 
Savings  Bank  idea  appeals  so  strongly  to 
the  popular  fancy? 

It  is  because  everybody  believes  Implicitly 
in  the  stability  of  the  United  States  Gov- 
ernment. and  when  you  get  down  to  the 
last  analysis  this  Is  a matter  of  advertising. 


People  believe  that  the  government  is  strong 
because  they  have  always  been  told  that 
?t  Is.  They  have  constantly  read  and  heard 
about  the  extent  of  its  financial  resources 
and  they  know  how  it  has  successfully 
passed  through  times  of  war,  depression 
and  public  calamity.  The  facts  concerning 
the  power  and  efficiency  of  the  government 
have  become  part  of  the  public  consciousness 
through  a species  of  advertising. 

Now,  there  is  no  reason  In  the  world  why 
the  banks  by  proper  advertising  carried  on 
continuously  cannot  to  a sufficient  degre® 
create  a feeling  fn  the  popular  mind  ana- 
logous to  that  which  is  entertained  toward 
the  government  in  regard  to  stability.  Of 
course  that  feeling  could  never  be  as  strong 
as  the  feeling  of  confidence  in  the  govern- 
ment, but  it  is  certain  that  continuous,  edu- 
cative advertising,  backed  up  by  continuous 
making  good  in  every  way  on  the  part  of 
the  banks  would  In  time  make  the  Impres- 
sion “Strong  as  the  bank”  as  frequently 
heard  as  “Strong  as  the  government.” 

The  amount  of  money  lost  by  bank  de- 
positors on  account  of  bank  failures  or 
mismanagement  Is  an  infinitesimally  small 
amount  when  you  take  into  consideration 
the  enormous  total  of  bank  deposits  year 
by  year.  But  a great  many  persons  do  not 
realize  how  almost  absolutely  safe  the  banks 
are — especially  the  savings  banks — as  de- 
positories for  the  surplus  money  of  the 
people.  Because  of  this  lack  of  knowledge 
and  also  on  account  of  the  lack  of  proper 
presentation  of  the  advantages  of  systematic 
thrift,  there  are  to-day  millions  of  dollars 
hidden  away  In  odd  places  which  might  be 
in  circulation  through  the  banks  of  the 
country. 


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104 


THE  BANKERS  MAGAZINE 


This  suggests  a very  important  economic 
service  which  modern  bank  advertising  per- 
forms, the  beneficial  results  of  which  are 
in  direct  ratio  to  the  amount  of  the  adver- 
tising done.  That  Is  the  development  of 
individual  industry  and  thrift. 

There  Is  no  doubt  that  the  savings  talks 
and  arguments  presented  day  by  day  cr 
week  by  week,  year  in  and  year  out,  by 
thousands  of  banks  throughout  the  country 
have  a distinct  influence  on  the  general 
moral  and  physical  well-being  of  the  people. 
The  experience  of  advertising  banks  proves 
that  these  advertisements  are  effective  in 
the  way  of  increasing  deposits  and  that  con- 
notes a good  deal,  because  the  thinking  man 
is  able  to  read  between  the  lines  of  a sav- 
ings passbook.  There  is  more  to  it  than 
merely  the  figures  showing  the  balance  in 
the  bank. 

Every  savings  account  stands  for  much 
honest  effort  and  self- sacrifice.  In  most 
cases  the  savings  bank  depositor  is  not 
working  and  economizing  for  his  own  bene- 
fit alone.  Often  it  is  for  the  purpose  of 
providing  a home  for  his  family,  or  other- 
wise to  care  for  the  needs  or  desires  of 
loved  ones. 

When  a man  saves  part  of  his  income 
regularly  for  some  good  purpose,  he  is  a 
better  husband  and  father  and  a better 
citizen  than  he  otherwise  would  be.  Thrift 
fs  diametrically  opposed  to  laziness,  intem- 
perance and  immorality.  Thousands  of  men 
have  found  that  adopting  a fixed  object  to 
work  for  and  the  practice  of  systematic 
economy  In  reaching  that  goal  has  been  the 
making  of  them,  not  only  from  a purely 
material  standpoint,  but  physically,  men- 
tally and  morally  as  well. 

The  banker  who  fills  his  advertising  space 
with  Interesting  and  s traight- from -the - 
shoulder  talks  on  thrift  for  the  masses  can 
justly  feel  that  he  is  performing  a good 
service  to  the  community  at  large  in  gen- 
eral and  to  the  individual  influenced  by  his 
advertising  in  particular. 

The  aggregate  of  good  accomplished  by 
the  sound  and  progressive  savings  adver- 
tising which  is  being  done  is  very  great 
Indeed.  The  amount  of  good  which  would 
result  if  every  bank  that  could  advertise 
would  advertise  in  this  way  is  incalculable. 
The  tot'll  Increase  in  deposits  resulting  from 
it  could  be  ascertained  quite  accurately, 
but  the  sum  of  the  other  benefits  would  be 
hard  to  reckon. 

There  is  a broad  way  to  look  at  commer- 
cial bank  advertising,  too.  The  great  mass 
of  men  and  women  the  country  over  ate  not 
ns  familiar  as  they  should  te  with  the  ser- 
vice which  the  bank  performs  in  the  busi- 
ness community  and  thousands  of  them 
are  trying  to  get  along  without  the  aid  of 
the  bank. 

In  every  communltv  there  are  many  per- 
sons who  know  nothing  by  personal  ex- 
perience of  the  safety  and  convenience  of 
a checking  account.  They  do  not  realize 
the  advnntages  of  sending  money  away  by 
hank  draft.  They  do  not  appreciate  the 
met  that  being  a regular  bank  depositor 
would  entitle  them  to  many  privileges  and 
conveniences  in  business  which  they  could 
not  enjoy  otherwise.  They  have  no*  found 


out  that  it  pays  to  cultivate  the  acquain- 
tance of  the  banker  and  that  by  being  a 
bank  customer  a man  puts  himself  in  a posi- 
tion where  he  can  ask  and  receive  wise 
counsel  in  business  and  financial  matters 
from  persons  more  experienced  than  him- 
self, and,  moreover,  the  bank  depositor  it 
in  the  way  of  getting  more  substantial  aid 
from  the  banker  than  advice. 

Educative  bank  advertising  will  Interest 
such  persons  and  sooner  or  later  will  get 
most  of  them  in  line  as  regular  bank  deposi- 
tors. This  has  been  proved  over  and  over 
again  in  the  experience  of  advertising  banks. 
If  all  banks  advertised,  and  advertised  in- 
telligently, it  would  not  be  long  before  a de- 
cided improvement  In  business  methods 
would  result.  System  and  promptness  would 
begin  to  appear  where  now  there  is  con- 
fusion and  delay. 

Depositors  will  not  come  to  a bank  or 
remain  with  it  unless  they  have  absolute 
confidence  in  it,  so  that  the  task  of  the 
advertising  bank  Is  two-fold:  to  inspire  and 
maintain  confidence  in  the  institution,  and 
to  educate  people  as  to  the  bank's  ability 
and  willingness,  to  serve  them  in  specific 
ways,  and  to  prove  that  it  will  be  greatly 
to  the  advantage  of  prospective  customers 
to  do  business  with  the  bank. 

Confidence  is  a plant  of  slow  growth,  but 
continuous  advertising  will  create  and  main- 
tain it. 

Advertising  increases  in  value  from  year 
to  year  as  It  continues.  It  would  be  a diffi- 
cult thing  to  estimate  the  full  value  of 
strong,  persistent  advertising  conducted 
through  a period  of  years.  The  momen- 
tum of  such  advertising  is  practically  irre- 
sistible. The  bank  that  thus  accumulates 
prestige  and  good  will  is  a hard  one  to 
overtake  and  surpass. 

It  Is  just  as  wise  for  a bank  to  adver- 
tise to  hold  the  confidence  and  business  of 
present  depositors  as  it  Is  to  get  new  ones. 
By  continuous  publicity  along  proper  lines 
the  bank  puts  Itself  in  a position  to  receive 
the  accounts  of  the  new'  generation  of  busi- 
ness men  constantly  coming  up  and  of  the 
newcomers  in  its  locality,  but  It  also  ce- 
ments the  ties  that  bind  old  customers  to  it. 

Thus  it  will  be  seen  that  a bank’s  ad- 
vertising may  be  regarded  not  as  an  ex- 
pense at  all,  but  as  an  Investment  and  a 
protection — an  investment  very  sure  and 
profitable  in  its  returns  and  an  insurance 
against  loss  of  present  business. 

Honest  continuous  advertising  and  making 
good  on  promises  helps  to  create  for  adver- 
tisers good  will— an  asset  of  Intangible  but 
very  real  value. 

There  are  many  other  things  that  go  to 
create  and  maintain  prestige  for  a business, 
but  the  right  kind  of  advertising  is  the 
principal  means  to  that  end. 

While  it  cannot  be  measured  by  the  yard- 
stick nor  expressed  in  dollars  ard  cents, 
good  will  has  an  acknowledged  value.  A 
certain  very  large  advertiser  vialues  his 
trademark  at  $1,000,000. 

There  is  such  a thing  as  the  cumulative 
effect  of  continuous  advertising.  The  first 
time  a person  reads  your  advertisement  he 
may  not  be  in  a position  to  act  favorably 
upon  the  suggestion  you  make.  In  fact,  he 


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may  not  lie  ready  for  months,  but  If  you 
have  kept  your  name  before  the  public  and 
used  your  advertising  space  to  good  advan- 
tage by  Ailing  It  with  interesting.  Informing, 
convincing  copy,  frequently  changed,  you 
have  held  that  man’s  attention  and  when  he 
is  prepared  to  do  as  you  suggest  you  are 
likely  to  get  his  business. 

There  is  a secondary  advertising  of  much 
value  that  comes  to  the  regular  and  steady 
advertiser.  It  arises  from  the  daily  talk  of 
the  community  when  the  name  of  your  in- 
stitution hss  become  a household  word 
through  persistent  publicity.  When  you 
have  reached  a point  where  the  people  take 
up  your  advertising  and  voluntarily  help  to 
make  your  business  better  known,  you  are 
reaping  the  special  reward  that  comes  to 
the  wise  advertiser. 

It  pays  banks  to  advertise.  That  is  proved 
beyond  question.  Good  bank  advertising  helps 
the  community  at  large  as  well  as  the  in- 
stitution that  advertises.  There  seems  to 
be  no  excuse,  therefore,  for  a bank’s  not 
advertising.  With  the  practical  suggestions 
along  the  line  of  banking  publicity  given  by 
such  publications  as  this  and  by  the  regular 
financial  journals,  to  say  nothing  of  the 
many  good  advertising  periodicals,  every 
banker  ought  to  find  It  easy  enough  to  un- 
dertake the  work  intelligently,  or  at  least 
he  should  have  no  difficulty  in  getting  the 
services  of  some  one  who  has  made  a spe- 
cial study  of  bank  advertising.  The  day 
has  gone  by  when  any  banker  can  afford  to 
ignore  this  subject. 


BOOKLETS  AND  HOUSE  ORGANS 

CITIZENS  Savings  & Trust  Company, 
Cleveland,  Ohio.  “Growth.”  This  is  a 
very  unusual  booklet  for  a bank,  the 
idea  being  to  give  a monthly  exposition  of 
flowers,  explaining  their  care  and  growth,  and 
in  connection  with  the  beautiful  pictures  and 
valuable  descriptive  matter  there  is  more 
or  less  reading  matter  impressing  the  analo- 
gy between  the  growth  of  plants  and  the 
growth  of  a savings  bank  account.  The 
color  of  printing  on  the  cover  and  on  the 
various  plates  throughout  the  booklet  is  of 
such  a high  grade  that  the  booklet  will  un- 
doubtedly be  kept  for  a long  time  by  those 
who  receive  it. 


Continental  Bank  & Trust  Company, 
Shreveport,  La,  A booklet  containing  a 
sketch  of  the  organization  and  progress  of 
this  institution,  illustrated  by  interior  and 
exterior  views  of  the  building  and  pictures 
of  the  officers.  It  is  a very  interesting  book- 
let and  unquestionably  must  have  proved  u 
valuable  advertising  feature  for  the  institu- 
tion which  produced  it. 


The  Wachovia  Loan  & Trust  Company, 
Winston-Salem,  N.  C.  A pamphlet  gotten 
up  In  imitation  of  a legal  document,  con- 
taining copies  of  a number  of  testimonial 


A Lot  of  Good  Meat 


letters  from  well-knowm  men  in  regard  to 
the  institution  on  various  features  of  its 
service. 


First  National  Bank  of  Clarksville,  Tenn. 
“Some  Bank  Advertisements.”  This  is  a 
collection  of  letters  from  officers  and  direc- 
tors of  the  institution  explaining  its  fitness 
to  handle  the  business  of  the  public. 


Fidelity  Trust  Company,  New  York.  “A 
Little  About  Our  Usefulness.”  A well- 
printed  booklet  giving  a clear  exposition  of 
the  leading  points  of  trust  company  service. 


Albany  Trust  Company,  Albany,  N.  Y. 
An  unusually'  fine  booklet,  deckle-edged  and 
bound  in  boards,  giving  an  interesting  ac- 
count of  this  well-known  company.  It  was 
prepared  by  Charles  H.  Bissikummer,  vice- 
president. 


First  National  Bank,  Chicago,  111.  A sta- 
tistical pamphlet  giving  statements  covering 
capital  and  deposit  accounts,  etc.,  for  a pe- 
riod of  ten  years  in  the  case  of  the  First 
National  Bank  and  for  six  years  in  the  case 
of  the  allied  First  Trust  & Savings  Bank. 


The  American  National  Bank,  Pensacola, 
Fla.  “Saving  Money  by  Mail.”  An  un- 
usually' good  booklet  dealing  with  this  sub- 
ject. 


J.  Hathaway  Pope  & Co.,  New  York. 
“The  Instability  of  Investments.”  A book- 
let taking  up  such  subjects  as  Danger  in 


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106 


THE  BANKERS  MAGAZINE 


i'lDJi.LlXl 

TUT  ST  COM  PAN 


A Good  Novelty  Ad.  of  a New  York  Institution 


Neglect  of  Investments;  Schemes  That  Have 
Absorbed  Money;  Fickleness  of  Supposedly 
Sound  Investments;  Present  Investments 
Formerly  Decried;  Investments  That  De- 
preciate; How  the  Investor  May  Avoid 
Loss. 


Otis  & Hough,  Cleveland,  Ohio.  A thor- 
oughly illustrated  booklet  explaining  the 
business  of  these  investment  bankers. 


Columbus  Savings  & Trust  Company,  Co- 
lumbus, Ohio;  Wachovia  Loan  & Trust 
Company,  Winston-Salem,  N.  C.;  First  Na- 
tional Bank  of  Joliet,  111.  These  three  in- 
stitutions publish  house  organs  in  the  titles, 
respectively,  of  The  Economist,  The  Solicitor 
and  The  Banker.  They  are  all  unusually 
good  and  all  of  a little  different  character. 
We  can  say  unhesitatingly  that  they  are  all 
good  advertising. 


HOW  BANKS  ARE  ADVERTISING 

Note  and  Comment  on  Current  Financial  Publicity 


THE  Merchants  & Manufacturers  Bank 
of  Milwaukee,  Wis.,  uses  a neat  mail- 
ing card  containing  printed  matter 
and  the  statement  is  printed  in  imitation 
typewriter  type  in  the  space  in  the  centre. 


We  are  in  receipt  of  the  following  letter 
from  F.  H.  Allen,  assistant  cashier  of  the 
First  National  Bank  of  Esterville,  Iowa: 


comment  on  it  in  your  advertising  depart- 
ment, offering  such  criticisms  as  may  sug- 
gest themselves. 

We  are  pleased  to  reproduce  the  adver- 
tisement referred  to  hy  Mr.  Allen,  and  by 
way  of  comment  would  say  that  this  is  a 
very  good  bank  ad.,  and  if  Mr.  Allen  keeps 
up  to  the  standard  set-up  of  this  advertise- 
ment, he  can  rest  assured  that  he  is  on  the 
right  track  in  his  advertising. 


A large  number  of  banks  use  post  cards 
as  a form  of  advertising. 

The  First  National  Bank  of  Traverse  City, 
Michigan,  which  is  located  in  a fruit  region, 
sends  out  a weather  bulletin  and  reports  on 
crop  prospects,  etc. 

The  Citizens  Savings  & Trust  Company 
of  Cleveland,  Ohio,  and  the  Northern  New 
Jersey  Trust  Company  of  Edgewater,  N.  J., 
use  some  very  effective  savings  arguments 
on  their  post  cards. 


The  New  Farley  National  Bank  of  Mont- 
gomery, Ala.,  has  a regular  illustrated  series 
of  post  cards  which  it  sends  to  the  chief  col- 
lection clerks  of  out-of-town  banks  from 
which  it  expects  business. 


The  Lowell  (Mass.)  Institution  for  Sav- 
ings advertises  that  it  “does  more  than  safe- 
guard deposits;  it  offers  financial  aid  to  the 
A Practical  Illustration  home-owner.’* 


A Lesson 
In  Saving  Money 

We  show  here  s reduced  copy  of  one  our  deposit  tickets 


oo  which  is  enter* 
posit  of  a small 
savings  account 
years  ago.  The 
9 yaars.  old  now 
a balance  to  his 
which  shows  the 
deposits  and  the 
tiefbs  o n same, 
perseverance  will 
boys  and  girls  can  do  as  well  if  they  but  try.  We  have 
a large  number  of  children's  names  on  our  books  now 
and  would  like  to  have  lots  more 

We  Pay  5 per-cent  on  90  day  Deposits 


ed  the  initial  de* 
’toy  who  opened  a 
kith  ns  about  8 
small  boy  is  only 
md  hie  book  shows 
xedit  of  8267.40, 
vaults  of  peuny 
nterest  lecumula- 
This  shows  what 
accomplish.  Other 


PROVIDENT  SAVINGS  BANK 


PR)  P.  COST,  ChMn 


KSTBUTILLS,  IOWA 


I am  sending  you  a copy  of  a newspaper 
"ad."  recently  published  by  our  savings 
bank.  If  you  consider  it  worthy  of  your 
notice  we  would  be  pleased  to  have  you 


The  .First  National  Bank  of  Northfork, 
W.  Va.,  has  recently  reorganized  its  foreign 
department,  specializing  in  steamship  tickets. 


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BANKING  PUBLICITY 


107 


and  sends  out  a folder  in  English  and  Ital- 
ion  advertising  that  fact. 

The  Monroe  National  Bank  of  Chicago, 
Edwin  F.  Brown,  president,  recently  offered 
as  a premium  for  a savings  account  a year’s 
subscription  to  any  one  of  a list  of  twenty- 
seven  popular  magazines.  The  bank  pays 
three  per  cent,  interest  on  savings.  Mr. 
Brown  is  quoted  in  Printer ? Ink  in  regard 
to  the  scheme  as  follows: 

"There  is  no  string  tied  to  the  offer,’*  said 
Mr.  Brown.  "Of  course,  a number  of  people 
opened  accounts  who  may  withdraw  them  as 
soon  as  the  magazine  begins  to  arrive.  That 
will  be  our  loss.  However,  I think  the  people 
interested  in  reading  such  publications  as 
these  are  not  of  the  ‘quitter’  variety.  It 
should  attract  the  fair-minded  middle 
classes." 


The  First  Mortgage  Guaranty  & Trust 
Company  of  Philadelphia,  of  which  ex- 
Secretary  of  the  Treasury  Leslie  N.  Shaw  is 
president,  is  a very  aggressive  advertiser. 
It  uses  a large  number  of  separate  pieces  of 
follow-up  matter.  It  recently  published  a 
good  booklet  covering  its  banking  by  mail, 
savings  and  checking  account  departments. 
One  of  its  follow-up  letters  reads  as  follows: 

Not  having  received  any  reply  to  our  re- 
cent letter  on* savings,  it  has  just  occurred 
to  us  that  you  mlg.n  be  interested  in  open- 
ing a checking  account,  instead  of  a savings 
account. 

Among  the  bankers,  Philadelphia  is  known 
as  a free  collection  point.  There  are  no 
charges  for  collection  on  Philadelphia 
checks  and  we  accept  checks  or  drafts  on 
all  cities  and  towns  in  the  United  States 
without  charge  for  collection. 

You  can  open  a checking  account  by  mak- 
ing an  initial  deposit  as  low  as  $50  and  we 
allow  from  2%  to  2%%  interest  on  daily 
balances,  depending  upon  the  amount  of  the 


account  and  the  activity  thereof.  A good 
healthy  balance,  with  relatively  few  checks 
per  month,  is  as  well  worth  2%%  interest 
as  others  are  worth  2%.  Some  accounts  at 
certain  seasons  are  worth  3%  Interest. 

You  can  make  deposits  with  us  by  check 
or  draft  on  any  bank  in  the  United  States 
or  by  Post  Office  money  order  or  Express 
money  order. 

If  you  will  write  us  regarding  your  check- 
ing account,  that  is  what  your  dally  balance 
w’ould  average  and  activity  of  your  account, 
we  will  be  very  glad  to  advise  you  just  what 
rate  of  interest  the  account  will  earn. 

We  would  be  very  glad  tQ  have  you  open 
a checking  account  and  hope  to  have  the 
pleasure  of  hearing  from  you  by  return  mail. 


BOOK  REVIEWS 


A Simple  Explanation'  of  Modern  Bank- 
ing Customs.  By  Humphrey  Robinson; 
edited  from  a legal  standpoint  by  W. 
Overton  Harris.  Boston:  Small,  Maynard 
& Co. 

This  is  a clear  and  admirable  explanation 
of  banking  rules  and  customs  and  will  be 
found  useful  to  all  who  have  dealings  with 
the  banks. 

There  are  a few  minor  errors  which 
might  be  corrected  with  advantage  in  later 
editions.  On  page  105  it  is  stated  that 
Meach  national  bank  must  issue  currency 
equal  to  a certain  per  cent,  of  its  capital.” 
TWs  is  incorrect.  The  national  banks  are 


obliged  to  invest  a certain  per  cent,  of  their 
capital  in  United  States  bonds,  but  the  issue 
of  notes  is  not  obligatory.  On  page  94  the 
number  of  reserve  cities  is  placed  at  13. 
It  is  now  much  larger  than  that.  On  page 
106  it  is  stated:  “The  law  says  that  not  more 
than  nine  millions  of  national  bank  notes 
can  be  retired  in  any  one  month.”  This  is 
not  quite  accurate  (see  Section  10,  Act  of 
May  30,  1900). 


BOOKS  RECEIVED 

A Solution  of  Money,  Currency  and 
Banking.  By  Chas.  Albert  Long.  New 
York:  Aberdeen  Publishing  Co. 


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THRrPF.OPLES-  TRUST  COMPANY 


MODERN  FINANCIAL  INSTITUTIONS 


AND  THEIR  EQUIPMENT 


Home  of  The  Peoples  Trust  Company  of  Brooklyn 


THE  Peoples  Trust  Company,  one  of  the 
largest  and  strongest  of  the  trust  com- 
panies in  the  borough  of  Brooklyn, 
was  organized  in  the  summer  of  1889.  There 
were  then  four  trust  companies  established  in 
Brooklyn,  but  it  was  believed  that  there  was 
room  for  another  good  company,  and  so  the 
Peoples  was  launched  with  the  following 

108 


incorporators:  Eugene  G.  Blackford,  Fred- 
erick A.  Sehroeder,  Henry  J.  Cullen,  Jr., 
Frederic  A.  Ward,  Howard  M.  Smith, 
Cornelius  N.  Hoagland,  Jacob  G.  Dettmer, 
Isidore  M.  Bon,  Alonzo  Slote,  John  E. 
Searles,  Jr.,  Solomon  W.  Johnson,  William 
B.  Hill,  Joseph  W.  Carroll,  James  Jourdan, 
Henry  W.  Slocum,  George  L.  Pease,  Daniel 


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MODERN  FINANCIAL  INSTITUTIONS 


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Main  Banking  Room 


One  of  the  Officer*’  Quarter* 


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110 


THE  BANKERS  MAGAZINE 


F.  Lewis,  William  H.  Murtha,  and  George 
P.  Tangeman. 

With  a capital  of  #500,000  and  a paid  in 
surplus  of  #350,000,  the  company  started 
in  business  at  301  Montague  street.  The 
officers  at  that  time  were  William  H.  Mur- 
tha, president;  Frederick  A.  Schroeder, 
first  vice-president;  Horace  J.  Morse,  second 
vice-president;  and  Edward  Johnson,  sec- 
retary. Two  clerks  (of  whom  the  present 
president  was  one),  and  a messenger  con- 
stituted the  working  force.  To-day  the 
volume  of  business  transacted  requires  the 


Increasing  business  and  additions  to  the 
office  force  again  made  it  necessary  to  con- 
sider larger  quarters.  The  company  then 
decided  to  erect  a banking  house  for  its 
own  exclusive  use,  and  the  present  hand- 
some structure,  one  of  the  finest  banking 
buildings  in  the  city  of  New  York,  is  the 
result.  The  company  took  possession  on 
March  36,  1906. 

Exterior  of  Building. 

Everything  that  human  ingenuity  has  de- 
vised has  been  employed  here  to  make  the 


Tmt  Department 


services  of  eight  officers  and  seventv-fivc 
clerks. 

The  company  has  experienced  a remark- 
able growth,  due  to  the  conservative  and 
safe,  yet  progressive,  methods  which  have 
characterized  its  management  since  its  in- 
ception. It  now  operates  three  branches — 
the  Bedford,  the  Wallabout,  and  the  Bay 
Hidge. 

From  the  very  first  day  the  business  of 
the  Peoples  Trust  Company  has  experienced 
a rapid  growth  and  development.  Very 
soon  after  opening  the  capital  was  in- 
creased to  #1,000,000  and  the  surplus  to 
$500,000.  Then  the  original  offices  became 
inadequate  and  in  1890  were  removed  to  173 
Montague  street,  ,where  the  business  was 
conducted  for  seventeen  years. 


building  artistic,  durable,  fireproof  and  con- 
venient both  to  the  public  and  the  em- 
ployes. 

White  Dover  marble  and  polished  Milford 
pink  granite  form  the  materials  used  in  the 
front  facade,  the  architecture  of  which  is 
striking.  Four  monolithic  columns  extend 
from  the  level  of  the  sidewalk  to  the  gabled 
roof,  rendering  a harmonious  finish  to  the 
exterior  that  is  well  set  off  by  the  solid 
granite  of  the  wall.  These  huge  marble 
columns  were  the  largest  blocks  of  marble 
ever  quarried,  each  weighing  twenty-eight 
tons. 

There  are  two  floors,  the  main  and  mez- 
zanine, the  latter  occupying  about  one- 
quarter  of  the  inside  area,  leaving  a domc- 


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MODERN  FINANCIAL  INSTITUTIONS 


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Ladies*  Department 


like  ceiling  over  the  central  structure  that 
affords  an  abundance  of  light  and  air. 

Interior  Arrangements. 

The  interior  of  the  bank  is  finished  in 
carved  San  Domingo  mahogany  and  Afri- 
can Numidian  maruie,  with  United  States 
standard  bronze  work,  and  gray  marble 
flooring.  Around  the  central  corridor  are 
the  tellers’  cages.  The  officers’  quarters 
are  in  the  front  of  the  building,  convenient 
to  both  the  public  and  clerks.  On  the 
mezzanine  floor  are  the  long  desks  used  by 
the  bookkeepers,  and  where  all  clerks  not 
necessarily  brought  in  contact  with  cus- 
tomers find  their  work.  Communication 
between  the  floors  is  had  by  means  of  the 
telautograph.  The  office  of  the  president, 
which  is  also  used  by  the  trustees,  is  fitted 
up  in  a pleasing  color  scheme  of  mahogany 
and  green.  On  the  ground  floor  are  waiting 
rooms  with  consulting  and  writing  rooms 
adjacent  to  the  tellers.  All  the  fixtures 
are  of  uniform  construction  in  bronze. 


Vaults. 

The  rear  of  the  banking  floor  is  occu- 
pied by  the  safe  deposit  and  security  vaults. 
Special  attention  was  paid  to  the  construc- 
tion of  these  vaults,  with  the  result  that  the 
work  is  most  complete  in  every  detail.  The 
architects,  Mowbray  & Uffinger  of  Manhat- 
tan, claim  that  this  part  of  the  bank  is  the 
most  modern  of  its  kind  in  the  world. 

The  safe  deposit  vault  is  particularly  im- 
pressive. It  has  a seven  foot  circular  door 
weighing  fourteen  tons,  the  mechanism  and 
perfect  adjustment  of  which  excite  the 
wonder  and  admiration  of  all  who  see  it. 
Over  1,400  boxes  are  installed  in  the  vault. 

A City  Depository. 

For  many  years  the  company  has  been 
one  of  the  depositories  of  the  city’s  moneys. 
In  the  basement  of  the  company’s  main  of- 
fice is  a spacious  room  fitted  up  as  a regu- 
lar teller's  department,  where,  on  the  first 
of  each  month,  about  $1,000,000  is  paid  out 


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112 


THE  BANKERS  MAGAZINE 


to  the  various  city  employes — policemen, 
firemen,  school  teachers,  etc.  The  scene 
upon  such  occasions  is  very  much  like  a 
“run”  on  the  bank.  The  presence,  however, 
of  so  many  uniformed  officers  in  the  line 
is  an  offset  to  the  apprehensions  which  the 
uninitiated  might  be  inclined  to  entertain 
from  such  evidence  of  tremendous  activity. 

Branches. 

The  Bedford  branch  of  the  company,  lo- 
cated at  the  corner  of  Bedford  avenue  and 


The  company  recently  assumed  control 
of  the  Home  Bank  of  Brooklyn,  situated  at 
the  corner  of  Fifty-fourth  street  and  Fifth 
avenue,  Bay  Ridge,  and  is  at  present  liqui- 
dating its  affairs.  The  bank  is  now  known 
as  the  Bay  Ridge  branch  of  the  company. 
In  the  opening  of  this  branch  the  company 
has  made  a wise  move,  for  there  was  long  need 
for  a strong  bank  or  trust  company  in  that 
section  of  the  borough.  That  the  merchants 
and  business  interests  there  fully  appreciate 
the  establishment  of  a powerful  banking  in- 


Coupon  Rooms 


Halsey  street,  was  acquired  in  February, 
1903,  through  the  purchase  of  the  Bedford 
Bank,  an  old  established  institution  which  had 
had  a successful  existence.  The  investment 
has  proved  a profitable  one,  and  the  growth 
of  this  branch  has  been  in  proportion  to 
the  steady  advance  which  is  being  made 
in  this  section  in  all  directions.  Henry  M. 
Heath,  one  of  the  assistant  secretaries  of 
the  company,  who  was  for  many  years  cash- 
ier of  the  old  bank,  and  who  is  well  and 
favorably  known  in  the  Bedford  district,  is 
in  charge  of  this  branch. 

In  December,  1905,  the  company  took  over 
the  Wallabout  Bank,  located  at  the  corner 
of  Clinton  and  Myrtle  avenues,  which  is 
now  known  as  the  Wallabout  branch.  This 
'branch  is  a great  convenience  to  the  many 
Wallabout  market  merchants  whom  the 
company  numbers  among  its  depositors. 


stitution  in  that  vicinity  is  attested  by  the 
numerous  accounts  which  have  been  received 
since  the  trust  company  has  taken  hold.  The 
Bay  Ridge  section  of  the  borough  is  one  of 
the  most  rapidly  developing  sections  in  the 
city,  and  with  the  completion  of  the  Fourth 
avenue  subway,  that  part  of  the  borough 
will  be  one  of  the  most  populous  and  pro- 
gressive fields  for  business  enterprise. 

The  strength  of  the  company  and  the  con- 
fidence in  it  which  obtains  among  its  nu- 
merous depositors  was  never  better  evidenced 
than  during  the  financial  panic  of  1907, 
when  the  withdrawals  of  deposits  were 
less  than  those  made  upon  any  other  com- 
pany in  the  borough;  to-day  it  leads  all 
the  trust  companies  in  Brooklyn,  with  de- 
posits aggregating  nearly  $19,000,000  and 
total  resources  of  over  $21,000,000. 

Following  is  a statement  of  the  condition 


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MODERN  FINANCIAL  INSTITUTIONS 


113 


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Bookkeepers’  Department 


of  the  company  as  rendered  to  the  State 
Superintendent  of  Banks  at  the  close  of  bus- 
iness on  March  25,  1910: 

RESOURCES. 

New  York  State  and  City  bonds  $984,350.00 


Other  securities  4,245,720.33 

Bonds  and  mortgages  857,729.00 

Time  ioans  and  bills  purchased..  5,495,026.26 

Demand  loans  5,820,335.10 

Cash  and  due  from  banks 3,593,279.55 

Real  estate  532,834.84 

Accrued  Interest  receivable....  127,448.30 


$21,656,723.38 


LIABILITIES. 

Capital  $1,600,000.00 

Surplus  and  undivided  profits...  1,059,393.50 

Reserved  for  taxes  17,856.89 

Unpaid  dividends  264.00 

Deposits  18,829,006.16 

Accrued  Interest  on  deposits 150.202.83 


$21,656,723.38 

The  present  board  of  trustees  is  composed 
of  Brooklyn’s  leading  citizens,  and  their 
connection  with  the  company  is  a guarantee 
of  the  maintenance  of  that  conservative 
policy  which  has  always  been  followed  and 


w'hich  has  stood  for  safety  and  success.  The 
list  follows: 

Charles  A.  Boody,  president. 

David  A.  Boody,  Boodv,  McLellan  & Co. 

Amory  S.  Carhart,  retired. 

William  C.  Courtney,  lawyer. 

Walter  V.  Cranford,  president  Cranford 
Company. 

J.  G.  Dettmer,  retired. 

Charles  M.  Englis,  John  Englis  & Son. 

William  H.  Good,  lawyer. 

William  E.  Harmon,  Wood,  Harmon  & Co. 

William  B.  Hill,  lawyer. 

Solomon  W.  Johnson,  president  American 
News  Company. 

James  Jourdan,  president  Brooklyn  Union 
Gas  Co. 

Adrian  T.  Kiernan,  lawyer. 

W.  Eugene  Kimball,  R.  J.  Kimball  & Co. 

James  McMahon,  retired. 

Horace  J.  Morse,  A.  M.  Kidder  & Co. 

Herbert  L.  Pratt,  Charles  Pratt  & Com- 
pany. 

Charles  E.  Robertson,  Brooklyn  Lumber 
Company. 

Max  Ruckgaber,  Jr.,  Schulz  & Ruckgaber. 

Clarence  W.  Seamans,  president  Union 
Typewriter  Company. 

Howard  M.  Smith,  president  Brevoort 
Savings  Bank. 

Casimer  Tag,  president  German-American 
Bank  of  New  York. 

George  P.  Tangeman,  retired. 

Wm.  H.  Ziegler,  retired. 


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114 


THE  BANKERS  MAGAZINE 


The  present  officers  of  the  company  are 
as  follows:  Charles  A.  Boody,  president; 
J.  G.  Dettmer,  first  vice-president;  Horace 
J.  Morse,  second  vice-president;  Charles  L. 
Schenck,  third  vice-president  and  secretary; 
Henry  M.  Heath,  William  A.  Fischer,  J. 
Frank  Birdsell,  Clarence  I.  McGowan,  as- 
sistant secretaries. 

The  company  has  had  four  presidents  dur- 
ing its  existence.  William  H.  Murtha,  the 
first  president,  died  in  1891  and  was  suc- 
ceeded by  the  Hon.  Felix  Campbell,  who 
continued  in  the  presidency  until  his  death 
in  1902.  Edward  Johnson,  the  then  secre- 
tary, succeeded  Mr.  Campbell.  Upon  the 
death  of  Mr.  Johnson,  in  1907,  Charles  A. 
Boody  was  advanced  from  the  secretaryship 
to  the  head  of  the  company.  Mr.  Boody’s 
minute  knowledge  of  every  detail  of  the  busi- 
ness exceptionally  qualified  him  for  the  suc- 
cessful administration  of  the  company’s 
large  interests,  and  the  position  of  the  com- 


pany to-day  speaks  well  for  his  executive 
ability. 

Charles  L.  Schenck,  the  third  vice-presi- 
dent, has  been  with  the  Peoples  Trust  Com- 
pany over  twenty  years.  He  has  served 
as  receiving  teller,  paying  teller,  assistant 
secretary  and  secretary,  which  last  office 
he  holds  in  conjunction  with  the  vice- 
presidency. 

William  A.  Fischer,  at  present  an  as- 
sistant secretary,  has  also  been  connected 
with  the  Peoples  Trust  Company  over 
twenty  years.  His  rise  from  one  posi- 
tion of  trust  to  another  has  come  about 
through  a genuine  appreciation  of  his 
painstaking  work  in  behalf  of  the  company. 

The  company  has  paid  dividends  since  the 
second  year  of  its  existence,  starting  with 
six  per  cent,  and  increasing  the  rate  to 
twelve  per  cent.,  upon  which  basis  it  has 
been  for  many  years.  Its  stock  is  quoted  at 
810  bid,  with  none  offered. 


PREPARING  NEW  QUARTERS  FOR  THE  FOURTH 
NATIONAL  BANK  OF  NEW  YORK 


OCTOBER  of  this  year  will  see  the 
Fourth  National  Bank  of  New  York 
in  possession  of  the  entire  first  floor 
of  the  building  bounded  by  Pine,  Nassau 
and  Cedar  streets.  Extensive  alterations 
are  now  under  way  which  will  provide  this 
conservative  old  bank  with  one  of  the  finest 
and  best  equipped  banking  rooms  in  the 
city. 

The  entrance  to  the  bank  is  to  be  pro- 


vided for  in  the  central  portion  of  the  build- 
ing, as  shown  in  our  illustration.  This  fea- 
ture is  to  be  attractively  designed.  Doric 
columns  of  granite  will  flank  the  winding 
staircases  of  marble  and  granite  leading  to 
the  main  banking  room,  through  a vestibule 
treated  with  bronze  and  marble  panels.  The 
space  reserved  for  the  public  runs  along  the 
Nassau  street  front  of  the  building  and 


NA3SAV  JTREGT 

General  Floor  Plan  of  the  Building  to  be  Remodeled  for  the  Fourth  National  Bank  of 

New  York 


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115 


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New  Home  of  the  Fourth  National  Bank  of  New  York  aa  it  will  appear  when  the  extensive  alterations  under  way  are  completed 


116 


THE  BANKERS  MAGAZINE 


will  have  a marble  floor,  with  wainscoting 
of  old  English  oak,  extending  to  the  ceiling. 
The  executive  force  will  be  located  in  the 
Pine  street  corner  of  the  new  quarters. 


Entrances  to  the  upper  portions  of  the 
building  will  be  from  the  level  of  Nassau 
street,  between  the  staircases  leading  to  the 
banking  room. 


A BANK  WITH  A HISTORY 

NEW  HOME  OF  THE  FIRST  NATIONAL  BANK  IN  OPERATION  IN  THE 
UNITED  STATES,  DAVENPORT,  IOWA 


THIS  bank’s  new  building,  located  in 
the  very  heart  of  Davenport’s  in- 
dustrial center,  was  designed  and 
constructed  by  Temple,  Burrows  & McLain. 
No  expense  has  been  spared  in  making 
it  a credit  to  the  city  and  state,  and 
in  its  finished  state,  it  presents  a substantial 
appearance.  It  is  constructed  of  cut  stone 
and  mat  finish  vitrified  brick,  and  stands 
six  stories  and  basement.  The  halls  and 
stairways  throughout  the  building  are  well 
lighted;  all  woodwork  has  the  finish  of 
flemish  oak  with  marble  wainscoting  and 
tiled  floors.  The  safe  deposit  vaults  occupy 
the  basement,  the  entrance  being  of  marble 
entire,  giving  at  a glance  that  substantial 
appearance  which  is  rightfully  expected  of 
a place  of  great  security.  There  are  numer- 
ous rooms  for  the  custodians,  coupon  booths, 
consultation  rooms  and  suitable  assembly 


room  for  delegations  or  board  meetings  of 
corporations  who  are  at  all  times  welcome 
to  its  conveniences. 

The  Banking  Room. 

This  is  the  pride  of  the  bank.  The  in- 
terior decorations,  furniture  and  fixtures 
were  designed  and  arranged  by  P.  W.  Dir- 
ham who  represents  the  Wollaeger  Man- 
ufacturing Company  of  Milwaukee,  which 
company  furnished  and  installed  the  en- 
tire equipment.  Regardless  of  size,  it 
would  be  difficult  to  find  a banking  room 
more  fully  displaying  convenience,  beauty 
and  elegance,  with  a masterly  touch 
of  artistic  harmony  in  all  of  its  appoint- 
ments, than  this  one.  The  entire  ves- 
tibule is  of  carefully  selected  imported 
Italian  Pavanazo  marble,  which  is  also  used 
in  the  wainscoting  of  the  main  lobby  and 


MODERN  FINANCIAL  INSTITUTIONS 


117 


Entire  Lower  Floor  of  this  Building  it  given  over  to  the  First  National 
Bank  of  Davenport,  Iowa 


customers’  room.  The  grill  work  is  of 
solid  bronze  in  Verde  Antique  finish  and  the 
furniture  and  wood-work  of  the  entire  room 
is  of  quarter  sawed,  fumed  white  oak,  with 
lofty  beamed  and  panelled  ceiling  moulded 
In  hand-run  plaster  of  paris,  finished  in  old 
ivory. 

Business. 

This  bank  has  been  in  operation  since 
the  time  of  Indians  and  has  surely  gained 
some  valuable  experience  and  some  of  the 


early  records  will  show  that  the  Indians 
themselves  had  money  in  the  bank.  It  has 
a capital  of  $300,000,  a surplus  of  $300,000, 
and  deposits  of  $1,500,000.  It  pays  four 
per  cent,  semi-annual  dividends,  has  com- 
mercial and  savings  departments,  and  is  a 
government  depositary. 

The  officers  ares  Anthony  Burdick,  presi- 
dent; Joseph  R.  Lane,  vice-president;  John 
P.  Van  Patten,  second  vice-president;  Lew 
J.  Yaggy,  cashier,  and  W.  J.  Housman,  as- 
sistant cashier. 


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MODERN  COOPERATION  AT  ITS  BEST 

By  Edward  White 


OF  all  the  cooperative  movements  and 
associations  that  have  been  instituted 
since  the  organization  of  the  first 
building  and  loan  societies  in  England,  in 
the  latter  part  of  the  eighteenth  century, 
history  records  the  fact  that  about  sixty- 
five  per  cent,  have  proven  successful.  Al- 
though the  percentage  is  a large  one,  it 
was  made  in  the  face  of  the  fact  that  many 
of  the  associations  and  societies  organized 
in  different  parts  of  the  world,  with  the 
principle  of  cooperation  as  a basis,  were 
either  lacking  in  practical  methods  or  were 
founded  by  unscrupulous  persons.  Reckon- 
ing, therefore,  with  only  the  good  organi- 
zations as  the  successful  ones,  it  is  quite 
clear  that  cooperation,  both  in  social  eco- 
nomics and  the  science  of  trade  and  in- 
dustry, is  an  unqualified  success. 

The  difference  between  the  two  kinds  of 
cooperative  effort  mentioned  is  well  defined. 
Societies  organized  for  the  promotion  of 
social  economics  have  no  place  in  the  busi- 
ness life  of  a community  or  a nation,  and, 
whether  successful  or  unsuccessful,  do  not 
affect  the  status  of  associations  or  societies 
banded  together  for  mutual  benefit  in  the 
production  or  distribution  of  commodities.  ( 
Cooperation,  as  applied  to  organizations  of 
the  latter  class,  has  a specific  and  technical 
sense,  and  means,  strictly,  the  encourage- 
ment of  thrift  and  the  conservation  of 
energy  and  resources. 

The  first  industrial  cooperative  societies, 
both  in  this  country  and  in  England,  were 
formed  about  the  middle  of  the  last  century, 
by  working  men,  in  an  attempt  to  do  away 
with  the  employer,  and  yet  virtually  all  of 
those  that  are  still  in  existence  are  simply 
joint  stock  corporations,  dominated  by  men 
who  formerly  would  have  been  called  em- 
ployers, but  who  are  now  known  as  officials. 
If  this  is  demonstrative  of  anything,  it  is 
the  fact  that,  after  all,  successful  coopera- 
tion means  successful  management.  The 
distribution  of  profits  is  a very  simple  mat- 
ter, but  the  production  and  marketing  of 
the  commodities  that  make  the  profits  con- 
stitute a much  more  difficult  problem.  This 
is  a competitive  age,  and  the  competition 
must  be  met  by  men  of  ability,  sagacity  and 
business  foresight,  or  the  enterprise  will 
come  to  naught. 

Starting  on  Historic  Ground. 

It  was  fitting  that  the  first  and  only  suc- 
cessful cooperative  organizative  formed  for 
118 


the  manufacture  and  distribution  of  farm  im- 
plements, machinery  and  vehicles,  should  be 
established  at  Plano,  Illinois.  From  the  year 
1857,  when  the  Marsh  Brothers,  of  Marsh 
Harvester  fame,  built  their  plant  and  began 
operations  at  Plano,  until  1902,  the  city  led 
the  world  in  the  manufacture  of  harvesting 
machinery.  Here  was  the  scene  of  the  ac- 
tivities of  such  men  as  C.  W.  and  W.  W. 
Marsh,  John  Hollister,  William  Deering,  E. 
H.  Gammon,  Lewis  Steward,  John  F.  Stew- 
ard, W.  H.  Jones,  and  others  eminent  in 
the  industrial  world,  and  the  name  Plano 
was  synonymous  with  the  best  of  everything 
in  the  line  of  agricultural  implements. 

Birth  of  Practical  Cooperation. 

By  the  year  1905,  three  years  after  the 
absorption  of  the  Plano  Manufacturing 
Company  by  the  trust,  the  citizens  of  Plano 
had  grown  weary  of  the  deprivation  of  their 
chief  industry,  and  began  casting  about  for 
a leader  to  guide  them  from  their  path  of 
misfortune.  At  that  time  W.  C.  Thompson 
of  Chicago  came  upon  the  scene,  and  im- 
mediately began  the  work  of  organizing 
the  Independent  Harvester  Company  on  a 
cooperative  basis.  Mr.  Thompson,  besides 
being  a successful  business  man,  was  a 
student  of  latter-day  economics,  and  fore- 
saw, not  only  the  possibility,  but  the  actual 
necessity  for  that  kind  of  effort.  His  range 
of  vision  enabled  him  to  see  that  with  the 
products  of  agriculture  in  the  United  States 
already  reaching  several  billion  dollars  a 
year,  and  increasing  at  the  rate  of  more 
than  a billion  dollars  every  twelve  months, 
there  must  be  a magnificent  field  of  en- 
deavor in  the  work  of  saving  to  the 
farmer  something  of  the  millions  upon  mil- 
lions that  was  annually  wasted  in  excessive 
prices  for  machinery,  implements  and 
vehicles.  Actual  competition  with  the  trust 
was  out  of  the  question — rendered  abso- 
lutely impracticable  by  its  immense  capital- 
ization. Cooperation,  therefore,  was  the 
only  solution,  and  that  was  begun  by  se- 
curing as  members  of  the  Independent  Har- 
vester Company  about  two  hundred  Kendall 
county  farmers,  each  one  of  whom  became 
a stockholder  in  the  corporation. 

Rapid  and  Substantial  Development. 

The  years  1906,  1907  and  1908  were  spent 
in  perfecting  the  organization  and  its  plans, 
and  in  the  erection  of  foundry,  blacksmith 


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MODERN  COOPERATION  AT  ITS  BEST 


119 


shop,  wood-working  shop  and  paint-shop. 
Those  were  not  years  of  idleness,  but  of 
great  preparatory  activity.  Skeptical  peo- 
ple, who  failed  to  grasp  the  situation,  were 
wont  to  criticise,  and  even  censure,  what 
appeared  to  them  a wanton  waste  of  time 
and  money,  as  they  saw  the  buildings  of 
concrete  and  steel  going  up  and  up-to-date 
equipment  going  into  them.  A tract  of 
land,  covering  nearly  a quarter  of  a section, 
and  stretching  along  the  railroad  track  more 
than  three-quarters  of  a mile,  was  pur- 
chased. Here  the  buildings  were  erected, 
and  here  the  experimental  farm,  that  is 
proving  so  useful  to  the  company,  was  es- 
tablished. From  the  gravel  beds,  on  Big 
Rock  creek,  on  the  farm,  is  taken  all  the 
gravel  necessary  in  the  manufacture  of  the 
concrete  used  in  the  construction  of  the 
buildings. 

At  the  beginning  of  the  year  1909,  the 
company  was  ready  for  real  business,  and 
by  its  close,  several  of  the  buildings  had 
been  enlarged,  a storeroom  and  warehouse, 
100x152  feet,  had  been  erected,  950  men 
were  at  work  in  the  shops  and  offices,  a 
business  of  $100,000  had  been  transacted, 
and  a reasonable  outlook  attained  for  more 
than  half  a million  dollars  in  1910. 

What  a transformation  from  the  strug- 
gling days  of  1906,  with  two  men  as  the 
office  force  and  six  men  in  the  shops!  The 
closing  days  of  the  season  of  1909  set  the 
seal  of  great  success  u£on  the  future  of  the 
Independent  Harvester  Company,  and  made 
the  coming  days  look  bright  indeed. 

Modern  Buildings  and  Equipment. 

The  buildings  and  equipment  of  the  com- 
pany are  of  the  most  modern  type  in  con- 
struction and  arrangement.  In  the  main 
group  there  are  six  fire-proof  structures, 
covering  in  all  several  acres  of  ground  space, 
and  so  constructed  as  to  secure  ample  light 
and  ventilation,  thus  insuring  the  minimum 
of  risk  to  life  and  health  and  the  maximum 
of  efficiency  on  the  part  of  the  employes. 
A trip  through  the  buildings  shows  that 
the  men  are  all  working  under  the  most 
favorable  conditions  possible,  and  that  the 
company  evidently  regards  their  health  and 
well-being  as  a distinctive  asset. 

The  various  departments  are  in  charge 
of  men  thoroughly  skilled  and  trained  in 
each  particular  line.  Every  one  appears  to 
realize  the  responsibility  that  rests  upon 


him — that  machinery  of  the  very  highest 
grade  is  to  be  turned  out,  and  that  his 
department  must  “make  good”  in  the 
strongest  sense  of  the  term.  When  a ma- 
chine or  a vehicle,  or  a device  of  any  kind 
goes  to  the  farmer  with  the  word  “Inde- 
pendent” stamped  upon  it,  it  goes  with  the 
absolute  guaranty  of  the  Independent  Har- 
vester Company,  and  every  employe  feels 
that  he  has  a share  in  that  guaranty.  Many 
of  the  employes  are  stockholders  in  the 
corporation,  and,  therefore,  have  a direct 
interest  in  its  affairs.  Others  are  sons  of 
stockholders,  who  have  turned  their  atten- 
tion to  mechanical  pursuits. 

Perfect  Facilities. 

The  facilities  of  the  company  are  gradu- 
ally reaching  a state  of  perfection.  They 
make  their  own  metal  patterns,  wood  pat- 
terns, grey  castings,  and  other  preliminary 
essentials,  and  keep  a full  stock  of  parts 
and  supplies  at  all  their  distributing  stations. 
Their  principal  warehouses  are  at  Omaha, 
Wichita,  Watertown,  Minneapolis,  Des 
Moines,  Fort  Dodge,  Madison  and  Kansas 
City.  At  the  manufacturing  plants,  they 
turn  out,  in  unlimited  quantities,  binders, 
mowers,  manure  spreaders,  wagons,  gaso- 
line engines  (three  to  thirty  horse-power), 
cream  separators,  seed  corn  graders,  grain 
elevators,  dumps,  plows,  planters,  etc. 

W hat  The  Future  Must  Hold. 

With  such  an  equipment,  operated  under 
the  direction  of  a corps  of  managers  that  has 
already  demonstrated  its  ability,  and  with 
a broad  and  comprehensive  financial  devel- 
opment plan,  there  is  nothing  in  the  way 
of  a successful  future  for  the  Independent 
Harvester  Company.  An  article  in  The 
Bankers  Maqaztne  for  May,  1910,  clearly 
reveals  the  solidity  of  the  monetary  founda- 
tion of  the  company,  and  the  success  of  the 
management  in  building  that  foundation 
and  attaining  the  present  high  degree  of  per- 
fection in  economic  organization,  shows  that 
the  affairs  of  the  company  are  in  the  hands 
of  the  right  element. 

All  these  fundamental  features  being 
propitious  and  favorable,  the  future  simply 
turns  upon  the  development  of  agriculture 
in  the  United  States,  or,  it  may  be  said, 
throughout  the  world,  for  the  limitations  of 


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THE  BANKERS  MAGAZINE 


the  field  can  only  be  placed  upon  the 
tillable  land  which  the  earth  contains. 

Growth  of  Population  and  Wealth  an 
Index. 

Although  the  growth  of  population  and 
wealth  in  the  United  States  has  indeed 
been  remarkable,  future  development  is 
sure  to  be  even  greater  and  of  a 
more  substantial  character  than  that  of 
the  past.  From  1850  to  1870  the  popu- 
lation grew  from  twenty- three  millions 
to  thirty-eight  millions,  or  at  the  rate  of 
about  seven  hundred  and  fifty  thousand  a 
year.  From  1870  to  1908  the  increase  was 
from  thirty-eight  millions  to  eightv-seven 
millions,  or  at  the  rate  of  one  million  three 
hundred  thousand  a year.  From  1850  to 
1870  the  wealth  of  the  country  grew  from 
$7,135,000,000  to  $30,068,000,000,  or  at  the 
rate  per  year  of  $1,100,000,000.  From  1870 
to  1904,  there  was  a growth  from  $30,063,- 
000,000  to  $107,104,000,000,  or  at  the  yearly 
rate  of  $2,260,000,000. 

The  figures  presented  by  articles  men- 
tioned show  that  the  development  of  agricul- 
ture, although  apparently  very  rapid,  has 
not  any  more  than  kept  pace  with  the 
growth  of  population  and  wealth,  and,  there- 
fore, we  see,  by  putting  the  two  statistical 
paragraphs  together  that  absolute  necessity 
will  compel  a still  greater  development  in 
the  future  in  every  line  of  agricultural  pur- 
suit. This  must  be  the  result  if  the  people 
of  the  world  are  properly  fed,  and  the 
advancement  of  civilization  warrants  the 
assumption  that  they  will  be. 

Only  One  Correct  Deduction. 

There  can  be  but  one  deduction  made 
from  the  above  that  will  stand  the  test  of 
actual  experience,  and  that  is  that  the  manu- 
facture and  distribution  of  agricultural  im- 
plements and  machinery  on  a practical  co- 
operative basis,  which  will  secure  a saving 
to  the  consumer,  will  not  only  prove  a bless- 
ing to  mankind,  but  a profitable  investment 
as  well. 

Illinois  has  always  led  the  world  in  the 
manufacture  of  agricultural  implements,  anil 
it  is  now  so  far  in  advance  of  every  other 
commonwealth  that  its  supremacy  is  secure. 
Its  transportation  facilities  are  unequaled, 
more  than  fifty  per  cent,  of  the  railroad 
mileage  of  the  United  States  being  credited 
to  the  trunk  lines  that  traverse  its  territory. 


Coal,  the  basis  of  all  manufacturing  on  « 
large  scale,  is  right  at  the  door  of  every 
industrial  center  in  the  state;  in  fact,  the 
coal  area  of  Illinois  is  nearly  three  times  the 
coal  area  of  the  Pittsburgh  district,  known 
as  the  workshop  of  the  world,  and  more 
than  three  times  the  coal  area  of  all  Great 
Britain. 

In  the  year  1909  the' value  of  agricultural 
implements  produced  in  the  state  was  ap- 
proximately $100,000,000,  which  amount  was 
within  one  million  dollars  of  equaling  the 
total  amount  of  the  product  of  the  United 
States  in  the  year  1900.  In  the  latter  year 
the  value  of  the  Illinois  product  reached 
$42,033,796,  or  about  forty-two  per  cent  of 
the  total  for  the  entire  country.  If  there 
is  added  to  the  agricultural  machinery  and 
implements  manufactured  in  Illinois  the 
vehicles,  such  as  wagons,  buggies,  automo- 
biles, etc.,  produced  for  the  farmers,  we 
have  a total  value  of  $175,000,000  for  the 
year  1909. 

The  Drift  of  Results. 

The  geographical  economy  of  the  location 
of  Plano,  the  home  of  the  Independent 
Harvester  Company,  makes  sure  its  rise  in 
the  industrial  world.  Sixty  per  cent,  of  the 
agricultural  products  annually  gathered  in 
the  United  States  are  credited  to  the  twelve 
north  central  states,  of  which  Illinois  is  the 
center.  Plano  is  already  known  throughout 
this  great  productive  region,  and  its  fame 
is  rapidly  spreading  to  the  farthermost  parts 
of  the  continent,  and  it  will  ere  long  become 
a market  for  all  the  world  for  the  best  and 
cheapest  there  is  in  harvesting  machinery* 
Already  farmers  from  distant  parts  of  the 
country  are  making  pilgrimages  to  the  beau- 
tiful little  Illinois  city,  where  they  spend  a 
pleasant  day  or  two  inspecting  the  plant  of 
the  Independent  Harvester  Company,  in 
which  they  have  a direct  interest,  and  in 
enjoying  the  hospitality  of  the  company  in 
its  own  quarters.  They  leave  the  place 
feeling  satisfied  that  they  have  linked  their 
fortunes  with  an  enterprise  that  is  at  once 
honest,  prosperous,  progressive. 

The  drift  of  results  is,  therefore,  favor- 
able to  the  city  of  Plano  and  the  Company. 
Their  eminence  is  assured,  and,  while  their 
path  to  the  goal  may  have  been  through 
great  difficulties,  it  will  yet  be  glorified  by 
their  achievements. 


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BANKING  AND  FINANCIAL  NOTES 


NEW  YORK  CITY 

— Lawrence  Lewis  Gillespie,  vice-presi- 
dent of  the  Equitable  Trust  Company,  who 
has  been  elected  a trustee  of  the  Green- 
wich Savings  Bank,  is  one  of  New  York’s 
younger  trust  company  men,  having  been 
bom  thirty-four  years  ago.  He  was  grad- 
uated from  Harvard  in  1898,  and  has 
traveled  around  the  world  and  served  as  a 
lieutenant  in  the  First  United  States  volun- 
teer engineer  regiment  in  Porto  Rico. 

— The  Mercantile  Trust  Company  has 
purchased  the  Mercantile  Safe  Deposit 
Company,  located,  like  the  trust  company, 
in  the  Equitable  building  at  125  Broadway. 
The  Mercantile  Safe  Deposit  Company  was 
organized  in  1870.  Its  officers  are  presi- 
dent, William  Giblin;  vice-president,  Wil- 
liam C.  Poillon;  treasurer,  John  B.  Rus- 
sell and  secretary,  E.  M.  Billings. 

— Following  the  election  of  S.  D.  Scud- 
der  as  president  of  the  Jefferson  Bank  and 
his  purchase  of  an  important  interest  in 
that  institution,  the  following  have  been 
added  to  the  directorate:  Christian  Bahn- 
sen,  of  C.  Bahnsen  & Company;  James  F. 
Fargo,  treasurer  American  Express  Com- 
pany, and  Richard  J.  Scoles,  a New  Jer- 
sey banker,  formerly  vice-president  of  the 
Trust  Company  of  America.  This  com- 


Bronze  and  Iron  Work  for  Banks 


Cast  Bronze  Signs  and  Tablets 
BRONZE  COUNTER  SCREENS 
Wire  Mesh  Enclosures 

To  Special  Design 

JNO.  WILLI  A >18  INC.  Bronze  Foundry, 
256  Went  27th  Street,  Nevo  York , publishes  the 
Magazine  “ American  Art  in  Bronze  and  Iron."  il- 
lustrating Bank  Counter  Screens,  Tablets,  Sigus, 
etc.  Copies  free  to  Bankers. 

**  Your  Architect  knows  jno.  Williams  Inc" 


Merchants  National  Bank 

RICHMOND,  VA. 

Oapltal  $200,000 

Surplus  and  Profits,  912,000 

This  bank  is  the  largest  depository  for 
banks  between  Baltimore  and  New  Orl- 
eans. It  Is  Virginia’s  most  successful 
National  Bank.  It  has  the  best  facilities 
for  handling  items  on  the  Virginias  and 
Carolinas.  Collections  carefully  routed. 

Correspondence  Solicited 


pletes  the  number  of  directors  provided  for 
by  the  present  by-laws,  which  it  is  intended 
to  amend  later  for  an  enlargement  of  the 
board. 

— The  German  Savings  Bank  of  New 
York,  with  deposits  of  more  than  $75,000,- 
000,  and  one  of  the  “Big  Four”  of  New 
York  savings  institutions,  has  decided  not 
to  cut  the  interest  rate  from  four  to  three 
and  one-half  per  cent,  as  recommended  at 
a recent  conference  by  Superintendent  Che- 
ney of  the  state  banking  department. 

— Ability  and  personality,  coupled  with 
long  and  able  service,  have  again  received 
the  recognition  which  they  deserve  in  the 
appointment  of  Samuel  Red  fern  as  as- 
sistant cashier  of  the  Mercantile  National 
Bank. 

Mr.  Redfem  has  been  connected  with  the 
bank  for  a period  of  nearly  thirty  years, 
latterly,  for  some  years,  as  loan  clerk,  in 
which  important  position  his  work  has  at- 
tracted favorable  attention. 

Mr.  Redfern  began  his  banking  experi- 
ence in  the  Hanover  National  Bank  in  De- 
cember, 1878,  as  messenger.  In  1880  he 
was  appointed  assistant  bookkeeper  and  in 
1881  was  promoted  to  bookkeeper.  He  re- 
signed from  the  Hanover  on  October  10, 
1881,  to  take  a similar  position  with  the 
Mercantile  National  Bank,  Col.  Geo.  W. 

121 


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B-V.  SYSTEM  FOR  LOANS  AND  DISCOUNTS 

ONE  WRITING,  WITH  EITHER  PEN,  PENCIL  OR  TYPEWRITER,  MAKES  THE 

DISCOUNT  REGISTER,  LIABILITY  LEDGER 
AND  MATURITY  TICKLER 

THE  M08T  PRACTICAL  8Y8TEM  EVER 
DEVI8ED  FOR  THE  PURPOSE.  ADAPT- 
ABLE TO  BANK8  OF  ALL  8IZE8.  FOR 
FULL  PARTICULARS  WRITE  TO 

BAKER- VAWTER  COMPANY 

( JONES  PERPETUAL  LEDGER  CO.) 

CHICAGO  NEW  YORK 


Perkins,  formerly  cashier  of  the  Hanover 
National  Bank,  having  been  elected  to  the 
presidency  of  the  Mercantile.  Mr.  Red- 
fern  was  in  charge  of  the  bookkeeping  de- 
partment of  the  Mercantile  from  18813  to 


SAMUEL  REDFERN 
Newly  Appointed  Assistant  Cashier  of 
the  Mercantile  National  Bank 


1901  when  he  was  appointed  loan  clerk, 
which  position  he  has  filled  continuously 
until  his  appointment  as  assistant  cashier. 

Ilis  ability  and  winning  personality  have 
made  him  as  well  and  favorably  known  in 
social  and  fraternal  circles,  as  in  the  bank- 
ing world,  and  the  prominence  he  has  at- 
tained in  the  many  organizations  with  which 

122 


he  is  connected  testifies  to  the  high  esteem 
in  which  he  is  held.  The  efficiency  which 
has  marked  his  work  as  a clerk  presages 
still  greater  results  in  his  newer  and  broader 
field. 

— The  trustees  of  the  Bowery  Savings 
Bank  have  declared  the  semi-annual  divi- 
dend of  earnings  for  the  six  months  ended 
June  30  at  the  annual  rate  of  three  and 
one-half  per  cent. 

This  rate  for  the  disbursement  of  “divi- 
dends'’ on  interest  deposits  was  established 
last  winter  after  four  per  cent,  had  been 
paid  for  several  years.  It  was  a foregone 
conclusion  that  the  three  and  one-half  per 
cent,  rate  would  be  continued  this  summer. 

— By  mutual  consent  the  partnership  ex- 
isting and  conducting  business  under  the 
firm  name  of  Wilkinson,  Reckitt,  Williams 
& Company,  certified  public  accountants, 
has  been  dissolved.  Henceforth  the  bus- 
iness in  New  York,  Philadelphia  and  the 
East  will  be  conducted  under  the  name 
of  George  Wilkinson  & Company,  with  the 
same  offices  at  No.  52  Broadway,  New 
York  city,  and  Mutual  Life  building,  Phil- 
adelphia. 

— The  seventeenth  annual  convention  of 
the  New  York  State  Bankers’  Association 
will  be  held  on  July  14  and  15,  at  Otsega 
Lake,  Cooperstown,  N.  Y.  A splendid  pro- 
gram has  been  arranged. 

— The  Washington  Trust  Company  has 
elected  these  trustees:  William  F.  Whiting, 
treasurer  Whiting  Paper  Company;  Wil- 
liam H.  Childs,  Wee-president  Ameriican 
Coal  Products  Company;  Brent  Good, 
president  Carter  Medicine  Company. 

— For  the  six  months  ending  June  30, 
the  Union  Dime  Savings  Bank  will  pay  a 
dividend  at  the  rate  of  three  and  one-half 
per  cent,  per  annum,  in  place  of  four  per 
cent.,  which  it  has  heretofore  credited  to 
deposits.  In  this  step  the  Dime,  which  has 
deposits  of  about  $29,000,000,  follows  the 


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EASTERN  AND  SOUTHERN  BANKERS’  TOUR 

To  Thirty-sixth  Annual  Convention 

American  Bankers  Association 

Los  Angeles,  Cal.,  October  3rd  to  7th,  1910 

SPECIAL  TRAIN  DE  LUXE 

via 

New  York  Central  Lines 


Over  400  bankers  and  friends  from  the  East  and  South 
have  engaged  accommodations  on  the  Bankers’  Special  to  be 
run  under  the  auspices  of  the  New  York  State  Bankers’ 
Association  in  co-operation  with  the  Bankers’  Associations  of 
Massachusetts,  Virginia,  West  Virginia,  North  Carolina  and 
South  Carolina. 

Traveling  with  this  party  will  afford  opportunity  of 
meeting  prominent  bankers  from  all  over  the  East.  Make 
arrangements  at  once  in  order  to  be  sure  of  accommodations. 
Beautifully  illustrated  itinerary  which  covers  the  Grand 
Canyon,  North  Pacific  Coast  and  Canadian  Rockies  sent  on 
request. 

Applications  for  reservations  or  additional 
information  may  be  addressed  to  L.  F.  Vos- 
burgh,  Assistant  General  Passenger  Agent, 

New  York  Central  Lines.  1216  Broadway, 

New  York.  Telephone  6310  Madison. 


COMMITTEE  ON  TRANSPORTATION  AND  ARRANBEMENTS 

LEDYARD  COOSWELL,  President  New  York  State  National  Bank,  Albany,  N.  Y.;  President 
New  York  8tate  Bankers’  Association. 

CHARLES  ELLIOT  WARREN,  Chairman,  Vice-President  Lincoln  National  Bank,  New  York. 
DAVID  H.  PIERSON,  Cashier,  Bank  of  Manhattan  Co.,  Ntw  York. 

E.  S.  TEFFT,  Cashier,  First  National  Bank,  Syracuse,  N.  Y. 

HIRAM  K.  8MITH,  President,  Bank  of  Rockville  Center,  Rockville  Center,  N.  Y. 


1/3 


Digitized  by 


Google 


Capital  - $6,000,000 
Surplus  - $6,000,000 

The  Mechanics 


Depository  of  the 
United  States,  State 
and  City  of  New  York 


and  Metals  National  Bank 


OF  THE  CITY  OF  NEW  YORK 

^ OATES  W.  McGARRAH,  President. 

ALEXANDER  E.  ORR,  Vice-President  WALTER  F.  ALBERTSEN,  Cashier. 

NICHOLAS  F.  PALMER,  Vice-President.  JOSEPH  S.  HOUSE.  Asst.  Cashier. 

ANDREW  A.  KNOWLES,  Vice-President.  ROBERT  U.  GRAFF.  Asst.  Cashier. 

FRANK  O.  ROE,  Vice-President.  JOHN  ROBINSON,  Asst.  Cashier. 


action  taken  last  January  by  the  Dry  Dock 
Savings  Institution,  the  Bowery  Savings 
Bank,  the  North  River  Savings  Bank,  the 
Union  Square  Savings  Bank  and  the  Italian 
Savings  Bank. 

NEW  ENGLAND  STATES 

— The  annual  meeting  and  dinner  of  the 
National  Bank  Cashiers’  Association  of 
Massachusetts  was  held  at  the  American 
House,  Boston,  June  2 , and  fifty  members 
and  guests  were  present. 

The  following  officers  were  elected:  C.  L. 
Brigham  of  Hudson,  president;  J.  H.  Gif- 
ford of  Salem  and  Ralph  P.  Alden  of 
Springfield,  vice-presidents;  W.  L.  Nicker- 
son of  Melrose,  secretary;  F.  L.  Oaks  of 
South  Framingham,  treasurer;  \V.  B.  Smith 
of  Brockton,  W.  F.  Houston  of  Newbury- 
port,  S.  R.  Stevens  of  Marlboro  and  B.  W. 
Guernsey  of  Wellesley,  executive  commit- 
tee. 

President  F.  E.  Bruce  of  Lynn  was  toast- 
master and  the  guests  and  speakers  were 
President  Allen  T.  Treadway  of  the  Senate 
and  Rev.  Frederick  W.  Buis  of  Salem. 

— Stockholders  of  the  Lincoln  National 
of  Bath,  Me.,  have  ratified  the  action  of  the 
directors  in  the  matter  of  the  propqped 
consolidation  with  the  First  National,  on 
a basis  of  share  for  share.  The  new  insti- 
tution will  be  known  as  the  First  National 
and  will  have  a capital  of  $400,000.  The 
officers  are  to  be  J.  R.  Andrews,  president; 


Oliver  Moses  and  Fred  H.  Low,  vice-presi- 
dents; W.  A.  Shorey,  cashier. 

EASTERN  STATES 

— Eugene  S.  Reilly  has  been  elected  first 
vice-president  of  the  Washington  TVi$st 
Company  of  Pittsburgh,  to  succeed  the  late 
Isaac  R.  Whitaker.  Mr.  Reilly  had  been 
second  vice-president  of  the  institution,  and 
he  is  replaced  in  that  office  by  Edward 
Kelly,  Jr.  S.  G.  Gallupe,  cashier  of  the 
Washington  National  Bank,  has  been 
chosen  secretary  of  the  trust  company. 
Two  new  directors  of  the  latter  are  Max 
Perlman,  its  treasurer,  and  John  P.  Harris. 

— The  surplus  fund  of  the  Mellon  Na- 
tional Bank  of  Pittsburgh,  which  was  in- 
creased to  $3,000,000  in  May  through  the 
addition  of  $100,000  from  undivided  profits, 
has  been  enlarged  to  $3,100,000  through  the 
transfer  of  another  $100,000  from  the  un- 
divided profits  account. 

— J.  G.  Jennings  has  been  elected  presi- 
dent of  the  Columbia  National  Bank  of 
Pittsburgh  to  succeed  his  brother,  E.  H. 
Jennings,  who  resigned.  Robert  J.  David- 
son, president  of  the  Guarantee  Title  and 
Trust  Company,  was  elected  second  vice- 
president.  Edmund  W.  Mudge  has  been 
made  a director.  The  other  officers  are 
John  A.  Bell,  first  vice-president;  William 
C.  Lowrie,  cashier,  and  T.  M.  Jones,  as- 
sistant cashier. 

--S.  Pemberton  Hutchinson,  president  of 
the  Westmoreland  Coal  Company  and  of 
the  Penn  Gas  Coal  Company,  has  been 
chosen  to  succeed  the  late  Edmund  H.  Mc- 
Cullough as  a director  of  the  Farmers  and 
Mechanics*  National  Bank  of  Philadelphia. 

— The  proposition  to  increase  the  capi- 
tal of  the  American  Bank  of  Philadelphia 
from  $100,000  to  $200,000  was  ratified  by 
the  stockholders  on  June  6.  The  bank  an- 
nounces the  addition  of  $10,000  to  the  sur- 


124 


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125 


plus,  making  the  latter  $20,000.  It  also 
reports  undivided  profits  of  $19,000.  The 
institution  began  business  in  June,  1908. 
The  present  is  the  second  addition  to  capi- 
tal. The  amount,  originally  $50,000,  was 
increased  to  $100, (MX)  in  March,  1909. 

— Thomas  Gamon,  Jr.,  has  been  elected 
assistant  treasurer  of  the  First  Mortgage 
Guarantee  & Trust  Company  of  Philadel- 
phia to  take  the  place  of  Charles  Lafferty, 
who  resigned  to  become  cashier  of  the  Vine- 
land  (N.  J.)  National  Bank.  Mr.  Gamon 
was  chief  clerk  of  the  Corn  Exchange  Na- 
tional Bank  of  Philadelphia. 

— John  P.  MacBean  has  been  chosen 
president  of  the  Wayne  Junction  Trust 
Company  of  Philadelphia  to  succeed  James 
A.  Hayes,  resigned.  Mr.  Hayes,  who  with- 
drew from  the  presidency  because  of  the 
pressure  of  private  business  interests,  was 
presented  with  a loving  cup  by  the  directors. 

— Action  on  the  question  of  changing  the 
par  value  of  the  stock  of  the  Tradesmen’s 
National  Bank  of  Philadelphia  from  $50  to 
$100  per  share  will  be  taken  by  the  stock- 
holders on  July  12.  No  change  will  be 
made  in  the  capital. 

The  movement  to  increase  the  par  value 
of  the  shares  arises  from  the  desire  to  place 
the  stock  on  the  same  basis  as  that  of  the 
majority  of  the  Philadelphia  National 
banks.  The  Tradesmen’s  National  has  a 
capital  of  $500,000  and  surplus  and  profits 
of  $799,144. 

— Horace  H.  Lee  has  been  elected  secre- 
tary and  treasurer  of  the  Philadelphia  Stock 
Exchange  to  fill  the  vacancy  resulting  from 
the  death  of  J.  Bell  Austin.  Mr.  Lee  is  a 
former  president  of  the  Stock  Exchange. 

— The  final  session  of  the  fifteenth  an- 
nual convention  of  the  Maryland  State 
Bankers’  Association,  held  in  Baltimore, 
came  to  a close  June  23,  with  the  election 
of  officers.  Those  elected  were: 

President,  Joshua  W.  Miles,  Princess 
Anne;  vice-presidents,  Waldo  Newcomer, 
Baltimore;  M.  E.  Doll,  Frederick;  Charles 


RUDOLPH  GUENTHER 

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THE 

GARFIELD 
NATIONAL  BANK 

Fifth  Avenue  Building 

Corner  Fifth  Ave.  and  Twenty-Third  Street 

NEW  YORK 

CAPITAL  SURPLUS 

$1,0010,000  $1,000,000 

OFFICERS 
RUEL  W.  POOR.  President 

JAMES  McCUTCHEON,  Vice-Prea. 
WILLIAM  L.  DOUGLASS.  Cashier 
ARTHUR  W.  SNOW.  Asst.  Cash. 

DIRECTORS 

James  McCutcheon  Samuel  Adams 
Charles  T.  Will*  William  H.  Gelshenea 
Ruel  W.  Poor  Morgan  J.  O’Brien 

Thomas  D.  Adams 


E.  llieman,  Baltimore;  William  McKenney, 
Centreville;  George  Cator,  Baltimore; 
George  R.  Gehr,  Westminster;  Isaac  L. 
Price,  Salisbury;  Lewis  J.  Ort,  Midland; 
Charles  Spillman,  Baltimore;  J.  Henry 
Cook,  Baltimore;  secretary,  Charles  Hann, 
Baltimore;  treasurer,  William  Marriott, 
Baltimore;  committee  of  administration, 
Joseph  D.  Baker,  Frederick;  Robert  Shri- 
ver,  Cumberland;  H.  B.  Wilcox,  Baltimore; 
W.  B.  Copper,  Chestertown;  Charles  T. 
Crane,  Baltimore. 

Following  the  session  a meeting  of  the 
Maryland  members,  who  are  members  of 
the  American  Bankers’  Association,  was 
held,  at  which  Albert  D.  Graham,  of  Bal- 
timore was  nominated  as  the  member  of 
the  executive  council  of  the  national  asso- 
ciation from  Maryland.  H.  H.  Haines,  of 
Rising  Sun,  was  named  as  the  vice-president 
from  Maryland,  and  Morris  Grape,  Bal- 
timore, as  delegate. 

— W.  A.  H.  Churcn  has  been  selected  to 
succeed  F.  C.  Stevens  as  president  of  the 
Commercial  National  Bank  of  Washington, 
D.  C.  Mr.  Church  is  a senior  member  of 
Church  & Stevenson,  lumber  dealers,  and 
a member  of  the  Board  of  Trade.  He  knows 
practically  “everybody  in  Washington.” 

— F.  W.  Dunbar  has  replaced  C.  W.  An- 
derson as  president  of  the  First  National 
Bank  of  Montclair,  N.  J.  F.  W.  Fulle  has 
become  vice-president,  succeeding  Mr.  Dun- 
bar, and  A.  T.  Gibbs,  heretofore  assistant 
cashier,  takes  the  place  of  H.  F.  Adams 
as  cashier.  The  institution  began  business 
last  year. 


Digitized  by 


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126 


THE  BANKERS  MAGAZINE 


SAVOY  TRUST 
COMPANY 

(Formerly  the  Itallan^American  Trust  Co.) 

520  BROADWAY  - NEW  YORK 


Capital  - $500,000.00 


This  company  has  a thoroughly  equipped 
Foreign  Department,  under  the  personal 
supervision  of  an  officer  of  the  bank.  We 
transact  a general  banking  business,  and 
have  the  best  facilities  for  collecting 
checks — domestic  or  foreign. 


ACCOUNT8  OF  BANKS  SOLICITED. 


EMANUEL  GERLI,  - - President 

C.  PIVA,  - Vice-President 

T.  K.  SANDS,  - - Vice-President 

ARTHUR  DAY,  - - Vice-President 

ARTHUR  BAUR,  Secretary  and  Treasurer 


— The  board  of  managers  of  the  Howard 
Savings  Institution  of  Newark,  N.  J.,  on 
May  53  elected  Samuel  S.  Dennis  presi- 
dent of  the  bank,  to  succeed  the  late  Horace 
T.  Brumlev.  Mr.  Dennis  had  served  as 
first  vice-president  since  1903.  He  is  a 
son  of  A.  L.  Dennis,  who  was  one  of  the 
original  incorporators  of  the  institution  in 
1857.  He  is  connected  with  various  finan- 
cial and  other  enterprises,  being  a director 
of  the  National  Newark  Banking  Company, 
the  American  Insurance  Company,  the  Mor- 
ristown Trust  Company,  the  Chicago  Junc- 
tion Railways  Company,  the  Pittsburgh, 
Cincinnati,  Chicago  & St.  Louis  Railway 
Company  and  the  United  New  Jersey  Rail- 
road & Canal  Company.  J.  William  Clark 
has  been  elected  vice-president  of  the  How- 
ard Savings  Institution,  Charles  II.  Nor- 
man, asistant  treasurer,  and  George  H. 
McLellan,  assistant  secretary. 

— Charles  T.  Brewer,  newly  elected  presi- 
dent of  the  Second  National  Bank  of 
Cooperstown,  N.  Y.,  is  well-known  in  his 
county  as  a conservative,  clear-headed  busi- 
ness man  and  lawyer,  and  his  administra- 
tion is  giving  entire  satisfaction.  Fred  I*. 
Quaif,  recently  elected  vice-president,  has 
been  a director  of  the  bank  for  eleven 
years.  His  father  was  vice-president  for 
many  years.  George  M.  Jarvis  has  heen 
with  the  bank  thirty-six  years  and  as 
cashier  since  1895.  F.  W.  Sprakcr  is  as- 
sistant cashier. 

The  Second  National  was  organized  in 
186L  succeeding  the  Bank  of  Cooperstown, 
which  had  been  in  existence  since  1853.  It 


has  a capital  stock  of  $159,000,  and  a sur- 
plus of  $100,000. 

— Vice-President  of  the  United  States, 
James  S.  Sherman,  is  a director  of  the 
Northern  New  York  Trust  Company  of 
Watertown,  N.  Y.,  which  has  filed  a cer- 
tifieate  of  incorporation  for  examination. 
It  is  capitalized  at  $300,000. 

SOUTHERN  STATES 

— Stockholders  of  the  City  Bank  and  the 
National  State  of  Richmond  have  ratified 
the  proposed  consolidation  of  the  two  in- 
stitutions, It  has  been  decided  to  increase 
the  hoard  of  directors  of  the  National  State 
Bank  from  nine  to  fifteen,  in  order  to  ac- 
commodate the  representatives  of  the  City 
Bank  interests  and  to  add  two  vice-presi- 
dents to  the  official  staff.  The  capital  stock 
of  the  new  bank  will  be  $1, 009,000,  and  the 
name  will  be  the  National  State  and  City 
Bank  of  Richmond. 

— Negotiations  for  the  merger  of  the 
Bank  of  Richmond,  Va.,  with  the  National 
Bank  of  Virginia,  have  been  practically 
completed.  For  a time,  at  least,  the  new 
National  Bank  of  Virginia,  after  consolida- 
tion, will  occupy  the  banking  house  of  the 
Bank  of  Richmond  at  Ninth  and  Main,  one 
of  the  most  attractive  hanking  houses  at  one 
of  the  principal  business  corners  of  the  city. 
I .a ter  the  board  of  directors  will  consider 
the  erection  of  a skyscraper  either  on  the 
present  site  of  the  Bank  of  Richmond  or  at 
Eleventh  and  Main,  where  the  National 
Bank  of  Virginia  occupies  a three-story 
building  and  where  it  owns  adjacent  prop- 
erty large  enough  for  an  immense  modern 
structure. 

William  M.  Hahliston,  now  president  of 
the  National  Bank  of  Virginia,  will  be  pres- 
ident; John  Skelt'm  Williams,  president  of 
the  Bank  of  Richmond,  will  be  one  of  the 
vice-presidents,  and  W.  Meade  Addison, 
now  cashier  of  the  National  Bank,  will  be 
cashier.  The  Bank  of  Richmond  has  no  one 
at  present  filling  the  office  of  cashier,  H.  A. 
Williams  being  assistant  caslrer.  Frederick 
Nolting,  formerly  vice-president,  has  gone 
to  the  First  National  of  Richmond  ns  sec- 
ond vice-president. 

The  total  capital  stock  will  he  $1,500,009, 


BANK  PICTURES 

Large  portraits  of  past  officers,  eta. 
made  from  any  good  photograph.  Splen- 
did for  directors*  room  or  bank  offices. 

Write  for  particulars. 

Oliver  Llpplncott.  Photographer  of  Men 
Singer  Bldg.,  149  B’way,  New  York 
References—  The  Bankers  Magazine 


Digitized  by  L.oooLe 


Efficient  Bank  Lighting 
A Business  Asset 


(The  illustration  shows  an  efficient 
and  effective  installation  of  one  thou- 
sand G-E  MAZDA  Lamps  in 
Fidelity  Trust  Co.,  Buffalo.) 


You  know  that  a well  lighted  bank  facilitates  work,  pleises 
clients  and  adds  materially  to  the  bank’s  prestige. 

Undoubtedly  you  can  easily  sum  up  the  advantages  of  electric 
lighting  for  hanks. 

But  do  you  know  that  the 


General  ($4)  Electric 
Mazda  Lamp 


marks  the  greatest  advance  in  electric  lighting  since  Edison’s  inven- 
tion of  the  incandescent  Lamp?  Without  requiring  any  more 
current  than  the  commonly  used  carbon  filament  lamp,  the  G-E 
MAZDA  Lamp  gives  nearly  three  times  the  light. 

Your  electric  light  man  knows -ask  him.  If  your  lighting  com- 
pany’s supply  of  the  “Dawn  of  a New  Era  in  Lighting’’  is  exhausted, 
write  us  for  it.  This  book  will  tell  you  all  you  want  to  know  about 
this  new'  lamp. 


Schenectady , N.Y. 


2614 

1*7 


Digitized  by 


Google 


‘lit! 


Capital,  $1,000,000.00  Earned  Surplus,  $1,000,000.00 


JOHN  B.  PURCELL 
President 


JOHN  M.  MILLER,  JR. 
Vice-Pres.  and  Cashier 


FREDERICK  E.  NOLTING,  2nd  Vice-President 

CHAS.  R.  BURNETT,  ^0^* 

J.  C.  JOPLIN  I Assistant  t 

W.  P.  SHELTON  f Cashlers^^^^ 
ALEX.  F.  RYLAND  J m M m 


m 


BILL  OF 
LADING  DRAFTS 
ON  RICHMOND  A SPECIALTY 


Strong  in  resources,  conservative 
in  management,  progressive  in  policy 

OF  RICHMOND,  VIRGINIA 


Assistant 


a ^ 


with  a surplus  of  .$fJ()0,000.  Thus  the  new 
National  Bank  of  Virginia  will  have  a 
larger  capital  than  any  other  banking  house 
in  the  city,  and  will  be  one  of  the  strongest 
financial  institutions  in  the  South. 

— Frederick  E.  Noltinar,  the  newly  elected 
second  vice-president  of  the  First  National 
Bank  of  Richmond,  Va.,  was  born  in  Rich- 


FREDERICK  E.  NOLTING 
Who  has  become  Second  Vice-President 
of  the  First  National  Bank  of 
Richmond,  Va. 

morid,  December  6,  187;?.  He  attended  the 
University  of  Virginia,  three  years,  and  in 
1893,  began  his  business  career  with  his 
father’s  firm,  E.  ().  Nolting  & Company,  to- 
bacconists. Later  he  became  associated 
with  bL  brother,  the  late  \Y.  Otto  Nolting 
in  the  tobacco  business.  During  a part  of 

u»s 


that  time  he  was  vice-president  of  the  Na- 
tional Bank  of  Virginia. 

Mr.  Nolting’s  active  banking  career  did 
not  properly  begin  until  1904,  when  lie 
took  charge  of  the  Richmond  Trust  and 
Safe  Deposit  Company  as  vice-president* 
just  prior  to  the  organization  of  the  Bank 
of  Richmond  by  consolidation  of  the  Rich- 
mond Trust  & Safe  Deposit  Company  and 
the  Metropolitan  Bank  of  Virginia.  From 
that  day  up  to  the  present  time,  he  has 
been  first  vice-president  of  the  Bank  of 
Richmond.  He  was  for  a number  of  years 
a director  in,  and  treasurer  of,  the  South 
Atlantic  Life  Insurance  Company,  and  is 
still  on  their  board.  Mr.  Nolting  is  also  a 
representative  of  the  Belgian  Government 
as  consul  with  jurisdiction  over  Virginia 
and  West  Virginia,  a position  he  fills 
capably. 

— The  American  Savings  Bank  of  Roan- 
oke, Va.,  has  been  taken  over  by  new  in- 
terests and  will  be  converted  into  a na- 
tional hank  with  a capital  stock  of  $500,000. 
G.  T.  P.  Cooper  will  be  president  of  the  new 
institution. 

— The  Bank  of  Baton  Rouge,  La.,  on 
June  1 celebrated  its  tw'en tv-first  anniversary 
by  enlarging  its  capital  to  five  times  the 
original  amount  paid  in.  With  the  declara- 
tion of  a dividend  of  400  per  cent.,  the  capi- 
tal was  increased  to  $250,000,  and  a surplus 
of  $125,000  was  provided.  How  successful 
the  bank  has  been  may  be  judged  from  the 
fact  that  up  to  the  time  the  capital  was  in- 
creased to  the  present  figure  the  stock- 
holders had  received  dividends  aggregat- 
ing 220  per  cent.  In  adition  to  the  400  per 
cent,  dividend  for  the  capital  increase,  a 
further  dividend  of  seventy  per  cent,  was 
declared  out  of  the  accumulated  profits. 
The  officers  are:  W.  J.  Knox,  president; 

O.  B.  Steele  and  Joseph  Bebelin,  vice-presi- 
dents; Eugene  Cazedessus,  cashier. 

— The  First  National  of  El  Paso,  Texas* 
the  oldest  financial  institution  in  the  city* 


Digitized  by  L^OOQle 


BANKING  AND  FINANCIAL  NOTES 


129 


has  been  merged  with  the  National  Bank  of 
Commerce,  the  consolidation  to  take  effect 
July  15.  The  combined  capital  of  the  two 
banks  is  $800,000,  deposits  about  $4,000,000, 
and  resources  of  $5,000,000. 

— Liquidation  of  the  American  National 
of  Houston,  Texas,  has  been  decided  on  by 
the  directors  of  that  institution,  the  busi- 
ness being  taken  over  by  the  Lumberman’s 
National  of  that  city.  W.  E.  Richards, 
president  of  the  American  National,  will  go 
to  the  Lumberman’s  National  as  a director 
and  honorary  vice-president,  and  Horace  H. 
Wilkins,  assistant  cashier  of  the  American, 
will  be  made  an  assistant  cashier  of  the 
Lumberman’s.  The  Lumberman’s  National 
guarantees  all  the  deposits  of  the  liquidat- 
ing institution. 

The  American  National  was  organized 
about  five  years  ago  as  a State  institution, 
under  the  name  of  the  American  Bank  & 
Trust  Company.  In  May,  1907,  W.  E.  Rich- 
ards, one  of  the  incorporators  of  the  Lum- 
berman’s National  and  vice-president  of 
that  institution,  was  called  to  the  American 
National  to  assume  the  office  of  president, 
made  vacant  by  the  death  of  C.  A.  Beasley. 
Soon  afterward  the  bank  became  a national 
institution  and  the  capital  stock  was  raised 
from  $100,000  to  $250,000. 

The  Central  Bank  & Trust  Company  of 
Houston  has  also  decided  to  liquidate 
through  the  Lumberman’s  National.  An  in- 
teresting feature  of  this  liquidation  is  that 
only  a short  time  ago  the  Union  Bank  & 
Trust  Company  of  Houston,  the  largest 
State  bank  on  the  books  of  the  department 
of  insurance  and  banking,  gave  notice  that 
it  had  merged  into  the  Union  National. 
When  the  affairs  of  these  two  banks  get  in 
shape  for  them  to  ask  the  State  Banking 
Board  to  refund  their  payment  into  the 
bank  guaranty  fund,  they  will  be  entitled  to 
a return  of  $46,774.  Of  this  amount,  $43,090 
will  go  to  the  Union  Bank  & Trust  Com- 
pany and  $2,684  to  the  Central  Bank  & 


Stiff  Albany 
QJruat  (Enmpany 

ALBANY,  N.  Y. 

ACTIVE  end  Reserve  cAocounts 
ere  solicited  end  interest  peid 
on  deity  belences ♦ cDesigneted 
depository  for  reserve  of  Nev> 
York  Stete  <Benks  end  Trust 
Compenies  ::::::: 

Capital  and  Surplus,  $725,000 


JOHN  SKELTON  WILLIAMS.  President 
H.  A.  Williams,  - - Asst.  Cashier 

Lewis  D.  Crenshaw,  Jr.,  - Trust  Offloer 

BANK  OF 
RICHMOND 

RICHMOND,  VA. 

Capital  and  Profits,  $1,500,000.00 

Accounts  of  banks  and  bankers  Invited 
upon  favorable  terms 

Cable  Address,  “Rlchbsnk,”  Richmond 

Correspondence  Invited 


Trust  Company.  At  present  the  bank  guar- 
anty fund  amounts  to  $400,979  and  the  de- 
duction of  $46,774  will  reduce  the  fund  to* 
$354,205. 

— John  E.  McMillan  has  replaced  C.  M. 
Cooley  as  cashier  of  the  Third  National 
Bank  of  Knoxville,  Tenn.  Mr.  McMillan 
had  previously  been  assistant  cashier. 

— Brief  mention  only  was  made  in  our 
last  issue  of  the  official  changes  brought 
about  in  the  Gulf  National  Bank  of  Beau- 
mont, Texas,  through  the  death  of  A.  L. 
Williams,  president.  R.  A.  Greer,  who  now 
has  the  presidency,  is  a prominent  member 
of  the  law  firm  of  Greer  and  Nall,  Beaumont* 
He  is  well  and  favorably  known  and  his  ac- 
ceptance of  the  important  office  of  presi- 
dent has  given  universal  satisfaction. 

It  is  upon  P.  B.  Doty,  the  new  vice-presi- 
dent and  cashier,  however,  that  the  task  of 
promoting  the  bank’s  interests  will  fall,  but 
Mr.  Doty,  with  his  intimate  knowledge  of 
every  phase  of  banking  and  because  of  his 
long  association  with  the  deceased  president, 
is  competent  to  take  up  this  work. 

In  1903,  one  year  after  the  organization 
of  the  Gulf  National  Bank,  Mr.  Doty  was 
assigned  to  the  collection  window;  within 
a few  months  he  was  made  second  assistant 
cashier.  Then  as  he  displayed  the  ability, 
he  was  appointed  first  assistant  cashier* 
later  cashier,  and  now  is  the  active  vice- 
president  and  cashier. 

The  Gulf  National  had  deposits  of  be- 
tween $400,000  and  $500,000  when  Mr.  Doty 
became  one  of  its  employes ; to-day  the  bank 
has  more  than  $1,500,000  of  deposits.  It 


Digitized  by  t^ooQle 


130 


THE  BANKERS  MAGAZINE 


AMERICAN 

NATIONAL  BANK 

RICHMOND,  VIRGINIA 


(Organized  Nov.  1,  1809) 

Capital,  - • -$500,000.00 
Surplus  and  Profits,  300,000.00 

Located  in  the  capital  and  metrop- 
olis of  the  state  and  fully  equipped 
in  every  respect  for  prompt  and 
efficient  service,  this  bank  seeks  the 
Richmond  and  Virginia  business  of 
Banks,  Firms,  Corporations  and  In- 
dividuals everywhere. 

The  large  number  of  this  Institu- 
tion's present  correspondents  and  de- 
positors is  ample  proof  of  the  satis- 
factory service  rendered. 


UNITED  STATES  AND  STATE  DEPOSITORY 


is  capitalized  for  $150,000,  has  surplus  and 
profits  of  $165,000  and  has  paid  dividends 
of  $0*5.000. 

— The  conversion  of  the  Broadway  Bank 
& Trust  Company  of  Nashville  into  the 
Broadway  National  Bank  was  perfected 
June  8.  With  the  change  to  the  federal 
system  the  institution  has  increased  its 
capital  from  $100,000  to  $200,000.  W.  T. 
Hardison  continues  as  president,  with  J.  H. 
Bradford  as  vice-president  and  A.  E.  Pot- 
ter, cashier.  The  bank  began  business  in 
July,  1906. 

— T.  ().  Vinton  has  been  elected  presi- 
dent of  the  Bank  of  Commerce  and  Trust 
Company  of  Memphis,  Tenn.,  succeeding 
O.  H.  P.  Piper,  who  is  retiring  from  active 
business  life  after  a long  and  notably  suc- 
cessful career.  As  a vice-president  Mr. 
Vinton  has  long  been  actively  connected 
wilh  the  bank  and  is  w-ell-known  in  commer- 
cial life  in  Memphis.  His  position  as  vice- 
president  was  filled  by  the  election  of  E.  L. 
Bice,  formerly  cashier.  The  other  officers 
are:  R.  Brinkley  Snowden,  vice-president; 
James  H.  Fisher,  secretary;  I,.  S.  Gwyn, 
assistant  cashier;  S.  J.  Shepherd,  trust  of- 
ficer, and  G.  A.  Bone,  auditor. 

MIDDLE  STATES 

— The  State  authorities  of  Illinois  have 
granted  a charter  for  the  organization  ol 
The  Saving  Bank  & Trust  Company  of  the 
Republic,  with  headquarters  in  Chicago. 
The  capital  will  be  $1,000,000,  and  owner- 
ship will  held  by  the  stockholders  of  the 


National  Bank  of  the  Republic,  in  connec- 
tion with  which  stalwart  financial  institu- 
tion the  new  company  will  be  operated.  Its 
location  will  doubtless  be  in  the  New  York 
Life  Building,  in  intimate  association  with 
the  controlling  bank;  and  it  is  expected 
that  this  new  auxiliary  trust  and  savings 
bank  will  commence  operations  by  early 
fall. 

— Charles  S.  Castle,  formerly  acting  cash- 
ier of  the  Continental  National  Bank  of 
Chicago,  and  who  resigned  the  position  of 
assistant  cashier  of  the  Continental  and 
Commercial  National  Bank  for  the  purpose 
of  starting  a new  bank,  has  been  granted  a 
permit  by  State  Auditor  McCullough  to  or- 
ganize the  Standard  Trust  and  Savings 
Bank  of  Chicago.  The  permit  was  issued  to 
Mr.  Castle,  Jesse  R.  Long  and  Charles  S. 
Kidder,  and  the  institution  will  have  a capi- 
tal of  $1,000,000. 

— Chicago  banks  will  pay  about  $1,750,000 
»n  quarterly  dividends  on  their  stock  the 
lirst  of  July.  This  is  a considerably  larger 
amount  than  they  ever  paid  before.  The 
increase  is  due  to  the  fact  that  some  of 
the  more  prominent  banks  have  enlarged 
their  capital  and  several  of  the  others  have 
raised  their  dividend  rates. 

Six  of  the  larger  banks  will  contribute 
$1 ,245,000  to  the  dividend  total  for  July. 
The  First  National  will  pay  $400,000  as 
four  per  cent,  on  its  increased  capital  of 
$10,000,000,  part  of  the  amount  coming  from 
the  dividend  of  the  First  Trust.  The  Illinois 
Trust  will  pay  $250,000,  which  includes  the 
regular  four  per  cent,  and  the  one  per 


The 


Berlitz  School 

of 

Languages 

MADISON  SQ.,  1122  BROADWAY 

Harlem  Branch,  843  Lenox  Are., 
above  127th  St. 

Brooklyn  Branch,  218  Livingston  St* 
Branches  In  over  280  leading  cities 
Summer  School  Asbury  Park,  N.  J. 

Hotel  Touralne  Annex 
Fifth  At.  near  Grand 

Teachers  sent  all  points  within  50  miles 
Day  and  Evening  Lessons,  in  Classes  or 
Privately,  at  School  or  at  Reeidenoe. 


AWARDS 


Paris  Exposition, 

1900, 

Lille 

1902, 

ZURICH  “ 

1902, 

8t.  Louis  « 

1904, 

Liege 

1908, 

London 

1908, 

2 Gold  Medals 
Gold  Medal 
gold  Medal 
grand  prize 
grand  prize 

GRAND  PRIZE 


Digitized  by  t^oooLe 


Digitized  by 


HON.  A.  BARTON  HEPBURN 

Former  Comptroller  of  the  Currency;  President  Chase  National  Bank,  New  Yoik; 
President  National  Currency  Association  of  the  City  of  New  York 

see  pane  214 


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THE 


BANKERS  MAGAZINE 

ELMER  H.  YOUNGMAN.  Edhoc 


SIXTY -FOURTH  YEAR  AUGUST,  1910  VOLUME  LXXXI.  NO.  2 


THE  CENTENNIAL  OF  OUR  NEIGHBORING 

REPUBLIC 


President  Diaz  gives  the 
grito  from  the  balcony  of  the 
National  Palace  in  Mexico  City  on  the 
night  of  September  15,  it  will  mark 
the  one  hundredth  anniversary  of  the 
date  on  which  that  cry  was  first  raised 
by  the  Patriot  Hidalgo  at  Dolores. 

But  while  Mexico  threw  off  the  Span- 
ish yoke  a century  ago,  its  subsequent 
history  was  for  many  years  thereafter 
anything  but  a happy  one.  While  oc- 
casionally there  were  rulers  like  Benito 
Juarez  who  were  patriots  and  states- 
men, the  country  was  frequently  sub- 
jected to  ruinous  exploitation  by  do- 
mestic and  foreign  despots.  It  was  not 
until  after  the  close  of  our  own  Civil 
War  that  the  foreign  invader  was  finally 
expelled  and  a reign  of  permanent 
peace  inaugurated. 

The  history  of  Mexico  as  a modern 
State  really  began  with  the  accession 
of  General  Diaz  to  the  Presidency  in 
1876.  He  has  held  that  office  ever 
since,  except  for  the  term  from  Decem- 
ber, 1880,  to  December,  1884,  when 
General  Manuel  Gonzalez  was  Presi- 
dent. 

Whatever  criticisms  may  be  j ustly 
made  of  Diaz,  one  fact  remains — he 
has  given  his  country  for  over  thirty 
years  a peaceful  and  orderly  form  of 
government,  something  the  country 
hardly  had  before  his  accession  to 


power,  and  something  that  it  sadly 
needed. 

When  General  Diaz  became  Presi- 
dent, Mexico  had  less  than  four  hundred 
miles  of  railway,  against  more  than  15,- 
000  miles  at  the  present  time.  And  this 
development  in  railway  building  has 
been  paralleled  in  other  lines  of  pro- 
gress, as  it  has  been  our  pleasure  to 
observe  very  recently  by  visits  to  vari- 
ous parts  of  the  Mexican  Republic. 

General  Diaz  is  supported  in  his  ad- 
ministration by  men  of  exceptional  char- 
acter and  ability.  Mr.  Limantour,  the 
Finance  Minister,  has  done  much  to 
preserve  the  country’s  credit  and  to  save 
Mexico  from  the  dangers  of  unsound 
finance.  Mr.  Creel,  who  recently  suc- 
ceeded the  lamented  Mariscal  as  Min- 
ister of  Foreign  Affairs,  is  well  known 
in  the  United  States,  having  served  for 
a time  as  the  Mexican  Ambassador  at 
Washington.  He  is  one  of  Mexico’s 
great  and  patriotic  sons. 

The  man  who  as  soldier  and  states- 
man has  rendered  preeminent  service 
to  his  country  by  inaugurating  and  pre- 
serving an  era  of  peace,  thus  giving  his 
people  an  opportunity  to  develop  char- 
acter, acquire  education  and  to  get  and 
to  hold  property,  is  General  Don 
Porfirio  Diaz,  the  builder  of  modern 
Mexico. 

The  cry  of  “Viva  Mexico V9  that  will 

139 


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resound  through  the  streets  of  the  beau- 
tiful southern  capital  on  the  night  of 
September  15  will  be  cordially  re- 
echoed in  the  United  States. 


NEW  YORK  BANKERS'  CONVEN- 
TION 

/"\NE  could  hardly  find  fault  with 
the  bankers  who  attended  the  re- 
cent annual  convention  of  the  New  York 
State  Bankers*  Association  at  Coopers- 
town  if  they  were  disposed  to  give 
themselves  up  to  enjoyment  rather  than 
to  business.  In  a State  noted  for  many 
beautiful  localities  it  would  be  difficult 
to  find  one  that  surpasses  Cooperstown 
on  the  shores  of  Otsego  Lake,  im- 
mortalized by  the  genius  of  James 
Fenimore  Cooper.  The  bankers  of 
New  York,  we  feel  sure,  were  unani- 
mous in  the  opinion  that  a happy  choice 
had  been  made  for  their  annual  con- 
vention. 

The  real  work  of  the  convention  be- 
gan with  the  address  of  President 
Ledyard  Cogswell.  In  speaking  of 
present  business  conditions,  Mr.  Cogs- 
well said  that  if  let  alone,  the  business 
men  would  soon  show  that  they  were 
capable  of  placing  their  feet  on  solid 
ground. 

Hon.  Edward  B.  Vreeland,  the 
Chairman  of  the  Banking  and  Cur- 
rency Committee  of  the  House  of  Rep- 
resentatives, spoke  in  favor  of  a central 
bank.  He  declared  that  we  are  bound 
to  have  centralization,  in  one  form  or 
another,  and  gave  it  as  his  opinion  that 
the  more  efficient  form  was  the  central 
bank. 

Mr.  Vreeland,  in  reviewing  the 
Postal  Savings  Bank  measure  and  the 
opposition  to  it,  said,  very  justly  as  we 
believe,  that  the  bankers  were  too  late 
in  beginning  their  fight. 

It  will  probably  be  the  same  with 
currency  and  banking  legislation.  Once 
the  leaders  of  the  party  determine  upon 


a certain  course  it  is  pretty  apt  to  be 
carried  out,  whether  the  bankers  like  it 
or  not.  But  the  bankers  by  carrying  on 
a campaign  continuously  can  undoubt- 
edly have  great  influence  in  shaping 
public  opinion. 

Mr.  Vreeland  declared  that  our 
bank  notes  should  rest  upon  gold  and 
commercial  paper.  We  wish  that  he 
might  also  have  emphasized  the  neces- 
sity of  basing  all  our  bank  credits  upon 
gold,  for  that,  in  our  view,  is  of  far 
greater  moment  than  the  central  bank, 
and  is  indeed  the  indispensable  condi- 
tion of  a healthful  progress  of  banking 
and  general  business.  We  know  the 
difficulties  in  the  way  of  this  reform, 
but  they  are  not  insurmountable. 

One  of  the  most  delightful  features 
of  the  convention  was  the  banquet  on 
the  evening  of  July  14.  The  speaking 
was  of  an  unusual  order  of  excellence. 
Mr.  David  R.  Forgan,  president  of  the 
National  City  Bank  of  Chicago,  made 
the  principal  speech,  and  proved  him- 
self to  be  as  good  a speaker  as  he  is  a 
banker — which  is  saying  a great  deal, 
as  the  bankers  of  the  country  well 
know.  Hon.  Wm.  A.  Prendergast, 
Comptroller  of  the  City  of  New 
York,  spoke  interestingly  on  the  city’s 
finances. 

At  the  second  day’s  session,  Hon. 
O.  H.  Cheney,  Superintendent  of  the 
State  Banking  Department,  made  an 
able  address  on  the  subject  of  ‘‘Bank 
Supervision.” 

The  banks  of  Cooperstown  were  ac- 
tive in  making  the  convention  a notable 
success  from  the  social  point  of  view. 


RESERVE  LENDING  POWER 

T^ISCUSSION  of  our  banking  and 
currency  problems  has  empha- 
sized the  necessity  of  having  some- 
where a reserve  of  lending  power.  Pro- 
fessor Sprague,  of  Harvard  Univer- 
sity, has  recently  called  attention  to  this 


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141 


fact.  He  says  that  this  reserve  should 
be  found  in  the  central  money  market. 

Elasticity  of  the  currency  has  re- 
ceived much  more  study  than  elasticity 
of  lending  power,  though  the  latter  is 
of  far  greater  importance.  Indeed,  a 
great  deal  of  the  withdrawal  and 
hoarding  of  currency  arises  from  the 
fear  that  banking  credit  may  no  longer 
be  procurable. 

While  expansion,  either  of  bank  de- 
posit credits  or  of  bank  notes  continues 
unchecked,  there  can  be  no  elasticity. 

A reserve  power,  either  of  loan 
credits  or  of  notes,  implies  the  existence 
of  a power  not  used  to  its  full  limit  at 
all  times. 

Elasticity  can  not  exist  without  con- 
traction as  well  as  expansion. 

Simple  as  this  statement  appears,  it 
is  lost  sight  of  by  most  of  those  who 
propose  banking  and  currency  reforms. 

Elasticity  depends  less  upon  the 
banking  machinery  than  upon  the  char- 
acter of  the  reserves  for  notes  or  other 
bank  credits.  The  foundation  must  be 
elastic. 

If  bonds  are  accepted  as  a basis  for 
currency  this  elasticity  can  not  be 
looked  for,  since  the  supply  of  bonds 
may  be  either  insufficient  or  redundant. 
If  other  than  Government  bonds  are 
admitted,  the  supply  will  be  almost  cer- 
tainly excessive.  But  in  either  case  the 
volume  of  bonds  has  but  little  relation 
to  business  activity  and  bears  practi- 
cally no  relation  to  the  demands  for 
currency. 

And  if  legal-tender  notes,  silver  or 
bank  notes  be  accepted  as  a basis  for 
bank  loans,  that  is,  if  they  be  used  as 
reserves,  credit  elasticity  is  impossible. 
For  the  amount  of  legal-tender  notes 
and  silver  is  fixed,  neither  increasing 
nor  decreasing,  and  the  bank  notes 
(which  are  now  used  as  reserves  to  a 
considerable  extent)  practically  never 
decrease,  although  they  do  increase. 

At  present  our  bank  notes  are  upon 
an  inelastic  basis  and  a very  large  part 


of  our  bank  loans  also  rests  upon  a sim- 
ilar foundation. 

We  shall  not  get  elasticity  of  credit 
or  of  notes  until  gold  and  gold  alone 
is  made  the  basis  of  our  note  issues  and 
our  bank  credits  of  all  kinds. 

If  the  foundation  of  these  credits 
were  gold,  it  would  be  elastic,  increas- 
ing with  gold  imports  and  a gain  in 
gold  production  and  decreasing  with  a 
falling  off  in  gold  production  and  the 
exportation  of  gold. 

There  are,  of  course,  other  secondary 
means  of  supplying  elasticity.  The 
banks  that  lend  to  the  limit  of  their 
ability  when  money  rates  are  low  will 
have  nothing  to  fall  back  on  when  the 
demand  is  strong  and  interest  rates  are 
high.  In  other  words,  there  must  be  a 
class  of  banks  that  in  “ordinary  times” 
will  keep  a high  reserve. 

As  Professor  Sprague  says,  this  re- 
serve of  lending  power  should  be  in  the 
central  money  market.  Perhaps  in  a 
country  like  the  United  States  it  should 
be  in  several  of  the  principal  money 
markets. 

This  leads  to  the  conclusion  that 
there  should  be  in  the  central  reserve 
cities  (and  we  believe  in  San  Francisco 
and  New  Orleans  also)  a number  of 
banks  of  large  capital  specially 
equipped  for  performing  reserve  func- 
tions, carrying  large  reserves,  holding 
the  deposits  of  the  Government,  and 
empowered  to  issue  their  credit  notes. 

With  all  the  bank  credits  of  the  coun- 
try based  upon  gold,  and  with  the  cen- 
tral reserve  banks  properly  equipped 
as  indicated  above,  it  would  be  found 
that  credit  expansion  would  be  afforded 
by  fluctuations  in  the  supply  of  gold, 
and  by  the  handling  of  their  lending 
operations  by  the  central  reserve  city 
banks  with  more  relation  to  the  general 
interests  of  the  community  than  to  their 
own  aggrandizement.  The  privileges 
accorded  these  banks  might  be  an  ade- 
quate compensation  for  this  service. 


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THE  BANKERS  MAGAZINE 


THE  AMERICAN  BANKERS’  ASSO- 
CIATION 

the  time  approaches  for  holding 
the  annual  convention  of  the 
American  Bankers*  Association,  it  be- 
comes pertinent  to  enquire  as  to  the 
efficiency  of  this  organization  in  repre- 
senting the  banking  interests  of  the 
United  States. 

Nearly  half  the  bankers  of  the  coun- 
try are  now  members  of  the  American 
Bankers’  Association.  The  resources  of 
the  member  banks  are  several  billions 
of  dollars. 

Is  the  association  doing  a work  com- 
mensurate with  its  membership  and  the 
large  annual  revenue  derived  from  the 
banks  of  the  country? 

When  the  Aldrich- Vreeland  bill  was 
pending  in  Congress  two  years  ago,  a 
committee  of  the  American  Bankers’ 
Association  opposed  it.  The  opposition 
had  no  effect. 

When  the  Postal  Savings  Bank  bill 
was  before  Congress  recently,  a com- 
mittee of  the  association  worked  to  de- 
feat the  bill,  but  to  no  purpose. 

In  these  two  important  pieces  of  leg- 
islation, both  of  great  importance  to  the 
banks  of  the  country,  this  great  and 
supposedly  powerful  organization  was 
too  weak  in  its  opposition  to  defeat 
measures  which  most  of  the  bankers  of 
the  country  regarded  as  vicious  and  un- 
necessary and  detrimental  to  the  banks. 

It  is  believed  that  if  the  American 
Bankers’  Association  had  taken  the 
proper  course,  at  the  right  time,  both 
these  measures  might  have  been  de- 
feated, and  that  long  ere  this  a cur- 
rency and  banking  law  could  have  been 
enacted  that  would  have  immensely 
benefited  the  banks  and  would  have  put 
the  whole  business  system  of  the  United 
States  upon  the  highest  attainable  point 
of  stability. 

The  American  Bankers’  Association 
has,  thus  far,  commended  itself  to  the 
bankers  of  the  country  chiefly  through 


its  burglar-catching  activities.  While 
the  discouragement  of  burglary  and 
forgery  is  commendable  work,  which 
has  no  doubt  saved  the  bankers  several 
hundred  thousands  of  dollars,  it  is  be- 
lieved that  the  provision  of  a sound  and 
safe  banking  and  currency  system 
would  have  been  of  far  greater  impor- 
tance, and  that  it  would  save  billions  of 
dollars  to  the  bankers,  the  manufac- 
turers and  the  merchants  of  the  United 
States. 

We  would  not  have  the  association 
become  less  energetic  in  hunting  down 
and  prosecuting  the  burglar  and  the 
forger. 

We  recognize  fully  what  the  associa- 
tion has  done  in  securing  legislation  re- 
garding bills  of  lading,  uniform  nego- 
tiable instruments,  the  educational  work 
of  the  American  Institute,  etc.,  etc.  All 
this  is  excellent  work  and  redounds 
greatly  to  the  honor  and  credit  of  the 
American  Bankers’  Association. 

The  association  effectively  fought  the 
free-silver  craze,  and  has  done  much 
through  its  conventions  to  instruct  the 
bankers  on  all  matters  relating  to  bank- 
ing and  currency. 

We  would  not  wish  to  abate  anything 
whatever  from  the  high  credit  which 
the  American  Bankers*  Association  de- 
serves because  of  these  and  many  other 
worthy  achievements. 

But  the  supreme  work  yet  remains  to 
be  done  by  the  American  Bankers’  As- 
sociation— to  inaugurate  and  carry  to 
successful  conclusion  a campaign  of 
education  that  will  result  in  unifying 
our  heterogeneous  banking  and  currency 
system  into  something  that  will  fairly 
represent  the  intelligence,  enterprise  “ 
and  progress  of  the  American  people, 
and  that  will  efficiently  serve  our  pro- 
duction and  trade  and  that  will  not 
break  down  either  in  times  of  prosper- 
ity or  adversity. 

If  the  American  Bankers’  Association 
will  not  fritter  away  its  energies  on 
trivialities,  and  take  up  this  great  work 


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COMMENT 


148 


in  earnest,  success  can  be  achieved  with- 
out a doubt. 

The  great  financiers  of  the  country — 
for  exactly  what  reason  we  do  not  know 
— have  been  and  are  largely  indifferent 
to  the  American  Bankers’  Association. 
It  is  believed  that  if  the  association  will 
take  up  the  work  indicated,  the  coopera- 
tion of  these  men  may  be  enlisted. 

It  is  likely  that  important  action  will 
be  taken  by  Congress  before  long  that 
will  affect  our  banks  and  the  currency. 
Whether  this  action  shall  be  beneficial 
to  the  banks  and  business  interests  or 
the  reverse  will  depend  largely  upon 
the  attitude  of  the  American  Bankers’ 
Association. 

If  this  organization  would  continue 
to  command  the  respect  of  the  bank- 
ers of  the  United  States  it  must  act 
wisely  and  energetically  in  the  present 
situation  of  financial  .and  banking 
affairs. 


CLOSER  ASSOCIATION  AMONG 
BANKERS 

CECRETARY  MacVEAGH  in  a re- 
cent address  advised  the  bankers  to 
form  national  currency  associations,  as 
provided  for  in  the  Aldrich- Vreeland 
Act.  It  will  be  recalled,  as  the  Secre- 
tary of  the  Treasury  pointed  out,  that 
immediately  after  the  passage  of  this 
act  in  May,  1908,  there  was  a move- 
ment among  the  banks  of  the  country 
to  form  such  associations.  But  this 
movement  collapsed  when  it  was  found 
that  there  was  no  way  for  a bank  to 
get  out  of  an  association  once  it  had 
become  a member. 

It  would  be  of  immense  benefit  to  the 
banks  and  to  the  business  interests  of 
the  country  generally  if  the  banks  could 
unite  in  a local  or  district  organization 
for  carrying  out  certain  work  in  which 
concerted  action  is  essential.  The  least 
of  these  purposes,  however,  would  be 
the  issuing  of  bank  notes.  There  are 
many  other  matters  of  far  greater  im- 


portance, such  as  payment  of  interest 
on  deposits,  charges  on  collections  and 
the  more  efficient  examination  of  banks. 
In  fact,  if  the  banks  were  united  in 
some  form  of  district  organization  ade- 
quately equipped  for  making  its  decrees 
effective,  the  whole  banking  situation 
would  be  vastly  improved. 

In  a country  lacking  the  branch  bank- 
ing system,  and  where  a central  bank 
seems  to  be  politically  impracticable, 
even  if  it  were  desirable,  some  form  of 
effective  organization  among  the  banks 
is  highly  desirable. 

Possibly  the  existing  clearing-house 
associations  might  be  adapted  to  meet 
this  need,  but  if  not  something  else 
should  be  devised. 

The  national  currency  associations 
authorized  in  the  Aldrich- Vreeland  Act 
are  wholly  inadequate  to  meet  the  pres- 
ent requirements.  Mr.  Fowler  has 
proposed  a much  better  form  of  organ- 
ization. This  is  a field  in  which  the 
practical  knowledge  of  the  banker 
would  be  especially  serviceable.  If  the 
American  Bankers.’  Association  could  be 
induced  to  give  some  attention  to  this 
important  problem,  a special  committee 
might  devise  a plan  of  district  bank  or- 
ganization to  deal  with  the  issue  and 
redemption  of  notes,  the  clearing  of 
checks,  regulation  of  interest  on  de- 
posits, bank  examination,  and  other 
matters  affecting  the  banking  interests. 

The  formation  of  efficient  district  or- 
ganizations, probably  affiliated  with  a 
central  body,  would  afford  a regulating 
force  much  more  efficient  than  a central 
bank,  without  the  objections  attaching 
to  the  latter. 


PRODUCTION  AND  CONSUMPTION 

A DDRESSING  the  last  annual  con- 
vention of  the  Minnesota  State 
Bankers’  Association,  President  W.  C. 
Brown,  of  the  New  York  Central 
Lines,  dwelt  on  the  high  cost  of  living 
and  the  causes  therefor.  While  ad- 


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THE  BANKERS  MAGAZINE 


mitting  that  the  great  increase  in  the 
production  of  gold  had  been  influential 
in  raising  prices,  he  thought  that  a 
much  more  important  factor  was  to  be 
found  in  the  failure  of  our  farms  to  add 
to  their  production  in  proportion  to  the 
gain  in  population  and  consumption. 
Comparing  the  year  1909  with  the  year 
1899*  Mr.  Brown  showed  that  the  acre- 
age devoted  to  agriculture  increased 
twenty-three  per  cent.;  production  in- 
creased thirty-six  per  cent.,  while  pop- 
ulation (consumption)  increased  sixty 
per  cent. 

“It  does  not  require,,,  he  said,  “the 
experience  of  a railroad  man-  to  know 
that  with  one  train — representing  pro- 
duction— running  at  the  rate  of  thirty- 
six  miles  an  hour,  followed  by  another 
train — representing  consumption — run- 
ning at  the  rate  of  sixty  miles  an  hour, 
either  the  leading  train  must  be  speeded 
up,  the  following  train  slowed  down, 
or  disaster  is  only  a question  of  time.” 

President  Brown  does  not  believe 
that  population  and  consumption  will 
be  slowed  down.  And  if  disaster  is  to 
be  avoided  there  must  be  an  increase  in 
production. 

The  motive  that  induces  production 
of  farm  commodities  is  precisely  the 
same  as  that  behind  every  other  kind 
of  business — profit.  Is  it  not  rather 
certain  that  the  increased  cost  of  farm 
products  will  tend  very  shortly  to  cor- 
rect itself?  Has  that  tendency  not  set 
in  already?  A New  Hampshire  banker 
said  to  the  editor  of  this  Magazine  re- 
cently that  in  his  part  of  New  Eng- 
land there  were  many  farms  a few 
years  ago  that  could  be  bought  for  a 
song.  Now  these  farms  had  all  been 
withdrawn  from  the  market  and  were 
not  to  be  had  at  any  price.  Travelling 
over  a considerable  part  of  New  Eng- 
land lately,  we  have  looked  for  the 
“abandoned  farms”  described  in  our 
popular  magazines.  We  had  expected 
to  see  old  houses  and  barns  rotting  and 
falling  to  pieces  and  surrounded  by  an 


air  of  melancholy  and  decay.  Nothing 
of  the  kind  is  to  be  seen.  On  the  other 
hand,  the  farmhouses  and  barns  are 
large  and  in  fine  repair,  the  farms  pro- 
ductive and  well-kept,  and  the  farmers 
almost  universally  prosperous. 

Mr.  Brown  made  some  comparisons 
of  the  yield  per  acre  of  certain  farm 
products  in  this  and  other  countries. 
With  soil  as  fertile  as  any  in  the  world, 
our  output  of  several  farm  staples  is 
less  per  acre  than  in  some  of  the  Euro- 
pean countries. 

Undoubtedly,  the  American  farmer 
tries  to  do  too  much.  He  would  rather 
have  a section,  a half  section  or  quarter 
section  of  land  than  a modest  eighty  or 
forty  acres,  even  though  the  smaller 
area  might  yield  greater  net  results. 
Like  a good  many  of  our  banks,  the 
American  farmer  tries  to  do  too  much 
business  for  his  capital.  Mr.  Brown 
has  done  a public  service  in  calling  at- 
tention to  the  imperfect  methods  of  a 
good  many  of  our  farmers.  His  sug- 
gestion that  the  sum  appropriated  for 
at  least  one  battleship  be  devoted  to  ag- 
ricultural experiment  stations  is  worthy 
of  consideration.  In  fact,  there  is  no 
more  effectual  preparation  for  war  than 
the  safeguarding  of  the  national  wealth. 
And  the  wealth  of  the  United  States 
lies  largely  in  the  products  of  the 
farms. 


DIVISION  FORM  OF  BANK 
ORGANIZATION 

AS  is  well  known,  the  First  National 
Bank  of  Chicago — one  of  the 
very  large  and  successful  banks  of  the 
United  States — has  been  conducting  its 
business  for  several  years  under  a 
division  form  of  organization,  corre- 
sponding to  a classification  of  the 
bank’s  customers.  The  First  National 
has  found  the  plan  highly  successful 
and  thoroughly  satisfactory.  It  has 
been  thought  desirable,  however,  to 


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COMMENT 


145 


change  the  designation  of  the  official  in 
charge  of  the  respective  divisions  from 
manager  and  assistant  manager  to  vice- 
president  and  assistant  cashier,  these 
terms  being  better  understood  in  this 
country. 

The  experiment  made  by  the  First 
National  Bank  of  Chicago  in  separating 
its  business  into  divisions  corresponding 
to  the  respective  lines  in  which  its  cus- 
tomers were  engaged  was  an  interesting 
one,  and  since  its  success  has  now  been 
fully  demonstrated  it  may  be  expected 
that  other  banks  will  adopt  a similar 
plan.  A method  of  this  kind  makes  it 
possible  for  the  various  divisions  of  a 
bank  to  render  the  special  service  that 
would  otherwise  be  difficult  except 
where  a bank  was  organized  for  the 
sole  purpose  of  catering  to  a particular 
line — a plan  that  circumscribes  the 
field  of  operations  more  than  is  desira- 
ble. The  division  form  of  organization 
affords  full  scope  for  a bank's  activi- 
ties, but  combines  this  with  the  possi- 
bilities of  specialization  in  the  various 
divisions. 


THE  POSTAL  SAVINGS  BANK 

pOR  the  first  time  in  its  history  the 
United  States,  imitating  foreign 
precedents,  will  soon  have  a postal  sav- 
ings bank. 

It  has  been  assumed  that  there  exists 
in  this  country  a vast  hoard  of  money 
that  the  ordinary  banks  could  not  get 
but  which  will  be  brought  out  by  the 
postal  savings  bank.  If  this  shall  be 
found  to  be  the  case,  the  new  scheme 
will  in  that  respect  be  of  some  use.  But 
the  same  end  might  have  been  achieved 
in  a better  way — by  making  all  savings 
banks  safe,  and  by  educating  the  igno- 
rant as  to  the  existence  of  thousands  of 
safe  banks  to  be  found  in  all  parts  of 
the  country.  Of  course,  only  the  most 
ignorant  persons  will  patronize  the 
postal  savings  bank,  for  there  are  other 


banks  just  as  safe  that  pay  nearly  or 
quite  twice  as  much  interest. 

The  postal  savings  legislation  illus- 
trates afresh  the  fact  that  most  of  our 
banking  and  currency  legislation  is  in- 
volved in  some  kind  of  project  for  “tak- 
ing care"  of  bonds  of  one  kind  or  an- 
other. 

When  the  national  banking  system 
was  established,  one  of  the  avowed  pur- 
poses was  to  provide  a market  for 
United  States  bonds.  * With  the  Gov- 
ernment facing  rebellion,  it  was  natural . 
and  proper  that  every  possible  assist- 
ance be  given  in  upholding  the  market 
value  of  the  bonds  that  must  be  issued 
to  prosecute  the  war.  As  an  historic 
fact,  however,  it  may  be  mentioned  that 
the  expectations  in  this  direction  were 
hardly  realized.  After  the  war  closed, 
however,  the  act  did  greatly  help  in 
marketing  the  bonds. 

The  Aldrich- Vreeland  Law  was  also 
a bond-boosting  measure.  This  time  the 
Government  lent  a helping  hand  to 
State,  municipal  and  railway  bonds. 

And  now  the  postal  savings  bank  law 
is  passed  chiefly  to  get  money  for  tak- 
ing up  the  two  per  cent.  United  States 
bonds,  which  are  threatened  with  de- 
preciation below  par. 

Furthermore,  the  postal  savings  law 
will  greatly  stimulate  the  general  bond 
market,  because  the  banks  in  which 
postal  savings  funds  are  to  be  rede- 
posited must  put  up  bonds  with  the 
United  States  Treasury  as  security  for 
these  deposits.  Some  of  the  country 
banks,  it  is  said,  desire  these  deposits, 
but  in  order  to  procure  them  they  will 
have  to  send  to  New  York  or  other 
financial  centers  and  buy  bonds  to  put 
up  as  security  for  the  deposits.  These 
banks  will  have  to  pay  a premium  gen- 
erally for  such  bonds,  and  thus  when 
they  get  the  postal  deposits  they  will 
have  less  money  than  before.  The 
policy  of  inducing  commercial  banks 
to  invest  in  bonds  tends  to  diminish  the 


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146 


THE  BANKERS  MAGAZINE 


power  of  these  banks  to  fulfill  the  chief 
object  of  their  creation,  viz.,  to  aid  in 
carrying  on  the  ordinary  operations  of 
production  and  trade. 

We  wish  that  it  were  possible  to  have 
financial  legislation  in  this  country  with 
just  one  object  in  view — to  provide  a 
system  that  "would  be  of  benefit  to  all 
the  people  of  the  country. 

When  Congress  gets  done  with  legis- 
lating to  bolster  up  the  price  of  Gov- 
ernment bonds — foolishly  issued  at  a 
rate  not  representing  the  country's  ac- 
tual borrowing  power — and  when  the 
State,  railway  and  other  bonds  are  suffi- 
ciently boosted  up  by  act  of  Congress, 
may  we  then  hope  for  banking  and 
currency  legislation  based  upon  prin- 
ciple, and  whose  object  will  not  be  to 
sustain  the  price  of  anybody’s  bonds, 
but  to  benefit  the  people  of  the  United 
States  ? 


FORCING  BANK  LIQUIDATION 

A NNOUNCEMENT  was  made  re- 
cently that  when  the  Comptroller 
of  the  Currency  discovers  that  a na- 
tional bank  is  being  conducted  in  a 
manner  that  must,  if  not  corrected,  end 
in  insolvency,  the  following  course  will 
be  taken: 

“First — That  the  bank,  in  accord- 
ance with  the  examiner’s  suggestions, 
be  immediately  placed  in  a satisfactory 
condition  by  the  officers  and  directors 
then  in  charge. 

“Second — That,  if  the  officers  and  di- 
rectors in  charge  are  unable  to  place  the 
bank  in  a satisfactory  condition,  it  will 
be  insisted  upon  that  a new  element  of 
strength  be  brought  into  the  board,  or, 
in  other  words,  that  the  bank  be  placed 
entirely  under  a new  management. 

“Third — That,  if  neither  of  the  above 
suggestions  can  be  complied  with,  the 
officers  and  directors  will  be  urged  to 


place  the  bank  in  voluntary  liquidation, 
and  if  they  refuse  to  recommend  that 
such  action  be  taken  by  the  stockhold- 
ers, the  examiner  will  ask  a committee 
of  the  representative  shareholders  to 
meet  with  him  for  the  purpose  of  plac- 
ing before  them  the  result  of  his  ex- 
aminations. 

“This  committee  will  be  asked  by  the 
examiner  to  consider  whether  it  is  not 
better  for  the  shareholders  to  vote  for 
voluntary  liquidation  and  pay  the  de- 
posit liabilities  in  full,  while  there  is  yet 
a chance  to  save  a portion  of  their  orig- 
inal investment  in  the  capital  stock  of 
the  bank,  rather  than  to  court  an  ulti- 
mate failure  with  not  only  a loss  to  de- 
positors but  an  entire  wiping  out  of  the 
original  investment  of  the  shareholders, 
in  addition  to  an  assessment  for  varying 
amounts  in  the  way  of  a double  liability, 
to  be  assessed  against  their  capital  stock 
holdings.  Under  such  circumstances  it 
is  the  purpose  of  the  Comptroller  that 
the  directors  should  be  told  that  the  ad- 
vantages of  voluntary  liquidation  are: 

“That  the  depositors  will  be  paid  in 
full; 

“That  the  shareholders  have  an  op- 
portunity to  save  a part  of  their  orig- 
inal investment; 

“That  the  dual  liability  on  the  cap- 
ital stock  holdings  will  be  averted;  and 

“That  the  disgrace  of  another  na- 
tional bank  failure  will  be  avoided.” 

Whether  the  Comptroller  has  power 
under  the  law  to  force  liquidation  or 
not,  it  is  certain  that  his  recommenda- 
tions to  place  the  bank  in  liquidation 
can  hardly  be  disregarded.  That  it 
would  be  better  for  the  stockholders 
and  depositors  to  liquidate  a bank  while 
there  still  remains  something  to  be 
saved,  rather  than  to  continue  a hope- 
less struggle  against  insolvency,  hardly 
admits  of  argument. 


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THE  UNITED  STATES  TREASURY— VIII* 

By  William  Henry  Smith 


l^OR  the  purpose  of  expediting  the 
business  of  the  public  the  Treas- 
ury Department  is  divided  into  a num- 
ber of  bureaus,  each  under  the  direction 
of  a bureau  head.  The  bureaus  are  sub- 
divided into  divisions,  each  charged  with 
some  specific  part  of  the  work  of  the 
bureau.  The  whole  work  is  divided  into 
three  branches — the  executive  force,  the 
auditing  and  the  fiscal  force. 

The  Executive  Force. 

The  executive  force  consists  of  the 
Secretary,  the  three  Assistant  Secre- 
taries and  the  chief  clerk,  each  being 
assigned  specific  duties,  the  Secretary 
being  over  the  whole.  The  Secretary  is 
charged  by  law  with  the  management  of 
the  national  finances.  He  prepares 
plans  for  raising  the  revenue  needed  for 
the  support  of  the  government,  and  for 
the  maintenance  of  the  public  credit. 
He  grants  all  warrants  for  moneys 
drawn  from  the  treasury  for  any  pur- 
pose, on  appropriations  made  by  Con- 
gress. He  also  annually  prepares  for 
Congress  estimates  of  the  probable  rev- 
enues and  disbursements  of  the  gov- 
ernment for  the  ensuing  fiscal  year.  He 
exercises  a supervisory  control  over  the 
erection  of  all  buildings  for  public  use 
and  the  coinage  of  money  and  the  print- 
ing of  paper  currency  of  the  govern- 
ment and  for  the  national  banks. 

The  management  of  the  internal 
workings  of  the  Department  is  divided 
between  the  three  assistant  secretaries, 
the  Secretary  maintaining  a close  over- 
sight of  the  whole,  and  all  the  more  im- 
portant matters  are  submitted  to  him 
for  final  decision. 

To  Assistant  Secretary  A.  Piatt  An- 
drew is  assigned  the  general  direction 
and  supervision  of  ail  matters  relating 
to  the  duties  and  business  »n  the  follow- 
ing bureaus  and  divisions:  Director  of 

the  Mint;  the  bureau  of  Engraving  and 
Printing;  the  Secret  Service  division; 
the  division  of  public  moneys;  the  divi- 
sion of  loans  and  currency;  the  division 

• This  concludes  the  series  of  articles  on 
the  United  States  Treasury.  The  first  one 
was  published  in  January. 


of  bookkeeping  and  warrants;  the  divi- 
sion of  printing  and  stationery,  and  the 
division  of  mails  and  files. 

Assistant  Secretary  Charles  D.  Hilles 
has  supervision  and  direction  of  the 
office  of  the  supervising  architect;  the 
Bureau  of  Internal  Revenue;  the  Bu- 
reau of  Public  Health  and  Marine  Hos- 
pital Service;  the  office  of  the  life  sav- 
ing service  and  the  revenue  cutter  ser- 
vice. 

Assistant  Secretary  James  Freeman 
Curtis  has  direction  of  all  matters  con- 
nected with  the  customs  service.  When 
a new  tariff  law  goes  into  effect  the 
duties  of  the  assistant  having  charge  of 
this  branch  of  the  service  are  exceed- 
ingly onerous.  It  is  a position  requir- 
ing tact,  firmness  and  sound  judgment. 

The  chief  clerk,  Walter  W.  Ludlow, 
is  the  general  executive  officer  of  the 
Department,  and  is  charged  with  the 
responsibility  of  the  enforcement  of  de- 
partmental regulations  general  in  their 
nature.  He  is  the  superintendent  of  all 
buildings  occupied  by  the  Department 
in  the  District  of  Columbia,  and  has 
charge  of  all  expenditures  for  the  care 
of  all  public  buildings  under  the  con- 
trol of  the  Secretary  of  the  Treasury. 
He  also  has  the  custody  of  the  files,  the 
records  and  the  department  library.  He 
has,  in  a general  way,  supervision  over 
the  whole  working  force  of  the  Depart- 
ment. 

The  Auditing  Force. 

The  auditing  force  consists  of  the 
Comptroller  of  the  Treasury,  an  Assist- 
ant Comptroller,  and  six  auditors.  Rob- 
ert J.  Tracewell,  under  the  direction  of 
the  Secretary,  prescribes  the  forms  for 
keeping  all  public  accounts  except  those 
relating  to  the  postal  service.  Appeals, 
from  settlements  made  by  any  of  the 
auditors  can  be  taken  to  the  Comp- 
troller. He  passes  on  all  decisions 
made  by  the  auditors  construing  orig- 
inally, or  modifying  any  former  con- 
struction, of  statutes,  his  decision  being 
binding  upon  the  auditors.  In  short, 
he  has  the  immediate  direction  of  the 
work  of  the  several  auditors  in  the  set- 
tlement of  claims  against  the  govern- 

147 


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LEE  McCLUNG  LAWRENCE  O.  MURRAY 

Treasurer  of  the  United  States  Comptroller  of  the  Currency 


PHOTO  BY  CUNEDIN8T,  WASHINGTON.  D.  C. 

WM.  T.  VERNON  ROYAL  E.  CABELL 

Register  of  the  Treasury  Commissioner  of  Internal  Revenue- 


FISCAL  FORCE 

148 


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THE  UNITED  STATES  TREASURY 


149 


merit.  He  countersigns  all  warrants  au- 
thorized by  law  to  be  signed  by  the  Sec- 
retary of  the  Treasury.  In  performing 
his  duties  he  is  required  to  keep  a close 
watch  over  all  appropriations  to  see  that 
none  are  exceeded.  Formerly  there 
were  two  Comptrollers,  each  having 
specific  charge  over  certain  disburse- 
ments from  the  treasury,  but  the  office 
of  Second  Comptroller  was  abolished 
some  years  ago,  and  an  assistant  given 
the  Comptroller.  He  takes  supervision 
of  such  accounts  as  are  designated  by 
the  Comptroller. 

W.  E.  Andrews,  Auditor  for  the 
Treasury  Department,  examines  all  ac- 
counts of  salaries  and  incidental  ex- 
penses of  the  Department,  all  accounts 
relating  to  the  customs  service,  the  pub- 
lic debt,  internal  revenue,  the  Treasurer 
and  Assistant  Treasurers,  the  mints 
and  assay  offices,  the  bureau  of  engrav- 
ing and  printing,  the  revenue  cutter  ser- 
vice, the  life  saving  service,  public 
health  and  marine  hospital  service,  the 
public  buildings  and  the  secret  service. 

Benjamin  F.  Harper,  Auditor  for  the 
War  Department,  audits  and  settles  all 
accounts  of  salaries  and  incidental  ex- 
penses of  the  office  of  the  Secretary  of 
War,  and  of  all  the  bureaus  and  offices 
under  the  Secretary's  direction;  all  ac- 
counts relating  to  the  military  estab- 
lishment, armories  and  arsenals,  nation- 
al cemeteries,  fortifications,  public 
buildings  and  grounds,  under  the  chief 
engineers,  rivers  and  harbors,  the  Mili- 
tary Academy  at  West  Point  and  the 
Isthmian  Canal  Commission. 

The  Auditor  for  the  Interior  Depart- 
ment, Howard  C.  Shober,  passes  on  all 
claims  for  salaries  and  incidental  ex- 
penses of  the  Interior  Department;  all 
accounts  relating  to  the  protection  and 
survey  of  public  lands;  the  expenses  of 
the  Geological  Survey,  army  and  navy 
pensions,  Indian  affairs,  Howard  Uni- 
versity, the  capitol  and  grounds  in 
Washington,  Hot  Springs  reservation, 
and  all  other  business  within  the  juris- 
diction of  the  Interior  Department. 

Ralph  W.  Tyler,  Auditor  for  the 
Navy  Department,  examines  and 
passes  on  all  accounts  connected  with 
the  Navy  Department,  and  with  the 


navy  itself,  including  those  connected 
with  the  construction  and  repair  of  all 
vessels  for  naval  use. 

Caleb  B.  Layton  is  called  the  “Audit- 
or for  the  State  and  other  Depart- 
ments.” This  means  for  such  depart- 
ments as  have  no  auditor  of  their  own, 
and  includes  the  departments  of  State, 
of  Agriculture,  of  Commerce  and  Labor 
and  of  Justice.  He  has  under  his  juris- 
diction all  claims  directly  connected 
with  each  of  these  departments,  for  sal- 
aries and  incidental  expenses,  includ- 
ing all  accounts  relating  to  the  diplo- 
matic service,  the  consular  service,  the 
judiciary.  United  States  Courts,  judg- 
ments of  the  United  States  Courts  and 
of  the  Court  of  Claims,  the  Executive 
office,  the  Civil  Service  Commission,  In- 
terstate Commerce  Commission,  the  Dis- 
trict of  Columbia,  the  Smithsonian  In- 
stitute, territorial  governments,  the  Sen- 
ate and  House  of  Representatives,  pub- 
lic printer,  the  library  of  Congress,  and 
of  all  boards  or  commissions  and  estab- 
lishments of  the  government?  not  within 
the  jurisdiction  of  any  of  the  executive 
departments. 

Meritt  O.  Chance,  the  Auditor  for  the 
Post  Office  Department,  has  jurisdiction 
over  all  claims  for  salaries  and  inci- 
dental expenses  of  the  Post  Office  De- 
partment; all  postal  and  money  order 
accounts  of  postmasters,  and  all  ac- 
counts relating  to  the  transportation  of 
the  mails.  He  countersigns  and  regis- 
ters the  warrants  on  the  Treasurer  is- 
sued in  liquidation  of  the  indebtedness 
of  the  Post  Office  Department,  and  su- 
perintends the  collection  of  debts  due 
the  United  States  for  the  services  of 
the  Post  Office  Department,  and  di- 
rects all  suits  for  the  payment  of  money 
for  postal  service. 

The  Fiscal  Force. 

The  fiscal  force  of  the  Department  is 
composed  of  the  Treasurer,  the  Regis- 
ter, the  Comptroller  of  the  Currency, 
the  Director  of  the  Mint  and  the  Com- 
missioner of  Internal  Revenue.  Two  of 
these,  the  Comptroller  and  the  Com- 
missioner of  Internal  Revenue,  were 
the  outgrowth  of  the  necessities  of  the 
government  during  the  civil  war.  The 


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EXECUTIVE  FORCE 

A.  PIATT  ANDREW  CHARLES  D.  HILLES 

Assitant  Secretary  Assistant  Secretary 

FRANKLIN  MacVEAGH 
Secretary  of  the  Treasury 

J.  F.  CURTIS  WALTER  W.  LUDLOW 

Assistant  Secretary  (photo  by  Harris  a iwino)  Chief  Clerk 


Digitized  by  t^ooQle 


AUDITING  FORCE 


WILLIAM  E.  ANDREWS 
Auditor  for  the  Treasury  Dept. 

HOWARD  C.  SHOBER 
Auditor  for  the  Interior  Dept. 

CALEB  R.  LAYTON 
Auditor  for  the  State  Dept. 


BENJAMIN  F.  HARPER 
• Auditor  for  the  War  Dept. 

RALPH  W.  TYLER 
Auditor  for  the  Navy  Dept. 

MERRITT  O.  CHANCE 
Auditor  for  the  Post  Office  Dept. 


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152 


THE  BANKERS  MAGAZINE 


others  were  created  b\  the  original  act 
of  1789  establishing  the  Treasury  De- 
partment. One  man,  Joseph  Nourse, 
held  the  office  of  register  forty  years. 
He  was  appointed  originally  by  Wash- 
ington, and  held  the  position  through 
all  the  changes  of  administration  down 
to  that  of  Jackson. 

The  Treasurer,  Lee  McClung,  is  the 
custodian  of  the  funds  of  the  govern- 
ment, and  collects  and  disburses  all  pub- 
lic moneys.  He  is  the  redemption  agent 
for  the  notes  of  national  banks,  and 
trustee  for  the  bonds  held  to  secure 
national  bank  circulation  and  the  gov- 
ernment deposits  in  national  banks.  He 
is  also  the  custodian  of  miscellaneous 
trust  funds,  fiscal  agent  for  the  pay- 
ment of  interest  on  the  public  debt,  in- 
cluding the  Spanish  indemnity  fund, 
and  disbursing  officer  of  the  school  fund 
of  the  Indian  Territory  and  the  Philip- 
pine Islands. 

William  T.  Vernon  is  Register  of  the 
Treasury.  He  signs,  issues  and  reg- 
isters all  bonds  of  the  United  States,  in- 
cluding those  for  the  Panama  canal  and 
the  Philippine  Islands  and  the  District 
of  Columbia.  He  receives,  examines 
and  registers  the  upper  halves  of  all  re- 
deemed United  States  notes,  gold  cer- 
tificates, silver  certificates,  interest  cou- 
pons and  checks,  and  all  fractional  cur- 
rency notes,  and  all  condemned  internal 
revenue  stamps  and  postage  stamps. 

Lawrence  O.  Murray,  Comptroller  of 
. the  Currency,  is  the  great  connecting 
link  between  the  Treasury  Department 
and  the  national  banks.  Among  his 
duties  are  the  examination  of  all  appli- 
cations for  bank  charters  and  the  grant- 
ing of  the  certificate  authorizing  the 
organization  of  banks.  He  has  direct 
supervision  over  all  national  banks,  and 
when  declared  insolvent,  he  appoints 
the  Receiver.  He  prepares  and  issues 
to  the  banks  the  currency  they  are  en- 
titled to  receive. 

The  Director  of  the  Mint  (office  va- 
cant up  to  the  time  of  going  to  press) 
has  general  supervision  of  all  the  mints 
and  assay  offices  of  the  government. 
He  directs  the  coinage  to  be  issued  and 
authorizes  all  expenditures  for  that  pur- 
pose. All  appointments  and  removals 


in  the  mints  and  assay  offices  arc  sub- 
ject to  his  approval. 

Royal  E.  Cabell,  as  Commissioner  of 
Internal  Revenue,  has  general  superin- 
tendence of  all  internal  revenue  taxes. 
This  gives  him  charge  of  the  employ- 
ment of  all  officers  and  agents  concerned 
in  the  collection  of  internal  revenue 
taxes,  including  what  is  known  as  the 
corporation  tax  and  the  enforcement  of. 
the  revenue  laws.  He  issues  all  regu- 
lations and  instructions  connected  with 
the  collection  of  the  taxes  and  the  en- 
forcement of  the  revenue  laws. 


WHOLESALE  PRICES,  1890  TO 
MARCH,  1910 

\\^HOLESALE  prices  in  1909,  as 
measured  by  the  prices  of  257 
commodities,  advanced  three  per  cent, 
over  the  wholesale  prices  in  1908,  but 
with  this  advance  they  were  still  two 
and  three- tenths  per  cent,  below  the 
high  average  of  1907  prices.  Whole- 
sale prices  in  1909  were  fourteen  and 
five-tenths  per  cent,  higher  than  in 
1900;  forty-one  per  cent,  higher  than 
in  1897,  the  year  of  lowest  prices  in  the 
twenty-year  period  from  1890  to  1909; 
twelve  per  cent,  higher  than  in  1890; 
and  twenty-six  and  five-tenths  per  cent, 
higher  than  the  average  price  for  the 
ten  years  1890  to  1899. 

The  highest  point  reached  in  1907 
was  the  month  of  October,  from  tfhich 
month  there  was  a general  decline  until 
August,  1908.  Beginning  with  Septem- 
ber, 1908,  there  has  been  an  increase 
without  a break  in  any  month  up  to 
March,  1910.  Wholesale  prices  in 
March,  1910,  were  higher  than  at  any 
time  in  the  preceding  twenty  years,  be- 
ing seven  and  five-tenths  per  cent,  high- 
er than  in  March,  1909,  ten  and  two- 
tenths  per  cent,  higher  than  in  August, 
1908,  twenty-one  and  one-tenth  per 
cent,  higher  than  the  average  yearly 
price  of  1900,  forty-nine  and  two-tenths 
per  cent,  higher  than  the  average  yearly 
price  of  1 897,  and  thirty-three  and 
eight-tenths  per  cent,  higher  than  the 
average  price  for  the  ten  years  1890  to 
1899. 


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SAVINGS  BANKS 

Conducted  by  W.  H.  Kniffin,  Jr. 


SAVINGS  BANK  BUILDINGS  AS  AN  ASSET 


By  W.  H.  Kniffin,  Jr. 


single  feature  of  savings  bank 
management  has  been  attended 
with  more  erroneous  impressions  and 
fruitful  of  more  adverse  comment  than 
has  the  building  of  ornate  and  expensive 
banking  houses.  This  is  especially  true 
where  the  bank  has  been  paying  a lesser 
rate  of  interest  than  generally  prevails, 
and  at  times  when  reduction  of  the  divi- 
dend rate  is  in  the  air. 

To  explain  to  the  average  man  why 
a bank  can  afford  to  live  in  a luxurious 
home  and  cannot  afford  to  pay  half  of 
one  per  cent,  more  interest,  is  as  diffi- 
cult as  to  attempt  to  demonstrate  that 
a man  who.  runs  an  automobile  is  not  in 
position  to  pay  his  gas  bill.  The  de- 
positor is  apt  to  take  the  gas  man’s 
view,  that  he  should  either  pay  up  or 
“cut  out”  the  car.  This  view  is  espe- 
cially prevalent  in  New  York  City, 
where  money  has  been  spent  with  a con- 
siderable degree  of  lavishness  on  sav- 
ings bank  buildings. 

Many  have  the  idea  that  the  earning 
power  of  the  bank  must  be  commensu- 
rate with  its  style  of  living,  and  that 
it  could,  if  it  would,  pay  even  more  than 
a four,  per  cent.  rate.  In  the  Brooklyn 
section,  a widespread  notion  exists  that 
these  structures  have  been  built  from 
dormant  account  money,  which,  as  any 
bank  man  knows,  is  utterly  absurd,  and 
would  be  both  illegal  and  unjust.  The 
charge  has  even  gone  out  that  banks 
have  made  needless  improvements  in  this 
line,  in  order  to  avoid  extra  dividends, 
and  whether  this  be  true  or  false,  is  for 
them  to  answer. 

The  building  of  any  fine  structure  ex- 
cites comment.  Marble,  granite,  steel 
and  bronze  are  indicative  of  stability, 
prosperity,  permanency,  soundness.  And 
while  a fine  building  will  not  make  a bad 
bank  good,  it  will  make  a good  bank 
better — in  the  eyes  of  many.  If  the 


outlay  is  too  elaborate,  it  may  excite 
adverse  comment  as  to  the  wisdom  of 
the  managers,  but  not  as  to  the  pros- 
perity of  the  institution.  It  is  said  that 
the  building  of  a certain  banking  edifice 
in  New  York  State  was  in  a measure  re- 
sponsible for  the  present  franchise  tax 
in  that  State,  inasmuch  as  the  legisla- 
tors concluded  that  if  banks  could  afford 
such  buildings,  they  could  afford  to  pay 
a tax,  and  promptly  proceeded  to  im- 
pose one. 

From  an  Advertising  Standpoint. 

From  a publicity  standpoint,  there 
can  be  no  question  that  a fine  building 
is  jbl  good  advertising  medium.  And  as 
long  as  men  are  judged  by  the  clothes 
they  wear  and  the  houses  they  occupy, 
it  will  be  so.  And  many  a bank  dates 
its  success  from  the  time  of  opening 
the  new  building.  The  phenomenal 
gains  of  two  banks  in  Brooklyn  during 
1909  are  directly  traceable  to  having 
moved  into  handsome  buildings  during 
that  year. 

The  average  man  cannot  digest  or 
appreciate  a bank  statement;  frequently 
he  does  not  know  the  men  in  charge,  and 
he  falls  back  upon  his  observation  of 
the  house  it  occupies  in  order  to  assure 
himself  that  it  is  worthy  of  his  trust.  It 
is  true  that  there  are  many  most  excellent 
institutions,  like  many  men,  that  oc- 
cupy shabby  quarters;  and  on  the  con- 
trary, many  unsound  concerns  that,  like 
other  men,  attempt  to  cover  up  their 
weaknesses  by  an  outward  show  of  pros- 
perity. But  a good  bank,  in  a good 
home,  is  like  unto  a good  man  in  a 
mansion — eminently  in  place. 

But  granting  that  a good  bank  is 
worthy  of  a good  home,  and  one  in  keep- 
ing with  its  dignity  and  standing;  and 
granting  that  it  may  be  advertising  par 

153 


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158 


THE  BANKERS  MAGAZINE 


excellence,  there  is  no  doubt  that  a bank 
can  be  weakened  as  well  as  strengthened 
by  this  line  of  investment.  It  is 
charged  that  a bank  of  discount  in 
Greater  New  York  that  went  to  the  wall 
recently  was  in  a large  measure  carried 
down  by  unwise  investments  in  bank- 
ing property.  In  the  South,  notably 
among  the  colored  banks,  this  is  espe- 
cially true,  and  while  they  overrate  the 
banking  house  as  an  advertising  me- 
dium, they  at  the  same  time  overvalue  it 
as  an  asset. 

To  illustrate  the  point  that  a bank 
may  become  weakened  by  this  line  of 
endeavor,  take  an  instance  as  follows: 
A bank  occupying  rented  quarters  and 
having  a surplus  of  $100,000,  invests 
(lawfully)  in  a banking  house  one- 
quarter  of  that  sum.  The  old  surplus 
being  one-tenth  of  the  deposits,  makes 
the  ratio  of  strength  ten  to  one.  The 
building  being  a “dead”  asset,  and  very 
slow  in  moving,  on  account  of  its  limited 
utility,  has  cut  into  the  available  sur- 
plus one-quarter,  leaving  the  ratio  of 
strength  seven  and  one-half  to  one. 

It  is  very  evident  that  a building  hav- 
ing such  limited  utility  and  usually  cost- 
ing dearly,  cannot  be  worth  its  cost  as 
a marketable  asset.  And  unless  some 
other  concern  should  step  in  and  pur- 
chase it,  the  building  would  be  worth 
merely  the  value  of  the  ground  and  the 
old  material.  This,  of  course,  has  refer- 
ence to  buildings  erected  for  banking 
purposes  only,  and  not  commercial  edi- 
fices. This  point  will  be  taken  up  later. 
But  it  would  certainly  seem  to  be  good 
banking  not  to  hold  an  asset  of  this 
character,  or  of  any  sort,  as  a matter 
of  fact,  above  its  market  value. 

The  Law  in  the  Case. 

This  matter  of  investment  in  bank 
buildings  is  generally  regulated  by  law. 
Let  us  “ask  to  inquire,”  as  Hasamura 
Togo  would  say,  and  ascertain  the 
status  of  this  question.  Real  estate  may 
be  held  for  banking  purposes  as  fol- 
lows: 

New  York — A plot  whereon  a build- 
ing may  be  erected  requisite  for  the  con- 
venient transaction  of  its  business,  and 


from  portions  of  which  not  required  for 
its  own  use  a revenue  may  be  derived. 
The  cost  shall  not  exceed  twenty-five 
per  centum  of  the  net  surplus,  except 
by  written  consent  of  the  superinten- 
dent of  banks.  Estimates  of  the  same, 
plans,  etc.,  must  be  filed  with  the  de- 
partment before  the  purchase  of  the  lot. 

Massachusetts — A sum  not  exceeding 
the  guarantee  fund  and  undivided  earn- 
ings; nor  in  any  case  to  exceed  five  per 
cent,  of  the  deposits,  or  two  hundred 
thousand  dollars.  Consent  of  commis- 
sioner of  banking  must  be  obtained. 

Rhode  Island — Such  corporations 

may  invest  in  the  purchase  of  a “suit- 
able” site  and  the  erection  of  a “suit- 
able” building  for  the  convenient  trans- 
action of  business. 

Vermont — Five  per  cent,  of  the  de- 
posits may  be  so  invested. 

New  Hampshire — In  land  and  build- 
ings suitable  and  actually  used  by  it,  in 
part,  for  its  banking  room,  the  total 
cost  of  which  shall  not  exceed  ten  per 
cent,  of  its  deposits. 

Connecticut — A greater  sum  than 
may  be  taken  from  the  surplus  of  such 
bank,  after  allowing  for  the  deprecia- 
tion of  assets,  and  the  three  per  cent, 
contingent  fund  required  by  section 
3441,  and  such  expenditure  shall  be  sub- 
ject to  the  approval  of  the  bank  com- 
missioners. 

Iowa — A lot  and  building  in  which  its 
business  is  carried  on. 

Maine — Real  estate  in  the  city  or 
town  in  which  such  bank  or  institution 
is  located  to  an  amount  not  exceeding 
five  per  cent,  of  its  deposits  or  to  an 
amount  not  exceeding  its  reserve  fund. 

Minnesota — Save  as  otherwise  spe- 
cially provided,  the  entire  cost  of  land 
and  buildings  for  the  transaction  of  the 
business  of  a savings  bank,  including 
premises  leased  to  others,  shall  not  be 
more  than  fifty  per  cent,  of  its  net  sur- 
plus, assets  other  than  cash  being  taken 
at  cash  market  value. 

Indiana — A lot  and  banking  house 
requisite  for  the  transaction  of  its  busi- 
ness, and  for  an  income  from  such  por- 
tions of  the  same  as  are  not  required  for 
its  own  use.  The  estimated  cost  and  in- 
come shall  be  approved  by  the  auditor 


Digitized  by  t^ooQle 


SAVINGS  BANKS 


159 


of  the  State  and  the  same  shall  not  cost 
more  than  five  per  cent,  of  the  deposits. 

Bank  Buildings  in  New  York. 

In  accordance  with  the  above  law,  the 
savings  banks  of  New  York  State  have 
invested,  or,  to  be  more  accurate,  “tied 
up,”  $20,788,300  of  past  earnings  in 
bank  buildings,  ranging  from  a modest 
two-story  brick  structure  costing  $2,000 
to  a palace  of  marble  and  onyx.  These 
structures  have  been  “amortized,”  or 
scaled  down,  on  the  books  to  $13,245,- 
700,  a loss  of  seven  millions  in  deprecia- 
tion. By  the  testimony  of  the  banks 
themselves,  these  structures  are  worth, 
as  a whole,  just  about  the  holding  value, 
$13,365,200.  This  will,  in  a small 
measure,  account  for  the  diminishing 
ratio  of  surplus.  Just  what  process  has 
been  used  to  ascertain  this  value  is  not 
known.  At  best  it  is  probably  an  esti- 
mate. 

Only  one  case  is  on  record  in  New 
York  State  where  the  value  of  a bank 
building  has  been  judicially  determined. 
That  was  in  the  case  of  the  Bank  for 
Savings,  corner  Twenty-second  street 
and  Fourth  avenue.  New  York.  This 
bank  brought  suit  against  the  State 
Comptroller  to  test  the  validity  of  the 
franchise  tax  levied  against  the  surplus 
of  savings  banks. 

As  will  be  seen  by  the  accompanying 
table  the  building  cost  upwards  of 
$750,000,  and  the  bank  then,  as  now, 
held  the  building  on  its  books  at  $400,- 
000.  The  comptroller  assessed  this  at 
cost.  This,  the  bank  contended,  was 
too  high.  Experts  were  put  on  the 
stand  for  both  sides,  and  it  was  shown 
that  property  in  that  neighborhood  had 
increased  materially  since  the  building 
was  erected,  and  that  the  lot  was  worth 
$390,000  and  the  building  as  old  ma- 
terial $100,000  more.  But  this  was  as 
old  material  and  a piece  of  ground,  and 
not  as  a building  especially  erected  for 
a special  purpose . In  this  case  the 

court  said:  “It  is  well  known  that  a 

building,  especially  one  constructed  for 
a special  purpose,  is  rarely  worth  in  the 
market  what  it  has  cost  to  erect  it. 
. . . Manifestly  the  value  of  the 


building  as  old  material  should  have 
little  weight  in  fixing  the  actual  value 
of  the  property.”  The  lot  was  held  at 
the  above  figure  ($390,000)  and  the 


Home  of  the  East  Side  Savings  Bank  of 
Rochester.  N.  Y.  Omitted  from  the 
large  groups. 


building  at  $200,000,  making  $590,000 
as  the  value  for  the  bank's  purposes — a 
depreciation  of  $160,000,  in  spite  of  en- 
hancing values  in  realty  thereabouts. 

It  is  not  often  that  such  property  ap- 
preciates in  value — the  tendency  is  the 
other  way.  By  referring  to  the  table  it 
will  be  seen  that  on  the  basis  of  present 
market  values  only  ten  bank  buildings 
out  of  a total  of  ninety-five  have  a mar- 
ket value  equal  to  or  exceeding  the  cost. 
Even  in  New  York  city,  with  the  steady 
rise  in  realty  values,  it  is  doubtful  if  the 
average  bank  building  would  make  any 
better  showing  than  did  the  building  of 
the  Bank  for  Savings  if  the  test  were 
judicially  made.  A recent  instance  is 
quite  to  the  contrary,  however,  due  to 
peculiar  local  conditions — that  of  the 
Union  Dime  Savings  Bank,  which  cost 
$690,000,  was  held  at  $450,000,  and, 
according  to  newspaper  reports,  sold  for 
$1,000,000  to  an  English  syndicate, 
which  in  return  sold  it  for  $1,500,000. 


Digitized  by  t^ooQle 


160 


THE  BANKERS  MAGAZINE 


Also  the  building  of  the  North  River 
Savings  Bank,  in  the  same  section, 
worth  about  double  its  cost.  This  is  due 
to  the  Pennsylvania  tunnels  and  termi- 
nals in  that  section,  making  it  the  com- 


Home  of  the  Westchester  County  Savings 
Bank  of  Tarry  town,  N.  Y.  Omitted 
from  the  large  groups. 


ing  center  of  New  York.  Such  phenom- 
enal rises  in  values  are  not  common. 

Again,  it  will  be  noted  that  thirty- 
nine  out  of  sixty-five  commercial  build- 
ings do  not  carry  themselves,  and  there- 
fore cost,  as  rentals,  the  interest  on  the 
investment  plus  the  deficiency,  which  in 
the  State  as  a whole  amounts  to  $193,- 
144.  Fourteen  banks  earned  a surplus 
above  their  carrying  charges.  Several 
banks  have  made  it  a practice  to  charge 
themselves,  as  rental,  with  a sum  esti- 
mated to  be  the  rental  value  of  the 
premises,  and  this  appears  in  the 
charges,  where  such  custom  exists.  Per- 
haps not  over  ten  banks  in  the  State  do 
this.  One  in  New  York,  whose  prop- 
erty is  held  at  upwards  of  $30,000, 
charges  itself  with  $7,000  in  addition  to 
the  taxes  and  repairs. 

As  to  the  merits  of  a commercial 
building  as  compared  with  a strictly 
banking  office,  there  is  this  to  be  said: 
A fine  office  building,  such  as  the  Erie 
County,  of  Buffalo,  or  the  Onondaga 
County,  of  Syracuse,  doubtless  carries 
as  much  prestige  as  an  advertising  me- 
dium as  does  the  strictly  bank  building. 
Perhaps  more  so,  for  if  filled  with  good 
tenants,  they  have  a tendency  to  attract 
notice  to  the  building  through  private 


advertising.  And  again : The  invest- 
ment is  not  a dead  asset,  as  it  earns 
something  towards  its  up-keep;  whereas 
the  strictly  banking  proposition  earns 
nothing.  The  only  case  of  a banking 
house  returning  any  income,  known  to 
the  writer,  is  that  of  the  Union  Square 
Savings  Bank,  New  York,  of  recent 
erection,  which  has  a happy  idea,  in 
having  an  extension  in  the  rear,  fitted 
up  as  apartments,  rented  in  the  main  to 
employees,  from  which  was  derived  last 
year  an  income  of  $800. 

The  intent  of  this  paper  is  not  to 
criticise — far  from  it — but,  rather,  to 
direct  attention  to  existing  facts,  and 
present  a subject  that  has  not  received 
attention  heretofore.  A glance  at  the 
group  reproductions  of  these  buildings, 
which  includes  all  but  twenty-four  in 
the  State,  cuts  of  which  were  impossible 
to  obtain,  will  demonstrate  that  the 
Empire  State  has  a fine  lot  of  savings 
bank  structures,  irrespective  of  the  cost 
or  carrying  charges.  That  they  are  a 
credit  to  the  banks  and  the  State  is 
readily  to  be  seen.  They  have  doubt- 
less had  much  to  do  with  the  success  of 
these  banks  and  have  added  not  a little 
to  the  opinion  of  stability  everywhere 
to  be  found.  If  they  have  cost  twenty 
millions,  they  have  doubtless  been  worth 
it,  or  they  would  not  have  been  built.  If 
part  of  that  twenty  millions  had  better 
been  reserved  in  the  surplus,  or  dis- 
tributed as  extra  dividends,  it  is  too  late 
to  alter  the  matter  now — they  are  here 
to  stay.  They  will  not  be  sold  for  old 
junk,  but  continue  to  be  used  for  bank- 
ing purposes  and  are  worth — whatever 
the  bank  men  may  say. 


LOCAL  REPRESENTATIVES 
WANTED 

THE  Bankers  Magazine  wishes  to  se- 
cure a local  representative  in  each  of 
the  large  cities  of  the  country  to  secure 
subscriptions  and  to  act  as  a general  repre- 
sentative. 

Liberal  arrangements  will  be  made  with 
responsible  persons.  Preference  given  to 
those  employed  in  banks  or  familiar  with 
the  banking  business. 

For  particulars,  address  Bankers  Pub- 
lishing Co.,  253  Broadway,  New  York. 


Digitized  by  touooQle 


A TRUST  DEPARTMENT  OUTFIT  FOR  THE 
SMALLER  TRUST  COMPANY 

By  W.  W.  Potts,  Secretary  and  Treasurer  Federal  Title  and  Trust 
Company,  Beaver  Falls,  Pa. 

TN  the  average  small  or  newly  incor-  The  trust  business  in  most  localities, 
porated  trust  company,  the  matter  aside  from  the  cities,  is  very  largely  a 
of  determining  just  what  will  be  neces-  matter  of  development,  and  in  the  in- 
sary  in  supplying  the  needed  books  and  stallation  of  the  necessary  outfit  care 
forms  in  the  trust  department  is  one  of  should  be  exercised  in  order  to  avoid  a 
considerable  perplexity  to  the  official  in  number  of  books  and  forms  not  abso- 
whose  hands  the  business  will  be  placed,  lutely  needed  at  the  outset, 
particularly  will  this  be  the  fact  should  In  the  ruling  of  the  trust  ledger  sub- 
the  trust  business  fall  to  one  wholly  un-  mitted,  it  is  believed  one  has  been  de- 
acquainted  with  that  branch  of  the  veloped  that  will  afford  all  needed  in- 
business. formation,  and  being  of  the  loose  leaf 


Voucher  Check,  folded  to  show  all  sides 

ill 


Digitized  by  t^ooQle 


162 


THE  BANKERS  MAGAZINE 


BOND 


Coupon  Bond  Register 


REGISTER. 


Reverse  of  Coupon  Bond  Register 


Mortgage  Register 


type,  will  be  found  capable  of  expan-  With  this  form  a record  can  be  had 
sion  up  to  the  point  where  it  is  neces-  of  both  receipts  and  disbursements,  as 
sary  to  place  the  trust  department  in  a well  as  of  all  investments,  personal  and 
separate  division.  real  property,  the  expenses  of  handling 


Digitized  by  t^ooQle 


Uninvested  Cash  Balance 


164. 


THE  BANKERS  MAGAZINE 


the  account,  uninvested  cash  balance, 
and  a history  of  the  matter  from  the 
appointment  to  the  final  closing  up  of 
the  account. 

The  form  for  the  uninvested  cash  bal- 
ance of  each  account  in  aggregate  is 
carried  in  the  front  of  the  ledger*  as 
well  as  a like  account  of  the  mortgages 


No.  * 

THE  FEDERAL  TITLE  & TRUST  COMPART. 


IS  ldok.. 


Beaver  Falls , Pa' 

TO  WHOM  IT  M AY  {WfCERNt 

The  BOND  and  MORTGAGE  herewith,  for 

,.v 


rtcordod  fe 

Mortgago  Book  I O & pago  . . 

although  standing  in  tho  namo  q/  this  Company  gtnorally,  iiM  tho 
individual  property  qf  tho  Company,  but  if  hold  by  it  in  trust,  for 


/Mowing  amounts,  and  /nr  tho  eotatoo  horsajtor  named,  vie; 

* .^OO,  . 

* /CO,. 

* /oo. 
$ 

$ 


Botaio  o0AJjbL+>  (o . 

^lUUkAAA/  ^A<o. 


(<3r& 


i 

$ 

TIE  FEKIAl  TITLE  k TRUST  COMPAIY. 


THCAnuHtn. 


Mortgage  Investment  Card— A similar  card  la 
filed  with  papers  of  the  trust  account 


and  other  investments,  a page  of  the 
regular  ledger  ruling  being  used  for 
each. 

The  individual  trust  accounts  may  be 
carried  numerically,  or  can  be  separated 
alphabetically  as  is  desired. 

In  the  disbursement  of  funds  the  use 


of  a manifold  voucher-check  has  been 
found  very  satisfactory.  The  voucher 
and  check  being  combined,  there  is  no 
possibility  of  loss  of  any  statement  or 
bill,  as  the  account  payable  is  copied  to 
the  voucher,  and  the  original  item  filed 
with  the  other  papers  in  the  case,  each 
bill  or  statement  being  marked  with 
the  number  of  the  trust,  voucher  num- 
ber and  date  of  payment,  as  follows: 

Trust  No 

Voucher  No 

Date  Paid 

It  has  been  found  advisable  to  use  a 
heavy  expansion  wallet  in  caring  for  the 
different  papers  and  records  of  each  ac- 
count, the  number  and  name  of  each  ac- 
count being  written  on  the  outside  of 
the  wallet,  and  the  papers  enclosed 
being  separated  and  placed  in  ordinary 
manila  envelopes,  bearing  the  number 
and  name  of  the  account,  the  classifica- 
tion of  the  papers  being  indicated  on 
the  outside  of  the  envelope,  viz. : 

Trust  Account  No.  5. 

Guardian  of  Philip  Rogers. 

Accounts  Payable. 

In  case  the  investment  of  funds  in 
any  account,  in  a portion  of  a mort- 
gage owned  bv  the  trust  company,  is 
desired,  a complete  record  of  the  same 
can  be  had  by  the  use  of  the  mortgage 
investment  card  here  shown.  One  of 
the  cards  should  be  filed  with  the 
papers  of  the  mortgage  loan,  showing 
the  amounts  invested  in  each  trust  ac- 
count, also  each  trust  envelope  should 
carry  a record  of  its  mortgage  invest- 
ments on  one  of  the  same  forms.  By 
the  use  of  the  investment  card  it  will  be 
unnecessary  to  burden  the  mortgage 
register  as  the  numerous  investments 
are  made,  or  to  record  the  return  of  the 
funds  at  such  time  as  the  trust  account 
is  closed. 

Suitable  rulings  of  bond  and  mort- 
gage registers  are  also  shown. 

By  the  use  of  the  different  forms  sub- 
mitted it  is  believed  the  trust  business 
of  the  smaller  company  can  be  handled 
at  not  too  great  an  expense  of  time  or 
outlay  of  money  in  installation  ex- 
penses. 


Digitized  by  t^ooQle 


PRACTICAL  BANKING 


SEEKING  BUSINESS  FROM  SHAREHOLDERS 

By  Archibald  G.  Boal 


'T'HEORETICALLY,  at  least,  every 
shareholder  in  a banking  associa- 
tion ought  to  be  interested  in  that  bank’s 
success  to  the  extent  of  patronizing  it 
himself  to  the  full  extent  of  his  ability 
and  encouraging  others  to  patronize  it. 
It  is  a common  complaint  among  many 
bank  executives  that  some  of  their 
stockholders  are  not  customers  at  all,  or 
very  indifferent  customers. 

In  these  days  when  in  towns  and 
cities  competition  for  depositors  is  not 
only  keen,  but  very  keen,  cashiers 
might  find  a field  for  study  and  thought 
in  the  stock  ledger.  Here  they  will  find 
prospective  customers  on  whom  they 
have  a real  claim  and  with  whom  there 
should  be  but  little  necessity  for  argu- 
ment. 

If  the  stock  ledger  be  taken  and  each 
shareholder’s  name  be  placed  under  one 
of  the  following  headings, the  latent  pos- 
sibilities of  increased  business  in  one’s 
own  family  (so  to  speak)  may  be  dis- 
covered. The  classification  is:  “Good 


Customers,”  “Medium  Good,”  “Keep 
No  Account,”  “Lives  Too  Far  Away.” 
No  cashier,  daily  and  nightly  prodding 
his  brains  for  ways  and  means  to  secure 
new  business,  should  be  satisfied  with 


less  than  seventy-five  per  cent,  of  the 
bank’s  shareholders  as  active  depositors. 

The  “Medium  Good”  class  will  prob- 
ably be  found  to  have  an  account  at  an- 


other bank,  which,  with  the  proper  ap- 
plication of  tact,  diplomacy  and  argu- 
ment, they  will  be  glad  to  bring  to  the 
bank  in  which  they  are  directly  inter- 
ested. Those  who  keep  no  accounts  are 
sometimes  estranged  by  trivial  incidents 
of  the  past  which  went  unexplained. 
Probably  the  incident  wasn’t  big  enough 
to  make  a fuss  over,  but  big  enough  to 
cause  a slight  dissatisfaction,  which  led 
to  new  alliances.  These  may  be  won 


back  by  the  good  salesmanship  qualities 
that  should  be  in  every  cashier.  Those 


who  live  too  far  away  may  sometimes  be 
persuaded  to  keep  a dormant  account 
under  an  agreement  to  pay  some  in- 
terest. 

Shareholders  sometimes  drift  away  to 
other  banks,  perhaps  more  conveniently 
located,  because  they  are  never  re- 
minded of  the  bank’s  existence,  except 
by  the  formal  notice  of  the  annual  meet- 
ing and  a request  for  a proxy  once  a 
year  and  by  their  dividend  check. 

All  published  reports  should  be  sent 
to  shareholders  and  a letter  once  or 
twice  a year  explaining  the  general  state 
of  the  bank’s  business  will  serve  to  keep 
them  interested. 

Likewise  the  shareholders  should  be 
on  the  mailing  list  for  all  advertise- 
ments sent  out  during  the  year.  In 
spite  of  this  there  will  always  be  some 
who  are  peculiar  and  prefer  to  do  busi- 
ness with  other  banks  and  some  who, 
living  in  other  cities,  inherit  stock. 
Whenever  possible  the  board  of  direc- 
tors should  endeavor  to  find  buyers 
nearer  home  for  such  stock  and  place 
it  where  it  will  do  the  most  good. 

By  adroit  suggestion  shareholders 
can  sometimes  be  trained  to  help  secure 
new  customers.  They  may  hand  the 
cashier  lists  of  names  of  friends  and 
neighbors,  whose  business  would  be 
worth  while,  or  of  those  who  have  sold 
or  are  About  to  sell  real  estate  or  other 
property  and  have  not  yet  found  a new 
investment.  In  these  days  the  alert  and 
careful  cashier,  without  unseemly  ef- 
forts, can  bring  to  bear  a constant  pull 
for  business  on  every  one  he  knows. 

The  tendency  of  shareholders  is  to 
leave  everything  to  the  directors  and  the 
tendency  of  the  directors  is  to  pass  the 
responsibility  for  success  along  to  the 
president  and  cashier.  In  seeking  to 
make  a bank  profitable  the  shareholders 
should  contribute  something  more  than 
the  money  they  have  invested. 

165 


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FOREIGN  BANKING  AND  FINANCE 

Conducted  by  Charles  A.  Consnt 


BANKING  PROSPERITY  IN  AUSTRALIA 


ENERAL  prosperity  is  reported  by 
the  banks  of  Australia.  At  the 
forty-fourth  general  meeting  of  the 
Bank  of  Adelaide  (Victoria),  as  re- 
ported by  the  London  “Economist/*  the 
chairman,  Mr.  A.  G.  Downer,  said  that 
during  the  fairly  long  number  of  years 
he  had  occupied  his  present  position  the 
reports  and  balance-sheets  had  been 
most  satisfactory,  but  it  had  never  been 
his  pleasure  to  dwell  upon  figures  so 
gratifying  as  those  now  presented  to 
the  shareholders.  The  dividend  of  ten 
per  cent,  resolved  upon  last  year  had 
been  maintained,  and  there  had  been 
carried  forward  a sum  of  about  *£6,000 
in  excess  of  that  carried  forth  last  year. 
It  was  proposed  to  pass  to  the  reserve 
fund  £25,000,  bringing  the  fund  up  to 
£550,000,  and  the  bank’s  premises  had 
been  written  down  by  £9,000.  This 
writing  down  was  in  respect  to  the 
branch  premises  only,  as  the  head  office 
required  no  such  treatment.  Despite 
the  largely  increased  advances,  their 
liquid  assets,  including  remittances  in 
transit — which  were,  of  course,  prac- 
tically cash — amounted  to  £3,053,000, 
or  12  shillings  in  the  pound  on  their 
liabilities  to  the  public.  This  amount 
was  larger  it  seemed  to  him  than  was 
necessary,  but  it  was  satisfactory  from 
the  point  of  safety.  It  was  extraordi- 
nary that  their  profits  were  what  they 
were  now  in  the  face  of  this  fact,  for 
liquid  assets  were  not,  as  a. rule,  great 


sources  of  earning  powers.  He  would 
give  some  evidence  of  the  marked  pro- 
gression of  the  Bank  of  Adelaide  dur- 
ing the  past  ten  years.  In  1900  the  de- 
posits were  £2,185,000;  they  were  now 
£4,114,000.  In  1900  the  note  circula- 
tion was  £127,000;  it  was  now  £225,- 
000.  In  1900  the  advances  were  £l,- 
401,000;  they  were  now  £2,817,000.  In 
1900  the  liquid  assets  were  £1,485,100; 
they  were  now  £2,445,000.  These  fig- 
ures excluded  remittances  in  transit, 
which  were  included  in  the  £3,033,000 
figures  previously  mentioned.  In  1900 
the  reserve  fund  was  £165,000;  it  was 
now  £325,000.  In  1900  the  branches 
and  agencies  numbered  thirty-one;  they 
were  now  eighty-one.  It  was  difficult 
to  go  through  figures  like  these  without 
using  adjectives — without  using,  in  fact, 
superlatives.  What  was  specially  satis- 
factory was  the  large  growth  of  the  re- 
serve fund  and  the  confidence  which  the 
public  had  in  the  bank,  as  evidenced  by 
the  large  growth  of  deposits.  To  the 
shareholders  the  condition  of  things 
must  be  a source  of  pleasure.  To  the 
public  it  ought  to  be  a source  of  pride 
that  the  one  bank  belonging  purely  to 
this  State  was  successful  almost  beyond 
words.  Even  the  Government,  whatever 
its  politics  might  be,  could  not  but  wel- 
come the  success  of  an  institution  that 
in  the  last  year  alone  had  given  it 
£7,300  in  land,  income  and  note  tax. 


JAPANESE  FINANCES 


JAPAN’S  economic  and  financial  posi- 
tion is  fully  set  forth  in  the  Tenth 
Financial  and  Economical  Annual,  pre- 
pared under  the  direction  of  Marquis 
T.  Katsura,  the  Minister  of  Finance. 

The  budget  for  1910-11  shows  a total 
estimated  revenue  of  534,303,861  yen, 
and  expenditures  of  the  same  amount. 


This  compares  with  revenues  of  520,- 
488,151  yen  and  expenditures  of  520,- 
479,979  yen  for  the  financial  year 
1909-10. 

Concerning  the  country’s  financial 
policy,  the  Annual  says: 

“In  the  preceding  financial  year  not 
only  was  there  no  issue  of  loans,  but 


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FOREIGN  BANKING  AND  FINANCE 


167 


also  the  policy  of  increasing  the  amount 
of  redemption  was  adopted ; and  the 
total  amount  to  be  transferred  to  the 
national  debt  sinking  fund  in  the  year 
1910-11  will  come  up  to  196,960,000 
yen,  which  is  an  increase  of  10,800,000 
yen  on  the  preceding  year.  This  in- 
crease is  due  to  the  addition  to  the  re- 
demption fund  of  7,500,000  yen,  be- 
sides about  2,500,000  yen,  which  is 
equivalent  to  the  interest  on  the  prin- 
cipal of  50,000,000  yen  (£5,121,377), 
which  was  redeemed  in  the  preceding 
year. 

“Moreover,  the  Government  formed 
the  plan  of  converting  its  five  per  cent, 
loans  into  those  of  four  per  cent.,  and 
has  twice  since  March,  1910,  issued  at 
home  four  per  cent,  loans,  which  amount 
altogether  to  200,000,000  yen  (£20,- 
485,507),  and  also  issued  in  the  British 
and  French  markets  similar  loans 
amounting  in  all  to  281,000,000  yen; 
and  the  proceeds  have  been  devoted  to 
the  redemption  of  the  five  per  cent, 
loans.  In  short,  in  the  financial  year 
1910-11  the  tax  system  was  readjusted 
with  a view  to  the  recuperation  of  the 
economic  powers  of  the  nation  and  at 
the  same  time  to  remove  any  inequality 
in  the  incidence  of  taxes,  the  salaries 
and  allowances  of  Government  officers 
and  non-commissioned  officers  and  pri- 
vates were  raised  with  the  object  of  ex- 
pediting the  conduct  of  official  business, 
and  the  amount  of  redemption  of  nation- 
al loans  increased  in  order  to  raise  the 
credit  of  national  loans  generally  and 
at  the  same  time  to  facilitate  their  re- 
demption and  conversion.*’ 


PLACING  GOVERNMENT  LOANS 

A NEW  departure  in  the  method  of 
'***  placing  Government  loans  in 
Austria  has  attracted  much  attention, 
says  the  “Australasian  Insurance  and 
Banking  Record.**  The  Austrian  Fi- 
nance Minister  has  recently  resolved  to 
issue  a loan  of  about  £5,800,000,  but 
instead  of  giving  it  to  what  are  known 
as  the  “Rothschild  group  of  banks,**  he 
lias  entrusted  it  to  the  Postal  Savings 
Bank.  But  it  is  questioned  whether  he 
has  acted  quite  wisely,  for  he  will  re- 


quire £8,000,000  more  during  the  year, 
and  without  outside  assistance  the 
Postal  Savings  Bank  cannot  handle  the 
operation.  It  is  thought,  however,  that 
it  can  induce  Czech  Polack  and  other 
Slav  banks  to  cooperate.  The  matter 
really  resolves  itself  into  one  of  terms, 
i.  e .,  the  cheapest  way  of  obtaining  the 
money. 

ENGLISH  NOTE  CIRCULATION 

'E'NGLAND’S  comparatively  small 
bank-note  circulation  is  often  cited 
by  bankers  in  the  United  States  as  an 
example  of  the  ability  of  a country  to 
get  along  without  bank  notes,  or,  at 
least,  with  an  insignificant  volume  of 
them.  But  there  is  expert  opinion  to 
the  effect  that  the  country  bank-note 
circulation  is  of  direct  benefit,  and  that 
its  reduction  may  not  be  considered  an 
unmixed  blessing.  Reviewing  the  pro- 
gress of  banking  in  Great  Britain  and 
Ireland  during  1909*  R>  H.  Inglis 
Palgrave,  the  well-known  British  econ- 
omist, says  in  a recent  number  of  the 
“Bankers*  Magazine**  of  London: 

“The  reduction  of  the  country  note 
circulation  in  England  and  Wales  con- 
tinues. The  total  note  circulation  of 
the  issuing  banks  in  England  and  Wales 
is  now  less  than  £800,000.  The  re- 
establishment of  a country  note  issue, 
well  secured  and  moderate  in  amount, 
would  be  a real  assistance  to  banking  in 
the  rural  districts  of  England  and 
Wales.  It  would  save  expense  to  the 
banks,  and  be  a convenience  to  the 
public.** 

While  the  increased  use  of  checks 
tends  to  minimize  the  demand  for  bank 
notes,  there  are  times  when  the  latter 
are  greatly  needed,  particularly  in  the 
country  districts,  and  this  need  is  even 
more  urgent  in  certain  portions  of  the 
United  States  than  in  England  and 
Wales. 

PROPORTION  OF  CAPITAL  TO 
LIABILITIES 

"DANK  credit  has  been  manufactured 
***  more  rapidly  in  recent  years  than 
it  should  if  old  standards  are  still  to 
govern.  Commenting  on  this  tendency, 


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168 


THE  BANKERS  MAGAZINE 


in  a recent  number  of  the  London 
“Bankers’  Magazine,”  Sir  R.  H.  Inglis 
Palgrave  says,  referring  to  the  British 
banks : 

“We  may  remind  our  readers  of  the 
old  rule  that  the  liabilities  of  a bank 
should  not  be  more  than  three  times  as 
large  as  its  capital.  It  may  not  be  pos- 
sible to  revive  this  prudent  practice,  but 
nearly  eight  times  as  large,  which  is  the 
average  at  the  present  time,  is  a very 
different  thing.” 

A similar  tendency  has  been  observed 
in  this  country,  although  the  national 
banks  at  least  have  not  as  yet  shown  so 
wide  a disproportion  between  capital 
and  surplus  as  have  the  banks  of  Great 
Britain  and  Ireland. 


GENERAL  NOTES 

— A special  meeting  of  shareholders  of 
llie  Credit  Foncier  was  held  on  July  2 to  au- 
thorize the  board  to  increase  the  capital 
from  200  million  francs  to  250  millions,  as 


required,  as  decided  provisionally  on  April 
3,  1909.  According  to  the  statutes  of  the 
bank  the  amount  of  the  bonds,  mortgage 
or  communal,  in  circulation,  must  not  ex- 
ceed twenty  times  the  capital  of  200  mil- 
lions, and  an  expansion  of  the  right  of  issue 
of  bonds  has  now  become  necessary. 

— The  Bank  of  Formosa,  a Japanese 
semi-official  institution,  has  increased  its 
capital  from  5,000,000  yen  to  10,000,000  yen, 
and  established  branches  at  Canton,  China, 
and  Singapore,  Straits  Settlements. 

— Owing  to  the  congested  condition  of 
the  foreign  bond  market  at  Paris,  the  con- 
version of  the  Mexican  five  per  cent,  loan 
into  bonds  of  a lower  denomination  has 
been  postponed  to  a more  favorable  op- 
portunity. 

— On  May  31  the  Bank  of  London  and 
Mexico,  of  Mexico  City,  reported  a total 
balance  sheet  of  $187,232,599.43. 

— The  Banco  Internacional  6 Hipotecario 
de  Mexico,  of  \rhich  Mr.  T.  P.  Honey  is 
manager,  reported  on  May  31,  mortgage 
bonds  in  circulation,  $18,843,000;  total  bal- 
ance sheet,  $33,157,319. 


BANKING  AND  COMMERCIAL  LAW 

Conducted  by  John  J.  Crawford,  Esq.,  Author  Uniform  Negotiable  Instruments  Act 


RECENT  DECISIONS  OF  INTEREST  TO  BANKERS 


CHECK  OF  CORPORA  TION 
DRAWN  BY  TREASURER  TO 
HIS  OWN  ORDER— NOTICE  TO 
BANK. 

HAVANA  CENTRAL  R.  R.  CO.  vs. 

KNICKERBOCKER  TRUST  COM- 
PANY. 

COURT  OF  APPEALS  OF  NEW  YORK,  MAY 

17,  1910. 

Tlie  bank  on  which  checks  are  drawn  is 
the  agent  of  the  depositor  to  determine 
whether  they  are  properly  payable  or  not. 

When  a corporation  opens  an  account 
with  a bank  it  confers  upon  the  bank  the 
power  to  determine  whether  any  check 
drawn  upon  the  account  conforms  to  the 
contract  between  them. 

While  a mistake  in  the  determination  of 
that  question  may  render  the  drawee  bank 
liable  to  the  depositor,  the  latter  cannot 
recover  the  money  paid  on  such  check  to  a 
third  person  who  received  the  same  in  good 
faith  relying  upon  the  representation  of  the 


bank  that  the  check  was  all  right,  and  who 
has  parted  with  the  money. 

The  treasurer  of  a corporation,  author- 
ized to  sign  checks  for  it  drew  checks  to  his 
own  order  and  deposited  them  to  his  own 
account,  and  these  checks  when  presented 
to  the  bank  on  which  they  were  drawn  were 
paid,  the  proceeds  being  credited  by  the 
collecting  bank  to  the  individual  account  of 
the  treasurer  and  afterwards  drawn  out  by 
him;  Held,  that  the  proceeds  could  not  be 
recovered  by  the  corporation  from  the  bank 
receiving  the  checks. 

'T'HIS  was  an  appeal  from  an  order 
of  the  Appellate  Division  of  the 
Supreme  Court  in  the  first  judicial  de- 
partment, which  affirmed  an  interlocu- 
tory judgment  overruling  a demurrer 
to  the  complaint.  The  facts  alleged 
in  the  complaint  were  as  follows: 

On  February  23,  1906,  the  plaintiff 
by  C.  W.  Van  Voorhis,  its  treasurer. 


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BANKING  LAW 


169 


opened  a deposit  account  with  the  Cen- 
tral Trust  Company  of  New  York  in  its 
name,  under  an  arrangement  by  which 
checks  drawn  upon  said  account  were  to 
bear  the  following  signature:  “Havana 
Central  Railroad  Company,  C.  W.  Van 
Voorhis,  Treasurer/1  Between  April 
21  and  June  15,  1906,  without  the 
knowledge  of  any  other  officer  or  em- 
ployee of  the  plaintiff,  C.  W.  Van  Voor- 
his drew  and  signed  three  checks  upon 
this  account  with  the  Central  Trust 
Company,  the  first  dated  April  21,  1906, 
for  $22,461.81,  payable  to  the  order  of 
W.  M.  Greenwood  or  C.  W.  Van  Voor- 
his, the  second  dated  May  28,  1906, 
for  $21,944.45,  payable  in  the  alterna- 
tive to  the  same  persons,  and  the  third, 
dated  June  14,  1906,  for  $15,000,  pay- 
able like  the  two  others.  Each  of  these 
checks  was  signed  “Havana  Central 
Railroad  Company,  C.  W.  Van  Voorhis, 
Treasurer” ; each  was  endorsed  by  C.  W. 
Van  Voorhis,  and  each  was  deposited 
by  him  in  a bank  account  in  his  own  in- 
dividual name  which  he  kept  with  the 
defendant.  The  first  and  third  checks 
were  accepted  by  the  Central  Trust 
Company  before  payment  and  the 
amount  of  each  check  was  paid  by  the 
Central  Trust  Company  to  the  defend- 
ant and  credited  by  the  defendant  to 
C.  W.  Van  Voorhis  in  his  individual 
bank  account  already  mentioned.  The 
Central  Trust  Company  charged  such 
payments  to  the  plaintiff  corporation. 
After  the  deposit  with  the  defendant  of 
the  amounts  represented  by  these  checks 
in  the  individual  account  of  C.  W.  Van 
Voorhis  he  was  permited  to  draw  upon 
said  account  and  did  draw  upon  it  until 
July  7,  1906,  when  the  account  was 
closed. 

The  complaint  further  alleged  that 
C.  W.  Van  Voorhis  deposited  the  checks 
and  used  the  proceeds  thereof  for  his 
own  purposes  without  any  right  or  au- 
thority so  to  do,  and  that  he  had  no 
right  or  authority  to  draw  upon  the 
account  of  the  plaintiff  or  to  use  its 
funds  except  for  the  purposes  of  the 
plaintiff’s  business,  and  that  the  plaint- 
iff was  not  at  any  of  the  times  hereto- 
fore mentioned  indebted  to  C.  \V.  Van 
Voorhis  in  any  sum  whatsoever,  and 


that  notice  or  inquiry  by  the  defendant 
to  and  of  the  plaintiff  would  have  re- 
vealed these  facts  and  would  have  shown 
that  by  drawing  the  checks  in  the  form 
already  described  and  depositing  them 
in  his  individual  account  with  the  de- 
fendant Van  Voorhis  was  wrongfully 
misappropriating  and  converting  the 
same  to  his  own  use;  but  the  defendant 
did  not  make  any  inquiry  of  the  plaintiff 
or  any  one  else  concerning  the  checks 
or  give  any  notice  to  the  plaintiff  in  re- 
gard to  their  deposit  with  the  defendant. 
It  was  alleged  that  on  account  of  these 
matters  the  defendant  has  had  and  re- 
ceived $59,406.26  of  the  moneys  of  the 
plaintiff,  and  thereby  became  indebted 
to  the  plaintiff  in  said  sum,  no  part  of 
which  has  been  paid  except  that 
$3,597.91  has  been  received  by  the 
plaintiff  from  the  said  C.  W.  Van  Voor- 
his in  reduction  of  the  amount  repre- 
sented by  the  third  check. 

Willard  Bartlett,  J.:  It  will  be 

observed  that  the  complaint  contains 
no  averment  of  any  conversion  by  the 
defendant.  The  only  conversion  al- 
leged is  a misappropriation  by  C.  W. 
Van  Voorhis,  the  plaintiffs’  treasurer. 
The  action  is  for  money  had  and  re- 
ceived, the  manifest  theory  of  the 
pleader  being  that  the  defendant  by  re- 
ceiving the  checks  for  deposit  in  the  in- 
dividual personal  account  of  the  plaint- 
iff’s treasurer  under  the  circumstances 
disclosed  by  the  complaint  has  become 
legally  obligated  to  repay  the  money 
represented  by  those  checks  to  the 
plaintiff  corporation.  This  theory  is 
based  on  the  proposition  that  the  checks 
when  presented  to  the  defendant  for 
deposit  bore  upon  their  face  what  the 
learned  counsel  for  the  respondent  calls 
“a  shadow/’  which  ought  to  have  pre- 
vented the  defendant  from  taking  them 
or  collecting  the  proceeds  without  in- 
quiry from  some  responsible  officer  of 
the  plaintiff  corporation  other  than  its 
treasurer  as  to  his  authority  to  draw 
checks  against  the  funds  of  the  cor- 
poration payable  to  his  own  individual 
order. 

The  complaint  does  not  allege  that  C. 
W.  Van  Voorhis,  the  plaintiff's  treas- 


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170 


THE  BANKERS  MAGAZINE 


urer,  was  not  authorized  to  draw  checks 
in  this  form.  It  merely  avers  that  he 
had  “no  right  or  authority  to  draw  upon 
said  account  of  the  plaintiff  or  to  use 
its  funds  except  for  the  purposes  of  the 
plaintiff’s  business.”  This  averment 
does  not  negative  the  idea  that  the  pur- 
poses of  the  plaintiff’s  business  may 
have  required  its  treasurer  on  occasion 
to  draw  checks  upon  the  corporation  ac- 
count payable  to  himself  individually; 
the  allegation  simply  amounts  to  an 
averment  that  he  was  not  authorized  to 
draw  these  particular  checks  to  his  own 
order,  and  that  the  defendant  could 
have  ascertained  that  fact  upon  due  in- 
quiry. The  case  really  turns  upon  a 
determination  as  to  what  were  the  rights 
of  the  defendant  and  its  duties  toward 
the  plaintiff  upon  the  presentation  of 
the  checks  for  deposit  in  the  individual 
account  of  the  treasurer. 

The  defendant  could  properly  regard 
the  checks  as  the  property  of  C.  W.  Van 
Voorhis.  The  possession  of  a bank 
check  payable  to  the  order  of  the  holder 
is  presumptive  evidence  of  ownership 
(2  Daniel  on  Negotiable  Instruments, 
4th  ed.,  sec.  1652).  In  behalf  of  the 
respondent  it  is  argued  that  the  fact 
that  the  checks  were  drawn  by  the  treas- 
urer in  behalf  of  the  corporation  pay- 
able to  himself  individually  cast  suspi- 
cion upon  them,  and  imposed  upon  the 
banking  institution  to  which  they  were 
offered  for  deposit  a duty  to  make  some 
inquiry  as  to  their  validity  before  it 
dealt  with  them  as  the  property  of  the 
payee. 

If  it  be  conceded  that  the  offer  of 
such  a check  for  deposit  to  the  individ- 
ual account  of  an  officer  calls  for  some 
inquiry  on  the  part  of  the  bank  to  which 
it  is  offered  as  to  the  extent  of  his  au- 
thority in  the  premises,  I am  of  opinion 
that  the  Knickerbocker  Trust  Company 
in  the  present  case  did  all  that  the  law 
demands.  When  it  caused  the  three 
checks  to  be  presented  to  the  Central 
Trust  Company  for  payment  it  thereby 
virtually  made  a twofold  inquiry  of 
that  institution : ( 1 ) Whether  the 

checks  bore  the  genuine  signature  of  an 
officer  authorized  to  sign  checks  in  be- 
half of  the  Havana  Central  Railroad 


Company;  and  (2)  whether  C.  W.  Van 
Voorhis,  the  treasurer  of  the  Havana 
Central  Railroad  Company,  had  author- 
ity to  draw  checks  upon  the  account  of 
the  corporation  payable  to  his  individual 
account. 

The  drawee  of  a bill  of  exchange  is 
bound  to  know  the  signature  of  the 
drawer  and  his  capacity  to  draw  a bill 
(1  Daniel  on  Negotiable  Instruments, 
4th  ed.,  secs.  534,  535).  The  accept- 
ance of  the  bill  is  an  acknowledgment 
of  the  genuineness  of  the  signature  and 
the  authority  of  the  drawer.  So  the 
payment  of  these  checks  by  the  Central 
Trust  Company  upon  their  presentation 
at  the  instance  of  the  Knickerbocker 
Trust  Company  was  an  acknowledgment 
by  the  deposit  bank  of  the  Havana  Cen- 
tral Railroad  Company  that  C.  W.  Van 
Voorhis,  its  treasurer,  possessed  author- 
ity from  the  railroad  corporation  to 
draw  precisely  such  checks  in  precisely 
the  form  in  which  they  were  drawn.  The 
Havana  Central  Railroad  Company  by 
opening  its  deposit  account  with  the 
Central  Trust  Company  constituted  the 
latter  corporation  its  agent  as  to  all 
third  parties  who  might  receive  checks 
drawn  upon  that  account  to  determine 
and  declare  whether  such  checks  were 
genuine  and  were  drawn  within  the 
scope  of  the  treasurer’s  agency  as  es- 
tablished by  the  contract  between  the 
Central  Trust  Company  and  the  rail- 
road corporation. 

When  the  Central  Trust  Company 
by  paying  these  checks  declared  to  the 
Knickerbocker  Trust  Company  that  they 
were  genuine  obligations  of  the  railroad 
corporation  which  the  treasurer  had  au- 
thority to  draw,  the  Knickerbocker 
Trust  Company  was  not  obligated  by 
law  to  make  any  further  inquiry,  but 
was  authorized  to  deal  with  the  pro- 
ceeds of  the  checks  as  the  individual 
property  of  the  payee,  and  after  it  has 
turned  over  such  proceeds  to  him  it  can- 
not be  compelled  to  restore  them  to  the 
Havana  Central  Railroad  Company 
merely  because  the  Central  Trust  Com- 
pany ought  to  have  withheld  payment 
of  the  checks. 

The  distinguishing  feature  between 
this  case  and  the  cases  relied  upon  to 


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BANKING  LAW 


171 


support  the  judgment  which  has  been 
rendered  herein  is  that  in  the  cases  cited 
the  form  of  the  transaction  was  notice 
to  the  party  receiving  the  check  or  other 
instrument  that  it  was  sought  to  be  used 
to  pay  an  individual  debt  out  of  trust 
funds.  Here  the  checks  were  not  de- 
signed to  discharge  any  obligation  ow- 
ing to  the  defendant.  The  defendant 
merely  collected  the  amounts  thereof 
and  placed  the  same  to  the  credit  of  the 
payee.  It  is  conceded  that  they  were 
properly  signed  as  checks  upon  the 
plaintiff's  bank  account  with  the  Cen- 
tral Trust  Company — that  is  to  say, 
they  were  signed:  “Havana  Central 
Railroad  Company,  C.  W.  Van  Voor- 
his.  Treasurer." 

As  has  already  been  pointed  out,  the 
complaint  does  not  allege  that  Mr.  Van 
Voorhis  had  no  authority  to  draw 
checks  upon  this  account  to  his  own  or- 
der. The  allegation  is  merely  that  he 
had  no  right  or  authority  to  draw  upon 
the  account  of  the  plaintiff  or  to  use  its 
funds  except  for  the  purpose s of  the 
plaintiff *s  business,  and,  in  substance, 
that  these  checks  were  not  drawn  for 
such  purposes,  as  the  defendant  might 
have  ascertained  upon  proper  inquiry. 
But  what  inquiry  and  of  whom? 

The  obvious  course,  as  it  seems  to  me, 
was  to  present  the  checks  for  payment 
to  the  institution  upon  which  they  were 
drawn.  If  it  paid  them,  such  payment 
constituted  the  most  emphatic  assertion 
upon  the  part  of  the  plaintiff's  own  de- 
posit bank  that  under  the  arrangement 
existing  between  it  and  the  plaintiff  the 
plaintiff's  treasurer  was  authorized  to 
draw  just  such  checks  payable  to  his 
own  order.  The  defendant  having  re- 
lied upon  that  assertion  and  subsequent- 
ly paid  away  the  money  thus  collected, 
the  plaintiff  corporation  is  estopped 
from  denying  that  its  treasurer  in  fact 
possessed  authority  to  draw  the  checks. 

But  it  is  said  that  inquiry  of  the 
plaintiff’s  deposit  bank  was  not  enough, 
because  it  was  not  the  plaintiff's  agent 
to  make  representations  to  third  parties 
as  to  the  validity  of  checks  drawn  upon 
the  plaintiff's  account.  I think  other- 
wise. It  seems  to  me  that  when  a cor- 
poration opens  an  account  with  a bank- 


ing institution  it  confers  upon  that  in- 
stitution the  power  to  determine  whether 
any  check  drawn  upon  the  account  con- 
forms to  the  contract  between  the  de- 
positor and  the  depositary.  When  it 
makes  a mistake  in  the  determination  of 
such  a question  the  depositary  may  be 
liable  to  the  depositor ; but  the  depositor 
cannot  recover  back  the  money  paid  on 
such  check  to  a third  person  who  has 
received  it  in  good  faith,  relying  on  the 
representation  of  the  deposit  bank  that 
the  check  was  all  right  and  has  subse- 
quently parted  with  the  money. 

The  case  of  Ward  vs.  City  Trust  Co. 
(192  N.  Y.,  61)  differs  essentially  from 
the  case  at  bar  in  the  fact  that  the  cor- 
poration check  there  in  controversy  was 
delivered  to  the  defendant  in  payment 
of  a personal  loan.  In  Squire  vs.  Orde- 
mann  (194  N.  Y.,  394?)  the  check  was 
that  of  executors  given  in  payment  of 
an  individual  debt*  The  only  point  de- 
cided in  Robinson  vs.  Chemical  National 
Bank  (86  N.  Y.,  404?)  which  has  any 
possible  application  here  was  the  ob- 
vious proposition  that  the  indorsement 
of  a check  drawn  to  the  order  of  a prin- 
cipal by  an  agent  having  no  authority  to 
indorse  could  not  operate  to  transfer 
title  to  the  paper.  The  principal  mat- 
ter litigated  in  the  case  of  Bank  of 
N.  Y.  Nat.  Banking  Ass’n  vs.  Am.  Dock 
& Trust  Co.  (143  N.  Y.,  559)  was  the 
validity  of  a warehouse  receipt  issued 
by  the  president  of  the  defendant  to  his 
own  order,  and  it  was  there  held  that 
the  certificate  on  its  face  gave  the  pur- 
chaser such  notice  as  should  put  a pru- 
dent person  upon  inquiry  in  regard  to 
the  president's  authority.  In  that  case 
Judge  Peckham  said:  “It  is  an  ac- 

knowledged principle  of  the  law  of 
agency  that  a general  power  or  author- 
ity given  to  the  agent  to  do  an  act  in 
behalf  of  the  principal  does  not  extend 
to  a case  where  it  appears  that  the  agent 
himself  is  the  person  interested  on  the 
other  side"  (p.  564),  and  he  further 
expressed  the  opinion  that  it  was  against 
the  general  law  of  reason  that  an  agent 


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THE  BANKERS  MAGAZINE 


should  be  intrusted  with  power  to  act 
for  his  principal  and  for  himself  at 
the  same  time. 

A similar  certificate  w-as  the  subject 
of  consideration  in  the  later  case  of 
Hanover  Bank  vs.  Am.  Dock  & Trust 
Co.  (148  N.  Y.,  612),  where  it  was  held 
that  authority  in  the  president  to  issue 
warehouse  certificates  *of  the  character 
in  question  might  be  implied  from  ac- 
quiescence. In  that  case  Judge  Vann 
said  that  the  authority  of  an  agent  was 
enlarged  as  to  third  persons  by  implica- 
tion when  the  principal  permitted  him 
to  do  acts  not  expressly  authorized,  and 
added:  “For  the  protection  of  innocent 
persons  the  law  will  imply  authority  in 
an  agent  to  do  acts  which,  although  for- 
bidden by  the  principal  before  they  are 
done,  are,  nevertheless,  recognized  by 
him  as  valid  after  they  are  done”  (p. 
620).  I am  unable  to  find  any  propo- 
sition actually  decided  in  any  of  these 
cases  or  in  any  other  authoritative  cases 
cited  in  behalf  of  the  respondent  which 
is  at  variance  with  the  view  I entertain 
as  to  the  rights  and  obligations  of  the 
defendant  in  the  case  at  bar.  The  view, 
stated  in  the  fewest  possible  words,  is 
that  the  Central  Trust  Company  was 
the  agent  of  the  Havana  Central  Rail- 
road Company  to  determine  whether  the 
checks  in  controversy  were  properly 
payable  or  not,  and  when  it  decided  that 
they  were,  and  paid  them  to  the  Knicker- 
bocker Trust  Company,  which  received 
the  proceeds  in  good  faith,  no  right  re- 
mains in  the  railroad  corporation  to  re- 
cover such  proceeds  after  the  Knicker- 
bocker Trust  Company  has  paid  them 
away. 

For  these  reasons  I advise  a reversal 
of  this  order,  and  that  the  question  cer- 
tified be  answered  in  the  negative. 

Cullen,  Ch.J Gray,  Haight, 
Vann  and  Chase,  «/.«/.,  concur. 

Order  reversed  and  judgment  ordered 
for  defendant  on  demurrer,  with  costs 
in  all  courts,  with  leave  to  plaintiff  to 
serve  amended  complaint  within  twenty 
days  on  payment  of  costs. 


DEPOSIT  SLIP  MADE  OUT  IN 
WRONG  NAME— EFFECT  OF 
ENTRY  IN  PASS  BOOK . 

SCHWARTZ  vs.  STATE  BANK. 

SUPREME  COURT  OF  NEW  YORK,  APPEL- 
LATE DIVISION,  FIRST  DEPARTMENT, 
DEC.  3,  1909. 

The  mere  fact  that  one  pays  money  into 
his  bank  does  not  necessarily  create  the 
relation  of  debtor  and  creditor  between 
them,  since  the  payment  may  be  to  the  credit 
of  another. 

An  entry  in  the  bank  book  showing  that 
the  holder  had  paid  money  into  the  bank 
would  show  presumptively  that  the  bank  had 
become  his  debtor  to  the  extent  of  the  de- 
posit ; but  the  bank  book  being  merely  a 
receipt  or  a series  of  receipts  is  open  to 
explanation,  and  the  bank  may  show  that 
notwithstanding  the  entry  it  is  not  in- 
debted to  the  depositor. 

The  plaintiff  presented  to  his  bank  some 
checks  for  deposit  with  his  own  pass  book, 
but  with  a deposit  slip  made  out  in  the 
name  of  one  H.,  who  was  also  a customer 
of  the  bank.  The  amount  of  the  checks 
was  entered  by  the  teller  in  the  plaintiffs 
pass  book,  but  credited  to  H.  on  the  books 
of  the  bank:  Held , that  the  depositor  could 
not  recover  of  the  bank. 

; 1 'HE  plaintiff  was  a customer  of  the 
defendant.  On  October  27,  1905, 
having  eight  checks  to  deposit  aggre- 
gating $221.30,  he  presented  the 
checks  to  the  defendant’s  receiving 
teller,  together  with  a deposit  slip  and 
a bank  book.  The  bank  book  was 
plaintiff’s  own,  but  the  deposit  slip  was 
headed  with  the  name  of  one  S.  Ham- 
merman, who  was  also  a customer  of 
the  bank.  The  receiving  teller,  follow- 
ing the  usual  custom,  entered  the  ag- 
gregate of  the  deposit  in  the  bank  book 
and  handed  it  back  to  plaintiff.  He  put 
the  checks  into  a drawer  used  for  that 
purpose  and  placed  the  deposit  slip  on 
a file.  Later  in  the  day  the  amount  of 
the  deposit  was.  entered  in  the  custom- 
er’s ledger  from  the  deposit  slip,  and 
since  the  slip  bore  Hammerman’s  name 
the  amount  of  the  deposit  was  credited 
to  him.  Some  time  later,  when  defend- 
ant sent  plaintiff  a statement  of  his 
account,  the  error  was  discovered. 

Scott,  J .;  We  are  not  referred  to 
any  case  similar  to  this  in  its  facts  or 


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173 


controlling  as  matter  of  principle.  All 
the  cases  cited  are  readily  distinguish- 
able. It  seems  to  be  clear  that  the 
bank  book  does  not  constitute  the  ac- 
count between  the  plaintiff  and  the 
bank.  It  contains  merely  a number  of 
receipts,  or  entries  amounting  to  re- 
ceipts, of  moneys  paid  into  the  bank 
by  the  customer.  But  the  mere  fact 
that  a customer  pays  money  into  a 
bank  does  not  necessarily  create  the  re- 
lation of  debtor  and  creditor  between 
the  payee  and  the  bank,  for  it  is  quite  a 
common  thing  for  one  to  pay  money 
into  a bank  to  the  credit  of  another. 

Unexplained,  the  fact  that  a bank 
book  contained  an  entry  showing  that 
the  holder  of  the  book  had  paid  money 
into  a bank  would  presumptively  show 
that  the  bank  had  become  the  deposit- 
or’s debtor  to  the  extent  of  the  deposit. 
But  the  bank  book  being  merely  a receipt 
or  a series  of  receipts  is  open  to  ex- 
planation, and  it  would  be  competent  to 
show  that,  notwithstanding  the  appar- 
ent creation  of  the  relation  of  debtor 
and  creditor,  the  payment  was  made 
under  such  circumstances  that  that  re- 
lation did  not  arise.  This  would  be 
shown  by  proof  that  at  the  time  of  pay- 
ing in  the  money  the  depositor  directed 
that  the  amount  should  be  placed,  not 
to  his  own  credit,  but  to  that  of  some 
* one  else. 

This,  as  we  consider,  was  the  effect 
of  handing  in  with  the  deposit  and 
leaving  with  the  bank  a deposit  slip  in- 
dicating that  the  deposit  had  been  made 
by  or  for  account  of  another  person 
than  the  one  who  actually  paid  it  in. 
The  deposit  slip  bearing  Hammerman’s 
name  and  reciting  that  he  was  the  de- 
positor amounted  to  a direction  to  the 
bank  to  credit  the  amount  to  Hammer- 
man. We  think,  therefore,  that  as  to 
this  deposit  the  relation  of  debtor  and 
creditor  was  never  created  between 
plaintiff  and  the  defendant  bank.  Of 
course,  the  plaintiff  cannot  recover  on 
the  theory  that  the  defendant  was  guilty 
of  negligence,  for  the  first  act  of  negli- 
gence, and  that  which  led  to  the  error, 
was  committed  by  plaintiff  himself. 

It  follows  that  the  determination  of 


the  Appellate  Terra  must  be  reversed 
and  the  judgment  of  the  Municipal 
Court  affirmed,  with  costs  to  appellant 
in  this  court  and  the  Appellate  Teipn. 

Ingraham,  McLaughlin,  Laughlin 
and  Houghton,  J.J.,  concurred. 


DISCOUNT  PROCURED  BY 
FALSE  REPRESENTA  TIONS— 
RIGHT  OF  BANK  TO  RESCIND 
AND  CHARGE  BACK . 

ROSALIE  FLATOW,  admr.  etc.  vs.  JEF- 
FERSON BANK. 

SUPREME  COURT  OF  NEW  YORK,  APPEL- 
LATE DIVI8ION,  FIRST  DEPARTMENT, 
DEC.  3,  1909. 

Where  a depositor  procures  the  discount 
of  a note  by  fraudulent  representations,  the 
hank,  upon  discovering  the  fraud,  may  can- 
cel the  credit  given. 

The  act  of  rescission  in  such  case  relates 
back  to  the  original  transaction. 

TSIDOR  L.  FLATOW,  who  died  in- 
testate  on  February  28,  1907,  had 
a deposit  in  the  defendant  bank,  and  on 
the  day  of  his  death  the  balance  in  his 
favor  was  $658.62.  About  a month 
prior  to  his  death  he  requested  the  bank 
to  discount  a note  for  $500.  The  note 
was  made  by  one  Samuel  Mishkoff,  pay- 
able to  Flatow’s  order  in  ninety  days 
from  date.  Flatow  indorsed  the  note, 
and  it  was  discounted  by  the  defendant, 
the  proceeds  being  credited  to  his  ac- 
count. This  action  was  brought  by  his 
administratrix  to  recover  the  balance 
standing  to  his  credit.  As  a defense 
the  defendant  alleged  that  it  was  in- 
duced to  discount  the  note  by  Flatow’s 
false  and  fraudulent  representations  to 
the  effect  that  he  was  then  worth  from 
$12,000  to  $15,000  over  and  above  his 
liabilities,  and  that  Mishkoff,  the  maker 
of  the  note,  was  engaged  in  business  on 
his  own  account  and  was  a solvent  and 
responsible  person;  and  by  reason  of 
such  false  and  fraudulent  representa- 
tions it  claimed  the  right  to  set  off  $500 
of  the  deposit  against  the  note,  admit- 
ting its  indebtedness  for  the  balance, 
$153.62.  The  defendant  had  a verdict 
of  no  cause  of  action,  and  from  a judg- 


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174 


THE  BANKERS  MAGAZINE 


ment  entered  thereon  and  an  order  deny- 
ing a motion  for  a new  trial  the  plaint- 
iff appeals. 

'McLaughlin,  J.  (omitting  part  of 
the  opinion):  The  evidence  justified 

the  jury  in  finding  that  the  statements 
made  by  Fla  tow  as  to  his  solvency  were 
false  and  that  he  was  not  at  that  time; 
nor  at  the  time  of  * his  death,  worth  any 
amount  whatever  over  and  above  his 
liabilities;  on  the  contrary,  that  his  es- 
tate was  insolvent;  that  the  maker  of 
the  note  was  not  engaged  in  business  on 
his  own  account,  and  that  he  had  no 
property  whatever.  It  also  justified  the 
jury  in  finding  that  the  defendant  re- 
lied upon  the  statements  made  by  Fla- 
tow  and  believed  then®  to  be  true  when 
it  discounted  the  note. 

The  note,  therefore,  having  been  dis- 
counted by  means  of  false  and  fraudu- 
lent representations,  the  defendant  had 
a right  at  any  time  thereafter  upon  dis- 
covering the  fraud  to  rescind  the  trans- 
action and  cancel  the  credit  given,  and 
this  right  related  back  to  the  time  when 
the  transaction  was  commenced.  The 
personal  representative  of  Flatow,  upon 
his  death,  took  such  rights  as  he  had  and 
no  more.  (Peyman  vs.  Bowery  Bank, 
14  App.  Div.  432.)  When  the  bank 
rescinded  the  contract,  Flatow  became 
indebted  to  it  for  the  amount  which  he 
had  received,  and  this  irrespective  of 


whether  the  credit  be  regarded  as 
money  of  the  plaintiff’s  intestate  or  the 
bank’s  own  money.  In  either  case  the 
money  never  belonged  to  Flatow,  nor 
was  he  entitled  to  the  credit,  and  to  the 
extent,  therefore,  of  $500,  Flatow’s  ad- 
ministratrix has  no  interest  therein  or 
claim  thereto. 

As  was  said  in  Andrews  vs.  Artisans’ 
Bank  (26  N.  Y.,  298) : “If  the  facts 
respecting  the  discount  of  Bensen’s  note 
were  such  as  the  defendant  offered  to 
prove  them,  the  credit  which  the  plaint- 
iff obtained  on  the  defendant’s  books, 
being  the  result  of  his  fraud,  was  un- 
availing either  as  a contract  for  the  pay- 
ment of  the  sum  which  was  in  form 
credited  or  as  evidence  of  money  of  the 
plaintiff  in  the  defendant’s  hands.  The 
contract  to  pay  the  amount  to  the 
plaintiff  upon  his  checks  in  the  usual 
course  of  banking  business,  which  would 
have  arisen,  if  no  fraud  had  intervened, 
could  not  be  predicted  of  the  transac- 
tion if  it  should  appear  to  have  been 
brought  about  by  the  fraud  of  the  party 
seeking  to  avail  himself  of  it.  Fraud 
vitiates  every  contract  and  renders  void 
as  to  the  guilty  party  every  transac- 
tion into  which  it  enters. 

The  jury,  therefore,  was  justified  in 
finding  that  the  defendant  was  not  in- 
debted to  the  plaintiff  to  the  extent  of 
$500. 


NOTES  ON  CANADIAN  CASES  AFFECTING  BANKERS 

[Edited  by  John  Jennings,  B.A..  L.L.B.,  Barrister,  Toronto] 


SUCCESSION  DUTIES  — NEW 
BRUNSWICK  ST  A TUTE— FOR- 
EIGN BANK— SPECIAL  DE- 
POSIT IN  LOCAL  BRANCH- 
DEPOSITOR  DOMICILED  IN 
NOVA  SCOTIA— DEBT  DUE  BY 
BANK— NOTICE  OF  WITH- 
DRAWAL-ENFORCEMENT OF 
PAYMENT . 

LOVITT  VS.  THE  KING  (43  S.  C.  R.  106). 

L.,  whose  domicile  was  in  Nova  Scotia, 
had,  when  he  died,  $90,000  on  deposit  in  the 
branch  of  the  Bank  of  British  North  Amer- 
ica, at  St.  John,  N.  B.  The  receipt  given 
him  when  the  deposit  was  made  provided 


that  the  amount  would  be  accounted  for 
by  the  Bank  of  British  North  America  on 
surrender  of  the  receipt  and  would  bear  in- 
terest at  the  rate  of  three  per  cent,  per  an- 
num. Fifteen  days’  notice  was  to  be  given 
of  its  withdrawal.  L’s  executors,  on  demand 
of  the  manager  at  St.  John,  took  out  ancil- 
lary probate  of  his  will  in  that  city,  and 
were  paid  the  money.  The  Government  of 
New  Brunswick  claimed  succession  duty 
on  the  amount. 

Held,  reversing  the  judgment  of  the  Su- 
preme Court  of  New  Brunswick  (37  N.  B. 
Rep.  558),  Idington  and  Duff,  J.J.,  dissent- 
ing, that  the  Government  was  not  entitled 
to  such  duty. 

Heldt  per  Davies  and  Anglin,  J.J.,  that 
notice  of  withdrawal  could  be  given  and 
payment  enforced  at  the  head  office  of  the 


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175 


bank  in  London,  England,  and  perhaps  at 
the  branch  in  Montreal,  the  chief  office  of 
the  bank  in  Canada. 

EORGE  H.  LOVITT  had  his  fixed 
place  of  residence  at  the  time  of 
his  death  in  the  Province  of  Nova 
Scotia  and  had  on  deposit  in  th‘e  Bank 
of  British  North  America  at  the  City  of 
St.  John  in  the  Province  of  New  Bruns- 
wick, $90,351.75  represented  by  deposit 
receipt  at  the  time  of  the  death  of  the 
said  Lovitt  was  in  his  possession  at  Yar- 
mouth in  the  Province  of  Nova  Scotia. 

The  executors  required  payment  of 
this  sum  from  the  Manager  of  the  Bank 
at  St.  John  who  refused  to  pay  the 
same  until  the  executors  took  out  an- 
cillary probate  in  the  Province  of  New 
Brunswick  which  was  done  by  the  ex- 
ecutors. Thereupon  the  Province  of 
Nova  Scotia  claimed  succession  duty  on 
this  sum  of  $90,351.75. 

A stated  case  was  submitted  for  the 
opinion  of  the  Court  on  these  facts. 

Judgment  (Sir  Chas.  Fitzpatrick, 
C.J.;  Girouard,  Davies,  Idington, 
Duff  and  Anglin,  JJ.):  All  of  the 

learned  Judges  read  reasons  for  judg- 
ment and  the  majority  of  the  Court, 
with  Idington  and  Davies  dissenting, 
held  that  the  Province  of  New  Bruns- 
wick was  not  entitled  to  succession  duty 
on  this  sum.  The  following  is  a sum- 
mary from  the  judgment  of  Mr.  Justice 
Anglin : 

“Three  questions  arise  upon  this  ap- 
peal; the  first,  whether  upon  the  proper 
construction  of  certain  bank  deposit 
receipts  issued  from  a branch  office  of 
a bank  the  moneys  represented  by  them 
are  demandable  by  the  depositor  or  his 
representatives  only  at  the  branch  office 
at  which  the  deposits  were  made;  the 
second,  whether  the  debts  evidenced  by 
these  documents  are  taxable  property 
at  the  place  of  the  deposit  within  the 
purview  of  the  “Succession  Duty  Act” 
of  New  Brunswick;  and  the  third, 
whether,  in  so  far  as  it  may  be  held  to 
cover  such  debts  due  to  a decedent  not 
domiciled  in  the  province,  this  legisla- 
tion is  intra  vires  of  a provincial  legis- 
lature. 

“The  deposit  receipts  are  in  the  usual 


form.  Issued  and  dated  at  St.  John, 
N.  B.,  where  the  deposits  were  made, 
but  naming  no  place  of  payment,  they 
purport  to  bind  the  Bank  of  British 
North  America,  after  fifteen  days'  no- 
tice, to  account  to  the  depositor  for  two 
sums  of  $86,775.93  and  $3,575.83  with 
interest,  on  surrender  of  the  receipts 
which  are  non-transferable.  The  head 
office  of  the  bank  is  in  London,  Eng- 
land. For  the  purposes  of  such  sec- 
tions of  the  “Dominion  Bank  Act”  (R. 
S.  C.  ch.  29)  as  apply  to  it,  its  chief 
office  is  its  office  at  Montreal  (section 
7).  It  maintains  a large  number  of 
branches  throughout  Canada  under  the 
authority  of  Section  76. 

“The  terms  of  the  receipts  sufficiently 
imply  the  exclusion  of  the  general  prin- 
ciple of  English  law,  “that  the  debtor 
is  to  seek  out  his  creditor  and  pay  him 
where  he  lives.”  But  excepting  the 
fact  that  they  are  dated  at  St.  John, 
N.  B.,  where  the  deposits  were  made, 
they  afford  no  indication  of  the  place  of 
payment.  They  purport  to  bind  the 
bank  as  a body  corporate.  The  bank  as 
a single  entity  is  unquestionably  the 
debtor. 

“But  in  the  absence  of  any  designation 
of  any  place  of  payment,  while  it  may 
be  questionable  whether  the  creditor 
would  have  the  right  to  give  notice  of 
withdrawal  and  to  make  demand  for 
payment  at  some  local  branch  of  the 
bank  other  than  that  at  St.  John  a right 
to  give  such  notice  and  to  demand  pay- 
ment at  the  head  office  of  the  bank  in 
London,  England,  or,  perhaps,  at  its 
chief  office  for  Canada,  in  Montreal,  as 
well  as  the  St.  John  branch,  is,  in  my 
opinion,  at  all  events  in  the  absence  of 
any  evidence  of  custom  of  bankers  or 
course  of  business  precluding  it,  con- 
ferred by  these  contracts.” 

The  learned  Judge  then  considered 
the  case  of  Attorney-General  vs.  New- 
man, 31  O.  R.,  340,  where  the  circum- 
stances were  somewhat  similar  and  con- 
tinued, “I  must,  with  all  proper  re- 
spect, express  my  dissent  from  the  con- 
clusion there  reached  that  moneys  rep- 
resented by  deposit  receipts  issued  by 
Ontario  branch  offices  of  banks  having 
their  head  office  outside  of  Ontario  are 


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176 


THE  BANKERS  MAGAZINE 


property  which  can  only  be  properly 
demanded  and  administered  from  that 
Province. 

“The  attempt  by  succession  duties  to 
tax  property  not  within  the  Province 
is  outside  the  constitutional  powers  of 
the  Province,  as  was  decided  by  the 
Privy  Council  in  Woodruff  vs.  Attor- 
ney-General for  Ontario,  1908,  A.  C. 
508.” 

After  a careful  review  the  learned 
Judge  holds  that  succession  duty  is  a 
tax  not  upon  the  succession  or  the  ad- 
mission to  administration  but  is  a tax 
upon  the  property  itself  and,  therefore, 
the  situs  of  the  property  becomes  a mat- 
ter of  prime  importance.  Under  Eng- 
lish law  it  is  well  established  that  a sim- 
ple contract  debt  owing  by  an  individ- 
ual is  property  which  has  a local  situs 
where  the  debtor  resides  and  as  the 
debtor  in  the  present  case  is  resident 
not  only  in  New  Brunswick  but  else- 
where and  the  money  on  deposit  could 
be  properly  demanded  outside  of  that 
Province  the  debt  is  not  strictly  prop- 
erty within  the  Province  of  New  Bruns- 
wick. A corporation  may  for  some 
purposes  have  many  residences. 


CONTRACT  — CONSTRUCTION  — 
SALE  OF  BUSINESS— COVE- 
NANT OF  PURCHASERS  TO 
MAKE  ANNUAL  PAYMENTS— 
COVENANT  OF  VENDORS  NOT 
TO  ENGAGE  IN  SIMILAR  BUSI- 
NESS-INDEPENDENT COVE- 
NANTS — PERFORMANCE  OF 
SUBSTANTIAL  PART  OF  CON- 
TRACT. 

TELFORD  VS.  SOVEREIGN  BANK  OF  CANADA 

(1  O.  W.  N.  8*2). 

A CTION  by  the  surviving  members 
^ and  the  representatives  of  a de- 
ceased member  of  the  firm  of  Telford 
& Co.,  who  for  many  years  carried  on 
business  as  private  bankers  at  Owen 
Sound,  to  recover  certain  sums  of 
money  alleged  to  be  due  under  an  agree- 
ment dated  May  31,  1906,  between  the 
firm  and  the  members  thereof,  of  the 
first  part,  and  the  defendants,  of  the 


second  part,  the  material  parts  of  which 
are  as  follows: — 

1.  For  the  consideration  thereinaf- 
ter mentioned,  the  firm  sold  and  trans- 
ferred to  the  bank  the  business  carried 
on  by  the  firm  at  Owen  Sound,  the  as- 
sets of  which  should  be  deemed  to  con- 
sist of  loans  to  customers,  with  the  col- 
lateral securities  attaching  thereto, 
notes,  drafts,  and  other  instruments  dis- 
counted by  the  firm,  and  the  goodwill 
of  the  firm,  and  the  liabilities  of  which 
should  consist  of  all  deposits  and  bal- 
ances to  the  credit  of  customers  at  the 
date  of  the  agreement. 

2.  The  firm  guaranteed  the  payment 

of  all  notes,  loans,  etc.,  discounted  by 
the  firm,  until  assumed  and  taken  over 
by  the  bank,  the  bank  having  the 
right  to  refuse  to  assume  any  of  the 
loans.  . . . 

5.  “For  and  in  consideration  of  the 

present  agreement,  the  said  bank  does 
hereby  undertake  and  agree  to  pay  each 
of  the  members  of  the  said  firm  . . . 

or  their  respective  heirs,  executors,  etc., 
the  sum  of  $250  per  annum  for  ten 
years  from  the  date  hereof.  Provided, 
that  if  the  deposits  to  the  credit  of  the 
customers  of  the  said  bank  at  the 
branch  at  Owen  Sound  do  not  amount 
to  a steady  average  of  $400,000  on  or 
before  the  1st  day  of  June,  1908,  the 
amount  payable  to  the  parties  of  the 
first  part  . . . shall  be  reduced  to 

$200  per  annum  on  or  after  the  said  1st 
day  of  June,  1908.” 

6.  The  bank  agrees  and  undertakes 

to  take  John  C.  Telford  and  William 
M.  Telford,  son  and  nephew  of  W.  P. 
Telford,  one  of  the  firm,  into  service  at 
Owen  Sound  at  a salary  of  $1,000  each 
per  annum  for  the  first  year,  the  said 
W.  M.  Telford  to  be  made  manager  of 
the  said  branch  from  the  1st  of  June, 
1906;  and  it  was  provided  that  the 
agreement  should  not  prevent  the  bank 
exercising  the  usual  supervision  over 
John  C.  Telford  and  W.  M.  Telford, 
who  should  be  subject  to  the  rules  and 
regulations  of  the  bank  the  same  as 
other  managers  and  members  of  the 
bank  staff.  . . . 

8.  The  firm  undertook  and  agreed  to 
use  their  best  efforts  to  enable  the  bank 


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BANKING  LAW 


177 


to  retain  the  whole  of  the  deposits 
transferred  to  it,  and  to  do  all  in  their 
power  to  assist  the  bank  in  maintaining 
the  banking  business  and  to  make  a sue* 
cess  of  the  branch  generally. 

9.  “The  vendors  (firm)  do  jointly 
and  severally  undertake  and  agree  not 
to  engage  either  directly  or  indirectly  in 
any  private  banking  business  in  the 
Province  of  Ontario  for  a period  of  five 
years  from  the  date  hereof,  and  not  to 
become  directors,  officers,  or  managers 
of  any  chartered  bank  of  Canada  in 
Owen  Sound  or  within  a radius  of  fifty 
miles  therefrom.”  . . 

Pursuant  to  the  agreement,  the  pri- 
vate banking  business  at  Owen  Sound 
was  duly  transferred  to  the  defendants, 
who  opened  a branch  there,  and  W.  M. 
Telford  was  installed  as  its  manager. 

Upon  realization  of  the  assets  of  the 
private  banking  business  a surplus  was 
obtained  and  paid  over  to  Telford  & 
Co.,  and  the  first  annual  payment  pro- 
vided for  in  paragraph  five  was  made 
June  1,  1907. 

The  defendants  having  become  em- 
barrassed in  January,  1908,  their  entire 
business  was  taken  over  under  an  agree- 
ment with  other  banks,  and  the  branch 
at  Owen  Sound  was  closed,  and  its  busi- 
ness transferred  to  a branch  of  the 
Merchants  Bank  in  that  city. 

On  January  21,  1908,  W.  *M.  Telford 
was  notified  by  the  defendants*  general 
manager  that  at  the  expiration  of  three 
months  his  services  would  not  be  re- 
quired, and  on  February  4,  1908,  he 
forwarded  to  the  general  manager  his 
resignation,  and  informed  him  that  he 
had  received  an  offer  of  a position  with 
the  Merchants  Bank  at  Owen  Sound. 

The  resignation  was  duly  accepted  on 
February  6,  and,  no  objection  to  his 
taking  a position  with  the  Merchants 
Bank  being  made,  he  on  the  same  day 
took  the  position  of  accountant  in  the 
local  branch  of  that  bank,  and,  until 
the  defence  in  this  action,  the  defen- 
dants never  raised  any  objection  that 
his  entering  into  the  service  of  the  Mer- 
chants Bank  was  a violation  of  the 
agreement. 

The  action  was  to  recover  the  annual 
payment  of  $250  to  each  of  the  seven 


members  of  the  firm,  due  on  June  1, 
1908,  under  clause  five  of  the  agree- 
ment. 

In  answer  to  the  action  the  defen- 
dents  pleaded  that  W.  M.  Telford,  who 
was  one  of  the  plaintiffs,  entered  into 
the  employment  of  another  bank,  in  con- 
travention of  paragraph  nine  of  the 
agreement,  and,  the  covenant  therein 
contained  being  joint  and  several,  the 
defendants  were  absolved  from  further 
liability  upon  the  agreement  by  reason 
of  the  plaintiffs’  breach  thereof. 

Judgment  (Teetzel,  ./ •):  After 

setting  out  the  facts  as  above,  he  said 
that  the  fundamental  question  was 
whether  the  covenant  contained  in  para- 
graph nine  was  an  independent  cove- 
nant, or  whether  its  observance  was  in 
the  nature  of  a condition  precedent,  for, 
if  the  defendants*  covenant  in  para- 
graph five  was  not  dependent  upon  the 
plaintiffs’  covenant  in  paragraph  nine 
being  strictly  observed,  the  plaintiffs 
were  entitled  to  enforce  the  perform- 
ance of  the  covenants  contained  in  para- 
graph five,  and  therefore  entitled  to  re- 
cover in  this  action. 

Having  regard  to  the  ma\n  purpose 
which  the  parties  had  in  view,  namely, 
the  acquisition  by  the  defendants  of  the 
plaintiffs*  well-established  private  bank- 
ing business  as  a going  concern,  and  the 
payment  therefor  of  the  substantial  an- 
nual sums  to  plaintiffs,  and  having  re- 
gard also  to  the  arrangement  and  lan- 
guage of  the  whole  agreement,  I cannot 
say,  in  the  absence  of  an  express  pro- 
vision to  that  effect,  that  the  parties  in- 
tended that  the  observance  by  the 
plaintiffs  of  the  provisions  of  clause 
nine  . . . was  to  be  a condition 

precedent  to  the  defendants*  liability  to 
pay  a single  dollar  for  the  considera- 
tion money  provided  for  in  clause 
five.  . . . 

The  construction  that  the  plaintiffs* 
covenant  contained  in  clause  nine  is  not 
precedent  to  the  covenant  of  the  defen- 
dants contained  in  clause  five,  but  is  an 
independent  covenant,  going  only  to  be 
a part  of  the  consideration,  and  for 
breach  of  which  the  defendants  could 
be  awarded  damages  with  an  injunction, 
is,  I think,  strikingly  demonstrated  to 


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178 


THE  BANKERS  MAGAZINE 


be  the  correct  construction  by  the  judg- 
ment in  Carpenter  vs.  Creswell,  4 Bing. 
409,411.  . . . 

After  one  party  has  performed  a con- 
tract in  substantial  part,  and  the  other 
party  has  accepted  the  benefit  of  the 
part  performance,  the  latter  may  there- 
by be  precluded  from  relying  upon  the 
performance  of  the  residue  as  a condi- 
tion precedent  to  his  liability.  In  such 
case  he  must  perform  the  contract  on 
his  part  and  claim  damages  in  respect 
of  the  defective  performance. 

Judgment  for  the  plaintiffs  for 
$1,750  and  interest  from  June  1,  1908, 
and  costs. 


PROMISSORY  NOTES— CONSID- 
ER A TION—T  RAN  SFER  OF 
BANK  SHARES  — ILLEGAL 
TRAFFICKING  BY  BANK  IN 
ITS  OWN  SHARES— DIREC- 
TORS—BOND— NOTES  GIVEN 
TO  REPAIR  WRONGDOING- 
HOLDER  IN  DUE  COURSE- 
ACQUISITION  OF  SEVERAL 
NOTES  AFTER  MATURITY— 
NOTICE  OF  ILLEGALITY  AS 
TO  OTHERS  — E VIDENCE  — 
ONUS— COSTS. 

STA,VERT  VS.  MCMILLAN  (1  O.  W.  N. 

825.) 

'I  'HE  facts  of  the  case  appear  suffi- 
ciently  clear  from  the  judgment 
of  Chancellor  Boyd. 

Judgment:  That  which  underlies 

and  affects  the  whole  litigation  is  a 
series  of  dealings  by  which  the  money 
of  the  Sovereign  Bank  was  used  in  pur- 
chasing shares  of  its  own  stock  to  the 
extent  of  about  $40,000.  The  shares  so 
acquired  stood  in  the  names  of  various 
nominees  of  the  bank — brokers,  officers 
of  the  bank,  and  others — who  under- 
took no  personal  responsibility  and 
whose  names  were  in  some  cases  used 
without  their  knowledge.  The  whole 
transaction  was  managed  by  the  then 
general  manager,  Stewart,  and  there  is 
no  doubt  that  the  money  was  illegally 
withdrawn  from  the  funds  of  the  bank 
and  used  in  violation  of  the  statute. 


(The  Bank  Act,  R.  S.  C.,  1906,  ch.  29, 
sec.  76.)  The  shares  were  bought  to 
be  sold  again,  and  the  plan  was  to  keep 
up  the  price  of  the  stock  and  to  make 
possible  profits.  The  process  amounted 
to  an  illegal  trafficking  in  the  shares, 
was  ultra  vires,  in  disregard  of  the  pub- 
lic policy  forbidding  banks  to  engage  in 
such  a line  of  business,  and  placed  in 
jeopardy  the  charter  of  the  bank.  . . . 

The  notes  . . . were  given  for 

value,  represented  by  the  transfer  of 
shares  apportioned  to  each,  and  in  the 
whole  representing  in  value  the  $400,- 
000  of  the  bank’s  money  illegally  ex- 
pended. 

This  was,  I think,  the  whole  consid- 
eration as  between  the  bank  and  the 
defendants;  but,  even  if  it  was  only  a 
part,  it  is  enough  to  raise  the  next  im- 
portant question:  in  how  far  can  an  ac- 
tion to  enforce  payment  be  entertained 
by  the  Court? 

We  start  with  a transaction  or  series 
of  transactions  illegal  in  every  sense. 
There  was  an  unwarrantable  misappli- 
cation of  the  bank’s  money,  which  was 
ultra  vires,  in  the  teeth  of  the  Bank 
Act,  and  in  violation  of  the  public 
policy  to  be  observed  and  maintained  in 
the  public  interest.  The  Act  says  that 
an  incorporated  bank  shall  not,  except 
as  authorized  by  the  Act,  directly  or  in- 
directly purchase  or  deal  in  or  lend 
money  or  make  advances  upon  the  se- 
curity or  pledge  of  any  share  of  its 
own  capital  stock.  (Sec.  76  [2b]). 
There  was  clearly  a purchasing  of 
shares,  and  the  purchase  was  in  order 
to  their  being  again  sold.  That  is  a 
trafficking  in  its  own  shares,  which  is 
forbidden.  The  original  acquisition  of 
the  shares  was  not  merely  voidable  but 
void;  it  was  a nullity,  not  to  be  vali- 
dated by  lapse  of  time  or  by  any  action 
of  the  bank  or  the  shareholders. 

Then  what  was  the  transfer  of  these 
shares  to  the  defendants,  in  exchange 
for  the  notes  sued  on,  but  a sale  of 
shares  ? . 

Going  back  to  the  bond  given  by  the 
directors  to  guarantee  the  payment  and 
to  take  over  or  otherwise  dispose  of  the 


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BANKING  LAW 


179 


stock,  it  could  not  have  been  enforced 
in  any  court  of  law  or  equity.  The 
reason  is  succinctly  given  by  Bramwell, 
B.,  in  Geere  vs.  Mare,  2 H.  & C.  339, 
346: 

‘‘The  indenture  declared  on  was  ex- 
ecuted as  a security  for  the  payment  of 
a debt  founded  on  an  illegal  considera- 
tion, and  as  the  debt  could  not  be  en- 
forced against  the  debtor,  neither  can 
it  be  enforced  against  the  person  who 
has  executed  the  security  for  its  pay- 
ment.” The  result  is  the  same  if  part 
of  the  consideration  is  illegal,  for,  as 
said  in  one  of  the  cases,  where  the 
parties  (as,  2.g.,  the  bank  and  the  di- 
rectors) have  woven  a web  of  illegality, 
it  is  not  part  of  the  duty  of  Courts  to 
unwind  the  threads. 

Considered  as  between  the  bank  as 
holder  and  the  defendants  (directors 
and  others,  their  friends),  the  case  ap- 
pears to  be  that  of  the  bank  adopting 
the  shares  bought  with  its  own  money 
and  selling  them  to  strangers  for  a 
price  sufficient  to  recoup  the  first  illegal 
outlay.  . . . 

I think  that  the  bank  has  not  power 
to  transfer  these  shares  or  enforce  pay- 
ment for  them  against  an  unwilling 
purchaser.  The  bank  has  no  legal  title 
to  the  shares,  and  can  confer  none;  so 
that  in  the  hands  of  any  one  having 
knowledge  of  notice  of  the  facts  or  of 
the  violation  of  the  statute,  the  notes 
cannot  be  enforced  by  action. 

The  legal  result  of  the  facts  indicates 
the  practical  impossibility  of  the  bank 
undertaking  to  indemnify  the  defen- 
dants in  regard  to  their  having  become 
holders  of  the  stock.  The  expenditure 
of  the  bank’s  money  was  a misfeasance 
in  the  first  place,  and  any  indemnifica- 
tion would  be  an  agreement  further  to 
misuse  the  shareholders’  money. 

Upon  the  evidence  it  appears  that 
fifteen  of  the  notes  sued  on  required  to 
be  indorsed  to  the  plaintiff  after  Jan- 
uary 18,  1908,  before  he  would  acquire 
title  thereto  or  become  a holder  in  due 


course.  . . . My  conclusion  is  as 

to  these  fifteen  notes  that  he  had  suffi- 
cient notice  of  the  situation  as  between 
the  directors  and  the  bank  as  to  this 
stock  being  purchased  with  the  bank’s 
moneys  and  as  to  the  way  in  which  the 
notes  sued  on  were  given. 

As  to  these  fifteen  notes,  the  actions 
fail  and  should  be  dismissed;  but  no 
costs  are  given  where  the  defence  is 
illegality. 

As  to  the  other  nine  notes,  a case  of 
illegal  consideration  is  shown,  and  in 
that  event  the  law  casts  the  burden  of 
proof  upon  the  holder  to  prove  both 
that  under  value  has  been  given,  and 
that  it  has  been  given  in  good  faith 
without  notice.  Suggestive  circum- 
stances are  in  evidence  as  to  these  notes, 
e . g.,  the  refusal  of  the  Morgans  to 
accept  them  as  commercial  security  for 
advances,  and  that  fact  that  Mr.  Stavert 
was  in  touch  with  the  Morgans,  so  that 
he  may  have  been  well  advised  in  not 
tendering  any  evidence  on  this  head.  In 
ordinary  circumstances,  there  would  be 
jurisdiction,  on  a proper  application,  to 
open  up,  on  terms,  for  a further  trial. 
But,  having  regard  to  the  situation  of 
the  defendants,  who  came  in  as  parties 
in  aid  of  the  directors,  and  who  are  en- 
tirely volunteers,  relying  on  credible 
assurances  that  their  signatures  were 
mere  matters  of  form,  and  to  the  situa- 
tion of  the  directors,  who  are  open  to  be 
pursued  for  their  alleged  privity  with 
the  general  manager,  in  respect  of  the 
whole  sum  involved,  as  joint  tort- 
feasors, and  to  the  common  danger  of 
both  sets  of  defendants  to  be  called 
upon,  in  the  event  of  winding  up  pro- 
ceedings, to  make  good  the  amounts 
represented  by  the  shares  they  hold, 
and  also  for  the  double  liability  of 
shareholders,  I think  it  more  advisable 
not  to  litigate  further  on  this  record  as 
to  the  knowledge  or  notice  possessed  by 
the  plaintiff  when  the  notes  payable  to 
bearer  came  to  his  hands.  It  is  better, 
in  my  opinion,  to  dismiss  this  part  of 
the  controversy  also  without  costs. 


Digitized  by  t^ooQle 


REPLIES  TO  LAW  AND  BANKING  QUESTIONS 

Qu cations  in  Banking  Law— submitted  by  subscribers— which  may  be  of  sufficient  general  interest 
to  warrant  publication  will  be  answered  in  this  department 


GIVING  INFORMATION  AS  TO 
DEPOSITOR’S  ACCOUNT 

Madison,  S.  P.,  July  10,  1910. 
Editor  Bankers  Magazine: 

Sir:  Supposing  a business  man  to  have 
committed  suicide  on  account  of  financial 
reverses,  leaving  three  or  four  large  credit- 
ors, one  creditor  especially  holding  a large 
sum  against  the  dead  person,  with  nothing 
in  sight.  Now  th?n  in  case  this  creditor, 
who  is  a stranger  in  the  community,  should 
come  to  a bank,  and  there  be  introduced  by 
some  responsible  business  man,  and  he 
should  then  ask  the  bank  to  inform  him  as 
to  the  amount  of  money  on  deposit  in  the 
name  of  the  person  now  dead,  is  there  any- 
thing in  commercial  or  banking  laws  to 
warrant  a bank  giving  this  information 
under  any  circumstances,  and  especially  un- 
der these  outlined  above? 

John  W.  Wadden, 
Vice-president. 

Answer:  It  is  not  customary  for  a 

bank  to  furnish  information  of  this 
character.  The  relation  between  a bank 
and  its  depositor  is  confidential,  and  in- 
formation concerning  the  condition  of 
his  account  is  given  only  with  his  con- 
sent or  upon  some  legal  compulsion,  as, 
for  example,  in  an  attachment  proceed- 
ing. And  the  same  course  is  to  be  pur- 
sued after  his  death.  In  strictness,  the 
only  persons  entitled  to  ask  for  such  a 
disclosure,  where  the  depositor  has  died, 
are  the  executors  or  administrators, 
though  cases  may  arise  where,  before 
the  will  has  been  probated,  or  adminis- 
trators appointed,  it  may  be  proper  to 
disclose  the  facts  to  persons  who  have 
a legitimate  interest  in  knowing,  as, 
for  example,  a son,  or  the  widow,  or  a 
surviving  partner.  But  all  this  is  a 
matter  of  good  taste  and  business  ethics, 
and  not  a question  of  legal  right. 


PAYMENT  OF  INTEREST  COUPONS 
ON  CALLED  BONDS 

Portland,  Me.,  July  8,  1910. 
Editor  Bankers  Magazine : 

Sir:  What  is  the  law,  as  well  as  custom 
and  usage  relating  to  coupons  on  called 
bonds  that  have  run  beyond  the  called  date, 

iso 


that  is,  a bond  with  a callable  clause  may 
be  called  for  payment,  according  to  its 
terms,  say  on  October  1,  and  the  call  ad- 
vertised in  the  New  York  papers.  A hold- 
er in  an  obscure  city  or  locality  does  not 
see  the  New  York  papers,  consequently  a 
six  months'  period  after  the  call  comes 
round  and,  in  presenting  April  1 coupons, 
is  told  that  bonds  were  called  as  of  Octo- 
ber 1,  six  months  before,  and  that  April 
coupons  are  of  no  value.  Yet  the  October 
coupons  had  been  paid  without  the  holder 
or  collecting  agent  being  informed  that  the 
bonds  themselves  were  called  for  payment 
at  that  time. 

Our  experience  has  been  that  coupons 
on  called  bonds  that  mature  on  date  of 
call  are  not  paid  until  bonds  are  presented 
with  them. 

In  other  words,  will  law,  custom  or  usage 
oblige  an  innocent  holder,  who  has  no 
knowledge  of  the  call,  to  sacrifice  the  in- 
come for  a period  of  six  months  on  such 
securities  to  the  sole  advantage  of  the  is- 
suing company? 

After  receiving  notice  that  the  April 
coupons  are  not  paid,  account  of  bonds 
being  called — no  date  of  call  being  given — 
and  the  bonds  are  forwarded  for  collec- 
tion, is  the  collecting  agent  justified  in  sur- 
rendering the  April  coupons  upon  simply 
receiving  payment  for  face  of  bonds? 

Cashier. 

Answer:  The  rights  of  the  holder  of 
a “call  bond”  are  not  determined  by 
practice  or  usage,  but  by  the  terms  of 
the  instrument  itself.  They  differ  from 
ordinary  bonds  in  that  the  corporation 
issuing  them  has  the  right  to  pay  them 
off  before  maturity,  and  the  bond  itself, 
or  the  mortgage  by  which  it  is  secured, 
provides  for  the  mode  by  which  it  is  to 
be  “called,”  and  for  the  manner  of  giv- 
ing notice.  A compliance  witfh  these 
provisions  is  equivalent  to  a legal  tender 
of  the  amount  then  due,  and  stops  all 
further  interest.  The  fact  that  the 
holder  may  not  have  seen  the  notice  is 
immaterial ; publication  in  the  mode 
provided  for  is  constructive  notice  to 
him,  and  binds  him  as  effectually  as  if 
he  had  received  notice.  For  example, 
if  a bond  should  provide  that  the  cor- 
poration making  it  might  discharge  it 
at  any  time,  by  depositing  the  principal 


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BANKING  LAW 


181 


sum  and  the  accrued  interest  with  the 
Farmers  Loan  and  Trust  Company  of 
New  York,  and  publishing  notice  in  the 
New  York  Times  and  Evening  Post 
once  a week  for  four  successive  weeks, 
such  corporation  in  order  to  defeat  any 
claims  for  interest  after  that  time  would 
have  only  to  prove  the  deposit  and  the 
publication.  And  as  the  coupons  of  a 
later  date  would  represent  only  subse- 
quent interest,  proof  of  these  facts 
would  operate  as  a bar  to  any  claim  on 
them. 

DRAFT  ON  SAVINGS  ACCOUNT 
WITH  INTEREST 

Newark,  N.  J.,  June  4,  1910. 
Editor  Bankers  Magazine: 

Sir  : I send  you  a copy  of  a draft  which 
was  presented  to  us  for  payment  in  the 
regular  course  of  business,  drawn  against 
funds  on  deposit  in  our  investment  de- 
partment, and  payable  to  and  indorsed  by 
the  Home  and  Home  Company,  followed  by 
three  (3)  regular  bank  indorsements. 

The  amount  of  deposit  to  the  credit  of 
John  Smith  on  the  date  of  presentation 
of  the  draft  was  $1,155.  Would  we  in  pay- 
ing to  the  last  bank  whose  indorsement  ap- 
pears thereon  the  sum  of  $1,155,  there  being 
no  accrued  interest  due  this  account,  pos- 
sibly incur  a loss  for  one  or  both  of  the 
following  reasons: 

The  draft  was  one  of  our  regular 
forms  which  states  that  the  pass  book  must 
accompany  the  draft  when  funds  are  with- 
drawn, and  that  the  amount  of  the  draft 
was  to  be  charged  to  a specific  account, 
hence  the  promise  is  conditional  in  that  the 
payment  of  the  draft  depended  upon  the 
sufficiency  of  a specific  fund  against  which 
it  was  drawn. 

Second,  the  amount  is  not  certain,  in  that 
the  draft  calls  for  $1,155  and  interest. 

It  would  seem  to  me  that  the  draft  in 
question  is  non-negotiable  for  one  or  both 
of  the  reasons  cited,  and  hence  the  regular 
bank  indorsements  appearing  thereon  could 
not  be  regarded  as  indorsements,  with  the 
usual  liability  attendant  thereto,  for  my 
understanding  is  that  the  term  indorsements 
specifically  applies  to  those  names  which 
appear  on  the  back  of  negotiable  (com- 
mercial) paper. 

Should  the  maker  of  this  draft  subse- 
quently raise  any  question  in  regard  to  the 
payment  thereof,  due  for  instance  to  lack 
of  fulfillment  of  contract  on  the  part  of 
the  payee,  or  a setoff  of  all  or  part  of  the 
amount  as  prior  consideration  for  the 
amount'  of  the  draft,  would  we  be  required 
to  repay  to  the  maker  the  amount  in  ques- 


tion and  then  seek  to  obtain  reimburse- 
ment from  the  payee,  whom  we  do  not 
know,  as  recourse  to  the  three  (3)  banks 
whose  indorsements  appear  on  the  draft 
could  not  be  had  for  the  reasons  above 
stated. 

There  may  possibly  be  other  points  for 
consideration  in  reference  to  this  draft,  but 
those  mentioned  are  undoubtedly  sufficient 
for  you  to  decide  the  question  at  issue. 

If  my  contention  is  correct,  can  you  sug- 
gest a form  of  draft  to  be  used  or  proced- 
ure to  follow  which  will  protect  us  against 
any  contingency,  similar  to  that  which 
forms  the  basis  of  this  inquiry. 

April  25,  1910. 

Safety  Trust  Company, 

Newark,  N.  J. 

Investment  Department. 

Pay  to  the  order  of  Home  & Home  Com- 
pany, or  bearer,  Eleven  hundred  and  fifty- 
five  dollars  and  interest.  Value  received, 
and  charge  to  account  No.  1,000. 

$1,155.00  and  interest. 

(Signed)  John  Smith. 

Teller. 

Answer:  Where  a check  or  draft  is 

presented  to  the  drawee  bank  for  pay- 
ment, that  bank  is  not  concerned  with 
the  question  whether  the  instrument  is 
negotiable  or  not;  but  has  only  to  know 
that  the  paper  is  genuine,  and  to  see 
that  payment  is  made  strictly  according 
to  the  directions  given.  (Crawford  vs. 
West  Side  Bank,  100  N.  Y.  50.)  Now, 
in  the  case  stated  in  the  inquiry,  the  de- 
positor has  directed  that  $1,155  and  in- 
terest be  paid  “to  the  order  of  Home 
& Home  Company,  or  bearer”;  and  if 
this  is  done,  he  has  no  ground  of  com- 
plaint. If,  then,  the  paper  bears  the 
genuine  indorsement  of  Home  & Home 
Company,  as  is  stated  in  the  inquiry, 
there  seems  to  be  no  reason  why  pay- 
ment may  not  be  made  to  the  bank  pre- 
senting the  same.  As  to  the  amount, 
the  bank  making  presentment  might 
perhaps  ask  for  instructions  as  to 
whether  it  should  receive  the  principal 
sum  without  any  interest;  but  if  that 
bank  is  willing  to  take  the  principal 
alone,  there  is  no  reason  why  the  drawee 
bank  should  not  pay  it. 


Digitized  by  t^ooQle 


INVESTMENTS 

Conducted  by  Franklin  Eacher 


A NEW  ERA  IN  RAILWAY  FINANCE 


By  Homer  Sloat 


TXTHAT  the  action  of  the  Commerce 
* * Commission  will  be  with  regard 
to  the  rate  increases  on  which  it  is  now 
deliberating,  it  is  still  too  early  to  say, 
but  from  what  has  been  done  so  far  it 
is  evident  that  a new  era  has  dawned  in 
railway  finance.  The  day  of  rebates, 
discriminations  and  unreasonable  high 
rates  is  over.  Secret  agreements  will 
have  a hard  time  surviving  the  searching 
inquiry  of  the  Commerce  Commission. 
The  millennium  in  railway  financial  op- 
erations can  hardly  be  said  to  have  come, 
but  it  is  a fact  that,  with  the  Interstate 
Commerce  Commission  empowered  as  it 
has  been  by  the  new  law,  railroading 
will  become  a straighter  and  more 
above-board  business  than  ever  before. 

General  Freight  Rate  Revision. 

For  whatever  the  effects  may  be  of 
the  railroad  legislation  recently  enacted, 
it  is  to  be  borne  in  mind  that  the  Com- 
merce Commission  has  been  practically 
authorized  to  go  ahead  and  revise  the 
freight  rate  situation — revise  it  wher- 
ever and  however  it  may  seem  necessary 
— rates  to  be  put  down  where  they  are 
found  to  be  too  high  and  to  be  put  up 
where  they  are  found  to  be  too  Ion. 
From  the  Atlantic  to  the  Pacific  the 
searching  eye  of  the  seven  legal  minds 
which  go  to  make  up  the  Commission 
are  scanning  the  rate  situation.  It  has 
been  put  up  to  them  on  behalf  of  the 
people  of  the  United  States  to  see  to  it 
that  the  railroad  business  of  the  country 
is  conducted  on  a fair  and  equitable 
basis.  Judging  by  the  activity  already 
displayed  in  searching  out  inequities, 
the  Commission  intends  not  only  to  find 
out  what  is  the  trouble  and  where  it  ex- 
ists, but  with  a strong  hand  to  apply  the 
corrective. 

To  aid  it  in  the  application  of  justice, 
182 


the  Commission  will  have  the  Commerce 
Court — that  creation  of  the  President, 
designed  to  further  and  facilitate  the 
course  of  justice.  We  have  here  both 
elements,  that  to  investigate  and  that  to 
correct.  Their  application  has  been  go- 
ing on  for  only  a short  time,  but  already 
it  is  evident  that  railroad  conditions  are 
in  every  respect  to  be  purified  and  im- 
proved. 

First  Decisions  Indicate  Little. 

On  edge  as  the  railroad  men  have 
been  since  the  passing  of  the  railroad 
law,  it  is  rather  unfortunate  that  the 
first  important  rulings  of  the  Commis- 
sion have  been,  in  the  Nevada  rate  cases, 
strongly  against  the  railroads.  It  was, 
however,  nothing  but  a coincidence  that 
the  first  corrective  applied  by  the  Com- 
mission should  have  been  in  the  way 
and  lower  freight  rates — it  might  just 
as  well  have  been  that  where  rates  were 
found  too  low  they  might  have  been 
raised.  It  is  to  be  remembered  that 
synchronously  with  the  Nevada  rate  de- 
cision, drastically  cutting  down  freight 
rates,  permission  was  given  to  the  New 
York  Central  to  advance  rates  sharply 
un  commodities  between  New  York  and 
Buffalo.  If  the  railroad  men  were  given 
the  impression,  because  the  first  impor- 
tant action  of  the  Commission  appeared 
to  be  adverse,  that  they  (the  railroad 
men)  are  “up  against  it,”  the  rest  of  the 
country  does  not  look  at  it  that  way. 
Railroad  students  realize  fully  that  the 
situation  is  full  of  unequalities — that  in 
many  directions  rates  ought  to  be  put 
down  and  that  in  many  directions  they 
ought  to  be  put  up.  The  fact  that  the 
Commission  has  started  in  by  cutting 
down  rates  in  one  quarter  shows  abso- 
lutely nothing.  Later  on,  the.  railway 
men  will  have  their  inning,  when  the  in- 


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INVESTMENTS 


183 


evitable  sharp  advances  which  are  to 
come  are  announced. 

Clearing  the  Situation. 

What  can  be  read  from  the  situation 
so  far  as  it  has  gone  is  a determination 
on  the  part  of  the  seven  members  of  the 
Commerce  Commission  to  go  ahead  with 
the  task  which  has  been  entrusted  to 
them  and  to  make  as  good  a job  of  it  as 
they  possibly  can.  When  they  get 
through  with  it,  the  chances  are  that  the 
situation  will  still  be  far  from  perfect, 
but  that  an  immense  amount  of  good  will 


have  been  done  seems  altogether  likely. 
The  men  on  the  Commission  are 
equipped  for  the  task.  By  the  recent 
law  enacted,  they  have  been  granted  the 
necessary  authority.  Through  the  oper- 
ation of  the  Commerce  Court,  they  will 
be  backed  up  in  what  they  do.  And  as 
a result  of  all  this,  investors  in  railroad 
securities  may  be  assured  that  in  the 
new  era  of  railway  finance  which  is 
dawning  on  a very  much  darkened  hori- 
zon, there  is  safety  for  themselves  and 
appreciation  in  the  intrinsic  value  of  the 
securities  they  hold. 


MOVING  THE  CROPS 

By  John  Terret 


TT  is  midsummer  now,  and  we  are  hear- 
*■’  ing  a great  deal  concerning  the  finan- 
cing of  the  crops.  Every  year  we  have 
the  same  thing  and  every  year  from  the 
West  comes  the  report  that  the  banks 
of  the  interior  are  well  able  to  handle, 
unassisted,  the  seasonable  demands  for 
crop-moving  currency.  We  have  gotten 
used  to  that;  we  hear  it  every  year. 
And  yet  every  year,  aid,  and  on  a large 
scale,  from  the  Eastern  banks,  is  not  a 
question  of  whether  but  of  how  much. 
It  is  not  at  all  a question  of  whether 
we  shall  have  to  send  a big  amount  of 
currency  Westward  this  season;  it  is 
only  a question  of  how  much  greater 
than  usual  the  amount  will  be  this  year. 

For  in  spite  of  the  deterioration 
noted  in  spring  wheat  in  the  last  Gov- 
ernment crop  report,  every  indication  is 
that  the  crops  this  year  will  be  fully  up 
to  the  average — that  corn,  in  fact,  will 
far  surpass  all  previous  yields  and  that 
cotton  will  approach  the  thirteen-mil- 
lion-bale  mark.  Nineteen  hundred  and 
ten,  in  spite  of  the  activity  of  the  crop- 
killers,  will  see  the  country  blessed  with 
an  abundant  harvest.  It  will  also  see 
this  part  of  the  country  blessed  with  a 
necessity  of  sending  Westward  any- 
where from  fifty  to  one  hundred  million 
dollars  in  currency  that  the  financing 
of  this  abundant  harvest  may  be  accom- 
plished. 

Especially  interesting  is  the  situa- 


tion this  year  because  of  special  condi- 
tions prevailing.  In  the  first  place, 
there  is  the  land  speculation,  which, 
while  it  has  swept  the  country  from  end 
to  end,  has  burned  most  fiercely  in  the 
country’s  agricultural  sections.  After 
that  there  is  to  be  considered  the  loss 
of  our  favorable  trade  balance — the 
fact  that  we  are  struggling  along  to 
keep  exports  up  to  the  level  of  imports. 
Thirdly,  there  must  be  considered  the 
condition  of  the  bond  market  and  the  in- 
ability of  dealers  and  syndicates  to 
market  what  they  are  carrying  along. 

Influence  of  the  Land  Speculation. 

Entirely  aside  from  its  moral  or  eco- 
nomic aspect,  the  land  speculation  con- 
cerns the  question  at  issue  chiefly  be- 
cause it  is  causing  so  wide  an  expansion 
of  credits  throughout  the  Western 
States.  The  way  in  which  the  contro- 
versy over  this  matter  is  raging  is  really 
quite  remarkable.  Asseveration  that 
the  banks  have  put  a check  upon  the 
land  speculation  and  that  it  is  well  in 
hand  is  followed  by  flat  denial  by  au- 
thorities high  in  the  banking  world, 
who  claim  that  the  speculative  move- 
ment has  tied  up  the  banks  to  an  extent 
not  seen  since  the  land  boom  of  the 
80s.  Just  where  the  matter  stands,  it 
is  pretty  hard  to  tell;  it  may  safely  be 
assumed,  however,  that  the  speculative 
mania  has  got  a pretty  good  grip  upon 


Digitized  by  t^ooQle 


Bor 


of  Established  Gas  and  Electric  Companies 

These  bonds  are  issued  by  prosperous  Companies  of  New  England  and  the 
Middle  West;  companies  whose  business  has  been  developed 
by  years  of  constant  and  growing  service,  whose  credit  is 
firmly  established  and  whose  ability  to  carry  their  bonded 
debt  has  been  proven  through  periods  of  prosperity  and  of 
general  business  depression. 


The  control  of  these  companies  is  vested  in  the  NATIONAL.  LIGHT,  HEAT  A POWER 
COMPANY,  New  York,  which,  through  Its  various  sub-companies,  controls  the  lighting 
franchises  of  some  Twenty  Cities  and  Towns. 


DOUBLE  SECURITY 


Each  of  these  Bonds  bears  the  unconditional  Guarantee  of  the  National  Light.  Heat 
& Power  Company  as  to  prompt  payment  of  principal  and  interest.  This  Guarantee 
means  protection,  insurance  against  loss  and  the  constant,  unremitting  supervision  and  in- 
terest of  a large  and  successful  corporation  which  controls  these  valuable  properties. 

DENOMINATION  $500  AND  $1,000. 

For  offerings  and  full  information  address  Bond  Dept. 

A.  H.  Bickmora  & Go.,  Bankers  30  Pine  Street,  New  York 


the  banks  as  well  as  on  the  farmers,  and 
that  the  big  increase  in  the  banks’  loans 
represents  money  used  in  land  specula- 
tion. 

How  will  it  affect  the  ability  of  the 
banks  to  finance  the  crops  ? Almost  im- 
mediately now  they  will  be  called  upon 
not  only  to  extend  credit  widely  but  to 
furnish  big  amounts,  of  actual  currency. 
Will  they  be  able  to  do  it  without  draw- 
ing heavily  upon  the  East?  Consider- 
ing their  generally  extended  position, 
probably  not.  Of  inflation,  there  is 
heard  nothing,  from  good  authority,  but 
of  wide  extension,  yes.  The  banks  are 
“loaned-up”  and  that  is  all  there  is  to 
it.  If  they  are  going  to  extend  to  their 
local  customers  the  accommodation  they 
will  so  soon  be  needing,  they  will  be 
able  to  do  it  only  by  drawing  heavily 
upon  their  Eastern  correspondents. 

Help  from  Abroad. 

Then,  again,  there  is  to  be  considered 
the  fact  that  the  wav  in  which  our  for- 
eign trade  has  been  shaping  itself  and 
the  way  in  which  our  trade  balance  has 
disappeared  mean  that  we  shall  not  be 
able  to  requisition  foreign  capital  to 
the  same  extent  as  formerly.  On  ac- 
count of  the  big  balances  which  Ameri- 
can banks  are  now  in  the  habit  of  car- 
rying abroad  and  on  account  of  the 
credits  which  we  seem  able  readily  to 
obtain  on  the  other  side,  it  may  be  possi- 
ble for  us  to  bring  a lot  of  foreign 
money  into  this  market  if  necessary, 

184 


but  such  aid  will  be  aid  and  not  the  use 
of  our  own  money.  If  we  find  our- 
selves in  a tight  box,  will  the  foreign 
bankers  be  willing  to  help  us  out  ? 
Probably  yes,  though  not  to  an  indefi- 
nite extent,  and  certainly  not  except 
upon  the  payment  of  a good  stiff  rate 
of  interest.  We  can  probably  get  help, 
but  if  we  do  we  shall  have  to  pay  for  it. 

The  Congested  Bond  Market. 

Lastly,  there  are  to  be  considered  the 
very  much  congested  conditions  prevail- 
ing in  the  investment  markets  and  the 
way  in  which  capital  here  in  the  East 
is  tied  up  in  the  securities  being  car- 
ried along  by  syndicates  and  other 
large  interests.  Things  are  better  than 
they  were,  there  is  no  doubt  about  that. 
At  the  same  time,  with  all  the  liquida- 
tion which  has  taken  place,  they  are 
none  too  good.  There  has  been  a slight- 
ly better  movement  of  securities  from 
the  dealers  to  the  investment  public, 
but  the  movement  at  best  has  been  a 
slow  and  halting  one,  and  bank  loans  to 
those  who  are  carrying  along  stuff  of 
which, they  cannot  dispose  are  still  on 
a big  scale.  With  things  in  this  condi- 
tion, what  will  happen  if  the  banks  are 
to  be  heavily  drawn  upon  and  compelled 
to  call  loans?  Without  seeming  in  the 
least  to  take  an  alarmist  view  of  the 
situation,  it  can  be  seen  that  there  is  at 
least  a chance  that  a good  deal  of  fur- 
ther liquidation  will  be  necessary. 

From  the  foregoing,  it  is  plain  that 


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Gttft  Union  National  Sank 

CAPITAL  *1,600,000  (Elmlattfo,  ®.  SURPLUS  $900,000 


GEO.  H.  WORTHINGTON,  President 
J.  F.  HARPER,  Vice-President 
E.  R.  FANCHER,  Vice-President 
G.  A.  COULTON,  Cashier 
W.  E.  WARD,  Asst.  Cashier 


Organized  in  1884*  More  than 
twenty-five  years  of  service  back 
of  us*  May  we  be  of  use  to  you? 


the  situation  contains,  if  not  the  ele- 
ments of  down-right  trouble,  at  least 
the  possibility  of  decidedly  firm  money 
rates  this  Fall.  A bird's-eye  view 
would  seem  to  indicate  that  the  possi- 
bility of  trouble  and  the  relief  for  the 
trouble  exist  side  by  side.  It  may  be, 
of  course,  that  the  forewarning  of  the 
trouble  may  have  caused  such  prepara- 
tions as  will  obviate  it  to  a great  ex- 


tent, but  it  is  hardly  possible  to  get 
away  from  the  fact  that  a pretty  stiff 
level  of  money  rates  this  autumn  is  to 
be  expected.  Fortunately,  for  the  good 
of  the  situation,  along  with  the  prob- 
ability that  money  rates  will  be  decided- 
ly firm,  there  exists  the  probability  that 
the  banks  here,  from  abroad  and  other- 
wise, will  be  able  to  get  the  aid  they 
need. 


GUARANTEED  STOCKS 

THE  ADVANTAGE  OF  THEIR  PURCHASE  AS  TAX-EXEMPT  IN- 
VESTMENTS 

By  Frederick  Hill  (With  Joseph  Walker  & Sons) 


' 1 'HE  great  increase  in  taxes  during 
the  past  few  years  has  led  to  con- 
siderable inquiry  concerning  the  tax 
laws  of  the  various  States.  These  laws 
are  not  sufficiently  known  to  the  average 
investor,  especially  to  the  trustee  of  an 
estate  and  the  large  taxpayer.  More- 
over, even  if  the  laws  are  known,  lack 
of  knowledge  usually  exists  of  the  dif- 
ferent classes  of  securities  which  are 
exempt  from  taxation  and  in  which  an 
investment  may  be  made. 

This  increase  in  taxes  has  created  a 
strong  demand  for  guaranteed  stocks, 
which  are  exenqpt  from  State,  county, 
town,  city  and  village  taxation,  in  ac- 
cordance with  the  various  State  laws 
governing  them.  In  other  words,  by 
these  laws  the  holder  of  guaranteed 
stocks  is  exempted  from  taxation  on  per- 
sonal property  to  an  amount  represented 


by  such  stocks.  Consequently,  at  this 
time,  it  has  seemed  most  advisable  to 
explain  this  favored  class  of  invest- 
ment. 

General  Description. 

These  stocks  have  their  dividends 
guaranteed  by  a lease  made  for  a term 
of  years  (usually  99  or  999  years)  at  a 
fixed  annual  rate  to  some  larger  rail- 
road or  other  corporation,  to  which,  in 
most  cases,  the  leased  properties  are 
absolutely  essential  and  of  which  they 
form  an  integral  part. 

The  large  railroad  systems  are,  with 
few  exceptions,  consolidations  of  small- 
er roads,  which  generally  form  their 
main  lines  or  important  branches.  For 
instance,  the  Pennsylvania  Railroad 
Company  leases  the  United  New  Jersey 
Railroad  & Canal  Company  for  999 

1S5 


Digitized  by  i^ooQle 


To  Buy  or  Not  to  Buy 
is  the  ? Most  Puzzling 
to  the  Average  Trader 


But  easily  obviated  by  good  Market  Literature. 
Send  for  dally  letter  and  other  data. 


J.  FRANK  HOWELL 


Member  Consoli 
dated  Stock  Ex 
change  of  N.  Y 


34  NEW  STREET  NEW  YORK  CITY 


years,  agreeing  to  pay  all  operating  ex- 
penses and  interest  charges,  taxes,  or- 
ganization expenses  and  ten  per  cent, 
annual  dividends  on  its  stock.  This 
road  is  the  main  line  of  the  Pennsyl- 
vania Railroad  between  Jersey  City  and 
Trenton  and  provides  its  terminal  in  the 
former  city. 

Similarly,  the  Pennsylvania  Company 
leases  the  Pittsburgh,  Ft.  Wayne  & Chi- 
cago Railroad  Company,  which  is  the 
main  line  of  the  Pennsylvania  System 
from  Pittsburgh  to  Chicago;  the  New 
York  Central  & Hudson  River  Railroad 
Company  leases  the  Rome,  Watertown 
& Ogdensburg  Railroad  Company;  the 
Delaware,  Lackawanna  & Western  Rail- 
road Company  leases  the  Morris  & 
Essex  Railroad  Company,  which  is  the 
main  line  of  the  Lackawanna  System  in 
New  Jersey  and  its  terminal  in  New 
York  Harbor,  and  the  New  York,  Lack- 
awanna & Western  Railroad  Company, 
which  is  the  main  line  of  the  Lacka- 
wanna System  from  Binghamton  to  Buf- 
falo; and  the  Delaware  & Hudson  Com- 
pany leases  the  Rensselaer  & Saratoga 
Railroad  Company,  which  forms  the 
main  line  of  the  Delaware  & Hudson 
System  from  Troy  to  Lake  Champlain. 
The  great  value  of  the  leased  roads  to 
their  lessees  is  thus  clearly  seen. 

Dividends  Are  Prior  Obligations. 

The  dividends  on  guaranteed  stocks 
are  prior  obligations  to  those  on  the 
stock  of  the  guaranteeing  company,  and 
some  of  these  stocks,  such  as  Joliet  & 
Chicago  and  Kansas  City,  St.  Louis  & 
Chicago  preferred,  guaranteed  by  the 
Chicago  & Alton  Railroad  Company,  are 
prior  obligations  to  the  bonds  of  the 
guarantor.  In  many  cases,  the  leased 
roads  have  no  bonded  debt,  their  stocks 
being  their  only  obligation:  consequent- 
ly, these  stocks  such  as  Ft.  Wayne  & 
Jackson  preferred*,  guaranteed  by  the 
1 8« 


Lake  Shore  & Michigan  Southern  Rail- 
way Company;  Nashville  & Decatur, 
guaranteed  by  the  Louisville  & Nash- 
ville Railroad  Company;  Rome  & Clin- 
ton, guaranteed  by  the  Delaware  & 
Hudson  Company;  and  Southwestern  of 
Georgia,  guaranteed  by  the  Central  of 
Georgia  Railroad  Company,  are  prac- 
tically a first  lien  upon  the  property. 

No  Maturity  Dates. 

With  few  exceptions,  guaranteed 
stocks  have  no  maturity  dates,  as  have 
bonds,  and  hence  the  trouble  of  re-in- 
vestment  at  fixed  periods  and  the  writ- 
ing off  of  premiums  is  avoided.  They 
can  be  purchased  in  large  or  small 
amounts,  their  par  value  being  from 
$50  to  $100  per  share.  The  dividends 
are  mailed  on  fixed  dates  by  check  from 
the  office  of  the  company  to  the  regis- 
tered holder  of  the  certificate,  or  the 
assignee  thereof  and,  hence,  the  annoy- 
ance of  cutting  off  coupons,  as  from 
bonds,  and  their  possible  loss  is  avoided. 
Guaranteed  stocks  are  a most  conven- 
ient form  of  investment  for  women. 
Unless  properly  endorsed  by  the  owner 
or  his  legal  representative,  they  are  non- 
negotiable ; and  consequently  the  risk  of 
ultimate  loss  by  theft  or  accident,  which 
risk  exists  in  the  case  of  coupon  bonds, 
is  minimized. 

Earnings  of  Leased  Roads. 

The  earnings  of  practically  all  of  the 
leased  roads  are  well  in  excess  of  the 
rentals  paid  by  the  lessee.  Many  of 
the  roads  were  leased  years  ago  and, 
consequently,  their  properties  have 
greatly  enhanced  in  value. 

Many  of  the  leases  contain  provi- 
sions, which  have  resulted  and  will  re- 
sult in  additional  benefits  to  the  stock- 
holders of  the  leased  roads.  For  ex- 
ample, Lake  Shore  & Michigan  South- 
ern guaranteed  stock  receives  ten  per 


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Investors  may  keep  in  touch  with  New  York  Stock  market  conditions 
and  receive  suggestions  for  investment  or  speculation  through  our  weekly 
"Market  Letter  on  Stocks.” 


Swartwout  & Appenzellar,  Bankers 

Members  New  Tork  Stock  Exchange 

404244  PINE  STREET,  NEW  YORK  CITY 

Aarlcmltural  Nat.  Bask  Bldg.  First  Nat.  Bank  Bldg. 

FtttsAeldf  Mass.  Chicago,  HI. 


cent,  annual  dividends  and  is  entitled 
to  share  pro  rata  with  the  stock  of  the 
Lake  Shore  & Michigan  Southern  Rail- 
way Company  in  excess  of  earnings  over 
ten  per  cent,  per  annum.  Morris  & 
Essex  stock  is  entitled  to  seven  per  cent, 
annual  dividends  and  an  additional  one 
per  cent.,  when  earnings  reach  a cer- 
tain amount.  In  1900,  the  dividend  on 
the  stock  of  the  New  York  & Harlem 
Railroad  Company  was  increased  two 
per  cent.,  through  the  refunding  of  its 
seven  per  cent,  bonds  into  S1^* s and, 
similarly,  in  October,  1909,  the  Albany 
& Susquehanna  Railroad  Company  won 
its  suit  against  the  Delaware  & Hudson 
Company,  thereby  obtaining  an  accu- 
mulated cash  dividend  of  thirty  dollars 
per  share  and  an  increase  in  its  annual 
dividend  from  nine  per  cent  to  12.45 
per  cent. 

Extra  dividends  are  frequently  paid, 
as  in  the  case  of  Peoria  & Bureau  Val- 
ley, guaranteed  by  the  Chicago,  Rock 
Island  & Pacific  Railway  Company,  and 
Little  Schuylkill  Navigation  Railroad  & 
Coal  Company,  guaranteed  by  the  Phil- 
adelphia & Reading  Railway  Company. 

The  stocks,  which  are  considered  the 
best,  naturally,  sell  at  the  highest  prices 
(lowest  income  basis)  and  their  selling 
prices  are  determined  bj'  their  indi- 
vidual value,  earning  power,  marketa- 
bility, capital  stock  and  bonded  debt 
and  importance  to  the  guarantor  and 
the  strength  of  the  guarantor. 

They  are  owned  largely  by  the  most 
conservative  investors,  including  estates, 
fire  insurance  companies,  casualty  and 
surety  companies  and  trust  companies. 

Exemption  from  Taxes. 

Holders  of  guaranteed  stocks  are  ex- 
empt from  taxes  levied  by  a State,  coun- 


ty, town,  city  and  village,  or  local  sub- 
divisions, such  as  school  and  road  dis- 
tricts. Because  of  the  high  tax  rates 
existing  practically  everywhere,  unless 
investments  are  made  in  tax  exempt  se- 
curities, the  net  income  therefrom  is 
greatly  reduced.  For  example,  the  tax 
rate  in  the  Borough  of  Manhattan,  New 
York  City,  for  the  year  1909  was  1.67 
per  cent.,  and  if  an  investment  were 
made  in  bonds  liable  to  taxation,  yield- 
ing an  annual  income  of  five  per  cent., 
the  net  return  would  be  only  3.  S3  per 
cent.,  whereas,  if  the  investment  were 
made  in  a five  per  cent,  tax  free  secur- 
ity, the  net  return  would  be  exactly  five 
per  cent. 

Assuming  that  “A”  invests  $10,000  in 
four  per  cent,  taxable  bonds  at  par,  and 
that  the  tax  rate  is  1.50  per  cent,  per 
annum  (in  many  instances  it  is  higher) 
his  gross  annual  income  is  $400,  but 
from  this  amount  must  be  deducted  the 
tax,  which  he  is  obliged  to  pay  of  1.50 
per  cent,  on  the  $10,000  invested,  which 
reduces  his  net  income  to  $250.  Now, 
assuming  that  “A”  invests  $10,000  in  a 
four  per  cent,  non-taxable  security,  such 
as  a guaranteed  stock,  at  par,  his  gross 
annual  income  will  be  $400,  and,  since 
he  is  obliged  to  pay  no  tax,  his  net  in- 
come is  exactly  the  same,  or  a clear  sav- 
ing or  gain  of  $150.  But,  as  guaran- 
teed stocks  yield  an  annual  income  of 
from  3.75  to  five  per  cent.,  according  to 
the  individual  stock,  “A”  can,  by  their 
purchase,  increase  his  income  propor- 
tionately and  still  have  a conservative 
and  safe  investment. 

As  Investments  for  Estates. 

The  trustee  of  an  estate  must  be 
governed,  in  the  matter  of  the  invest- 
ments he  may  make,  by  the  terms  of  #the 

1.37 


Digitized  by  t^ooQle 


TELEPHONES 
67901 
6791 

6799  )■  BROAD 

6793 

6794 
Union  Ferry 

Stock  nnd  5'« 
Now  Amsterdam 
Gas  S’s 


WILLIAMSON  A SQUIRE 

MEMBER8  N.  T.  STOCK  EXCHANGE 

INVESTMENT  SECURITIES 

85  BROAD  IT,  HEW  TORE  OITY 

All  Local  Street  Railway,  Gas,  Electric  and  Ferry 
Companies  Bought,  Sold  and  Quoted 


Economy  Light  A 
Power  0’s.  1006 
Syracuse  Light- 
ing 0's.  1901 
Dela.,  Lack.  0 
Western  Coal 
Pacific  Gas  and 
Electric 

King's  Gouty 
El.  Lt.  6 Power 


instrument  creating  the  trust.  In  some 
cases,  he  is  restricted  to  bonds,  which 
the  State  laws  prescribe  as  legal  invest- 
ments for  trust  funds.  In  other  cases, 
he  may  invest  only  in  certain  railroad 
bonds  and  guaranteed  stocks,  while  in 
still  other  cases  he  is  unrestricted  and 
can  use  his  own  judgment  as  to  making 
purchases.  In  any  event,  it  should  not 
only  be  his  aim,  but  his  duty,  to  obtain 
as  large  an  income  as  possible,  commen- 
surate with  safety  and,  in  order  to  do 
this,  it  is  necessary  for  him  to  invest 
in  tax  exempt  securities.  Because  of 
their  security  and  their  exemption  from 
taxation,  guaranteed  stocks  are  ex- 


tremely attractive  investments  for  es- 
tates. 

The  purchase  of  guaranteed  stocks 
can  be  recommended  because: 

First — Their  security  of  principal 
and  permanence  of  dividends. 

Second — Their  convenience  of  form 
and  ready  salability. 

Third — Their  exemption  from  taxa- 
tion in  accordance  with  the  different 
State  laws  governing  them. 

Fourth — Their  offering  a higher  net 
income  commensurate  with  the  same 
degree  of  safety  than  can  be  obtained 
by  purchasing  other  tax  exempt  se- 
curities. 


DANGER  OF  THE  CURRENT  SPECULATION  IN 

LAND 

By  Franklin  Escher 


'T'HE  American  nation  is  tempera- 
mentally  optimistic — disposed  to 
take  chances  with  its  money.  There  is, 
consequently,  seldom  a time  when  we  are 
not  speculating  in  something.  It  may 
be  in  stocks  or  in  mining  shares,  in  grain 
or  in  land,  but  somewhere  there  is  bound 
to  be  an  outlet  for  speculative  exuber- 
ance. Just  at  present,  stocks,  mining 
shares  and  grain  are  neglected  and  the 
country  is  being  swept  from  end  to  end 
by  a speculation  in  land  of  wider  ex- 
tent than  any  that  has  been  since  the 
80s. 

There  are  certain  sections  of  the 
country  where  the  speculative  fever  is 
raging  more  fiercely  than  in  others,  but 
to  no  special  locality  or  district  is  the 
movement  confined.  Down  in  central 
Florida,  sand  lots  are  being  sold  like 
hot  cakes  to  excursionists  brought  from 
hundreds  of  miles  away  on  special  ex- 
cursion trains,  run  at  the  promoters’ 
expense.  Out  in  the  farming  sections  of 
188 


the  country,  mortgages  are  being 
slapped  on  farms  cleared  of  such  en- 
cumbrances by  the  rural  prosperity  of 
the  past  few  years.  In  the  Southwest, 
the  sun-baked  plains  of  Northern  Texas, 
Arizona  and  New  Mexico  are  being  ex- 
ploited as  a veritable  Eldorado,  and 
lands  which  have  been  all  along  consid- 
ered worthless  are  represented  as  about 
to  be  made  valuable  by  irrigation  and 
other  schemes.  To  the  northward,  the 
land  opened  up  by  the  new  railroads 
which  have  been  pushed  through  to  the 
coast  are  a fertile  field  for  speculative 
effort  and  are  bounding  upward  in 
price.  As  Vice-President  Talbert  of 
the  National  City  Bank  recently  re- 
marked, to  find  the  limit  of  the  present 
speculation  you  have  to  go  pretty  near- 
ly out  to  Montauk  Point. 

Two  Classes  of  Land  Speculation. 

The  current  speculation  in  land  read- 
ily divides  itself  into  two  classes — that 


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(MoAdoo  Tunnel*  System) 

HUDSON  COMPANIES  7%  CUMULATIVE  PREFERRED  STOCK 

HUDSON  COMPANIES  OWNSi 

•Hndsoa  * Mmhsttn  B.  B.  Co.  First  Mtfa.  4H%  Boalf 

• Hndsost  A Msahstt—  B.  B.  Co.  Cdbumni  Stock 

Hmdra  A Msshittas  B.  B.  Co.  Preferred  Stock  Eqvlttaa  In  Beal  Estate 

OBLIGATIONS  CONSIST  OPi 

• Hodsoa  Coe.  Secured  Notes  of  Various  Maturities 

• Hiidsoa  Cos.  Preferred  Btoek  Hodsoa  Cos.  Commas  Btoek 

* I will  boy.  sell  or  quote  these  securities 
DETAILED  INFORMATION  FUBNISHED  UPON  BEQUEST 

Tsl.  Hattvtr  S075  BriggS  C.  KOCk  45  Wall  Straat 


which  has  to  do  with  improved  acreage 
— that  is  to  say,  farming  land,  for  in- 
stance, in  the  Middle  West,  and  that 
which  concerns  itself  with  land  the 
value  of  which  is  entirely  prospective. 

As  might  be  expected,  the  speculation 
in  improved  lands  is  finding  its  greatest 
outlet  in  the  agricultural  sections  of 
the  Middle  West.  Missouri,  Iowa,  Illi- 
nois, the  States  to  the  Northwest,  in  all 
of  these  the  speculative  spark  has  been 
fanned  into  a hot  burning  flame.  Every- 
where farm  mortgages  are  springing 
into  existence;  there'  are  more  of  them 
to  be  had  and  at  a higher  rate  of  inter- 
est than  in  years.  The  farmer  desiring 
to  speculate  can  best  do  so  by  borrowing 
on  the  land  which  he  has.  In  some  Sec- 
tions of  the  Middle  West  this  borrowing 
demand  has  become  so  insistent  that  the 
banks,  in  order  to  check  it,  are  asking  as 
much  as  seven  per  cent,  and  eight  per 
cent. 

Where  the  money  borrowed  on  mort- 
gage is  being  spent  for  the  acquisition 
of  more  land  for  the  purpose  of  farm- 
ing the  additional  acreage,  the  effect  is 
not  so  bad.  A farmer  who  has  the  en- 
terprise to  mortgage  his  farm  in  order 
to  extend  operations  is  apt  to  make  good 
on  what  he  is  doing — he  may  possibly 
be  biting  off  more  than  he  can  chew, 
but  the  chances  are  that  where  it  is  a 
straight  agricultural  proposition,  he 
will  be  able  to  make  good.  In  cases 
where  mortgages  are  being  executed  in 
order  to  buy  additional  land  for  out- 
and-out  speculative  purposes,  however, 
it  is  different.  A farmer  may  know  a 
great  deal  about  agriculture  and  about 
s 


the  possibilities  of  raising  produce  but 
he  may  be — usually  is — a very  poor 
judge  of  the  money  value  of  land.  There 
is,  moreover,  to  be  considered  the  fact 
that  most  of  these  purchases  made  with 
speculative  intent  only,  are,  so  to  speak, 
on  “margin” — that  is  to  say,  the  amount 
of  money  actually  paid  down  represents 
only  a very  small  part  of  the  total  pur- 
chase price.  As  in  the  case  of  other 
margin  operations,  the  death  rate  among 
operators  is  apt  to  be  very  high.  Also 
there  must  be  considered  the  mortality 
among  the  banks  supplying  the  money 
for  this  sort  of  thing. 

For  it  must  be  borne  in  mind  that  a 
succession  of  good  crops  sold  at  remark- 
ably high  prices  has  proved  a great 
stimulating  influence  on  farming  lands 
and  that  improved  acreage  is  consequent- 
ly selling  at  very  high  levels.  Wheat 
at  $1.25  a bushel,  corn  at  seventy  cents 
— these  are  the  things  responsible  for 
the  fact  that  farm  lands  which  formerly 
used  to  sell  around  $100  an  acre  now 
easily  bring  $200  or  $300.  To  buy 
these  lands  now  means  to  buy  something 
upon  which  a strong  upward  influence 
has  been  acting  for  the  past  three  or 
four  years. 

But  with  however  much  danger  the 
purchase  of  farm  lands  at  present  high 
prices  may  be  attended,  it  is  in  the  spec- 
ulation in  unimproved  lands  that  the 
greatest  possibilities  of  trouble  exist. 
The  farmer  who  has  bought  cultivated 
land  worth  $100  an  acre  and  paid  $200 
for  it,  when  the  inevitable  decline  comes, 
will  at  least  have  something  to  show  for 
his  money.  But  how  about  the  pur- 

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43  EXCHANGE  PLACE,  N.  Y. 

chaser  of  the  sand  lots  down  in  the 
Everglades  of  Florida,  and  how  about 
the  man  on  whose  swamp  land  down  in 
Arkansas  the  two  or  three  feet  of  water 
peacefully  continues  to  repose,  waiting 
for  the  appropriation  of  Congress 
which  never  comes  ? And  how  about  the 
lands  in  the  Far  West  which  have  been 
opened  up  and  sold  on  prospect  of  one 
of  the  new  railroads  putting  through  a 
spur  or  an  extension?  All  this  sort  of 
thing  is  a heavy  tax  upon  the  bank  ac- 
count of  the  American  people  and  bids 
fair  to  remain  so  for  a good  while  to 
come. 

Land  Speculation  and  the  Markets. 

Interesting  however,  as  may  be  the 
psychology  of  the  present  speculation  in 
land,  it  is  more  with  the  practical  side 
of  the  thing  and  with  its  effect  upon  the 
markets,  that  this  article  has  to  do. 
As  it  influences  the  financial  markets,  the 
effect  of  the  dhrrent  speculation  in  land 
is  two-fold.  In  the  first  place,  it  cur- 
tails the  buying  power,  thus  depriving 
the  bond  market  of  an  important  source 
of  support,  and  in  the  second  place,  it 
causes  an  undue  extension  of  credits. 
By  curtailment  of  the  buying  power,  it 
is  by  no  means  meant  that  all  the  money 
now  going  into  land  speculation  would 
otherwise  have  been  used  to  buy  bonds. 
At  the  same  time,  a great  part  of  it 
would,  and,  furthermore,  the  banks  and 
other  institutions  who  are  lending  the 
money  with  which  the  speculation  is 
being  carried  on,  are  themselves,  for  the 
time  being,  driven  out  of  the  bond  mar- 
ket as  buyers.  To  a erreater  extent  than 
is  generally  thought,  the  apathy  existing 
in  the  investment  markets  is  due  to  this 
cause.  The  last  statement  of  condition 
of  all  the  national  banks  in  the  country 
shows  very  clearly  how  the  speculation 
in  land  has  affected  the  loan  account  of 
the  banks.  It  is  the  expansion  outside 

■5QO 


of  New  York  that  tells  the  story,  the 
increase  of  hundreds  of  millions  of  dol- 
lars which  represents  the  money  tied 
up,  much  of  it  in  enterprise  that  is 
bound  to  remain  unproductive  for  years 
to  come.  An  economic  influence  of  the 
foremost  importance,  the  effect  of  this 
diversion  of  capital  is  just  coming  to  be 
recognized. 

It  will  be  recognized  even  more  plain- 
ly in  a few  weeks  when  the  crop  moving 
demand  sets  in.  The  Western  banks 
are,  so  to  speak,  “loaned  up.”  They 
have  not  loaned  out  their  last  dollar, 
but  they  are,  nevertheless,  not  in  a posi- 
tion to  finance  the  moving  of  the  crops, 
even  to  the  extent  to  which  in  former 
years  they  did  finance  it.  Ordinarily, 
crop-moving  time  finds  the  Western 
banks  drawing  heavily  upon  their  cor- 
respondents in  the  Eastern  cities  for 
currency.  This  year  will  be  no  excep- 
tion to  the  rule.  On  the  contrary,  it  is 
altogether  likely  that  on  account  of  the 
already  extended  position  of  the  West- 
ern banks,  the  demands  upon  New  York 
will  be  quite  exceptionally  heavy.  Not 
improbably  those  who  up  to  now  have 
been  belittling  the  land  speculation  as 
a factor  in  the  financial  situation  will, 
at  that  time,  be  given  a concrete  illus- 
tration of  the  results  that  this  sort  of 
thing,  when  it  remains  unchecked  long 
enough,  is  liable  to  bring  about. 


A CLEARING  SITUATION 

By  J.  Frank  Howell 

TN  the  stock  market  there  has  occurred 
*■*  a very  extensive  and  thorough  liqui- 
dation. The  process  has  resulted  in  a 
general  house-cleaning  by  the  banks 
and  in  the  weeding  out  of  weak  mar- 
ginal accounts  in  commission  houses. 
The  result  has  been  a transfer  of  specu- 
lative lines  from  weak  to  strong  hands 


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Miners  Bank,  Joplin,  Mo. 

We  cordially  invite  correspondence  relative  to  opportunities  and  investments,  the  advan- 
tages of  Joplin  as  a manufacturing  point,  etc.  Accounts  and  collections  also  invited. 

Capital,  $100,000  Surplus,  $100,000  Deposits,  $750,000 


and  the  absorption  of  large  amounts  by 
the  investing  public,  both  at  home  and 
abroad. 

The  general  average  price  of  stocks 
is  twenty-five  per  cent,  to  thirty  per 
cent,  below  what  it  was  nine  months  ago. 
Earnings  of  organized  capital  are  con- 
siderably larger  in  the  aggregate  of 
gross  and  net  than  they  were  when 
prices  were  at  their  highest. 

The  distribution  of  $204,000,000  in 
dividends  and  interest  on  stocks  and 
bonds  of  railroad,  industrial  and  trac- 
tion properties  during  the  first  week  in 
July  is  impressive  testimony  of  the  Na- 
tion's tremendous  business  activity.  The 
amount  distributed  is  $18,000,000  more 
than  on  the  corresponding  date  last 
year.  The  exhibit  should  be  convincing 
proof  that  we  have  been  making  head- 
way, instead  of  retrograding,  as  it  has 
been  the  fashion  to  proclaim.  This  in- 
crease in  earnings  could  not  have  oc- 
curred if  the  country  had  been  going 
backward  instead  of  forward.  In  this 
connection,  it  is  to  be  noted  that  for  the 
last  six  months  corporations  have  been 
paying  a very  much  greater  sum  in 
wages  than  during  the  corresponding 
period  a year  ago.  But  for  that  fact 
the  disbursements  for  dividend  account 
would  have  been  larger  than  the  figures 
given  above. 

During  the  last  few  weeks  many 
features  of  the  disturbing  character 
have  been  eliminated  from  the  situation, 
and  the  low  quotations  in  the  stock  mar- 
ket may  be  said  to  represent  the  dis- 
counting or  the  actual  occurrence  of  the 
things  that  had  been  feared — most  of 
which  never  happened.  So  far  as  can 
now  be  judged,  there  is  very  little  that 
is  likely  to  happen  which  could  further 
impair  values  or  shake  confidence.  Con- 
gress has  adjourned  after  passing  many 
laws  which  should  work  to  the  public 
advantage.  Notable  among  these  is  the 


so-called  new  railroad  rate  law  which 
empowers  the  Interstate  Commerce 
Commission  to  pass  upon  the  reason- 
ableness of  advances  in  railroad  charges 
before  such  changes  shall  go  into  effect. 

At  first,  the  great  financial  powers 
behind  the  railroads  put  doleful  con- 
struction on  this  new  law,  but  the  more 
it  is  studied  the  less  ground  they  appear 
to  have  for  real  complaint.  There  is 
nothing  confiscatory  in  the  statute,  and 
the  high  character  of  the  personnel  of 
the  Interstate  Commerce  Commission 
is  a guarantee  that  the  railroads  will 
not  be  treated  unfairly. 

On  the  other  hand,  investors  are  given 
additional  guarantee  of  protection 
against  extravagance  or  mismanagement 
on  the  part  of  the  “insiders."  In  the 
Old  World,  where  strict  governmental 
supervision  of  railroads  is  an  old  story, 
investors  regard  such  policy  as  distinct- 
ly to  their  advantage.  The  same  view 
will  probably  prevail  here  in  time,  and 
what  is  now  looked  upon  in  some  quar- 
ters as  a menace  will  prove  a blessing. 
This  seems  to  be  distinctly  the  trend  of 
sentiment  at  the  present  writing  among 
those  who  have  given  the  matter  studious 
and  unprejudiced  thought. 

All  this  should  weigh  with  judicious 
investors  and  speculators  who  are  try- 
ing to  form  conclusions  as  to  their 
course  of  action.  Judged  from  an  in- 
come-bearing basis  and  from  the  gen- 
eral business  and  political  conditions 
as  they  now  exist,  it  must  be  admitted 
that  prices  of  a great  majority  of  rail- 
road and  industrial  stocks  now  actively 
traded  in  are  cheap.  The  best  of  our 
seasoned  stocks  can  now  be  bought  at 
prices  that  will  yield  five  to  six  and  one- 
half  per  cent,  on  the  investment. 

The  average  could  not  be  lower  if  the 
country  were  threatened  with  war, 
famine  or  other  calamity,  whereas  we 

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THE  BANKERS  MAGAZINE 


John  Mvir  & Qo. 

^ THE  SPECIALISTS  IN  ^ I 

ODD  LOTS 

If  you  have  limited  capital  aod 
wish  to  deal  in  stocks;  if  you  have 
ample  capital  and  wish  to  be  con- 
servative— trade  in  odd  lots.  First, 
communicate  with  us. 

Send  for “ 044  Ut  Circular  L” 
Menben  New  York  Stock  Sxehuce 

71  BROADWAY,  NEW  YORK 


have  nothing  ahead  of  us  but  peace  and 
plenty.  The  outlook  is  for  the  largest 
crops  on  record — normal  condition  and 
greatly  increased  acreage.  Manufac- 
turing in  some  directions  may  not  be  at 
flood  tide,  but  there  is  enough  to  keep 
everybody  busy  and  to  pay  fair  returns 
on  capital  as  well  as  labor. 


THE  INVESTMENT  OF  SURPLUS 
FUNDS 

Sidelights  on  the  Suitable  Disposition  of  the 
Investor's  Surplus 

COME  interesting  and  instructive 
^ ideas  on  the  investment  of  surplus 
funds  are  thus  expressed  by  the  Harris 
Trust  & Savings  Bank  of  Chicago:  It  is 
assumed  that  the  reader  approaches  the 
subject  of  investment  banking  with  a 
question  in  his  mind — “What  shall  I do 
with  my  surplus  capital  ?”  And  capital 
in  this  sense  may  mean  the  ten  dollars 
from  the  monthly  or  weekly  wage 
which  will  not  have  to  go  for  necessary 
expenses,  or  it  may  mean  the  millions 
to  be  invested  safely  by  the  board  of 
directors  of  a savings  bank  or  insur- 
ance company.  Between  these  ex- 
tremes there  are  many  different  require- 
ments, varying  according  to  the  desires 
or  needs  of  the  individual  investor. 
There  are  also  provisions  to  meet  any 
and  all  these  requirements. 

Before  taking  up  the  question  of 
these  provisions,  the  owner  of  idle  cap- 
ital must  decide  in  a measure  what  his 


own  desires  or  needs  are  in  the  matter 
of  several  simple  conditions  upon  which 
the  profitable  employment  of  his 
money  may  depend.  First,  perhaps,  is 
the  question  whether  or  not  he  wishes  to 
keep  his  capital  practically  in  cash,  t.  e., 
where  it  can  be  turned  almost  instantly 
into  money  in  the  event  of  sudden  need. 
If  the  investor  holds  that  "liquid”  char- 
acter, as  it  may  be  called,  of  more  im- 
portance than  the  amount  of  income  he 
is  to  receive,  the  logical  place  for  such 
funds  is  the  savings  bank.  Here,  safe- 
guarded by  wise  and  conservative  man- 
agement, adequate  laws  and  strict  ex- 
aminations by  the  State  and  by  experts, 
money  may  be  profitably  set  to  work, 
in  large  or  small  sums,  to  produce  a 
stated  and  definite  income.  There  is  no 
safer  method  of  employing  money  at 
interest  where  there  is  like  privilege  of 
ready  convertibility  into  cash. 

Risk  or  Safety? 

The  next  condition  to  be  decided 
upon  by  the  owner  of  idle  capital  is 
whether  he  wishes  to  make  an  invest- 
ment which  will  employ  his  funds  for  a 
long  or  short  period  at  a fixed  and  re- 
munerative rate  of  income,  or  whether 
he  deliberately  decides  to  participate  in 
a business  venture.  It  is  at  this  point 
that  the  average  person,  unversed  in  in- 
vestments, fails  to  distinguish  the  dif- 
ference between  an  investment  made  on 
definite  terms,  and  risks  undertaken  for 
possibly  large,  though  uncertain,  profits. 
This  distinction  must  be  made  intelli- 
gently before  the  owner  of  capital  can 
exercise  further  discretion  as  to  the  em- 
ployment of  his  funds. 

Surplus  money  is  usually  derived 
from  the  conduct  of  some  business  in 
which  the  owner  has  had  an  active  part 
and  in  which  skill  probably  was  the 
chief  determining  factor.  So  long  as 
the  owner  of  an  accumulated  surplus  has 
direct  supervision  of  his  capital,  any 
venture  into  which  he  may  put  it,  is  sub- 
ject  to  his  special  skill.  When,  how- 
ever, he  comes  to  place  it  in  another’s 
hands,  he  should  exact  every  possible 
provision  for  its  safe  return,  it  is  one 
thing  to  acquire  capital,  quite  another 


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For  Bankers— The  soundness  of  the  collateral  upon  which  money  is  being  loaned. 

For  Investors— The  safest  stocks  with  attractive  yields. 

For  Traders— The  stocks  with  possibilities  for  either  appreciation  or  depreciation. 

Acknowledged  by  authorities  as  the  best,  the  most  concise,  and  the  latest  thing  In  useful  and  practical 
stock  statistics.  Subscription  $0  00  per  year.  Sample  copy  free. 

A.  KESHISHIAN,  99  John  Street,  NEW  YORK  CITY 


to  invest  it.  The  prospective  investor 
should  not  confuse  real  investments 
with  the  purchase  of  a share  in  a busi- 
ness of  variable  profits,  such  as  stocks 
of  corporations.  It  is  for  the  owner  of 
capital,  therefore,  to  decide,  first, 
whether  he  wishes  to  put  his  funds  back 
into  the  business  from  which  they 
came,  if  possible;  or,  second,  whether 
he  shall  risk  them  in  some  other  busi- 
ness where  he  may  or  may  not  be  able 
to  exercise  his  skill  or  supervision;  or, 
third,  whether  he  will  make  a safe  and 
sound  investment. 

Length  of  Investment. 

In  the  event  that  a real  investment 
is  desired — that  is,  the  definite  employ- 
ment of  $500,  or  its  multiple,  for  a cer- 
tain period  of  time  at  a fixed  rate  of  in- 
come, with  a guaranty  of  the  return  of 
the  full  principal  sum  at  the  time  of 
expiration  of  the  investment — carefully 
selected  bonds  are  the  ideal  form  of  in- 
vestment which  meet  every  require- 
ment. The  prospective  investor  has  yet, 
however,  to  decide  for  himself  the  ques- 
tion as  to  how  long  his  investment  is  to 
run.  On  the  answer  to  this  question 
frequently  depends  some  condition  by 
which  the  desirability  of  a given  bond 
is  to  be  judged. 

Rates  of  income  often  vary  according 
to  the  life  of  the  bond.  It  is  unwise  to 
buy  bonds  which  will  mature  and  be 
paid  off  in  a year  or  so,  when  it  is 
known  that  the  investor’s  funds  should 
be  employed  ten  or  twenty  years.  Not 
only  will  the  funds  need  to  be  rein- 
vested if  they  are  placed  for  too  short 
a period,  but  frequently  it  happens  that 
funds  cannot  be  reinvested  upon  as  fa- 
vorable terms  as  could  have  been  se- 
cured at  the  time  the  original  invest- 


ment was  made.  On  the  other  hand,  it 
should  be  borne  in  mind  that,  in  the 
event  of  unforseen  need,  well  selected 
bonds  are  readily  convertible  into  cash 
before  maturity,  either  by  sale  or 
through  a loan  secured  by  them.  With 
this  question  of  time  settled,  the  pros- 
pective investor  should  seek  out  the  in- 
vestment banker  at  once  and  ask  for 
advice. 


Need  for  Good  Advice. 

The  majority  of  investors,  of  neces- 
sity, must  rely  largely  upon  the  ad- 
vice of  their  bankers  in  the  purchase  of 
securities  for  the  permanent  placing  of 
funds.  However  familiar  an  individual 
may  be  with  investments  in  general,  it 
is  usually  impossible  for  him  to  investi- 
gate all  the  legal  and  technical  questions 
bearing  upon  the  safety  of  any  par- 
ticular bond.  Therefore,  it  is  of  the  ut- 
most imnortance  that  the  investor  at 
the  outset  determine  by  careful  inquiry 
the  standing  and  general  reputation  of 
the  banking  house  offering  the  bonds 
for  sale. 

He  should  know  that  his  bankers  are 
careful  and  conservative  in  the  selection 
of  securities  offered  for  sale  to  their 
customers,  that  they  are  of  large  finan- 
cial responsibility  and  of  the  highest 
standing,  and  that  they  have  had  a suc- 
cessful ecrperience  over  a period  of 
many  years,  covering  times  of  general 
depression  as  well  as  of  great  financial 
and  business  prosperity.  Such  bankers 
will  have  built  up,  over  a period  of 
many  years,  a reputation  for  ability,  for 
fair  dealing,  and  for  the  safeguarding 
of  the  interests  of  their  customers. 
They  will  continue  to  guard  jealously 
this  reputation,  if  for  no  higher  reason 
than  enlightnened  self-interest. 

198 


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BANKERS 

We  Finance  Railroads,  Electric  Railways,  Gas  and  Electric  Companies  of  Established  Value 

50  Congress  Street,  Boston 


THE  “MAGNIFICENT  UNIT”  OF  $1,000 

OPINION  OF  LEADING  INVESTMENT  BANKERS  AS  TO  THE  FEASI 
BILITY  OF  ISSUING  BONDS  IN  SMALLER  DENOMINATIONS 


TN  an  effort  to  get  at  the  real  reason 
*■*  as  to  why  bonds  in  this  country  are 
so  rarely  issued  in  denominations  of  less 
than  $1,000,  and  as  to  whether  the  dis- 
tribution of  securities  would  not  be 
facilitated  by  their  issue  in  smaller 
pieces,  several  leading  banking  houses 
were  appealed  to  by  the  editor  of  “In- 
vestments.” Following  are  some  of  the 
answers  received: 

N.  W.  Halsey  & Co.,  New  York. 

Editor  “Investments,”  New  York: 

Dear  Sir — Referring  to  your  favor 
of  June  9th,  asking  if  it  would  not 
greatly  facilitate  distribution  in  times 
like  these  if  bonds  were  to  be  issued  in 
small  denominations,  I beg  to  advise 
you  that  I doubt  very  much  whether  any 
substantial  amount  of  securities  could 
be  sold  to  small  investors  in  this  Coun- 
try- 

Several  reasons  may  be  offered  in  ex- 
planation: In  the  first  place,  very  few 

individuals  with  savings  of  $100  or  $200 
have  much  knowledge  of  bonds.  In  the 
large  centers  of  population  the  savings 
banks  have  secured  the  largest  part  of 
the  funds  of  the  small  investor.  It  is 
quite  possible  that  there  would  be,  if 
bonds  were  available  in  small  denomi- 
nations, an  increasing  number  of  pur- 
chasers who  would  be  attracted  by  the 
higher  rate  of  interest  paid  by  the 
bonds  as  compared  with  that  paid  by 
the  savings  banks.  Yet  I doubt  whether 
bankers  handling  securities  would  find 
it  profitable  to  try  to  interest  the  small 
investors  who  have  less  than  $1,000 
each. 

A comprehensive  campaign  of  educa- 
tion would  have  to  be  undertaken,  and 


I believe  the  expense  would  be  greater 
than  the  results  would  justify.  There 
would  probably  be  an  opportunity  to 
sell  a certain  amount  of  bonds  in  small 
denominations  in  communities  not  large 
enough  to  support  savings  banks.  The 
expense  of  reaching  such  investors, 
however,  would  be  very  high,  because 
neither  the  security  nor  the  firm  offer- 
ing it  would  be  known  in  the  commun- 
ity in  which  such  investors  lived.  As 
there  are  comparatively  few  investors 
in  each  of  the  small  communities  the 
cost  of  reaching  the  few  would  be  rela- 
tively high. 

I believe  the  bankers  in  France  find 
it  profitable  to  handle  bonds  in  small 
denominations,  not  only  because  of  the 
great  frugality  of  the  French  people  as 
a whole,  but  also  because  the  French 
banks  offering  the  security  have 
branches  throughout  the  Republic,  and 
the  manager  of  each  branch  has  a sub- 
stantial clientele  who  has  confidence  in 
him  and  in  his  institution.  The  French 
banking  institutions  may  make  a large 
purchase  of  bonds,  feeling  confident 
that  the  securities  may  be  distributed 
through  the  hundreds  of  branches 
throughout  the  country.  No  such  ma- 
chinery for  the  distribution  of  bonds  of 
small  denomination  is  available  in  the 
United  States. 

Very  truly  yours, 

Allen  G.  Hoyt. 

Harvey  Fisk  & Sons,  New  York. 

Editor  “Investments,”  New  York: 

Dear  Sir — Replying  to  your  favor 
of  the  9th  instant,  we  beg  to  advise  you 
that  in  our  opinion  it  would  not  greatly 
facilitate  the  distribution  of  securities 


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J.  K.  Rice,  Jr.,  & Co. 

We  have  good  markets  in  unlisted  and  Inactive 
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Phones  7460  to  7466  Hanover.  88  Wall  Street,  N.  Y. 


in  this  country  if  railroad  bonds  were 
issued  in  denominations  of  less  than 
$1,000.  We  appreciate  that  bonds  of 
much  smaller  denominations  are  readily 
distributed  abroad,  but  conditions 
there  are  dissimilar  from  ours,  as  the 
very  small  investor  is  in  the  habit  of 
buying  securities  of  this  class  while 
here  with  us  the  facilities  and  attractive 
rates  afforded  by  the  savings  banks 
throughout  the  country  attract  the  small 
investor  and  induce  deposits  in  these  in- 
stitutions rather  than  the  direct  pur- 
chase of  investment  securities. 

Very  truly  yours, 

Harvey  Fisk  Sc  Sons. 

F.  J.  Lisman  Sc  Co.,  New  York. 

Editor  “Investments/'  New  York: 

Dear  Sir — In  answer  to  your  query 
as  to  why  bonds  are  usually  issued  in 
denominations  of  $1,000  and  not  in 
smaller  amounts,  I beg  to  briefly  outline 
my  views  on  the  subject: — 

Theoretically,  the  scheme  might  be 
desirable,  but  the  objections  are  practi- 
cal— from  several  standpoints.  In  this 
country  the  masses  have  not  been  edu- 
cated in  the  buying  of  bonds,  and  it 
would  be  a very  costly  matter  to  send 
salesmen  into  the  highways  and  byways 
to  interest  the  investors  of  small 
amounts,  who  would  naturally  be  buy- 
ers of  small  denomination  issues.  That 
class  of  people  when  they  have,  by  hard 
work,  saved  a few  hundred  dollars,  or 
possibly  more,  must  be  in  a position, 
should  they  of  necessity  be  compelled  to 
draw  such  funds,  to  quickly  have  ac- 
cess to  same,  such  situations  only  too 
frequently  arising  through  sickness, 
lack  of  employment,  etc.,  and  they  nat- 
urally look  to  the  savings  banks  as  the 


proper  custodians  of  their  savings  with 
this  end  in  view.  These  institutions 
have  no  stockholders  and  are  really 
charitable  in  their  purposes,  organized 
for  the  purpose  of  stimulating  thrift 
among  working  classes,  and  their  in- 
vestments are  so  safe-guarded  (particu- 
larly those  in  New  York  State)  that 
losses  are  practically  impossible,  and 
the  depositor  receives  three  and  one- 
half  to  four  per  cent,  interest,  with  no 
fluctuations  of  principal,  as  in  the  case 
of  bonds.  This  latter  phase  is  a diffi- 
cult matter  to  have  the  masses  under- 
stand. Valuable  documents  require  a 
place  of  safe-keeping,  and  a man  of 
small  means  cannot  afford  such  a de- 
pository, and  the  risk  of  leaving  them 
in  the  home  is  too  great,  in  view  of  the 
fact  that  the  requirements  on  the  part 
of  corporations,  when  securities  are  lost 
or  stolen,  are  so  stringent  that  such  an 
investor  could  not  meet  them.  Another 
objection  is  that  bonds  below  $500  de- 
nomination are  not  a good  delivery  on 
the  New  York  Stock  Exchange;  but  of 
course  this  prohibition  could  probably 
be  removed  when  conditions  justify  it. 
Large  investors  will  not  buy  small  de- 
nomination bonds,  as  any  fair  amount 
of  them  makes  them  too  bulky  and  in- 
convenient to  handle. 

It  is  true  the  masses  abroad  have 
been  educated  by  the  Governments 
through  their  own  issues  to  invest  their 
savings  in  small  denomination  securi- 
ties and  are  helped  by  their  branch 
bank  system,  being  able  to  economically 
distribute  them. 

While  I believe  it  would  be  a great 
financial  gain  to  corporations  if  they 
were  enabled  by  public  subscription  to 
dispose  of  their  issues  in  small  denomi- 

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nations^  I do  not  believe  that  conditions 
in  the  United  States  are  ready  for  such 
a movement,  or  will  be  for  a number  of 
years  to  come,  particularly  if  a postal 
savings  bank  is  established;  which  is 
contemplated;  and  which  is  bound  to 
even  draw  from  the  savings  banks,  as 
the  ignorant  and  untrusting  always  look 
to  the  best  guarantor. 

Very  truly  yours, 

Wm.  Goodman. 

From  a Leading  House  Which  Asked 
That  Its  Name  Be  Not  Used. 

Editor  “Investments,”  New  York: 

Dear  Sir — I acknowledge  receipt  of 
your  letter  of  the  9th  inst.  It  has  been 
my  custom  not  to  talk  for  publication. 
I would  therefore  prefer  not  to  have  my 
name  or  the  name  of  the  firm  used  in 
regard  to  the  matter,  but  it  is  our  belief 
that  the  distribution  of  bonds  would 
not  be  greatly  facilitated  were  they  in 
smaller  pieces  than  $1,000. 

I know  that  it  is  the  French  custom, 
however,  to  take  much  smaller  pieces, 
even  as  low  at  $100,  but  conditions  over 
there  are  much  different  than  here.  It 
is  very  doubtful  whether  it  actually 
“pays”  to  sell  bonds  of  less  than 
$1,000  denomination,  and  while,  per- 
haps, it  might  be  a good  thing  in  some 
respects,  in  order  to  instill  the  saving 
spirit  into  the  American  public,  we,  as 
a banking  house,  would  not  care  to  ex- 
ecute such  orders. 

Frankly,  it  does  not  pay  us,  in  view 
of  the  tremendous  expense  which  we  are 
under  in  maintaining  our  investigating, 


buying  and  selling  organization.  Per- 
haps it  is  fair  to  assume,  therefore,  that 
every  house  looks  at  the  matter  in  the 
same  way,  i.  e.,  bankers  as  a class  are 
not  desirous  of  having  the  railroads 
issue  bonds  in  denominations  of  less 
than  $1,000. 

There  has  been  a good  deal  of  talk, 
as  you  doubtless  know,  on  the  part  of 
some  houses  and  trust  companies  in  re- 
gard to  having  $500  and  even  $100 
bonds.  Perhaps  this  is  an  indication 
that  times  are  changing,  and  that  in  the 
future,  more  bonds  of  these  denomina- 
tions will  be  issued. 

Redmond  & Co.,  New  York. 

Editor  “Investments,”  New  York: 

Dear  Sir — We  have  received  your 
letter  of  the  9th.  There  are  now  a 
number  of  bonds  issued  in  denomina- 
tions of  $100,  $250  and  $500.  The 
Colorado  & Southern  4^’s,  for  instance, 
are  obtainable  in  $100  pieces.  The 
Harwood  Electric  Company  first  mort- 
gage 5’s  in  $100  and  $500  pieces,  as 
well  as  in  $1,000  bonds.  The  North- 
western Telegraph  Company  4^’s,  in 
$500  pieces,  etc. 

We  find,  however,  that  while  there  is 
some  demand  for  these  small  denomina- 
tions, it  is  comparatively  slight,  and  we 
do  not  think  that  it  would  materially 
facilitate  distribution  to  have  new  is- 
sues in  small  denomination  pieces.  We 
are,  dear  sir, 

Yours  very  truly, 

Redmond  & Co. 


FROM  THE  SAVINGS  BANKS’  POINT  OF  VIEW 


TT^THAT  the  presidents  of  some  of 
* * the  leading  savings  banks  in  New 
York  City  think  about  the  much-dis- 
cussed question  of  whether  the  savings 
banks  are  being  largely  used  for  the 
deposit  of  funds  which  ought  properly 
to  be  invested  in  bonds,  and  as  to  what 
would  be  the  effect  of  a general  reduc- 
tion in  the  rate  paid  to  depositors,  can 
be  seen  from  the  following  communica- 


tions, received  by  the  editor  of  “In- 
vestments”: 

Union  Dime  Savings  Bank,  New 
York,  N.  Y. 

Editor  “Investments,”  New  York: 

Dear  Sir — It  is  undoubtedly  true  that 
there  are  considerable  sums  deposited  in 
savings  banks  by  persons  who  are  not 
of  the  class  for  which  savings  banks  are 


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intended,  and  the  crediting  of  interest 
at  high  rates  encourages  such  deposits. 
So  long  as  the  savings  banks  allow  a re- 
turn which  is  nearly  what  an  investor 
could  get  from  direct  investments,  he 
leaves  his  money  safely  in  the  savings 
bank;  but  when  the  moment  comes  that 
the  return  from  the  investment  is  de- 
cidedly better  than  the  savings  bank 
allows,  such  investors  draw  their  money 
from  savings  banks  and  invest  it  else- 
where. The  savings  bank  may  then  be 
compelled  to  sell  the  same  securities, 
now  depreciated,  at  a loss  and  a cor- 
responding gain  for  the  investor. 

It  is  true  that  the  savings  bank  can 
avail  itself  of  its  right  to  require  no- 
tice; but  it  will  not  do  so  until  the 
above  process  has  been  going  on  for 
some  time  and  the  surplus  has  been 
more  or  less  depleted. 

We  have  a legal  limit  of  $3,000  per 
account,  but  this  is  nugatory  where 
there  are  thirty-three  savings  banks  in 
a single  borough. 

A reduction  in  the  rate  of  interest  is 
the  only  effectual  means  of  confining 
the  function  of  the  savings  bank  to  the 
protection  of  the  wage  earner. 

Some  banks  will  reply  that  their 
earnings  are  so  great  that  they  must 
pay  four  per  cent.  I would  suggest 
that  they  could  spend  some  of  their  sur- 
plus income  in  saving  the  time  of  the 
wage  earner,  who  often  complains  as  to 
being  compelled  to  “go  and  sit  down,” 
instead  of  being  allowed  to  go  back  to 
his  work. 

Very  respectfully, 

Charles  E.  Sprague, 

President. 

The  Franklin  Savings  Bank,  New 
York. 

Editor  “Investments,”  New  York: 

Dear  Sir — We  are  in  receipt  of 
yours  of  June  9th,  regarding  the  ques- 


tion of  savings  banks  being  used  for 
deposit  of  funds  which  should  prop- 
erly be  invested  in  bonds,  and,  if  so, 
what  would  be  the  effect  if  the  reduc- 
tion in  deposits  becomes  general. 

There  is  no  doubt  that  a consider- 
able sum  of  money  has  been  deposited 
in  savings  banks  during  the  past  two 
years  in  order  to  obtain  four  per  cent.; 
and  so  long  as  the  banks  continue  to 
pay  that  rate,  the  amounts  will  in- 
crease quite  rapidly.  If  all  the  banks 
should  reduce  the  rate  of  interest  to 
three  and  one-half  per  cent.,  they 
would  continue  to  increase  their  de- 
posits, as  they  did  from  1884  to  1907 — 
when  that  rate  was  generally  paid.  A 
number  of  the  more  intelligent  and  well- 
to-do  depositors  would  invest  their 
money  where  it  would  derive  a larger 
income,  and  still  use  the  savings  banks 
for  smaller  sums. 

Yours  very  truly, 

Wm.  G.  Conklin,  President. 

The  Brooklyn  Savings  Bank,  Brook- 
lyn, N.  Y. 

Editor  “Investments,”  New  York: 

Dear  Sir — In  response  to  the  in- 
quiry contained  in  your  letter  of  the  9th 
inst.,  we  beg  to  state  as  follows: — In 
our  opinion  savings  banks  are  not  being 
largely  used  for  the  deposit  of  funds 
which  ought  to  properly  be  invested  in 
bonds,  as  deposits  generally  have  never 
recovered  in  amount  since  the  panic  of 
1907.  One  reason  for  the  lack  of  de- 
mand for  high-grade  bonds  is,  that  sav- 
ings banks  have  not  the  funds  with 
which  to  purchase  these  securities. 

Very  truly  yours, 

Byron  H.  Smith,  President. 

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THE  ETHICS  OF  FINANCE 

By  Frederic  Drew  Bond 

In  the  following  article  Mr.  Bond , whose  experience  in  matters  financial  is  com- 
bined with  a curiously  analytical  turn  of  mind,  presents  the  tf other  side  of  the 
case.”  By  no  means  agreeing  with  the  author  as  to  the  essentially  speculative 
character  of  financial  transactions,  “ Investments 93  presents  Mr.  Bond’s  views  as 
an  accurate  analysis  of  the  way  a large  part  of  the  financial  world  looks  at  the 
matter. 


"FINANCE  is  concerned  with  the  dis- 
**  tribution  of  money  and  securities. 
Commerce  deals  with  goods  having,  pri- 
marily, values  in  use;  finance  deals  with 
those  which  have,  pre-eminently,  values 
in  exchange.  Commerce,  in  other  words, 
deals  with  articles  which,  in  the  hands 
of  the  last  purchaser,  or  consumer,  sat- 
isfy some  need.  Examples  of  such 
goods  are  foodstuffs,  cotton,  timber  and 
iron.  Such  articles,  in  the  end  will  wear 
out  or  be  used  up,  and  other  goods  of 
the  same  sort  will  then  take  their  places. 
On  the  other  hand,  the  goods,  outside  of 
money,  with  which  finance  especially 
deals — securities — are  intangible  and 
are  dealt  with  simply  by  paper  certifi- 
cates of  their  existence.  Their  values 
fluctuate  normally  with  the  success  of 
the  enterprise  of  which  they  are  the 
ownership  or  debts;  but,  they  are, 
themselves,  indestructible  by  direct 
physical  means.  Their  only  use  is  for 
money-making. 

Methods  of  Commerce  and  Finance. 

The  differences  of  the  methods  of 
finance  from  those  of  commerce  rest  on 
this  difference  between  the  goods  with 
which  they  deal.  In  both  finance  and 
commerce,  aside  from  necessity,  a seller 
sells  to  gain;  but  buyers  in  each  do  not 
buy  from  the  same  motives.  In  com- 
merce, the  buyer,  if  he  be  the  consumer, 
buys  to  use.  But  in  finance  there  is  no 
consumer;  the  buyer  as  well  as  the  seller 
traffics  for  gain  only,  and  the  financial 
buyer  looks  for  his  profit — not  as  the 
middleman  who  counts  on  the  consumer 
— but  because  he  hopes  that  what  he  has 
dealt  in  will,  usually  independently  of 
his  own  activities,  change  in  price  so  as 
to  yield  him  a profit.  When  not  an  in- 
vestor purely  for  income,  the  financial 
198 


buyer  is  always  a speculator,  whether 
he  buys  on  margin  or  purchases  out- 
right. 

Thus  in  financial  trades,  the  buyer 
and  seller  alike  are  necessarily  actuated, 
as  far  as  the  curcumstances  permit,  sole- 
ly by  the  desire  for  gain.  In  routine 
banking  operations  and  in  the  investing 
of  funds  this  situation  is  minimized.  In 
the  dealings  on  the  exchanges  it  is 
masked  through  the  intervention  of  the 
broker;  the  cupidity  which  animates  the 
traders  becomes  mostly  tacit — they  do 
not  even  know  the  identity  of  those  with 
whom  at  the  moment  they  are  dealing. 
On  the  other  hand,  in  the  promotion  and 
reorganization  of  enterprises  the  greed 
sometimes  leaps  startlingly  to  the  sur- 
face. In  numerous  promotions,  reor- 
ganizations and  deals,  the  means  adopt- 
ed to  effect  the  ends  in  view  have  seemed 
tainted  with  trickery  and  fraud.  But 
here  a distinction  is  to  be  made.  The 
conflict,  for  instance,  which  centered 
around  the  Equitable  Life  Assurance 
Society  in  1905  might,  as  far  as  many 
of  its  objectionable  features  went,  have 
just  as  easily  waged  around  a small 
trading  concern.  To  speak  of  trickery 
and  fraud  existing  in  connection  with  a 
financial  institution  as  being,  neces- 
sarily, financial  trickery  and  fraud  per 
se,  is  simply  to  confuse  matters.  If 
some  of  the  lower  traits  of  character 
have  been  particularly  in  evidence  in 
connection  with  financial  affairs,  this  is 
partly  because  the  law  is  still  in  process 
of  development  as  how  best  to  check 
practices  analogous  to  such  as  in  com- 
merce are  clearly  illegal.  But  a feature 
to  which,  as  financial,  objection  may  be 
taken,  must  be  one  which  flows  logically 
from  the  character  of  financial  dealings 
as  depending  on  goods  which  are  of  use 


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Fundamental  Investments 


That  is  the  term  we  use  in  describing  the  securities  we  handle. 
The  securities  of  a corporation  having  a monopoly  of  a neces- 
sity are  rightly  considered  very  desirable  from  an  investment 
standpoint. 

We  have  for  sale  particularly  good  issues  of  this  class  which 
we  recommend  to  investors.  - 

Write  for  full  information. 

J.  HATHAWAY  POPE  & CO. 

67  Exchange  Place  New  York  City 


only  in  and  through  their  exchange 
value. 

Are  These  Things  Right? 

Of  such  features,  marginal  trading  in 
stocks  is  most  in  evidence.  But  others 
less  obvious  may  be  easily  specified. 
Thus,  to  take  instances  which  have  ac- 
tually occurred:  Is  it  rightful  for  a 

buyer  to  pledge  shares  under  a bond  is- 
sue so  that  he  may  enjoy  the  rights  and 
privileges  of  ownership  without  the  ex- 
pense of  carrying  the  shares  and  with 
the  hazard  to  the  bondholders  that  the 
stock  on  which  they  depend  as  security 
may  be  voted  to  affect  speculative 
schemes?  Again,  to  break  up  a rival 
railway  system,  is  it  right  to  impair  the 
road’s  credit  in  ways  not  clearly  illegal 
— as  by  influence  on  banks  controlled  by 
stock  ownership — to  throw  the  corpora- 
tion, if  necessary,  into  receivers’  hands, 
and  to  harass  and  wear  out  with  delays 
the  security  holders  of  the  road  till  they 
assent  to  terms  of  reorganization  harsh 
to  themselves?  Is  a corner  lawful?  Are 
matched  orders?  Is  the  curious  scheme 
of  short  selling  beyond  one’s  capital  in 
order  to  ‘‘break  the  market  open,” 
imagined  by  Mr.  Lawson  in  his  ‘‘Black 
Friday,”  and  tried  twice,  two  years 
later,  by  a broker  on  the  Philadelphia 
Stock  Exchange — the  latter  time  with 
disastrous  results  to  himself?  Is  it  right 
to  sell  at  a good  price  stock  whose  prop- 
erty the  vendor  knows  to  be  of  little  or 
no  value;  or  to  buy  for  a song  shares 


which  the  purchaser  has  knowledge  are 
of  value,  but  which  the  seller  believes 
to  be  almost  worthless?  Are  great  in- 
terests justified  in  helping  to  ‘‘bull”  or 
“bear”  a stock,  by  facilitating  or  hin- 
dering loans  on  such  stock  as  collateral, 
through  the  banking  institutions  which 
they  control? 

Other  questions  arise  in  connection 
with  a broker’s  office.  The  fact  that  the 
securities  a broker  handles  are  the  same 
as  those  handled  by  other  members  of 
the  same  exchange  limits  the  induce- 
ments he  can  offer  customers.  His 
clients  come  to  him  from  personal  rea- 
sons or  from  the  reputation  of  the 
house  for  long  standing,  wealth,  influ- 
ence, ‘‘inside  knowledge,”  etc.  Thus  the 
tendency  around  a brokerage  house  is  to 
encourage  transactions  (from  which  the 
broker  derives  his  commissions)  by  the 
chief  means  available — constant  appeals 
to  the  customers’  hopes  of  money-mak- 
ing. To  what  extent  are  such  appeals 
justifiable?  Should  a broker  encourage 
a client  to  trade  without  really  good  rea- 
sons for  his  commitments?  Or,  if  he 
knows  the  client  to  be  of  the  sort  whose 
money  is  sure  to  be  soon  lost?  Should 
the  broker  aim  to  get  ‘‘good  producers” 
— managers  who  can  “jolly  the  custom- 
ers along”  and  persuade  them  to  trade 
frequently? 

Other  situations  may  occur  in  the 
most  conservatively  conducted  houses. 
Suppose  a large  speculator  in  the  shares 
of  a road  is  a director  in  the  company 

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and  that  his  trades  art  obviously  based 
on  the  inside  knowledge  which,  as  direc- 
tor, he  has  of  the  company’s  affairs; 
should  the  broker  in  this  case  (a  not  in- 
frequent one)  refuse  his  order?  Again, 
a broker  may  have  foolish  or  improper 
orders  given  by  the  executor  of  an  es- 
tate; what  is  his  duty  to  do?  Once  more, 
he  may  have  to  choose  between  the  hos- 
tility of  wealthy  interests  on  one  hand, 
and,  on  the  other,  the  giving  out  of  in- 
formation sought  by  them  to  be  sup- 
pressed but  of  great  value  to  bona  fide 
investors. 

Every  One  for  Himself. 

Probably,  in  the  foregoing  instances 
most  Wall  Street  men  would  be  inclined 
to  take  the  “liberal  view.”  And  this, 
not  from  personal  laxness,  but  because 
they  would  argue  that  the  object  of  all 
concerned  being  to  make  money,  each 
participant  is  supposed  to  be  on  his 
guard  against  every  other,  and  it  is  un- 
fair to  impose  restrictions  save  such  as 
may  be  found  necessary  for  the  good  of 
the  community.  As  regards  the  broker 
— he  generally  considers  his  position  as 
simply  to  execute  orders  and  as  of  a 
sort  analogous  to  that  of  an  attorney  in 
his  relations  with  clients;  moreover,  the 
money-making  principle  on  which  he 
acts  is  common  to  all  in  the  market  and 
to  none  so  much  as  to  the  principals  to 
the  transactions  themselves. 

Generally  speaking,  the  legal  maxim, 
“caveat  emptor”  (let  the  buyer  be- 
ware) is  thus  the  rigid  rule  in  ordi- 
nary financial  dealings.  If  the  buyer 
does  not  beware,  no  one  is  held  to  blame. 
That  merely  plausible  statements  are 
often  made,  that  some  of  the  truth  is 
withheld  if  likely  to  repel,  come  from 
the  fact,  repeatedly  referred  to,  that 
the  buyer  buys  from  greed  and  that  the 
seller  aims  to  arouse  this  greed.  The 
man  who  loses  in  financial  dealings  is 
rarely  a whit  less  greedy — from  his 
acts,  is  often  more  so — than  the  man 
who  makes;  he  is  simply  less  wise  in  his 
greed.  Finance  in  its  great  speculative 
features  has  been  compared  to  certain 
games,  such  as  chess — in  both  the  object 
of  the  participants  calling  at  times  for 
the  giving  of  wrong  impressions  without 


trespassing  beyond  certain  limits.  Down- 
right misrepresentation  is  much  rarer 
than  generally  supposed  in  connection 
either  with  promotions  or  with  stock  ex- 
change manipulations;  simply,  on  occa- 
sion, less  than  the  truth  is  told,  and 
those  who,  in  consequence,  deceive  them- 
selves are  allowed  to  do  so. 

The  Good  of  Speculation. 

In  other  sorts  of  business,  the  ele- 
ment of  cupidity  which  dominates  in 
finance  is  partly  masked  and  partly 
overborne  by  the  still  stronger  motive, 
at  the  bottom,  of  actual  needs.  But  a 
financial  feature  which  tends  in  the  long 
run  to  disturb  public  order  in  some  way, 
is  sure  in  the  end  to  be  restrained,  it 
may  be  by  legal  enactment  or  by  action 
of  the  governors  of  the  large  exchanges 
or  simply  by  the  influence  of  public 
opinion.  The  routine  practices  of  bank- 
ing and  investment,  having  for  object 
the  conservation  and  safe-guarding  of 
wealth,  plainly  do  not  call  for  notice 
here.  As  regards  the  speculative  feat- 
ures of  finance,  the  facts  are  twofold: 
On  the  one  hand,  such  practices  as  mar- 
ginal trading  and  the  marketing  of  large 
blocks  of  new  securities  through  specu- 
lative activity  are,  both  of  them,  under 
modern  conditions,  essential  to  the  quick 
and  efficient  distribution  of  securities,  as 
well  as  to  afford  an  immediate  market  to 
those  who  wish  to  sell. 

Thus,  on  this  side,  speculative  activi- 
ties subserve  an  important  public  want. 
But,  on  the  other  hand,  the  motive  which 
induces  each  individual  principal  to  en- 
gage in  such  activities  is  simply  the  de- 
sire for  personal  gain — a desire  imply- 
ing a willingness  to  profit  without  an 
equivalent  to  the  community  in  work, 
and  with  the  understanding  that  such 
profit,  if  attained,  necessitates  either 
loss  to  others  or,  at  least,  the  missing 
of  an  opportunity  for  advantage.  As 
the  late  Walter  Bagehot  put  it,  on  the 
stock  exchanges,  and  there  only,  does 
the  “economic  man,”  actuated  solely  by 
the  greed  for  wealth,  cease  to  be  a con- 
venient fiction  of  political  economy  and 
become  an  actuality. 

It  thus  seems  that  in  finance  public 
good  is  brought  about  by  a motive  de- 


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Why  Don’t  You  Try  It? 

You  will  find  that  the  best  medium  through  which 
to  reach  the  investor  and  get  him  interested  in  your 
securities  and  invest  in  them,  is  the  publication  that 
the  investor  reads  and  has  faith  in  — the  publication 
that  can  bring  larger  returns  than  any  other  paper 
in  the  financial  world. 

LESLIE'S  WEEKLY 

with  its  circulation  of 

Over  a Quarter  Million 

Has  brought  larger  returns  to  its  Financial  Advertisers 
than  any  other  publication,  250,000  copies  each  week — 
over  a million  a month — and  at  a lower  advertising  rate 
than  any  other  advertising  medium  of  equal  circulation. 

One  of  the  large  financial  institutions  of  New  York  tried  out 
nine  weekly  and  monthly  publications  for  five  months,  in- 
cluding leading  financial  magazines  — each  publication  used 
the  same  copy  the  same  number  of  times.  The  final  returns 
show  that  Leslie’s  Weekly  brought  over  FOUR  TIMES  as 
many  Inquiries  as  any  one  of  the  other  publications,  amount- 
ing to  almost  one- half  of  the  total  inquiries  received. 

LESLIE'S  WEEKLY  offers  an  opportunity  to  Banking 
Houses  and  Financial  Institutions  that  cannot  be  found 
through  any  other  publication  because  of  the  special  inter* 
est  created  through  Jasper's  Hints  to  Money  Makers.  This 
department  is  edited  by  Jasper,  one  of  the  best  known 
financial  writers  in  this  country. 

Try  an  advertisement  in  Leslie’s  for  four  weeks  and 
you  will  find  the  returns  will  prompt  you  to  become  a con- 
stant advertiser.  Our  Financial  Advertising  Man  will  be 
glad  to  call  at  your  office  and  confer  with  you  regarding 
your  advertising. 

Financial  Advertising  Department 

LESLIE'S  WEEKLY 

ALLAN  c.  HOFFMAN,  225  Fifth  Avenue,  New  York 

Advertising  Manager  v 


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202 


THE  BANKERS  MAGAZINE 


cried  by  theories  of  ethics.  Few  per- 
sons, indeed,  may  like  to  admit  that  so 
striking  a practical  dilemma  exists,  yet 
but  a few  centuries  ago,  it  was  generally 
agreed  that  the  taking  of  interest  is 
wrong.  How  the  present  matter  will 
finally  be  regarded  remains  to  be  seen. 


The  attempt  is  here  made  merely  to 
put  the  subject  clearly  and  to  show  that 
financial  features  which  have  aroused 
objection  cannot  be  put  aside  as  ex- 
traneous, but  spring,  really,  from  the 
character  of  financial  dealings  .them- 
selves. 


THE  INDUSTRIAL  PREFERRED  STOCKS 

A FORM  OF  SECURITY  WELL  WORTH  THE  INVESTOR’S  CAREFUL 

ATTENTION 


THAT*  the  industrial  preferred  stocks 
have  made  an  enviable  record  for 
themselves  during  the  past  few  years 
is  generally  realized  among  investors, 
who,  indeed,  are  turning  their  atten- 
tion toward  this  form  of  security  to  a 
greater  extent  than  ever  before.  In  the 
following  interesting  discussion  of  pre- 
ferred industrials  as  investments, 
Messrs.  Bigelow  & Co.  make  several 
points  which  are  well  worth  the  in- 
vestor's careful  attention: 

The  field  covered  by  the  industrial 
enterprises  in  the  United  States  is  of 
such  great  extent  and  so  varied  it  is 
hard  to  grasp  the  magnitude  of  the 
figures  or  the  undertakings.  By  com- 
parison, the  value  of  the  manufactured 
products  consumed  or  produced  each 
year  in  the  United  States  equals  more 
than  two-thirds  of  the  value  of  the 
farms  and  farm  properties  of  the  coun- 
try. These  totals  are  so  immense  that 
the  mind  hesitates  to  grasp  their  im- 
portance. 

That  the  American  investing  public 
has  come  to  realize  the  significance  of 
this  industrial  outlook  is  indicated  by 
the  recently  published  figures  showing 
that  the  number  of  stockholders  of 
fifty-four  representative  railroads  in 
the  past  year  decreased  16,752,  while 
the  number  of  stockholders  of  fifty-six 
representative  industrial  companies  in- 
creased no  less  than  3,900.  Their  aver- 
age holdings  were  ninety-two  and 
three-quarter  shares  against  ninety  and 
one-third  shares  last  year. 

When  the  past  earnings,  the  pres- 
ent financial  status  and  favorable  pros- 


pects, together  with  the  consistent 
record  of  dividends  paid  by  all  of  these 
companies  are  taken  into  consideration 
it  would  seem  that  the  prices  of  the 
above  preferred  stocks  should  record  a 
substantial  advance.  The  six  per  cent, 
stocks  could  sell  at  120,  the  seven  per 
cent,  stocks  at  140  and  the  eight  per 
cent,  stocks  at  160,  and  the  investment 
yield  at  each  price  would  be  the  same, 
namely,  five  per  cent.  Railroad  pre- 
ferred shares  at  present  prices  invaria- 
bly yield  slightly  under  five  per  cent, 
and  in  a great  many  instances  as  low  as 
four  per  cent. 

Facts  of  Gold  Production. 

The  continued  large  production  of 
gold,  with  the  resultant  decrease  in  the 
purchasing  power  of  the  dollar,  tends 
to  increase  the  price  of  all  commodities 
and  not  less  so  the  value  of  real  estate, 
coal  and  mineral  lands,  and  such  other 
forms  of  wealth  represented  by  the 
stocks  of  the  various  companies.  As 
commodities  rise  in  value  these  compa- 
nies receive  larger  returns  for  their 
products  and  earnings  increase  accord- 
ingly. In  this  respect  industrial  stocks 
enjoy  an  advantage  over  railroad  stocks 
in  not  being  restricted  by  legislation 
or  serious  regulation  as  to  the  prices 
they  may  charge  for  their  product  when 
the  demand  exceeds  the  supply. 

In  this  connection,  attention  must 
necessarily  be  turned  to  the  continuity 
of  the  demand  for  industrial  manufac- 
turing products.  As  long  as  the  coun- 
try's population  continues  to  increase 
at  the  present  rate  there  will  be  a con- 


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INVESTMENTS 


203 


stantly  increasing  demand  for  all  com- 
modities which  enter  into  consumption. 
So  long  as  structures  for  bridges,  houses 
and  rolling  stock  for  railroads  continue, 
so  long  will  there  be  a demand  for  steel, 
and  steel  industries  will  be  carried  on 
with  advancing  improvements. 

Development  and  Progress. 

With  the  center  of  population  con- 
stantly advancing  westward,  the  need 
of  new  railroads  is  clearly  becoming 
more  urgent  in  those  sections  which  at 
present  are  showing  such  tremendous 
development  and  progress. 

This  is  true  not  only  of  the  West  but 
the  South  as  well.  In  1907  the  total 
operated  railroad  mileage  in  the  United 
States  aggregated  227,454?  miles,  in 
1908  it  was  230,000  and  on  June  30, 
1909,  it  was  approximately  285,000 
miles.  The  rapidity  with  which  new 
railroad  construction  is  being  pushed  in 
these  sections  is  indicated  in  the  figures 
compiled  by  the  Manufacturers  Record, 
which  shows  2,031  miles  of  new  con- 
struction in  the  Southern  States  in  the 
year  1909  and  proposed  construction 
for  1910  aggregating  3,743  miles. 

Although  figures  for  the  Western 
States  are  not  available,  they  will  show 
the  same  tremendous  expansion  of  mile- 


age both  accomplished  and  proposed. 
In  no  section  of  the  country  is  new  rail- 
road construction  assuming  larger  pro- 
portions than  in  the  Northwestern 
States,  while  in  Canada  new  lines  are* 
being  pushed  into  undeveloped  territory 
with  phenomenal  rapidity.  Similar 
conditions  prevail  in  Mexican  territory. 

There  is  no  reason  why  an  investor 
should  not  take  a five  per  cent,  or  a six 
per  cent,  investment  predicted  upon  the 
demand  for  steel,  rubber,  products  of 
the  spindle  and  loom,  etc.  A demand 
which  will  always  be  in  evidence  so 
long  as  the  method  of  living  and  the 
present  development  and  improvement 
requires  the  constant  renewing  of  all 
outfits,  be  it  manufacturing  or  house- 
hold goods,  railroads  or  wearing  ap- 
parel. A demand  which  yearly  must 
show  tremendous  increases  and  this 
necessarily  leads  to  the  conclusion  that 
industrial  stocks  which  will  fully  bene- 
fit from  these  conditions  will  in  the 
near  future  march  at  the  front  of  the 
procession  of  great  paying  investments 
held  by  the  American  people. 

Stability  op  Earnings. 

The  stability  of  this  demand  for  in- 
dustrial manufacturing  products  has 
been  fully  reflected  in  the  earnings  re- 


Avg.  Earn’gs  Avg.  Per 
Amt.  Pfd.  Stk.  for  Pfd.  Stk.  Cent,  for 
Company.  Outstanding  6 years.  6 years. 


American  Agricultural  Chemical  . . . 

American  Beet  Sugar  

American  Car  & Foundry  

American  Cotton  Oil  

American  Locomotive  

American  Sugar  Refinery 

American  Sugar  

American  Wool  

Central  Leather  

Corn  Products  

General  Chemical  

International  Harvester  

International  Steam  Pump  

Mac  Arthur  Bros 

National  Biscuit  

National  Lead  

Pressed  Steel  Car 

Railway  Steel  Springs 

Republic  Iron  & Steel 

United  States  Steel  

Virginia  Carolina  Chemical 

* Two  Year  Average, 
t Four  Years,  inc.  in  April,  1905. 
7 Three  Years,  inc.  in  1906. 


$18,826,400 

$1,936,028 

10.28 

5,000,000 

625,835 

12.51 

30,000,000 

5,030,438 

16.76 

10,198,600 

1,596,911 

15.81 

25,000,000 

4,619,801 

18.48 

50,800,000 

7,896,366 

15.54 

45,000,000 

*7,626,110 

*16.94 

40,000,000 

3,447,285 

8.61 

31,061,500 

71,982,692 

78.39 

29,817,600 

72,313,254 

77.90 

12,500,000 

1,418,326 

11.34 

60,000,000 

10,014,439 

16.69 

11,350,000 

1,091,826 

9.62 

1,000,000 

264,270 

26.49 

24.804,500 

3,866,052 

15.48 

24,367,000 

2,257,004 

9.24 

12,500,000 

1,397,328 

11.17 

13,500,000 

1,606,980 

11.90 

25,000,000 

2,210,314 

8.84 

360,281,100 

67,442,191 

18.72 

18,000,000 

2,657,782 

14.75 

Digitized  by  t^ooQle 


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THE  BANKERS  MAGAZINE 


corded  by  these  companies  over  a series 
of  years,  notwithstanding  the  severe 
setback  which  occurred  following  the 
panic  of  October,  1907. 

. In  the  accompanying  table  is  shown 
the  amount  of  preferred  stock  outstand- 
ing, the  average  surplus  after  charges 
available  for  preferred  dividends  over 
the  past  six  years  and  the  per  cent,  of 
this  average  to  the  total  outstanding 
preferred  stock.  In  no  case,  it  will  be 
seen,  have  the  average  earnings  fallen 
below  the  full  dividend  requirements 
and  in  numerous  cases  have  doubled 
and  even  tripled  the  preferred  dividend 
requirements : 

Of  the  above  twenty-one  companies 
only  one,  the  Corn  Products,  has  in  the 
past  eight  years  failed  to  pay  the  full 
dividend  rate.  This  company  was  or- 
ganized in  1906.  In  that  year  it  paid 
two  per  cent,  on  its  preferred  stock, 
seven  per  cent,  in  1907,  and  five  per 
cent,  in  1908  and  1909-  The  accumu- 
lated dividends  on  this  stock  now 
amount  to  five  per  cent.  Most  of  the 
companies  have  paid  the  full  dividends 
since  organization. 

The  Republic  Iron  and  Steel  Com- 
pany has  at  various  times  been  com- 
pelled to  defer  preferred  dividend  pay- 
ments, but  is  now  paying  at  the  full 
rate  of  seven  per  cent,  and  has  provided 
in  full  for  all  accumulated  dividends, 
either  by  cash  payments  or  issue  of 
dividend  warrants. 

All  of  the  companies  presented  in  the 
above  tabulation  are  representative  ones 
in  their  respective  lines  of  industry  and 
are  equally  dependent  on  the  country’s 
growth  and  development. 

The  American  Agricultural  Chemical 
is  one  of  the  largest  concerns  engaged 
in  the  manufacture  of  chemical  ferti- 
lizers. The  American  Sugar  Refining 
and  the  American  Beet  Sugar  are  in  the 
foremost  ranks  of  the  Sugar  Refiners. 

The  International  Harvester  stands 
pre-eminent  in  the  manufacture  of 
farming  and  harvesting  implements  and 
machinery  and  its  ramifications  extend 
throughout  the  whole  world. 

MacArthur  Brothers’  name  is  closely 
woven  in  the  industrial  development  of 
the  United  States.  This  company  has 


built  more  miles  of  railroads  and  canals, 
more  dams  and  reservoirs  and  buildings 
than  any  other  individual  company. 
They  have  carried  to  completion  over  a 
hundred  million  dollars’  worth  of  en- 
gineering works  and  are  one  of  the 
largest  employers  of  labor  in  the  coun- 
try. This  stock  has  always  been  highly 
regarded  as  an  investment. 

Like  the  American  Car  & Foundry, 
Pressed  Steel  Car,  American  Locomo- 
tive, Railway  Steel  Spring  and  the 
United  States  Steel  Corporation,  they 
profit  from  the  ability  of  the  railroads 
to  reconstruct,  to  purchase  materials, 
supplies  and  new  equipment.  That 
these  companies  as  well  as  the  others 
above  represented,  have  displayed  such 
a consistent  record  of  preferred  divi- 
dend payments  in  times  of  depression 
and  prosperity  alike  is  a strong  com- 
mentary on  industrial  securities. 

INVESTMENT  NEWS  AND  NOTES 

— Investors  who  are  looking  for  a chance 
to  invest  in  high  grade  quaranteed  railroad 
bonds  yielding  a high  rate  of  interest  will 
do  well  to  look  into  the  Kansas  City,  Fort 
Scott  & Memphis  refunding  fours  being  of- 
fered by  J.  S.  & W.  S.  Kuhn,  Inc.  The 
bonds,  which  are  guaranteed  principal  and 
interest  by  the  St.  Louis  & San  Francisco 
Railroad  Co.  are  secured  by  a first  mort- 
gage on  117.6  miles  of  track,  a second  mort- 
gage on  899.42  miles  of  track,  and  a third 
mortgage  on  186.10  miles  of  track.  The 
mortgage  will  become  ultimately  a first 
mortgage  on  all  of  the  company’s  lines  of 
railroad,  equipment,  property,  shares  of 
stock,  and  stock  and  bonds  of  auxiliary 
controlled  and  affiliated  roads  owned  by  the 
company  at  the  time  of  the  creation  of  this 
mortgage  or  afterward  acquired  with  the 
proceeds  of  any  of  the  refunding  bonds. 

The  property  above  mentioned  as  security 
includes  most  valuable  and  extensive  termi- 
nals in  Kansas  City,  Mo.,  Memphis,  Tenn., 
and  Birmingham,  Ala. 

The  bonds  are  offered  to  net  the  buyer 
five  and  five-eighths  per  cent 

— Comment  on  the  declaration  of  the  reg- 
ular St.  Paul  and  Atchison  dividends,  which 
goes  to  the  point,  is  made  in  a recent  letter 
issued  by  the  New  York  Stock  Exchange 
firm  of  Keane,  Zayas,  & Potts: 

“From  sources  of  information  supposed  to 
be  in  close  touch  with  the  affairs  of  cer- 
tain railroads  the  report  has  been  system- 
atically and  persistently  spread  for  weeks 
that  St.  Paul  hadn’t  earned  its  dividend  and 


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INVESTMENTS 


205 


might  be  compelled  to  reduce  it,  and  that 
Atchison  was  doing  so  badly  that  a cut  in 
its  dividend  rate  was  as  good  as  a certainty. 

“These  reports,  accompanied  as  they  were 
by  liquidation  of  these  stocks  by  insiders, 
caused  innocent  and  too  credulous  investors 
to  throw  over  their  holdings  and  accept  losses 
ranging  from  ten  to  twenty  dollars  a share. 
And  then,  which  possibly  may  account  for 
the  sudden  change  of  opinion  referred  to 
above,  we  have  the  St.  Paul  directors  meet- 
ing two  weeks  in  advance  of  the  scheduled 
date  and  declaring  the  regular  dividend. 
Next  day  the  Atchison  directors  meet  and 
declare  the  usual  dividend  also,  and  the  re- 
ports of  both  roads  disclose  the  fact  that 
there  was  not  the  slightest  reason  for  the 
false  reports  so  industriously  circulated. 

“If  this  situation  gives  rise  to  an  opinion 
that  insiders  sold  these  stocks  short  on  false 
reports  to  which  their  sales  gave  the  color  of 
truth,  covering  at  lower  levels  in  ample 
time  to  take  advantage  of  the  recovery 
forced  by  the  action  of  the  directors  in  vot- 
ing the  usual  dividends,  those  in  control  of 
the  affairs  of  these  roads  have  no  right  to 
complain.  A word  from  them  in  the  be- 
ginning would  have  stopped  the  raids.  And 
the  failure  to  utter  that  word  has  created  a 
belief  in  some  quarters  that  we  are  grad- 
ually working  back  to  the  methods  of  ‘those 
good  old  days — the  days  of  Fisk  and 
Gould’ — when  railroads  were  operated,  not 
as  commerce  carriers,  but  as  mere  gambling 
machines;  when,  as  frequently  happened,  a 
difference  of  ten  cans  of  milk  in  the  day’s 
traffic  was  sufficient  to  cause  Erie  to  fluc- 
tuate a point. 

— Writing  of  Pennsylvania,  Messrs. 
Plympton,  Gardiner  & Company  say: 

In  an  unsettled  market,  Pennsylvania 
railroad  stock  affords,  in  our  judgment,  one 
of  the  wisest  purchases  on  the  list.  It  is 
noted  for  its 

Stability  in  the  Mabket. 

During  the  year  1907,  the  percentage  of 
decline  shown  by  Pennsylvania  was  only 
twenty-six  per  cent.,  comparing  with  forty- 
one  per  cent,  for  Louisville  & Nashville, 
forty-four  per  cent,  for  Union  Pacific  and 
forty-seven  per  cent,  for  Northern  Pacific. 

In  the  liquidating  market  since  last  Jan- 
uary its  extreme  decline  has  been  but  ten 
and*  one-half  points.  It  is  now  selling  higher 
than  it  did  in  February,  while  most  other 
active  stocks  are  five  to  fifteen  points  lower 
than  they  were  then.  The  stock  has  not 
sold  below  par  since  listed  on  the  New  York 
Stock  Exchange  in  1896. 

Financial  Position. 

Since  1901  the  Pennsylvania  has  spent  for 
“main  line”  improvements  about  $280,000,- 
000  of  which  over  forty  per  cent,  has  been 
charged  to  current  earnings  and  to  profit 
and  loss  surplus,  and  the  balance,  $165,000,- 
000,  to  capital. 


The  great  financial  strength  of  the  com- 
pany is  thus  illustrated: 

1901.  1909. 

Stock  outstanding. $203, 000, 000  $320,000,000 
Per  cent,  earned..  10%  11% 

Per  cent,  paid 6%  6% 

The  Pennsylvania  programme  of  im- 
provements is  now  practically  concluded. 
It  is  therefore  believed  probable  that,  under 
favorable  conditions,  the  rate  of  dividend 
will  be  increased  to  seven  per  cent. 

Dividend  Record. 

Only  one  other  road  in  the  United  States 
has  paid  uninterrupted  dividends  for  a 
longer  period.  The  Pennsylvania  com- 
menced payments  in  1856,  dividends  to  date 
a88reg«tir*g  351  per  cent.  Since  1905  the 
road  has  earned  an  average  of  ten  and  one- 
half  per  cent. 

— About  the  best  thing  of  its  kind  we 
have  ever  seen — an  index  of  corporate  stock 
values— is  being  published  by  A.  Keshishian 
at  99  John  street,  New  York.  The  service, 
which  is  weekly,  consists  of  a weekly  digest 
of  both  railroads  and  industrials,  giving, 
in  tabular  form,  a vast  amount  of  informa- 
tion concerning  earnings,  dividends  and 
prices. 

There  are  several  other  digests  issued 
but  we  do  not  recall  ever  having  seen  one 
put  in  as  simple  and  comprehensive  a form 
as  this.  On  a single  large  sheet,  each  week, 
subscribers  are  given  boiled-down  informa- 
tion about  industrials  and  railro«u)s,  the 
digging  out  of  which  would  entail  a vast 
amount  of  trouble. 

A file  of  these  weekly  sheets  would  con- 
tain an  enormous  amount  of  information 
in  such  form  as  to  make  it  accessible  and 
invaluable  to  the  business  man,  the  investor, 
and  the  banker. 

— To  increase  the  investor’s  income  re- 
turn, the  New  York  Stock  Exchange  house 
of  Joseph  Walker  & Sons,  20  Broad  street. 
New  York  City,  has  issued  and  will  send 
free  upon  request,  a circular  letter  contain- 
ing a selected  list  of  active  stocks  and  bonds, 
their  present  prices  and  the  interest  re- 
turn they  afford,  compared  with  those  of  a 
year  ago. 

— The  five  per  cent.  Electric  Lighting 
Company  bond  which  is  described  in  the 
special  circular  sent  upon  application  to 
the  well-known  bond  house  of  Chas.  H. 
Jones  & Company,  20  Broad  street.  New 
York,  is  an  example  of  how  general  condi- 
tions have  made  it  possible  for  investors  to 
secure  a good  l>ond  which  at  present  prices 
will  yield  about  5.70  per  cent,  income.  Or- 
dinarily this  bond  should  sell  around  its 
par  value  and  yield  about  five  per  cent, 
income. 


Digitized  by 


Google 


INVESTMENT  AND  MISCELLANEOUS  SECURITIES 

[Corrected  to  July  20,  approximate  yield  as  figured  Aug.  1.] 


Quoted  by  J.  Hathaway  Pope  & Co.,  brokers 
in  investment  securities  and  dealers  in  un- 
listed and  inactive  railroad  and  industrial 
securities,  87  Exchange  pi.  New  York. 

GOVERNMENT,  STATE  AND  CITY  BONDS. 

Name  and  Maturity.  Price.  Yield. 

U.  8.  Gov.,  reg.  2s,  1930 100% -101  1.66 

U.  8.  Gov.,  reg.  3s.  1918 101% -102%  2.60 

Panama  Canal,  reg.  2s,  1936  100% -100%  1.96 

Dist.  of  Columbia-  3-66s  105  -106 

Alabama  4s.  July,  1956  101  -104%  2.77 

Colorado  4s.  '22  (op.  ’12) 95  -100  4.00 

Connecticut  3%s,  Apr.,  'SO 99  -102  8.37 

Georgia  4%s,  July,  1915 104  -105  3.40 

Louisiana  4s,  Jan.,  1914 96  -101  3.72 

Massachusetts  3%s,  1940 94  %-  95  8.75 

New  York  State  3s,  *59 101%-108  2.88 

North  Carolina  6s,  Apr.,  *19.  .114 %-116%  8.80 

South  Carolina  4%s,  1988 103  -104  4.22 

Tenn.  New  Settlement  8s,  ’13..  95  - 96  4.40 

Va.  6s.  B.  B.  & Co.  ctfs.,  1871  40  - 45 

Boston  3%s,  1929  95  - 96%  3.85 

New  York  City  4%s,  1957 106% -107  4.10 

New  York  City  4%s.  1917 102%-108  3.92 

New  York  City  4s.  1969 98  %-  99  4.02 

New  York  City  4s.  1956 98  - 98%  4.03 

New  York  City  3%s,  1954 86  %-  87%  4.08 

New  York  City  3%s.  1930 89  %-  91  4.12 

New  York  City  rev.  6s.  1910.. 101  -101%  1.30 

Philadelphia  4s,  Jan..  1938... 100  -101%  3.95 

St.  Louis  4s,  July,  1928 100  -101%  3.92 


SHORT  TERM  SECURITIES. 

[Corrected  to  July  20.] 

Quoted  by  J.  Hathaway  Pope  & Co. 

Following  are  current  quotations  for  the 

principal  short-term  railway  and  Industrial 

securities.  Date  of  maturity  is  given,  be- 

cause of  the  importance  of  those  dates  in 
computing  the  value  of  securities  with  so 
near  a maturity.  All  notes  mature  on  the 
first  of  the  month  named  except  where  the 
day  is  otherwise  specified;  interest  is  semi- 
annual on  all.  Accrued  interest  should  be 

added  to  price. 

Name  and  Maturity.  Price.  Yield. 

Am.  Cig.  4s,  “A"  Mar.  15,  '11  98 %-  99%  4.92 

Am.  Clg.  4s,  “B"  Mar.  15,  '12  97  %-  98%  5.10 

Am.  Locomotive  6s,  Oct.,  '10..  99%-100%  4.25 

Bethlehem  Steel  6s,  Nov.,  '14..  97  - 98  6.20 

"Big  Four"  5s,  June,  '11 100  -100%  4.35 

B.  ft  A P.  Equip.  4 %s 99  -100% 

Chic.  & Alton  5s,  Mar.  15,  '18  98%-  99%  6.25 

C.  H.  & D.  4s.  July,  '13  96 %-  97%  6.06 

Diamond  Match  6s.  July,  ’12  98% -100  6.00 

Hudson  Co.  6s,  Oct.,  '11 98% -100  6.00 

Interboro  6s,  May,  'll 101% -101%  8.92 

K.  C.  R.  & L.  6s,  Sept.,  ’12..  98%-  98%  6.50 

Maine  Central  4s,  Dec.,  ’14....  98  -100  4.26 

Minn.  & St.  Louis  5s,  Feb.,  ’ll  98 %-  99%  6.58 

New  Orl.  Term.  6s,  Apr.,  ’ll..  99% -100  3.45 

N.Y.C.  Equip.  6s,  Nov.,  ’10.. 100  -101%  4.15 

N.Y.C.  Equip.  6s,  Nev..  ’14 . .102%-103%  4.15 

N.Y.C.  Equip.  5s.  Nov.,  ’16.  .103%-104%  4.15 

N.Y.C.  Equip.  5s,  Nov.,  ’19.  .104 %-106 % 4.15 

N.Y..N.H.&H.  5s,  Jan.,  ’ll 100  -100%  3.70 

N.Y..N.H.&H.  6s.  Jan.,  '12 100%-101  8.93 

No.  American  5s,  May,  '12.  . 99  -100  5.00 

8t.  L.  A S.  F.  4 %s,  Feb.,  '12..  96%-  96%  6.00 

8t.  L.  A 8.  F.  5s.  Apr.,  '13 96 %-  97%  5.46 

Southern  Ry.  5s,  Feb..  1913....  98  - 98%  5.45 

Tidewater  6s,  June,  '13 100% -101%  6.36 

Westlnghouse  6s,  Aug.,  '10 100  -100%  4.26 

Wood  Worsted  4%s.  Mar.,  '11  99%-  ..  4.50 

Western  Tel.  6s.  Feb..  1912..  99  - 99%  6.20 

INACTIVE  RAILROAD  STOCKS. 

[Corrected  to  July  20.] 

Quoted  by  J.  Hathaway  Pope  A Co. 

Bid.  Asked. 

Ann  Arbor,  pref 66  73 

Arkansas.  Oklahoma  & Western ...  5 8 

Atlanta  A West  Point  165  180 

Atlantic  Coast  Line  of  Conn 225  240 

Buffalo  A Susquehanna,  pref 16  20 

206 


Bid.  Asked. 


Central  New  England  18  18 

Central  New  England,  pref 23  28 

Chicago,  Indianapolis  A Louisville.  50  56 

Chicago.  Ind.  & Louisville,  pref....  65  72 

Cincinnati,  Hamilton  & Dayton...  35  60 

Cincinnati.  Ham.  & Dayton,  pref. . 65  75 

Clncin.,  N.  O.  & Tex.  Pac 125  135 

Cincin.,  N.  O.  & Tex.  Pac.,  pref..  108  107 

Cincinnati  Northern  50  65 

Cleveland,  Akron  A Columbus 76  85 

Cleve.,  Cin.,  Chic.  & 8t.  L.,  pref..  98  110 

Delaware  47  49 

Des  Moines  & Ft.  Dodge,  pref 50  80 

Detroit  & Mackinac  56 

Detroit  & Mackinac,  pref 85  95 

Grand  Rapids  & Indiana  40  55 

Georgia,  South.  A Florida  27  36 

Georgia,  South.  A Flor.,  1st  pref..  92 

Georgia.  South.  & Flor.,  2d  pref.  . 70  80 

Huntington  & Broad  Top 10 

Huntington  A Broad  Top,  pref....  25  30 

Kansas  City,  Mexico  A Orient....  20  25 

Kansas  City.  Mex.  & Orient,  pref.  25  30 

Louisville,  Henderson  A St.  Louis.  14  18 

Louisville,  Hend.  A St.  L.,  pref...  84  40 

Maine  Central  200  220 

Maryland  & Pennsylvania  10  22 

Michigan  Central  166  172 

Mississippi  Central  38  40 

Northern  Central  125  180 

Pitta,  Cin.,  Chic.  A St.  L.,  pref.  .107  116 

Pittsburg  A Lake  Erie 200  ... 

Pittsburg,  Shawmut  & Northern..  1 

Pere  Marquete  27  84 

Pere  Marquette,  1st  pref 50  60 

Pere  Marquette,  2d  pref.  84  40 

St.  Louis,  Rooky  Mt.  A Pac.,  pref.  ..  46 

Seaboard  1st  pref 70  80 

Seaboard  2d  pref 40  45 

Spokane  A Inland  Empire  36  45 

Spokane  & Inland  Empire,  pref. . . 60  70 

Texas  Central  45  ... 

Texac  Central,  pref.  76 

Virginian  17  22 

Vandalla  75 

Williamsport  A North  Branch....  1 3 


GUARANTEED  STOCKS. 

[Corrected  to  July  20.] 

Quoted  by  J.  Hathaway  Pope  A Co. 

(Guaranteeing  company  in  parentheses.) 

Bid.  Asked. 

Albany  A Susquehanna  (D.  A H.)..280  800 

Allegheny  & West’n  (B.  R.  I.  A P.).140  150 

Atlanta  A Charlotte  A.  L.  (SO.R.R.)  .180 
Augusta  A Savannah  A.  L.  (Cen. 

of  Ga.)  107  115 

Beech  Creek  (N.  Y.  Central) 95  102 

Boston  A Lowell  (B.  & M.)  216  225 

Bleecker  St.  A F.  Ry.  Co.  (Met. 

St.  Ry.  Co.)  10  20 

Boston  & Albany  (N.  Y.  Cen.) 210  230 

Boston  A Providence  (Old  Colony). 290  300 

Broadway  A 7 th  Av.  R.  R.  Co. 

(Met.  St.  Ry.  Co.)  120  125 

Brooklyn  City  R.  R.  (Bk.  H.  R.  R. 

Co.)  145  155 

Camden  A Burlington  Co.  (Penn. 


R.  R.)  140  160 

Catawlssa  R.  R.  (Phila  & Read.).. 112  120 

Cayuga  & Susquehanna  (D.L.&W.)  .216  280 

Cent.  Pk.  N.&E.  R.R.  (Met.  St.  Ry.)  30  40 

Christopher  & 10th  St.  R.  R.  Co. 

(M.  S.  R.)  80  100 

Cleveland  A Pittsburg  (Pa.  R.  R.1..170  176 

Cleveland  A Pittsburg  Betterment.  . 96  101 

Columbus  A Xenia  (Pa.  R.  R.) 201  206 

Commercial  Union  (Com'l  C.  Co.)..  106  120 

Commercial  Union  of  Me.  (Com.  C. 

Co.)  110 

Concord  A Montreal  (B.  A M.)  160  170 

Concord  A Portsmouth  (B.  A M.)...170 
Conn.  A Passumpsic  (B.  & L.)....130  140 

Conn.  River  (B.  & M.)  260  270 

Dayton  & Mich.  pfd.  (C.  H.  & D.)..180  195 

Delaware  A Bound  B.  (Phila.  & R.)  .190  200 

Detroit.  Hillsdale  A S.  W.  (L.  S.  & 

M.  S.)  130  145 

East.  Pa.  (Phila.  A Reading)  130  140 

Eighth  Av.  St.  R.  R.  (M.  S.  R.  Co.). 260 
Elmira  A Williamsport  pfd.  (Nor. 

Cen.)  135  150 

Erie  A Kalamazoo  (J.  S.  A S.) 226  240 

Erie  A Pittsburg  (Penn.  R.  R.) 140  160 


Digitized  by  (^.ooQle 


INVESTMENTS 


207 


Bid. 

Franklin  Tel.  Co.  (West.  Union)..  40 
Ft.  Wayne  A Jackson  pfd.  (L.  S.  A 

*1.  S.)  130 

Forty-second  St.  A G.  St.  R.  R. 

(Met.  St.  Ry.)  200 

Georgia  R.  R.  A Bk.  Co.  (L.  A N. 

& A.  C.  L.)  250 

Gold  A 8tock  Tel.  Co.  (W.  U.) 107 

Grand  River  Valley  (Mich.  Cent.).. .120 
Hereford  Railway  (Maine  Central)..  85 

Inter.  Ocean  Telegraph  (W.  U.) 90 

Illinois  Cen.  Leased  Lines  (111.  Cen.)  95 
Jackson.  Lana  A Saginaw  (M.  C.)..  84 

Joliet  A Chicago  (Chic.  & Al.) 168 

Kalamazoo.  A I.  A G.  Rapids  (L.  S. 

A 8.)  140 

Kan.  C.,  Ft.  Scott  & M.  pfd.  (St. 

L.  A S.  F.)  70 

K.  C.  St.  L.  A C.  pfd.  (Chic.  A Al.) . 125 
Lake  Shore  Special  (Mich.  S.  A N. 

Ind.)  S80 

Little  Miami  (Penn.  R.  R.) 210 

Little  8chuylktll  Nav.  A Coal  (Phil. 

, R->  no 

Louisiana  A Mo.  Riv.  (Chic.  A Atl.).160 
Mine  Hill  & Schuylkill  Hav.  (F.  A 

RO  120 

Mobile  A Birmingham  pfd.  4 % (So. 
Ry.)  68 

Mobile  A Ohio  (So.  Ry.)  75 

Morris  Can.  pfd.  (Lehigh  Valley)..  170 
Morris  A Essex  (Del.  Lack.  A W.).176 
Nashville  & Decatur  (L.  A N.)....186 
N.  H.  A Northampton  (N.  Y.,  N.  H. 

A H.)  100 

N.  J.  Transportation  Co.  (Pa.  R.R.)  .250 
N.  Y.,  Brooklyn  A Man.  Beach  pfd. 

(L.  I.  R.  R.)  107 

N.  Y.  A Harlem  (N.  Y.  Central) 800 

N.  Y.  L.  A Western  (D.  L.  A W.)..120 
Ninth  Av.  R.  R.  Co. (M.  St.  Ry.  Co.)  .140 
North  Carolina  R.  R.  (So.  Ry.).155 
North  Pennsylvania  (Phila.  A R.) . .190 
North.  R.  R.  of  N.  J.  (Erie  R.  R.) . . 85 
Northwestern  Telegraph  (W.  U.)...107 
Nor.  A Wor.  pfd.  (N.Y..N.H.&H.) . .205 
Ogden  Min.  R.R.  (Cen.R.R.  of  N.J. ) . 95 

Old  Colony  (N.Y..N.H.&H. ) 185 

Oswego  A Syracuse  (D.  L.  A W.)..210 
Pacific  A Atlantic  Tel.  (W.  U.)....  66 
Peoria  A Bureau  Val.  (C.R.I.AP.) . 180 
Philadelphia  A Trenton  (Pa.  R.  R.)245 
Pitta  B.  & L.  (P.  L.  E.  A C.  Co.)..  82 
Pitta,  Ft  Wayne  A Chic.  (Pa.R.R.)  .168 
Pitta.  Ft.  Wayne  & Chic,  special 

(Pa  R.  R.)  165 

Pitta  A North  Adams  (B.  A A.)..  127 
Pitta.  McWport  A Y.  (P.  A L.  E. 

M.  S.)  120 

Providence  A Worcester  (N.  Y.,  N. 

H.  A H. ) 260 

Rensselaer  A Saratoga  (D.  A H.)..190 

Rome  A Clinton  (D.  A H.) 140 

Rome,  Watertown  A O.  (N.  Y.  Cen.)  118 
Saratoga  A Schnectady  (D.  A H.)..169 
Second  Av.  St.  R.  R.  (M.  S.  R.  Co.).  20 
Southern  Atlantic  Tel.  (W.  U.)....  87 

Sixth  Av.  R.  R.  (Met.  S.  R.  Co.) 110 

Southwestern  R.  R.  (Cent,  of  Ga.)..108 
Troy  A Greenbush  (N.  Y.  Cent.)..  168 
Twenty- third  St.  R.  R.  (M.  8.  R.)..200 

Upper  Coos  (Maine  Central)  135 

Utica  A Black  River  (Rome,  W. 

A O.)  171 

Utlda  Chen.  A Susqueh.  (D.  L. 

A W.)  144 

United  N.  J.  A Canal  Co.  (Pa.R.R.) . 244 
Valley  of  New  York  (D.,  L.  A W.)..120 

Ware  R.  R.  (Boston  & Albany)  160 

Warren  R.  R.  (D.,  L.  A W.)  168 


Asked. 

60 


260 

115 

180 

92 

100 

100 

90 

174 


150 


78 

140 


360 

216 


120 

171 


126 


76 

85 


184 

192 


255 

118 

i 25 
190 
165 
200 
95 
115 
215 
105 
195 
225 
75 
190 

*35 

178 

170 

134 

130 

300 

200 

150 

125 

*50 

97 

180 

115 

176 

275 

145 

178 

155 

250 

125 

i76 


EQUIPMENT  BONDS. 

[Corrected  to  July  20.] 

Quoted  by  Blake  A Reevea  dealers  in  invest- 
ment securities,  84  Pine  st..  New  York. 
Quotations  are  given  in  basla 

Bid.  Asked. 

Atl.  Coast  Line  4%.  Mar.,  *17 4*  4% 

BufT..  Roch.  A Pitta  4%%.  Apr.,  *27 
Canadian  Northern  .(4%,  8ept.,  *19 
Central  of  Georgia  4(4%,  July.  *16 

Central  of  N.  J.  4%,  Apr..  *18 

Chea  A Ohio  4%.  Oct.,  *16 

Chic.  A Alton  4%,  June,  *16 

Chic.  A Alton  4(4%,  Nov..  *18 

Chic.,  R.  I.  A Pac.  4(4%,  Feb.,  *17 
Den.  A Rio  Grande  5%.  Mar.,  *11  _ „ 

Del.  A Hud.  4(4%,  July.  *22 4(4 

Erie  4%,  Dec.,  *11  5(4 


4* 

6% 

5 

6(4 
5(4 
6(4 
5 (4 


4% 

5 

4(4 

4(4 

4% 

5 

5 

4% 

4* 

j4(4 

'5 


Erie  4%,  June,  *11 
Erie  4%,  Dec.,  *14 
Erie  4%,  Dec.,  *15 
Erie  4%,  June.  *16 


Bid.  Asked. 
5(4  5 


5(4 

5(4 


*-*•  u uuc.  1U  SU 

N.  Y.  Cent.  5%,  Nov.,  *11 4 % 

JJ.  Y.  Cent.  5%,  Nov.,  *18  4% 

No.  West  4%,  Mar.,  *17  4 2 

Pennsylvania  4%,  Nov.,  *14 4 2 

Seaboard  Air  Line  6%,  June,  ’ll..  5 

So.  Ry.  4(4%,  Series  E,  June.  *14  5 


4\ 

4\ 

4% 

4(4 

4(4 

4% 

4(4 

4% 

4% 


NEW  YORK  CITY  RAILWAY.  GAS  AND 
FERRY  COMPANY  BONDS  AND  8TOCK8. 

[Corrected  to  July  20.] 

Quoted  *y  Williamson  A Squire,  members  New 
York  Stock  Exchange,  brokers  and  dealers  In 
York  eft"  •ecur,t,e,,’  « Broad  .treet!  'n.w 


Bleecker  St  A Ful  Fy 

l»t  4s  1950 

Bway  Surf  Ry  1st  5s.  .1924 

Bway  A 7th  Av  stock 

Bway  A 7th  Av  Con  6s. 1948 
Bway  A 7th  Av  2d  6s.  .1914 
Col  A 9th  Av  1st  6s...  1992 
Christopher  A 10th  8t.... 
Dry  Dk  E B A Bat  6s.  1922 
Dry  Dock  E B A Bat 

Ctfs  5s  1914 

42d  St  M A St  N Av  6al910 
Lex  Av  A Pav  Fy  6s..  1922 

Second  Av  Ry  stock 

Second  Av  Ry  1st  6s.. 1909 
Second  Av  Ry  Cons  5s. 1948 

Sixth  Av  Ry  stock 

South  Ferry  Ry  1st  5s.  1919 
Tarryt’n  W P A M 6s. 1928 

Union  Ry  1st  6s 1942 

Westchester  El  Ry  5s.  1943 

Yonkers  Ry  1st  5s 1946 

Central  Union  Gas  6s.. 1927 
Equitable  Gas  Light  6s.  1932 
New  Amst  Gas  Cons  6s.  194 8 
N Y A E R Gas  1st  6s. 1944 
N.  Y A E R Gas  Con  5s.  1945 
Northern  Union  Gas  5s.  1927 
Standard  Gas  Light  5s. 1930 
Westchester  Light  5s..  1950 
Brooklyn  Ferry  Gen  5s.  194 3 
Hoboken  Fy  1st  Mtg  6s. 1946 
NY  A Bkn  Fy  1st  Mt  6s. 1911 
NY  A Hobok  Fy  Gen  6s. 1946 

N Y A East  River  Fy 

10th  A 28d  St  Ferry 

10th  A 28d  St  Fy  1st  5s. 1919 

Union  Ferry  

Union  Ferry  1st  6s 192o 


Bid. 

Asked. 

J&J 

54 

60 

JAJ 

102 

104 

120 

126 

JAJ 

100 

102 

JAN 

99 

100(4 

MAS 

96 

100 

QJ 

80 

95 

JAD 

96 

100 

FAA 

40 

49 

MA  S 99(4 

100(4 

MAS 

95 

98 

8 

15 

MAN 

27(4 

99 

FAA 

50 

60 

.... 

120 

186 

AAO 

88 

91 

MAS 

60 

80 

FAA 

100 

102 

JAJ 

66 

86 

AAO 

70 

86 

JAJ 

99(4 

101 

MAS 

102 

106 

JAJ 

97(4 

99 

JAJ 

100 

108 

JAJ 

95 

98 

MAN 

99 

101 

MAN 

100 

108 

JAD 

102(4 

106 

17 

24 

MAN 

102 

105 

JAJ 

93 

97 

JAD 

94 

98 

Q M 

20 

28 

AAO 

26 

JAD 

60 

*70 

O J 

29 

32 

MAN 

74 

98 

ACTIVE  BONDS. 

[Corrected  to  July  20.] 

Quoted  by  Swartwout  A Appenzellar.  bankers, 
members  N^w  York  Stock  Exchange,  4 4 Pine 
street,  New  York. 


Amer.  Agrl.  Chem.  5s  

Amer.  Steel  Foundries  4s,  1923.. 
Amer.  Steel  Foundries  6s.  1935.. 
Balt.  A Ohio.  Southwest.  Div.  3 (4s 


(’in..  Hamilton  A Dayton  4s.... 
Denver  A Rio  Grande  Refng  5s 
Louis.  A Nashville  unified  4s.... 

Mason  City  & Ft.  Dodge  4s 

Norfolk  A West.  Divisional  4s. 
Savannah.  Florida  A Western  6s 
Ya.  Carolin  Chem.  1st  5s 


Western  Pacific  5s  

COAL  BONDS. 

[Corrected  to  July 
Quoted  by  Frederick  H.  Hatch  A Co.,  dealers  In 
Investment  securities,  20  Broad  street.  New 
York. 


Bid. 

Asked. 

.100 

101 

64 

67 

99 

102 

90 

92 

84 

85(4 

97 

98 

. 98 

99 

86(4 

87 

96(4 

97(4 

90 

91 

97 

98 

. 80 

83 

. 90(4 

92 

.120 

123 

. 98(4 

99  14 

. 82(4 

83(4 

. 78 

80 

■ 90(4 

91 

. 92 

• ] 

94 

Bid.  Asked. 

Beech  Creek  C.  A Coke  1st  6s.  1944.  70  80 

Cahaba  Coal  Min.  Co.  1st  6s,  1922.105  110 

Clearfield  Bltum.  Coal  1st  4s,  1940.  8 85 


Digitized  by 


Google 


208 


THE  BANKERS  MAGAZINE 


Bid.  Asked. 


Consolidated  Indian  Coal  1st  Sink- 
ing Fund  5s,  1985  90  93  4 

Continental  Coal  1st  5s,  1952 95  100 

Fairmount  Coal  1st  5s,  19S1 93  95 

Kanawha  & Hocking  Coal  & Coke 

1st  Sinking  Fund  5s.  1961  99  4 101 

Monongahela  River  Con.  Coal  & 

Coll.  Tr.  5a  1947  96  97 

New  Mexico  Railway  & Coal  1st  & 

Coll.  Tr.  6s.  1947 95  97 

New  Mexico  Railway  & Coal  Con. 

& coll.  Tr.  5s,  1961  94  96  4 

Pittsburg  Coal  Co.  1st  & Coll.  Tr. 

Sinking  Fund  5s.  1954  106  110 

Pleasant  Val.  Coal  Co.  1st  5s,  1928.  90  95 

Pocohontas  Consol.  Collieries  1st 

6s,  1957  80  85 

Somerset  Coal  Co.  1st  5s,  1932..*..  92  95 

Sunday  Creek  Co.  Coll.  Tr.  5s,  1944  60  65 

Vandalla  Coal  1st  5s.  1930  100 

Victor  Fuel  1st  6s,  1963  85  87 

Webster  Coal  & Coke  1st  5s.  1942..  80  834 

West  End  Coll.  1st  6s,  1913  95 


POWER  COMPANY  BONDS. 

[Corrected  to  July  20.] 

Quoted  by  Wm.  P.  Bonbright  & Co.,  bankers, 
members  of  the  New  York  Stock  Exchange, 
24  Broad  street,  New  York. 

Bid.  Asked. 

Guanajuato  Power  & Electric  Co. 

Bonds,  6%,  due  1932  (Int.)  924  97 

Guanajuato  Power  & Electric  Co. 

Pref..  6%.  cumulative  (ex  com. 

stk.  dlv. ) 76  81 

Guanajuato  Power  & El.  Co.  Com.  32 
Arizona  Power  Co.,  bonds  6%,  due 

1933  87  93 

Arizona  Power  Co.  pref 45  60 

Arizona  Power  Co.  com 22  23 

Great  Western  Power  Co.  bonds, 

6%.  due  1946  87  91 

Western  Power  Co.  pref 49  51 

Western  Power  Co.,  com 27  4 28  4 

Mobile  Elec.  Co.  bds.,  5 %,  due  1946  88  90 

Mobile  Electric  Co,  pref.  6% 75 

Mobile  Electric  Co.  com 26  30 

Amer.  Power  & Lt.  Co.  pref.,  $%..  79  81 

Amer.  Power  & Lt.  Co.  com 43  45 

MISCELLANEOUS  SECURITIES. 

[Corrected  to  July  20.] 

Quoted  by  J.  K.  Rice,  Jr.,  & Co.,  brokers  and 
dealers  In  miscellaneous  securities,  33  Wall 


street.  New  York. 


Bid. 

Asked. 

American 

Brake  Shoe  & F.,  com. 

. 83 

87 

American 

Brake  Shoe  & F..  pref. 

.118 

128 

American 

Brass  

.117 

125 

American 

Chicle,  com 

.216 

221 

American 

Chicle,  pref 

. 98 

103 

American 

Coal  Products  

. 96 

100 

American 

Gas  & Electric,  com... 

. 41 

44 

American 

Gas  & Electric,  pref... 

. 40 

43 

Adams  Express  

.250 

270 

American 

Express  

.238 

248 

American 

Light  & Traction,  com. 

.260 

265 

American 

Light  & Traction,  pref. 

.102 

106 

American 

District  Tel.  of  N.  J.  . 

. 494 

524 

Babcock  & 


Cripple  Creek  Central,  com. 
Cripple  Creek  Central,  pref. 
Del.,  Lack.  & Western  Coal . 


Du  Pont  Powder,  prof. 
E.  W.  Bliss,  com 


International  Nickel,  pref. 
International  Silver,  com. 
International  Silver,  pref. 
Int.  Time  Recording,  com. 
Int.  Time  Recording,  pref. 
Kings  Co.  E.  L.  & P. 

Oil  Fields  of  Mexico  .. 

Otis  Elevator,  com.  . . 

Otis  Elevator,  pref 

Pacific  Gas  & Electric,  con 
Pacific  Gas  & Electric,  pref 

Phelps,  Dodge  & Co 

Pope  Manufacturing,  com. 
Pope  Manufacturing,  pref. 
Producers  Oil  


Royal  Baking  Powder,  pref. 


Standard  Coupler,  com. 


Texas  & Pacific  Coal 


U.  S.  Express  

V.  S.  Motors,  com. 
V.  S.  Motors,  pref. 


Bid. 

Asked. 

. 98 

103 

.118 

115 

.102 

105 

. 85 

100 

. 20 

30 

. 40 

50 

.200 

215 

.144 

149 

. 88 

88 

.120 

130 

.125 

135 

. 18 

20 

.133 

138 

. 89 

94 

. 50 

80 

.107 

112 

.120 

140 

.103 

108 

.122 

126 

65 

! 49 

51 

. 93 

96 

. 53 

56 

. 83 

88 

.190 

210 

. 67 

71 

. 77 

82 

.140 

150 

.185 

195 

.102 

106 

.123 

127 

.137 

142 

.270 

300 

. 30 

50 

.138 

142 

. 98 

103 

. 22 

26 

. 87 

92 

. 96 

100 

. 55 

65 

. 65 

75 

. 41 

46 

. 97 

101 

. 55 

57 

. 18 

23 

.162 

168 

. 17 

22 

.103 

107 

FOREIGN  AND  MUNICIPAL  BONDS. 


[Corrected  to  July  20.] 


Reported  by  Zimmerman  & Forshay,  9-11  Walt 
street,  New  York. 


German  Gov.  3 4s  

German  Gov.  3s  

Prussian  Consols  4s 

Bavarian  Gov.  4s  

Russian  Gov.  3 4s  

Saxony  Gov.  3s  

Hamburg  Gov.  3s  

City  of  Berlin  4s  

City  of  Cologne  

City  of  Augsburg  4s  ... 
City  of  Munich  4s 
City  of  Frankfurt  3 4s 

City  of  Vienna  4s  

Mexican  Gov.  5s  

Russian  Gov.  4s  

French  Gov.  Rente  3s  . 
British  Consols  2 4s  .. 


Bid. 

Asked. 

. 924 

934 

. 814 

85  4 

.1014 

1024 

.100% 

101% 

. 91 

92 

. 83 

84 

. 82 

83 

.1004 

101% 

.100 

101 

. 994 

1004 

. 994 

1004 

. 924 

934 

. 95 

96 

. 99  4 

1004 

. 92 

93 

. 97 

98 

. 814 

83  4 

BANK  AND  TRUST  COMPANY  STOCKS 

[Corrected  to  July  20,  1910.] 


NEW  YORK  BANK  STOCKS. 


Reported  by  Hornblower  & Weeks,  members 
New  York  and  Boston  Stock  Exchanges,  42 
Broadway,  New  York. 


Dlv. 

Rate. 

Bid. 

Asked. 

Aetna 

National  Bank  . . . . 

8 

170 

180 

Amer. 

Exchange  Nat.  Kk.  . 

10 

230 

240 

Audubon  Bank  

115 

125 

Bank 

of  America  

26 

575 

625 

Bank 

of  the  Manhattan  Co. 

12 

320 

335 

Bank 

of  the  Metropolis. . . . 

16 

S80 

410 

Bank 

of  N.  Y..  N.  B.  A 

14 

315 

325 

Bank 

of  Washington  Hts. . 

8 

280 

. . . 

Battery  Park  Nat.  Bank... 

• . 

115 

. . . 

Div. 

Rate. 

Bid. 

Asked. 

Bowery  Bank  

12 

380 

... 

Bronx  Borough  Bank 

20 

310 

Bryant  Park  Bank 

156 

165 

Butchers  & Drovers  Bank.. 

6 

135 

145 

Century  Bank  

6 

160 

176 

Chase  National  Bank  ..... 

. 6 

485 

... 

Chatham  National  Bank... 

16 

320 

. . . 

Chelsea  Exchange  Bank.... 

8 

200 

. . . 

Chemical  National  Bank... 

15 

430 

450 

Citizens  Central  Nat.  Bk... 

6 

155 

165 

Coal  & Iron  Nat.  Bank.... 

6 

145 

155 

Colonial  Bank  

10 

380 

. . . 

Columbia  Bank  

12 

340 

. . . 

Digitized  by  CjOOQle 


INVESTMENTS 


209 


Div.  Rate. 

Bid. 

Asked. 

Corn  Exchange  Bank 

16 

315 

325 

East  River  Nat.  Bank 

6 

100 

120 

Fidelity  Bank  

6 

165 

176 

Fifth  Avenue  Bank  

100 

4000 

4500 

Fifth  National  Bank  

12 

800 

First  National  Bank  

32 

880 

900 

Fourteenth  Street  Bank.... 

10 

150 

Fourth  National  Bank  

8 

180 

190 

Gallatin  National  Bank.... 

14 

330 

850 

Garfield  National  Bank.... 

12 

800 

German 'American  Bank  . . . 

6 

140 

150 

German  Exchange  Bank... 

20 

450 

Germania  Bank  

25 

500 

Greenwich  Bank  

10 

250 

260 

Hanover  National  Bank.  . . . 
Importers'  A Traders  Nat. 

16 

610 

635 

Bank  

24 

540 

560 

Irving  Nat  Exchange  Bk. 

8 

200 

210 

Jefferson  Bank  

10 

180 

190 

Liberty  National  Bank  .... 

20 

600 

Lincoln  National  Bank  . . . . 

10 

400 

420 

Market  St  Fulton  Nat.  Bk. 
Mechanics  & Metals  Nat. 

12 

250 

260 

Bank  

12 

240 

255 

Mercantile  Nat.  Bank  

6 

150 

160 

Merchants  Ex.  Nat.  Bk... 

6 

160 

175 

Merchants’  Nat  Bank  

7 

170 

180 

Metropolitan  Bank  

8 

200 

Mount  Morris  Bank  

10 

250 

Mutual  Bank  

8 

275 

Nassau  Bank  

8 

240 

250 

Nat.  Bk.  of  Commerce.... 

8 

210 

210 

Nat.  Butchers  St  Drovers*.. 

6 

138 

145 

National  City  Bank  

10 

370 

385 

National  Park  Bank  . . . . 

16 

325 

340 

National  Reserve  Bank 

6 

100 

110 

New  Netherlands'  Bank.... 

5 

210 

N.  Y.  County  Nat.  Bank. . . 

40 

960 

* * [ 

New  York  Bkg.  Assn 

14 

315 

325 

N.  Y.  Produce  Ex.  Bank... 

Night  St  Day  Bank  

Nineteenth  Ward  Bank  . . . 

8 

160 
* * * 

170 

230 

# § 

270 

Northern  Bank  

6 

105 

Pacific  Bank  

8 

230 

240 

Park  Bank  

16 

325 

340 

People's  Bank  

10 

260 

280 

Phenix  National  Bank  

8 

190 

200 

Plaza  Bank  

20 

625 

Seaboard  National  Bank.. 

12 

390 

Div. 

Rate. 

Bid. 

Asked. 

New  York  Trust  Co.  . 

82 

640 

860 

People’s  Trust  Co 

12 

285 

Queens  Co.  Trust  Co.  . . 

115 

125 

Savoy  Trust  Co 

100 

Standard  Trust  Co.  . . 

16 

400 

Title  Guar.  & Trust  Co 

20 

475 

490 

Trust  Co.  of  America 

10 

840 

852 

Union  Trust  Co 

50 

1300 

1360 

U.  8.  Mtg.  Sc  Trust  Co 

24 

470 

480 

United  States  Trust  Co 

50 

1175 

1225 

Van  Norden  Trust  Co. 

111 

210 

Washington  Trust  Co.. 

16 

866 

Williamsburg  Trust  Co. 

80 

ioo 

Windsor  Trust  Co. 

*6 

110 

126 

BOSTON  BANK  STOCKS. 

Reported  by  Hornblower  St  Week*,  member* 
New  York  and  Boston  Stock  Exchanges,  60 
Congress  St.,  Boston. 

Dir.  Last 

Name.  Rate.  Sale. 

Atlantic  National  Bank  6 161% 

Boylaton  National  Bank  4 102% 

Commercial  National  Bank  6 140 

Eliot  National  Bank  8 226 

Fourth  National  Bank  7 178% 

Merchants  National  Bank  10  266 

Metropolitan  National  Bank  6 122 

National  Bank  of  Commerce  6 172% 

National  Market  Bank,  Brighton..  6 102 

Nat.  Rockland  Bank.  Roxbury....  8 167 

National  Shawmut  Bank  10  876 

National  Union  Bank  7 204 

National  Security  Bank  12  • 

New  England  National  Bank  ....  6 162 

Old  Boston  National  Bank  6 127 

People’s  National  Bank,  Roxbury..  6 122% 

Second  National  Bank  10  263% 

South  End  National  Bank  6 104% 

State  National  Bank  7 182 

■Webster  & Atlas  National  Bank...  7 180 

Wlnthrop  National  Bank  10  826 

• No  public  sales. 


8econd  National  Bank  . . . . 

12 

875 

Sherman  National  Bank... 
State  Bank  

io 

125 

800 

Twelfth  Ward  Bank  

8 

150 

Twenty-Third  Ward  Bk.... 

6 

185 

Vnlon  Ex.  Nat.  Bank 

10 

160 

1*75 

Washington  Heights  Bank. 
West  Side  Bank  

12 

275 

600 

Yorkvllle  Bank  

20 

525 

. . . 

NEW  YORK  TRUST  COMPANY  STOCKS. 


Div.  Rate. 

Bid. 

Asked. 

Astor  Trust  Co 

8 

360 

870 

Bankers’  Trust  Co 

16 

650 

675 

Brooklyn  Trust  Co 

20 

436 

Carnegie  Trust  Co 

8 

130 

Central  Trust  Co 

45 

1000 

1025 

Columbia  Trust  Co 

8 

280 

300 

Commercial  Trust  Co.  

no 

126 

Empire  Trust  Co 

io 

300 

320 

Equitable  Trust  Co 

Farmers’  T^>an  St  Trust  Co. 

24 

490 

(par  $25)  

60 

1673 

1725 

Fidelity  Trust  Co 

6 

200 

210 

Flat  bush  Trust  Co 

8 

210 

Franklin  Trust  Co 

8 

215 

Fulton  Trust  Co 

10 

290 

Guaranty  Trust  Co 

32 

825 

850 

Guardian  Trust  Co 

175 

Hamilton  Trust  Co 

12 

270 

Home  Trust  Co 

4 

105 

• . ! 

Hudson  Trust  Co 

6 

170 

International  Bank’g  Corp. 

90 

ios 

Kings  Co.  Trust  Co 

16 

500 

Knickerbocker  Trust  Co.... 

12 

290 

310 

Lawyers’  Mortgage  Co 

Lawyers*  Title  Insurance  & 
Trust  Co 

12 

240 

260 

12 

270 

280 

Lincoln  Trust  Co 

130 

150 

Long  111.  Loan  St  Trust  Co. 
Manhattan  Trust  Co.  (par 

ti 

300 

$80)  

12 

375 

• . . 

Mercantile  Trust  Co 

30 

725 

... 

Metropolitan  Trust  Co 

24 

535 

Mutual  Aliance  Trust  Co. . 

iis 

130 

Nassau  Trust  Co 

*8 

176 

National  Surety  Co 

8 

240 

260 

N.  Y.  Life  Ins.  Sc  Trust  Co. 

45 

1100 

1120 

N.  Y.  Mtg.  St  Security  Co... 

12 

200 

210 

BOSTON  TRUST  COMPANIES. 


Div.  Last 
Name.  Rate.  Sale. 

American  Trust  Co 8 826 

Bay  State  Trust  Co 7 • 

Beacon  Trust  Co 8 186 

Boston  Safe  D.  St  T.  Co 14  869 

City  Trust  Co 12  468 

Columbia  Trust  Co 6 120 

Commonwealth  Trust  Co 6 206 

Dorchester  Trust  Co 6 106 

Exchange  Trust  Co • 

Federal  Trust  Co 6 188 

International  Trust  Co 16  400 

Liberty  Trust  Co 6 

Mattapan  D.  St  T.  Co 6 201 

Mechanics  Trust  Co 6 110 

New  England  Trust  Co 16  809 

Old  Colony  Trust  Co 20  735 

Turitan  Trust  Co 8 219 

8tate  8treet  Trust  Co 8 • 

United  States  Trust  Co 16  225 


* No  public  sales. 


CmCAGO  NATIONAL  BANK  8TOCK8. 
Reported  by  Hornblower  & Weeks,  members 
New  York  and  Boston  Stock  Exchanges,  162 
Monroe  St.,  Chicago. 

Dir.  Rate.  Bid.  Asked. 
Calumet  National  Bank  ...  6 190 

City  National.  Evanston...  12  315 

Commercial  National  Bank.  8 239  242 

Continental  National  Bank.  10  281  283 

Corn  Exchange  Nat.  Bank.  16  ...  415 

Drovers  Deposit  Nat.  Bank.  10  221  228 

First  National  Bank  16  415  419 

First  Nat.  Bk.  of  Englewood  10  250 

Fort  Dearborn  Nat.  Bank..  8 175  180 

Live  Stock  Exchange  Nat. 

Bank  10  218  225 

Monroe  National  Bank  ....  4 130  134 

Nat.  Bank  of  the  Republic.  8 199  201 

National  City  Bank  6 207  210 

National  Produce  Bank....  4 144  ... 

Prairie  National  Bank  140  ... 


Digitized  by  ^.ooQle 


210 


THE  BANKERS  MAGAZINE 


CHICAGO  STATE 

BANKS. 

Div. 

Rate. 

Bid. 

Asked. 

Ashland  Exchange  Bank.. 

110 

Austin  State  Bank  

10 

280 

Central  Trust  Co 

7 

163 

Chicago  City  Bank  

10 

174 

180 

Chicago  Savings  Bank  .... 

6 

144 

148 

Citizens  Trust  Co 

4 

100 

111 

Colonial  Tr.  & Saw  Bank.. 

10 

192 

195 

Drexel  State  Bank  

6 

153 

Drovers  Tr.  & Sav.  Bank... 

8 

176 

180 

Englewood  State  Bank.... 

6 

114 

Parwell  Trust  Co 

6 

119 

123 

Hibernian  Banking  Assn... 

8 

205 

210 

Illinois  Tr.  & Sav.  Bank... 

20 

496 

503 

Kaspar  State  Bank  

10 

250 

Kenwood  Tr.  & Sav.  Bk. 

7 

133 

138 

I.ake  View  Tr.  & Sav.  Bk . 

5 

136 

Merchants  Boan  & Tr.  Co.. 

12 

410 

416 

Metropolitan  Tr.  & Sav.  Bk. 

6 

119 

121 

Northern  Trust  Co  

8 

318 

326 

North  Avenue  State  Bank.. 

6 

135 

137 

North  Side  State  Bank.... 

6 

125 

Northwest  State  Bank  .... 

4 

117 

Northwestern  Tr.  & Sav.  Bk. 

6 

139 

143 

Oak  Park  Tr.  & Sav.  Bank 

308 

312 

Peoples  Stock  Yards  State 

Bank  

10 

200 

204 

Prairie  State  

6 

250 

Pullman  Boan  & Tr.  Bank. 

8 

160 

Railway  Exchange  Bank... 

4 

125 

Security  Bank  

6 

168 

i 7 4 

Sheridan  Tr.  & Sav.  Bank 

6 

110 

112 

South  Chicago  Sav.  Bank... 

6 

144 

148 

South  Side  State  Bank 

135 

150 

State  Bank  of  Chicago  . . . 

12 

334 

338 

State  Bank.  Evanston  .... 

10 

278 

Stockmen’s  Trust  Co 

5 

113 

i is 

Stock  Yards  Savings  Bank. 

8 

215 

I’nion  Bank  

6 

132 

136 

I'nion  Trust  Co 

8 

325 

West  Side  Tr.  & Sav.  Bank 

175 

Western  Trust  

* 6 

150 

i 55 

Woodlawn  Trust  

8 

134 

139 

NORTHERN  BANKERS'  ASSOCIA- 
TION 

Annual  Convention  at  Portsmouth,  N.  H. 
HE  Northern  Bankers’  Association, 
which  is  composed  of  banks  in  Ver- 
mont and  New  Hampshire,  held  its 
annual  convention  at  the  Hotel  Wentworth, 
Portsmouth,  N.  H.,  June  22  and  £3. 


The  convention  opened  with  a banquet  at 
the  Wenthworth  on  Wednesday  evening, 
June  22,  F.  W.  Sawyer,  cashier  of  the  Sou- 
hegan  National  Bank,  Milford,  N.  H.,  and 
president  of  the  Northern  Bankers'  Asso- 
ciation, presided.  After  recounting  the 
work  of  the  association,  he  introduced  Hon. 
John  McLane,  who  was  Governor  of  New 
Hampshire  at  tlie  time  of  the  holding  of  the 
Russo-Japanese  Peace  Conference  at  Ports- 
mouth. Governor  Mcl«ane  gave  an  inter- 
esting account  of  that  historic  episode.  He 
began  by  sketching  the  conditions  of  the 
two  opposing  powers  at  the  time  the  con- 
ference was  called,  and  gave  an  entertaining 
description  of  the  principal  personages  at 
the  conference  and  of  the  events  marking 
its  progress  from  the  beginning  to  the  close. 

Others  who  spoke  were  Hon.  Wallace 
Hackctt,  former  mayor  of  Portsmouth; 
Henry  M.  Batchelder,  president  Merchants* 
National  Bank  of  Salem,  Mass.,  and  mem- 
l>er  executive  council  of  the  American 
Bankers’  Association;  Judge  Page  of  Ports- 
mouth; J.  N.  Brown,  president  Alamo  Na- 
tional Bank.  San  Antonio,  Texas;  and  the 
editor  of  The  Bankers  Magazine. 

The  second  day  of  the  convention  was 
largely  devoted  to  entertainment  features, 
which  included  a trip  to  the  Portsmouth 
Navy  Yard  and  an  inspection  of  the  bat- 
tleship New  Hampshire,  a visit  to  historic 
places  in  Portsmouth,  lunch  at  the  Rocking- 
ham, and  a social  hour  at  the  home  of  Judge 
Page. 

The  Northern  Bankers'  Association  has  a 
large  and  active  mernbership,  and  the  or- 
ganization is  in  a flourishing  condition. 


r 


Hotel  Wentworth,  Portsmouth,  N.  H. 


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PERILS  OF  UNSOUND  LEGISLATION 


Address  of  Elmer  H.  Youngman,  Editor  of  THE  BANKERS  MAGAZINE 
Delivered  at  the  Meeting  of  the  Northern  Bankers' Association,  Hotel 
Wentworth,  Portsmouth,  N.  H.,  June  22,  191# 


BANKERS  as  conservators  of  wealth 
and  credit  are  profoundly  interested 
in  whatever  affects  the  welfare  of  our 
business  institutions.  Anything  that  in- 
fluences, either  for  good  or  ill,  the  indus- 
tries and  commerce  of  the  country  must  ill 
the  long  run  be  reflected  in  the  banks,  for 
it  is  here  that  all  business  centers. 

One  fact  stands  out  strikingly  in  the 
civilisation  of  to-day — the  identity  of  in- 
terest between  different  classes  and  widely- 
separated  localities.  This  commonalty  of 
interest  breaks  down  local  barriers,  obliter- 
ates sectional  lines,  destroys  class  preju- 
dices, and  even  crosses  seas  to  make  brothers 
of  those  who  dwell  in  far-away  lands  and 
who  speak  in  unknown  tongues. 

The  great  financial  centers  Are  to-day 
bound  together  by  ties  the  most  intimate 
and  sensitive,  so  that  a serious  disturbance 
at  New  York  will  cause  anxiety  at  Parts 
and  London,  while  neither  of  these  markets 
can  suffer  without  harm  being  done  on  this 
side  the  ocean. 

lu  view  of  this  interdependence  of  various 
classes  and  different  sections,  which  every 
enlightened  person  recognizes,  is  it  the  part 
of  wisdom  to  impose  hurtful  legislative 
restrictions  upon  certain  lines  of  business 
in  the  belief  that  an  injury  to  them  will 
not  react  upon  the  entire  community? 

Railboad  and  Cobpobation  Legislation. 

The  most  conspicuous  of  the  legislative 
acts  aimed  at  great  corporate  combinations 
was  what  is  generally  known  as  the  Sherman 
Anti-Trust  Act.  Its  early  history  seems 
to  warrant  the  inference  that  the  act  was 
passed  to  satisfy  the  spirit  of  hostility  to 
the  trusts  that  prevailed  at  the  time,  and 
that  there  was  little  thought  that  the  law 
would  be  enforced.  In  fact,  the  law  was 
practically  a dead  letter  until  Mr.  Roose- 
velt discovered  that  it  afforded  a conven- 
ient means  of  putting  some  of  his  precepts 
into  practice.  Here  was  something  ready 
at  hand  with  which  the  “malefactors  of 
great  wealth”  could  be  taught  a lesson. 

But  it  has  been  found  that  this  law  not 
only  reaches  what  Mr.  Brvan  termed  the 
“predatory  interests,”  hut  that  it  applies  to 
our  railways,  our  industrial  corporations, 
and  that  even  the  individual  who  buys  out 
his  competitor  and  who  does  an  inter-Statc 
business  is  liable  to  its  penalties. 

Instead  of  having  a law  that  draws  a 
sharp  distinction  between  a combination 
that  is  harmful  and  one  that  is  beneficial, 
the  Sherman  Anti-Trust  Act  practically 
places  all  business  combinations  at  the 
mercy  of  the  Federal  Government.  Business 


is  carried  on  under  tolerance  only.  The 
discretion  of  the  executive  may  have  been 
wisely  used  or  not.  The  fact  that  at  any 
time  it  may  be  used  to  punish  mere  tech- 
nical violations,  harmful  to  nobody,  places 
the  business  of  the  country  on  an  uncertain 
basis. 

The  right  to  do  business  is  one  not  de- 
rived from  any  authority.  It  is  a natural 
right  that  can  not  be  limited  or  taken  away 
except  for  the  general  good.  And  under 
present  conditions  the  right  to  form  cor- 
porations and  even  to  combine  corporations 
can  not  be  denied  without  great  injury  to 
business  interests. 

The  economic  laws  governing  business 
can  not  be  created,  amended  or  repealed  by 
act  of  Parliament.  All  attempts  in  this 
direction  must  be  'futile  In  the  end;  buc 
w'hile  they  are  being  made  the  business  of 
the  country  suffers  enormously. 

Whatever  theories  any  one  may  have,  we 
are  face  to  face  with  the  fact  that  the 
corporation  is  here  and  that  it  will  remain, 
and  that  corporations,  when  they  find  it 
desirable,  will  combine.  To  fight  against 
this  tendency  would  be  equivalent  to  an- 
tagonizing the  telephone,  the  telegraph,  the 
electric  motor  or  the  aeroplane,  or  to  fight 
against  the  stars  in  their  courses. 

Business  laws  are  evolved  from  condi- 
tions which  are  ever  changing,  and  they 
must  obey  the  law  of  progress  and  adapt 
themselves  to  the  needs  of  the  times. 

When  the  corporation  is  taxed  and  the 
individual  engaged  in  the  same  line  of  busi- 
ness is  not  taxed,  then  an  injustice  has 
been  done,  yet  this  rule  prevails  in  recent 
Federal  legislation.  If  regulation  was  the 
end  sought,  it  should  have  been  reached 
without  resorting  to  unjust  discrimination. 
The  regulation  of  corporations  does  not 
necesvsitate  the  imposition  of  a penalty  upon 
their  existence. 

No  shouts  of  approval  from  the  unthink- 
ing multitude  can  repair  the  ravages  that 
invariably  follow  the  crystallization  of  pre- 
judice and  passion  into  legislative  acts. 

Wc  may  well  distrust  the  power  of  legis- 
lation to  make  men  virtuous,  happy  and 
prosperous,  but  we  know  that  a bad  law, 
or  even  a good  law  injudiciously  applied, 
will  destroy  more  wealth  in  a single  day 
than  industry  and  thrift  can  accumulate 
in  a year.  'The  building  up  of  wealth  is 
a slow  and  laborious  process.  It  requires 
not  only  skill  and  judgment,  but  industry, 
frugality  and  self-denial.  The  destruction 
of  wealth  is  easy  and  requires  but  little 
qualification  except  prodigality  and  fool- 
ishness. 

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THE  BANKERS  MAGAZINE 


How  eagerly  do  we  scan  the  crop  reports 
in  endeavoring  to  make  a forecast  of  the 
season's  prosperity.  And  by  bitter  experi- 
ence we  have  learned  that  careful  heed 
must  also  be  taken  of  the  crop  of  new  legis- 
lation springing  up  every  year,  for  in  this 
direction  lie  possibilities  of  danger  greater 
than  those  to  be  feared  from  floods, 
droughts,  rust,  boll-weevil,  grasshoppers, 
chinch-bugs,  army-worms  and  all  the  innu- 
merable enemies  that  beset  the  farmer  from 
seed  time  to  harvest. 

With  forty-six  State  legislatures  and 
Congress  ready  to  grind  the  mental  grist 
of  the  reformer,  the  politician,  the  doc- 
trinaire and  the  demagogue,  there  is  im- 
minent danger  that  the  legitimate  business 
undertakings  of  the  country  will  be  legis- 
lated to  death.  And  this  peril  will  be 
increased  if  we  are  to  enact  into  law  every 
declaration  which  a political  convention 
may  manufacture  for  the  purpose  of  catch- 
ing votes. 

The  currency,  the  tariff,  the  regulation  of 
corporations — all  these  matters  require 
wise,  careful,  deliberate  and  unprejudiced 
consideration.  Too  often  in  legislating  on 
these  subjects  have  we  been  guided  by  party 
expediency  or  by  the  exigencies  of  the  mo- 
ment. More  than  once  have  wc  followed  the 
teachings  of  the  men  who  make  noise  rather 
than  of  those  who  think.  Sneer  as  any  one 
may  at  the  critic  and  the  closet  philosopher, 
that  nation  is  bound  to  suffer  that  refuses 
to  listen  to  what  economic  experience  has 
to  say. 

Recently  we  have  had  a clear  illustration 
of  the  possibilities  of  mischief  inherent  in 
the  anti-trust  law.  The  railroads  of  the 
count  rv  found  themselves  under  the  neces- 
sity of  raising  their  rates  to  meet  the  in- 
creased cost  of  labor  and  materials.  For  a 
time  it  looked  as  if  the  law  were  to  be  in- 
voked to  prevent  an  increase  of  rates.  Thus 
tlie  roads  would  have  been  practically 
forced  by  the  labor  unions  to  increase  the 
wages  of  their  employees,  and  compelled  by 
the  generally  increased  prices  of  commodi- 
ties to  pay  more  for  their  materials,  and  yet 
denied  by  law  from  reimbursing  themselves 
for  this  increased  outlay  by  putting  up 
their  rates  for  freight  and  passenger  traf- 
fic. Ultimately,  this  policy  would  have 
bankrupted  every  railroad  in  the  country. 
But  wiser  counsels  prevailed,  and  a way 
out  of  the  difficulty  was  found. 

What  would  have  been  the  result  had  the 
Presidential  chair  not  been  filled  by  one 
as  wise,  sane  and  judicious  as  Mr.  Taft, 
may  be  readily  imagined. 

The  Sherman  Anti-Trust  Act  wrould  be 
an  exceedingly  dangerous  weapon  to  place 
in  the  hands  of  an  over-zealous  reformer  who 
might  ride  into  power  at  some  time  when 
the  public  mind  should  be  inflamed  against 
the  possessors  of  corporate  wrealth.  Even 
under  the  most  favorable  circumstances,  the 
law  contains  too  many  dangerous  possibili- 


ties to  the  legitimate  business  interests  of 
the  country. 

A public  commission,  composed  of  the 
ablest  and  most  representative  men  of  the 
country,  should  be  created  to  study  the  situ- 
ation carefully,  and  to  report  to  Congress 
such  amendments  to  the  law  as  would  make 
it  thoroughly  effective  against  corporate  op- 
pression of  every  kind,  and  that  would  make 
it  impossible  to  use  the  law  to  frighten  or 
coerce  those  engaged  in  any  legitimate  un- 
dertaking. 

In  behalf  of  those  corporations  that  have 
broken  the  laws,  defied  all  the  principles 
of  ethics,  and  whose  aggressions  have  been 
bounded  by  nothing  save  their  own  greed, 
1 utter  no  word  of  apology  or  defense.  They 
sowed  the  wind,  and  are  reaping  the  whirl- 
wind. They  have  done  more  to  advance 
the  cause  of  socialism  than  all  other  in- 
fluences combined.  But  the  great  majority  of 
the  corporations  are  law  abiding.  They  have 
a right  to  demand  that  the  laws  relating  to 
their  organization  and  methods  shall  be  rea- 
sonable and  just,  administered  fairly,  and 
not  used  to  embarrass  legitimate  business 
operations. 

Let  us  not  forget  that  an  injury  to  the 
great  railroad  interests  must  be  harmful  to 
us  all.  We  are  told  that  In  the  last  year  forty- 
one  per  cent,  of  the  gross  earnings  of  the 
railways  wrent  to  pay  for  labor,  and  if 
we  take  into  account  the  labor  cost  of  the 
materials  bought  by  the  railroads,  it  will  be 
found  that  labor  got  more  than  half  the 
gross  earnings,  while  capital  received  in  the 
form  of  dividends  and  interest  a little  over 
one-fifth. 

A reduction  in  the  earning  power  of  the 
railroads,  or  the  adoption  of  any  policy 
that  imposes  unreasonable  restraints  upon 
the  operations  of  these  great  and  beneficent 
institutions,  will  of  necessity  decrease  the 
wages  of  American  labor,  and  impair  one 
of  our  most  useful  agencies  in  the  production 
and  distribution  of  wealth. 

Nor  can  you  as  bankers  forget  what  would 
happen  should  there  be  a serious  fall  in  the 
value  of  railway  securities.  Very  properly 
these  securities  constitute  a large  portion  of 
the  investments  of  savings  banks  and  trust 
companies,  and  even  the  commercial  banks 
are  finding  it  advantageous  to  invest  their 
surplus  funds  in  the  same  way.  The  use  of 
railway  bonds  and  stocks  as  collateral  for 
bank  loans  also  vastly  enliances  the  interest 
of  the  banker  in  the  stability  of  the  values 
of  these  securities. 

It  is  quite  within  the  truth  to  say  that 
anything  seriously  disturbing  the  railway 
situation  will  be  productive  of  widespread 
harm;  and  that  while  the  capitalist  would 
suffer,  the  laborer  would  suffer  still  more, 
because  of  his  greater  share  in  the  earnings 
of  the  railways  and  his  greater  dependence 
on  his  income  as  a means  of  support. 

Therefore,  without  extenuating  any  of  the 
offences  of  which  the  railways  or  other 


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PERILS  OF  UNSOUND  LEGISLATION 


213 


great  corporations  may  have  been  guilty,  nor 
denying  that  reasonable  regulation  would  be 
beneficial  to  the  corporations  and  the  public, 
I wish  to  enter  a plea  for  deliberation, 
justice  and  moderation  in  dealing  with  these 
problems. 

Moral  enthusiasm  is  indeed  a splendid 
thing,  but  while  there  remain  in  the  world 
such  prosaic  individuals  as  the  landlords,  the 
butchers  and  the  tailors  with  bills  to  be  paid, 
this  enthusiasm  will  have  to  be  mixed  with 
a large  proportion  of  reason  and  common 
sense. 

The  machinery  of  commerce  is  complex 
and  delicate.  The  various  ( parts  of  its  me- 
chanism and  the  rules  governing  its  efficient 
operation  are  better  understood  by  the 
man  of  business  than  by  the  politician  or 
the  ardent  reformer.  The  railroad  man 
and  the  director  of  the  corporation  have 
something  else  to  do  than  to  carry  out  the 
theories  of  the  idealist  and  the  dreamer. 
They  must  find  the  means  of  paying  divi- 
dends and  wages,  so  that  capital  shall  re- 
ceive its  just  reward  and  hungry  mouths 
be  fed. 

Our  captains  of  industry  are  enlightened 
men.  They  can  read  the  signs  of  the  times. 
Already,  without  legislative  compulsion, 
they  are  constantly  imposing  higher  stand- 
ards upon  the  corporations  they  direct. 
Not  so  readily  perhaps  as  they  should  have 
done,  but  finally,  they  have  come  to  under- 
stand that  corporate  dishonesty  and  indi- 
vidual dishonesty  look  very  much  alike. 
They  see  that  extortion  and  sharp  practice 
will  cause  a lack  of  confidence  and  invite 
retaliatory  legislation.  Not  only  is  there 
a tendency  toward  the  correction  of  abuses, 
but  to  this  negative  kind  of  virtue  has  been 
added  something  of  a positive  character. 
Many  of  the  great  railway  and  other  cor- 
porations are  providing  pension  systems, 
accident  insurance  and  various  forms  of 
welfare  work,  all  calculated  to  ease  the  bur- 
dens of  labor.  Perhaps  this  policy  may 
be  dictated  by  selfishness;  but  if  so,  it  is 
enlightened  selfishness,  tending  to  benefit 
the  employee.  It  would  be  more  charitable 
and  possibly  quite  as  accurate  to  say  that 
the  captain  of  industry  is  not  beyond  the 
humanizing  influence  of  that  growing 
spirit  of  interdependence  and  brotherhood 
which  only  the  mentally  obtuse  or  the 
morally  blind  can  have  failed  to  perceive. 

When  a demand  for  a reduction  of  rail- 
way rates  is  made  by  a merchant  or  manu- 
facturer whose  profits  far  exceed  the  return 
on  railway  investments,  the  good  faith  and 
justice  of  such  demand  may  well  be  ques- 
tioned. 

When  the  railroads  are  forced  to  pay 
more  for  labor  and  materials,  and  prohibited 
from  raising  rates,  this  amounts  to  what 
is  in  effect  a confiscation  of  property. 

Our  recent  railway  legislation  tends  to 
make  the  Government  the  sole  judge  of  the 
country’s  railway  policy,  without  assuming 


any  of  the  risks  and  responsibilities  of 
management  and  control.  It  is  a long  and 
perilous  step  in  the  direction  of  Govern- 
ment ownership  and  one  that  should  not 
have  been  taken  without  the  most  careful 
deliberation. 

Executive  Craving  for  Legislation. 

Not  the  least  of  our  dangers  from  unwise 
legislation  arises  from  the  executive  who 
no  sooner  gets  into  office  than  he  begins 
un  active  campaign  for  carrying  out  some 
favorite  legislative  programme. 

In  the  very  first  article  and  the  first  sec- 
tion of  the  Constitution  of  the  United  States 
it  is  declared  that  “All  legislative  powers 
herein  granted  shall  be  vested  in  a Con- 
gress of  the  United  States,  which  shall  con- 
sist of  a Senate  and  House  of  Representa- 
tives.” Has  not  this  provision  been  ob- 
scured by  the  struggle  of  the  President  in 
recent  years  to  have  his  favorite  policies 
enacted  into  law? 

The  proper  place  of  the  President  with 
respect  to  legislation  is  thus  defined  in  Sec- 
tion three,  Article  two,  of  the  Constitution: 
“He  shall  from  time  to  time  give  to  Con- 
gress information  of  the  state  of  the  union, 
and  recommend  to  their  consideration  such 
measures  as  he  shall  judge  necessary  and 
expedient.”  Would  it  not  strain  the  Eng- 
lish language  to  refer  to  some  of  the  legis- 
lative activities  of  our  two  most  recent 
Presidents  as  “recommendations”? 

The  craving  for  more  and  more  legislation 
seems  to  be  universal,  and  the  President 
merely  becomes  for  the  time  the  embodiment 
of  that  mistaken  belief  in  the  efficacy  of 
statutes  in  directing  business  enterprise. 
Executives  of  the  nation  and  of  the  States 
seern  now  to  think  quite  as  much,  if  not 
more,  of  carrying  through  a legislative  pro- 
gramme than  they  do  of  enforcing  the  laws 
they  were  elected  to  execute. 

Sometimes,  indeed,  the  President  more 
clearly  represents  the  public  will  than  do 
the  members  of  the  House  and  Senate.  His 
utterances  may  be  the  voice  of  the  people, 
which  has  been  declared  to  be  the  voice  of 
God.  But  the  power  to  compel  Congress 
to  adopt  his  views  is  not  found  in  the  Con- 
stitution. And  while  I am  not  unmindful  of 
the  fact  that  this  power  has  sometimes  been 
used  wisely  and  beneficially — as  when  in 
1893  President  Cleveland  wrung  a repeal  of 
the  silver-purchase  act  from  an  unwilling 
Congress — I nevertheless  believe  that  the 
practice  of  legislative  interference  by  the 
executive,  outside  the  wise  limits  imposed 
by  the  Constitution,  is  fraught  with  grave 
danger.  And  that  this  danger  is  not  imagi- 
nary but  real,  I think  one  or  two  examples 
from  recent  legislative  history  will  prove. 

In  the  spring  of  1908,  while  the  people 
were  still  smarting  under  the  experiences 
of  the  panic  of  the  preceding  fall,  a move- 
ment for  currency  legislation  was  initiated 
in  Congress.  Many  people  believed  that 


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THE  BANKERS  MAGAZINE 


214 


there  was  instant  need  of  a law  of  some 
kind  providing  for  the  issue  of  more  bank 
notes.  They  failed  to  realize  what  you 
bankers  well  know,  that  generally  for  a long 
time  after  a severe  panic  a currency  famine 
is  about  the  least  likely  thing  to  happen. 
Mr.  Roosevelt,  who  is  never  so  happy  as 
when  in  action,  became  imbued  with  the  be- 
lief that  currency  legislation  of  some  kind 
was  necessary,  and  most  unfortunately  his 
desire  for  action  caused  him  to  throw  his 
influence  in  favor  of  the  Aldrich-Vreeland 
law,  which  violates  nearly  every  sound  prin- 
ciple of  a bank-note  currency,  and  whose 
enactment  has  greatly  delayed  the  reform 
of  our  banking  and  currency  system  along 
scientific  lines. 

The  story  is  told  that  one  day  a delega- 
tion of  business  men  called  to  talk  with  Mr. 
Roosevelt  regarding  currency  legislation. 
To  this  delegation  he  is  reported  to  have 
said:  ‘‘Gentlemen,  in  one  respect  I resemble 
Abraham  Lincoln — I don’t  know  anything 
about  currency.”  In  view  of  this,  it  might 
have  been  expected  that  he  would  have  been 
governed  by  one  of  the  late  Tom  Reed’s 
favorite  maxims — “When  you  don’t  know 
what  to  do,  don’t  do  anything” — but  he  was 
evidently  too  fond  of  seeing  things  moving 
to  be  bound  by  any  such  conservative 
notions. 

Quite  recently  we  have  had  a more  striking 
illustration  of  the  President’s  devotion  to 
a legislative  programme.  Mr.  Taft  seems 
to  have  conceived  the  idea  that  the  salvation 
of  the  country  and  the  life  of  the  Republican 
party  were  dependent  upon  the  enactment 
of  a postal  savings  bank  law.  And  yet  I be- 
lieve the  best-informed  men  of  the  country 
will  bear  me  out  in  saying  that  such  a law  was 
unnecessary,  for  the  very  good  and  sufficient 
reason  that  the  legislatures  of  the  respective 
States  have  full  powers  to  enact  just  such 
savings  legislation  as  the  people  need.  What 
possible  ground  is  there  for  calling  on  the 
Federal  Government  to  do  what  the  State 
legislatures  can  do  equally  well  or  better? 
You  have  shown  here  in  New  Hampshire, 
and  throughout  New  England,  that  you  do 
not  need  the  help  of  the  Federal  Government 
in  taking  care  of  the  people’s  savings.  If 
the  mutual  savings  banks  are  not  adapted 
to  conditions  as  they  exist  in  the  South  and 
West,  any  other  system  could  have  been 
adopted,  as  has  been  done  in  Michigan  and 
elsewhere. 

If  the  Government  made  a mistake  in 
issuing  two  per  cent,  bonds,  the  proper 
remedy  would  have  been  to  refund  the  bonds 
at  a rate  attractive  to  investors. 

To  a considerable  extent  the  postal  savings 
bank  will  draw  money  away  from  the  lo- 
calities where  it  is  most  needed,  and  will 
thus  work  an  injury  to  the  people  whom  it 
is  intended  to  serve. 

Reduced  to  its  lowest  terms,  the  postal 
savings  bank  is  a roundabout  means  of  in- 
suring savings  deposits.  And  seeing  that 


tjie  Government  will  pay  but  two  per  cent, 
interest  on  these  deposits  while  the  ordi- 
nary savings  banks  are  paying  an  average  of 
about  four  per  cent.,  the  cost  of  this  in- 
surance to  the  depositor  is  exorbitant. 

I happen  to  know  that  influential  members 
of  Congress  were  led  to  vote  for  the  pos- 
tal savings  bank  bill  because  they  feared 
to  offend  the  President.  Such  a situation  is 
to  be  deplored. 

And  it  is  not  the  demagogue  from  whom 
most  is  to  be  feared  in  this  respect.  The 
American  people  seem  capable  of  taking 
a demagogue’s  measure  and  keeping  him 
out  of  the  highest  office  in  the  land.  It  is 
the  popular  hero,  obsessed  with  an  idea  of 
his  divinely-appointed  mission  or  the  in- 
fallibility of  his  wisdom,  that  is  the  most 
dangerous.  The  member  of  Congress  trem- 
bles and  abdicates  his  authority  before  the 
popular  idol  of  the  hour.  He  prefers  to 
sacrifice  his  judgment,  to  stifle  his  con- 
science, rather  than  to  vote  against  a legis- 
lative hobby  of  a President  who  may  be  so 
firmly  entrenched  in  public  estimation  as 
to  be  deemed  incapable  of  making  mistakes. 
We  need  legislators  who  have  the  courage 
of  their  convictions.  We  need,  and  we 
badly  need,  some  prompt  and  efficient  means 
of  applying  to  our  legislative  problems  a 
higher  degree  of  intelligence,  so  that  our 
laws  may  fairly  represent  the  progress  we 
have  made  in  education,  commerce,  indus- 
try, science  and  invention.  In  nearly  every- 
thing that  constitutes  material  and  moral 
greatness  we  are  well  abreast  of  the  world. 
But  no  one  would  guess  it  by  studying 
much  of  our  recent  legislation. 

While  the  shores  of  New  York  are  even 
yet  echoing  with  the  welcome  to  our  fore- 
most citizen,  I should  be  the  last  to  raise 
a discordant  note.  Every  American  worthy 
the  name  glories  in  the  character  and 
achievements  of  Theodore  Roosevelt.  It  was 
said  of  a Roman  Emperor  that  he  found 
Rome  of  brick  and  left  it  marble.  It  may 
be  said  of  Theodore  Roosevelt  that  he  /ound 
the  American  people  so  deeply  engrossed 
in  the  pursuit  of  wealth  that  they  had  lost 
sight  of  many  of  the  higher  principles  of 
life.  He  aroused  the  national  conscience, 
rebuked  iniquity  in  high  places,  and  set  in 
motion  a wave  of  moral  reform  whose 
cleansing  und  refreshing  tides  have  sent  a 
new  glow  of  health  throughout  the  life  of 
the  nation.  He  stirred  us  from  the  moral 
lethargy  into  which  we  had  been  sunk  by 
sordid  aims  and  awoke  us  to  our  better 
selves.  To  have  done  so  mighty  a work  ns  this 
for  an  entire  nation  is  honor  enough  for 
any  man.  But  his  influence  did  not  stop 
there.  It  circled  the  earth,  made  his  name 
famous  the  world  round  and  increased  the 
glory  and  honor  of  American  citizenship. 

Nor  would  I have  you  believe  that  I am 
lacking  in  respect  for  the  Presidential  office 
or  for  the  present  distinguished  occupant 
thereof.  In  courage,  patriotism,  adminis- 


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215 


trative  ability,  and  all  that  goes  to  make 
a great,  manly,  brave  American  President, 
William  II.  Taft  is  worthy  of  our  respect, 
our  confidence  and  our  love. 

I wish  especially  to  disclaim  any  intention 
of  personally  criticising  him  or  his  prede- 
cessor. I have  simply  endeavored  to  point 
out  that  executive  insistence  on  a legislative 
programme  is  something  apparently  not 
contemplated  by  the  Constitution,  and  that 
it  is  a policy  fraught  with  the  gravest  perils 
— not  confined  to  national  affairs  alone,  but 
that  a similar  condition  is  developing  with 
relation  to  the  State  executives  and  the 
State  legislatures. 

Self-Reliance  Needed. 

Most  of  our  wrongs  are  to  be  redressed 
by  our  own  vigorous  individual  insistence 
on  our  rights.  The  courts  can  attend  to 
nearly  every  grievance  without  the  enact- 
ment of  a single  new  statute.  Where  legis- 
lation is  needed,  trust  to  your  legislature, 
and  call  upon  Congress  only  as  a last  re- 
sort. 

Unwise  legislation  can  be  prevented  only 
by  electing  the  wisest  and  best  men  to 
office,  and  by  educating  the  people  so  that 
they  will  think  and  act  temperately  and 
justly  on  all  public  questions. 

Our  currency  and  banking  legislation 
affords  a striking  example  of  the  perils  of 
unsound  law  making.  It  does  not  fairly 
represent  the  progressive  spirit  of  the 
American  people.  We  are  clinging  to  su- 
perstitions that  other  less  advanced  nations 
have  long  since  discarded.  We  shall  learn 
some  time,  it  is  hoped,  that  bonds  are  not 
a suitable  or  necessary  foundation  for  cur- 
rency, that  silver,  greenbacks  and  bank 
notes  should  not  be  used  as  a basis  for 
bank  credits,  and  that  only  great  and  strong 
banks,  adequately  equipped  and  managed, 
are  fitted  to  act  as  reserve  agents. 

We  have  already  learned  something  about 
the  tariff.  We  know  at  last  that  when  the 
duty  on  beeswax  or  pins  requires  adjust- 
ment, it  is  not  absolutely  essential  to  halt 
the  entire  business  activity  of  the  country 
on  that  account.  In  the  light  of  intelligent 
and  careful  investigation  such  changes  may 
be  made,  annually  if  needed,  as  will  oc- 
casion the  least  possible  disturbance  of  the 
country’s  industry  and  trade. 

As  hankers  you  possess  the  confidence  of 
your  depositors  and  are  therefore  in  a posi- 
tion to  do  much  in  inculcating  sound  prin- 
ciples among  the  voters.  The  people  are 
coming  into  political  power,  and  the  reign 
of  the  boss  is  passing.  Those  of  us  who 
have  faith  in  republican  institutions  must 
believe  that  the  people  when  thoroughly  in- 
formed and  with  time  for  unprejudiced 
deliberation  will  decide  aright  every  question 
submitted  to  them.  He  who  has  not  faith 
in  the  people  lacks  faith  in  American  in- 
stitutions. I^t  us  not  be  dismayed  by  the 
signs  of  agitation  and  unrest  which  are  but 


manifestations  of  the  law*  of  progress  and 
of  life.  A nation  of  nearly  one  hundred 
million  people,  free,  intelligent,  prosperous 
and  happy,  is  an  inspiring  spectacle.  We 
who  are  fortunate  enough  to  live  in  this 
land  and  among  this  people  have  reason  to 
rejoice  and  give  thanks. 


And  now  my  talk  is  ended.  I thank  you 
for  the  courtesy  and  patience  with  which 
you  have  listened  to  my  too  critical  and 
ungracious  remarks.  Before  I sit  down  I 
would  trespass  a moment  longer  on  your 
patience.  We  are  here  to-night  on  a spot 
made  memorable  in  the  world’s  history  by 
the  Treaty  of  Portsmouth  which  ended  the 
war  between  Japan  and  Russia.  These 
are  times  when,  on  account  of  the  growing 
burden  of  naval  and  army  expenditures, 
practical  statesmen  are  discussing  means  of 
reducing  appropriations  for  purposes  of 
war.  It  can  not  be  expected  that  we  as 
a nation  will  ever  be  content  to  occupy  a 
place  with  the  weaklings.  So  long  as  other 
nations  keep  on  increasing  their  armaments 
we  shall  maintain  our  standing  as  a naval 
and  military  power,  whatever  the  cost  may 
be.  Yet  this  race  for  supremacy  is  costly 
and  unwise,  and  must  come  to  an  end  some 
time.  Perhaps  force  may  never  be  dis- 
pensed with  as  a last  resort  in  settling  con- 
troversies, but  if  a properly-constituted  in- 
ternational court  were  established  by  the 
leading  civilized  nations,  the  employment  of 
force  might  be  limited  to  carrying  out  its 
decrees.  The  efforts  being  made  along  this 
line  by  the  statesmen  of  this  and  other 
countries  seem  practicable  and  worthy  of 
support.  Contenting  ourselves  for  the  pres- 
ent with  attainable  progress,  we  may  yet 
indulge  the  hope  of  a time,  perhaps  far 
distant,  when  the  “peace  of  justice”  will 
reign  universally. 


PRACTICAL  BANKING  CONTRI- 
BUTIONS WANTED 

HELPFUL  articles  relating  to  the  every- 
day work  of  banks,  savings  banks 
and  trust  companies  are  desired  for  publi- 
cation in  The  Bankers  Maoazine. 

Short,  bright  paragraphs,  telling  in  a clear 
and  interesting  way  of  some  of  the  methods, 
systems  and  ideas  employed  in  the  most 
progressive  banks  of  the  country,  will  be 
especially  welcome. 

Contributions  accepted  by  the  editor  will 
be  paid  for  on  publication. 


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SAFE  DEPOSIT 


HUMAN  NATURE  AS  SEEN  IN  A SAFE  DEPOSIT 

VAULT 

SOME  ODD  CHARACTERS  AMONG  THE  BOX  RENTERS 


OU’D  be  surprised,”  said  the  officer 
i in  charge  of  the  safe  deposit  vaults 

connected  with  one  of  New  York’s 
largest  banking  institutions  to  a reporter 
for  the  New  York  “Times,”  “at  the  oppor- 
tunity I have  to  study  human  nature  and 
certain  phases  of  character  among  our  pa- 
trons who  rent  boxes.  There  is  no  mistake; 
it  is  one  of  the  finest  places  for  this  sort 
of  study,  as  the  environment  of  heavy  doors, 
steel  bars,  time  locks  and  all  that,  a room 
where  the  individual  keeps  those  valuables 
he  or  she  prizes  most — bonds,  stock,  jewel- 
ry, and  often  cash — brings  out  some  things 
in  their  make-up  that  under  ordinary  cir- 
cumstances would  rarely  come  to  the  sur- 
face. 

“In  these  vaults  we  have  nearly  1,000 
boxes,  and  never  during  all  my  experience — 
I’ve  been  here  some  years,  too — have  I 
known  two  persons  who  are  exactly  alike 
as  regards  the  manner  in  which  they  act 
when  visiting  their  boxes,  either  for  the 
purpose  of  putting  in  valuables,  taking  some 
out,  or  just  come  for  the  fun  of  looking 
over  what  they  have  stored  away. 

“Why,  some  of  them  get  so  nervous  when 
they  enter  the  big  vault  that  they  can  hard- 
ly place  the  key  in  the  lock  of  their  box, 
and  remain  nervous,  too,  until  they  see  their 
valuables  are  intact.  Others  when  re- 
turning their  box  to  its  space  will  pull  it 
out  several  times  before  locking  it  as  if 
greatly  regretting  the  temporary  parting 
with  their  possessions.  Some  will  take  their 
box  and  tip-toe  to  and  from  the  booth  as 
if  they  thought  some  one  on  the  street  might 
know  they  were  there,  and  actually  had 
something  of  worth  and  necessitating  the 
use  of  a strong  box. 

“During  the  panic  of  1907,”  he  continued, 
“a  man  prominent  in  the  New  York  busi- 
ness world — you’d  know  him,  too,  if  I were 
to  mention  his  name — came  here  and  rented 
a box.  Unquestionably  he  had  others  else- 
where, but  he  took  one  here  just  the  same, 
and  among  the  things  he  put  in  it  was  a 
package  of  new-crisp  bank  bills — there  was 
probably  $30,000. 

“I  don’t  know — nor  care,  for  that  mat- 
ter— what  people  place  in  their  boxes.  It’s 
not  my  business  to  know;  but  this  particu- 
lar man  did  not  hesitate  to  let  me  under- 
stand just  what  was  in  his.  In  fact,  I 
rather  think  he  wanted  me  to  know  that  he 
had  money  in  it,  for  it  subsequently  de- 
veloped that  he  felt  there  would  come  a 

216 


time  during  the  panic  when  ready  cash 
would  be  mighty  hard  to  get  and  he  was 
taking  time  by  the  forelock,  as  it  were. 

“Well,  lie  would  come  in  very  often — 
about  once  a week — get  out  his  box  and 
place  it  before  him  on  my  desk  instead  of 
going  to  one  of  the  booths  as  most  people 
do. 

“Then  he’d  take  out  the  bills  and  count 
them  over  a couple  of  times,  a smile  on 
his  face  during  all  of  the  procedure.  When 
finished,  he  would  return  the  box  to  its 
little  space,  but  before  actually  locking 
the  door  would  pull  out  the  box  about  three 
times,  lift  the  lid,  gaze  fondly  at  the  stack 
of  bills,  and  then  gently,  even  lovingly,  pet 
them. 

“Can  you  beat  that?  Pet  them!  He  was 
absolutely  oblivions  of  my  presence,  it 
seemed.  Even  after  he  had  locked  the  box 
and  was  going  through  the  big  door  he 
would  look  over  his  shoulder  toward  the 
location  of  his  possessions. 

“No,  indeed,  he  wasn’t  the  only  one  who 
resorted  to  a deposit  box  in  those  days. 
In  fact,  during  the  three  months  from  No- 
vember, 1907,  to  the  end  of  January,  1908, 
I reckon  I rented  over  fifty  boxes  to  dif- 
ferent people,  and  I’m  morally  certain  that 
most  of  them  were  used  to  hold  cash.  The 
majority  of  those  fifty  gave  up  their  boxes 
after  the  trouble  was  all  over — that  is  what 
caused  me  to  have  that  opinion. 

“Yes,  I suppose  those  little  things  in 
tliere,”  he  added,  pointing  to  row  upon  row 
of  shining  brass  boxes,  “contain  many  mil- 
lions of  securities,  and  I shouldn’t  be  sur- 
prised if  they  held  a number  of  joys  and 
sorrows,  too,  for  that  matter,  of  which  the 
world  may  never  know. 

“One  of  our  customers  rents  a box,  in 
which  he  keeps  just  one  thing.  It  is  a 
daguerreotype  of  his  mother. 

“He  conies  in  here  pretty  regularly,  takes 
out  his  box,  sits  over  yonder  in  that  chair 
and  just  looks  at  that  picture.  He  is  a 
man  about  my  own  age,  and  I didn’t  think 
he'd  feel  offended,  so,  at  his  third  visit,  I 
said  to  him:  ‘That  looks  like  an  old-fashioned 
daguerreotype — the  kind  we  used  to  have 
when  I was  a boy.’ 

“ ‘It  is,’  he  responded,  ‘a  picture  of  my 
mother — she’s  dead  now.  Would  you  like  to 
see  it  r* 

“He  handed  it  to  me.  It  was  the  pic- 
ture of  one  of  the  sweetest  and  quaintest 


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SAFE  DEPOSIT 


217 


Daily  newspaper  ads.  from  the  South  Texas  National  Bank  of  Houston.  Very  effective 


looking  women  I have  ever  seen,  and  dressed 
in  the  style  of  half  a century  ago. 

“The  man  seemed  pleased  to  think  that 
I wanted  to  look  at  it,  and  even  now,  at 
each  visit  he  makes,  and  after  he  has  silently 
gazed  at  it  for  some  minutes — often  I fancy 
1 see  tears  in  his  eyes — he  hands  it  over  to  me 
without  saying  a word.  ‘Finished?’  he  asks 
a few  moments  later,  and  then  takes  it 
gently  in  his  hand,  places  it  in  his  tin  box, 
locks  it  and  departs.  No,  I don't  know  any- 
thing about  the  man  personally,  but  the 
touch  of  sentiment  is  the  prettiest  I have 
known. 

“Certain  evidences  of  economy  on  the  part 
of  wealthy  men  who  rent  boxes  might  sur- 
prise you,  too.  Why,  I’ve  known  some  to 
rent  a five-dollar  box,  then  change  to  a ten, 
then  to  a fifteen,  and  as  they  disposed  of 
their  securities  go  back  to  a ten  or  a five, 
just  to  save  the  few  dollars. 

“This  by  men  of  wealth,  mind  you. 
And,  furthermore.  I’ve  seen  some  of  them 
fuss  for  a long  time  sorting  and  resorting 
their  papers  and  securities  so  they  would 
not  have  to  get  a larger  box. 

“I  suppose  this  is  real  economy,  but  it 
appears  strange  to  think  that  men  who 
handle  hundreds  of  thousands  a year  would 
do  that  sort  of  thing.  It’s  another  phase 
of  character,  though,  I suppose. 

“Oh,  yes,  wc  have  a good  many  women 
who  rent  boxes,  and  we  like  to  have  them, 
too,  although  we  are  a bit  more  particular 
as  to  their  references,  for  the  simple  reason 
the  gentler  sex  as  a rule  is  controlled  by 
emotions,  and  it  is  hard  sometimes  to  make 
them  understand  or  appreciate  conditions. 
We  had  a fair  example  of  that  here  not 
so  very  long  ago.  I’ll  tell  you  about  it. 

“Down  in  Vesey  street  there  is  a Jewish 
woman  by  the  name  of — well,  never  mind 
her  name.  It’s  enough  to  know  that  she 
had  made  a big  fortune  in  the  sale  of  celery. 

“No,  you  wouldn’t  think,  to  look  at  her, 
that  she  had  a lot  of  money  and  diamonds, 


but  she  has,  just  the  same.  She  came  here 
well  recommended  and  rented  a box.  Among 
the  things  she  put  in  it  was  a number  of 
diamonds,  and  she  told  me  at  the  time  they 
were  to  go  to  her  niece  when  she  became 
of  age. 

“Some  weeks  later  she  came  in  again  and 
wanted  to  look  at  the  box.  I put  in  my 
pass  key,  which  as  you  know  only  half 
opens  the  lock  and  necessitates  the  box 
owner  finishing  the  turn  with  his  or  her 
own  key.  She  put  in  her.  key,  turned  it 
around,  pulled  out  the  box,  lifted  the  lid 
and  uttered  a scream. 

“‘The  diamonds  are  gone!*  she  cried. 

“ ‘Gone  f I repeated.  ‘Why,  that  can’t  be ! 
No  one  has  been  in  the  box  but  yourself — 
no  one  could  get  in!* 

“ ‘But  they  are  not  there,*  she  wailed, 
‘and  my  nephew  Davy  saw  me  put  them 
in — Davy  saw  me!’ 

“She  was  getting  more  excited  every  min- 
ute, so  I told  her  to  lock  the  box  and  send 
for  Davy.  Then  I reported  the  matter  to 
the  president. 

“We  waited  for  Davy.  He  came  along 
after  a while  and  the  box  was  reopened. 
Davy  put  his  hand  in  it  and  drew  out  the 
diamonds. 

“The  celery  woman  made  a motion  to  hug 
me,  but  I dodged.  She  hadn’t  seen  the  dia- 
monds the  moment  she  opened  the  box  first 
and  jumped  at  the  conclusion  they  were 
gone.  It  was  a fair  example  of  the  emo- 
tional makeup  of  some  women.” 

“By  the  way,”  asked  the  reporter,  “how 
can  you  tell  that  the  individual  who  comes 
in  here,  say  once  a year,  and  has  forgotten 
his  box  number,  but  has  his  key,  is  entitled 
to  enter  the  box  the  key  calls  for?” 

“That’s  where  bur  character  study  comes 
in,”  was  the  answer.  “If  the  man  comes 
here  but  once  a year  I may  possibly  have 
forgotten  his  name,  of  course,  and  people, 
as  a rule,  do  not  like  to  be  forgotten. 


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THE  BANKERS  MAGAZINE 


“Oh,  yes,  I can  generally  get  him  to  talk, 
and  if  he  hasn't  told  me  his  name  I generally 
get  it  before  putting  my  pass  key  in  the 
lock,  and  I get  it  in  such  a way  as  not  to 
offend  the  man  or  woman,  as  the  case  may 
be.  Of  course,  if  I am  still  in  doubt  we 
carry  the  signature  of  every  boxholder,  and 
I could  call  upon  the  man  or  woman  to 
write  his  name  and  make  the  comparison, 
but  as  yet  I have  never  had  to  resort  to  this. 

“No,  you  who  are  out  in  the  bustle  and 
hustle  of  the  street  each  and  every  day 
might  not  think  this  is  interesting  work, 
but  it  is,  just  the  same,  and  when  I said 
it  is  a great  place  to  study  the  unusual 
characteristics  of  some  people  I meant  just 
what  I said.  I've  only  given  you  a few  ex- 
amples of  them — there  are  many  more.” 


PROGRAM  OF  THE  LOS  ANGELES 
CONVENTION  OF  THE  AMERICAN 
BANKERS’  ASSOCIATION 

THE  interest  manifested  in  the  thirty- 
sixth  annual  convention  of  the  Amer- 
ican Bankers’  Association  which  will 
be  held  in  the  city  of  Los  Angeles  the  week 
of  October  3,  1910,  has  been  phenomenal. 
Even  six  months  ago  arrangements  for 
special  trains  were  consummated  by  differ- 
ent State  Bankers’  Associations,  which  are 
scheduled  to  start  from  New  York,  Phila- 
delphia, Chicago,  Cincinnati,  New  Orleans 
and  St.  Louis.  Reports  indicate  that  they 
will  carry  a larger  number  of  people  than 
ever  before  carried  in  a body  to  these  na- 
tional conventions. 

The  local  committees  of  bankers  at  Los 
Angeles  have  been  working  on  plans  for  the 
entertainment  and  other  convention  features 
for  several  months.  The  program  as  out- 
lined by  the  local  committee  was  submitted 
to  the  executive  officers  of  the  American 
Bankers’  Association  at  a meeting  just 
held  in  New  York.  Those  present  at  this 
meeting  were  President  L.  E.  Pierson  of 
New  York;  vice-president  F.  O.  Watts  of 
Nashville;  chairman  Win.  Livingstone  of 


Detroit  and  general  secretary  F.  E.  Farns- 
worth of  New  York. 

The  program  as  outlined  and  adopted  is 
as  follows: 

Business  Sessions. 

Monday,  October  3,  committee  and  council 
meetings;  Tuesday,  October  4,  first  day's 
sessions  of  convention  proper;  Wednesday, 
October  .5,  trust  company  section  meeting 
and  meeting  organization  of  secretaries; 
Thursday,  October  6,  savings  bank  section 
and  clearing-house  section  meetings;  Fri- 
day, October  7,  second  day’s  session  of  con- 
vention proper;  Friday  evening,  October  7, 
first  meeting  of  the  new  council  for  organi- 
zation purposes. 

The  four  sessions  of  the  convention 
proper  will  be  held  in  the  Auditorium  Thea- 
tre; the  morning  sessions  commencing  at 
ten  o’clock  sharp,  adjourning  at  one  o’clock 
for  luncheon;  the  afternoon  sessions  com- 
mencing at  two  o'clock. 

. The  Auditorium  which  is  called  “The 
Theatre  Beautiful’’  is  within  three  blocks  of 
most  of  the  hotels,  and  is  especially  adapted 
for  convention  purposes. 

Entertainment. 

Monday  evening,  October  3,  annual  council 
dinner,  tendered  by  the  bankers  of  Los  An- 
geles, at  the  Hotel  Alexandria:  entertain- 
ment for  the  ladies  of  the  members  of  the 
council;  Tuesday  evening,  October  4,  grand 
reception  and  bail  at  the  Shrine  Auditorium, 
(this  building  is  one  of  the  finest  of  the 
kind  in  the  United  States,  and  can  accom- 
modate any  number  of  people  in  a most 
comfortable  manner) ; Wednesday,  October 
5,  trip  to  Catalina  Island  where  a barbecue 
will  be  given;  automobile  ride  to  Pasadena; 
Wednesday  evening,  October  5,  theatre; 
Thursday,  October  6,  trip  to  Catalina  Island 
where  a barbecue  will  be  given;  automobile 
ride  to  Pasadena;  Thursday  evening,  Octo- 
ber 6,  theatre. 

The  arrangements  for  Wednesday  and 
Thursday  are  identical  and  are  so  made 
that  the  large  number  of  people  can  be 
better  provided  for,  and  that  the  entertain- 
ment will  not  interfere  with  the  section 
meetings. 


DATES  OF  COMING  CONVENTIONS 


Association.  Date  Place  Secretary 

A.  B.  A Oct.  3-  7 Los  Angeles F.  E.  Farnsworth 

Arizona  Nov.  11-12 Phoenix  

Kentucky  Sept.  12-43 Louisville  A.  B.  Davis 

Wisconsin  Aug..  17-18 La  Crosse Geo.D.  Bartlett 

Pennsylvania  ....Sept.  6-  7 Bedford  Springs D.  S.  Kloss 

Indiana  Sept.  14-15 Evansville  Andrew  Smith 

Colorado  Sept.  27-29 Grand  Junction G.  L.  V.  Emerson 

Illinois  Oct.  26-27 Cairo  R.  L.  Crampton 


New  York 


. .Milwaukee 

Tyrone 

Indianapolis 
. ..  .Silverton 
Chicago- 


Digitized  by  L^oooLe 


LATIN  AMERICA 


DOMESTIC  CORPORATIONS  IN  MEXICO,  THEIR 
ORGANIZATION,  RIGHTS  AND  DUTIES 

By  M.  Cervantes  Rendon,  Assistant  Consulting  Attorney  for  the  Foreign  Office 

INTRODUCTION.  of  books,  and  editorial  and  printing:  houses. 


E Mexican  law  recognizes  as  Moral 
Persons:  (1)  The  nation,  the  states 

and  the  municipalities.  (2)  Such  asso- 
ciations or  corporations,  whether  temporary 
or  perpetual,  as  are  founded  for  the-  purpose  of 
public  utility,  or  whose  motive  is  such,  or 
public  and  private  utility  jointly.  (3)  Civil 
and  mercantile  companies,  viz.:  partnerships 
and  corporations,  formed  according:  to  law. 

The  moral  or  legal  personality  attributed 
by  law  to  the  above-mentioned  associations, 
corporations  or  establishments  produces  two 
effects:  (1)  It  invests  them  with  a legal 
entity,  that  is,  it  gives  them  a legal  and 
separate  existence,  distinct  and  Independent 
from  each  one  of  the  members  composing 
same.  (2)  It  confers  upon  them  legal  ca- 
pacity for  the  exercise  of  all  rights  inherent 
to  their  object. 

We  may  divide  the  moral  persons,  above 
enumerated,  into  two  principal  groups:  (1) 

Public  corporations,  which  include  the  na- 
tion, the  states,  municipalities,  and  corpora- 
tions which  are  founded  with  a view  to  pub- 
lic utility,  such  as  hospitals,  etc.  These  are 
governed  by  the  constitution  of  the  republic, 
and  the  respective  organic  laws  emanating 
therefrom;  by  the  state  constitutions  and 
organic  laws,  by  municipal  bills  and,  in  gen- 
eral, by  the  body  of  laws  which  constitute 
the  constitutional  and  administrative  law  of 
the  republic.  (2)  Private  corporations.  In- 
cluding: (a)  foundations  and  associations 

established  by  private  persons  for  scientific, 
artistic,  religious,  humanitarian,  literary  or 
similar  purposes,  and.  In  general,  those  not 
having  In  view  the  gaining  of  profit,  (b)  civil 
and  mercantile  associations  intended  for 
profit 

CIVIL  AND  MERCANTILE  PARTNER- 
SHIPS AND  CORPORATIONS. 

Mercantile  partnerships  and  corporations 
are  governed  by  the  prescriptions  of  the 
commercial  code,  a general  law  enacted  by 
the  federal  congress,  and  in  force  through- 
out the  republic,  the  states  not  being  per- 
mitted to  legislate  in  commercial  matters. 
The  companies  referred  to  are  those  which 
engage  in  business  classed  by  law  as  “com- 
mercial transactions/* 

COMMERCIAL  TRANSACTIONS. 

The  law  considers  as  commercial  transac- 
tions: (1)  All  acquisitions,  transfers  and 

bailments  made  with  the  object  of  commer- 
cial speculation,  of  commodities,  chattels, 
movables  or  merchandise  of  any  kind, 
whether  in  their  natural  state,  or  after  be- 
ing manufactured  or  partly  wrought.  (2) 
The  purchase  and  sale  of  real  estate,  when 
made  with  th£  object  of  commercial  specula- 
tion. (3)  The  purchase  and  sale  of  an  inter- 
est in  and  of  the  shares  and  bonds  of  com- 
mercial companies.  (4)  Contracts  relating 
to  the  obligations  of  a state,  or  other  securi- 
ties customary  in  trade.  (5)  Concerns  hav- 
ing for  their  object  the  trading  in  provisions 
and  other  supplies.  (6)  Concerns  for  con- 
tracting public  and  private  works.  (7) 
Building  and  manufacturing  concerns.  <M 
Transportation  of  persons  or  goods  by  land 

or  water.  (9)  Establishments  for  the  sale 


(10)  Concerns  for  commission  and  agency 
business,  mercantile  commission  and  agency 
and  establishments  for  conducting  public 
vendues.  (11)  Enterprises  for  public  amuse- 
ments. (12)  Banking  operations.  (13)  Con- 
tracts relating  to  maritime  commerce  and 
navigation.  (14)  Insurance  contracts  of  all 
kinds.  (15)  Commercial  deposits,  warehouse 
deposits  and  the  operations  made  with  their 


M.  Cervantes  Rendon 


certificates.  (16)  Contracts  involving  the  is- 
suing of  checks,  letters  of  credit,  bills  of 
exchange,  drafts,  promissory  notes  and  other 
negotiable  instruments.  (17)  All  obligations 
of  merchants  and  those  between  merchants 
and  bankers,  unless  they  are  shown  to  be  of 
an  essentially  civil  nature.  (IS)  Sales  by 
farmers  of  their  products.  (19)  Mining  en- 
terprises. (20)  Other  analogous  acts. 

When  the  nature  of  these  acts  Is  in  doubt, 
it  will  be  fixed  by  the  courts. 

KINDS  OF  COMMERCIAL  COMPANIES. 

The  law'  recognizes  five  kinds  of  commer- 
cial companies:  (1)  Ordinary  partnerships. 

219 


Digitized  by  t^ooole 


220 


THE  BANKERS  MAGAZINE 


®lf*  Mexiran 
ifltttanmr 

Only  Weekly  FinencUl  Journal 
Published  in  Mexico 

COMPLETE  QUOTATIONS  OF  ALL 
BANK,  INDUSTRIAL  AND  MINING 
STOCKS 

READING  MATTER  OF  VITAL  INTEREST 
TO  ALL  INVESTORS  IN  MEXICO 

$5.00  U • 5.  Currency  per  Annum,  post - 
Age  peid 

JOHN  R.  SOUTHWORTH.  F.  R.  G.  S. 
Managing  Director 

CALLE  DEL  EL1SEO  . MEXICO.  D.  F. 
Cable  Addna,  Cel-South.  P.O.  Bos  1172. 
Mexico  City 


viz.,  unlimited  liability.  (2)  Partnerships 
having  one  or  more  dormant  partners.  (3) 
Limited  companies  or  corporations.  (4) 
Joint  stock  companies.  (5)  Co-operative 
societies. 

MERCANTILE  ASSOCIATIONS. 

These  are,  according  to  the  commercial 
code,  associations  for  mercantile  transac- 
tions, formed  without  any  special  legal  for- 
mality, either  for  a special  transaction  or  for 
various  ones  for  a limited  time.  These  asso- 
ciations are  unusual. 

COMPANIES  UNDER  THE  CIVIL  LAW. 

These  companies  or  partnerships  are  such 
as  are  formed  under  and  subject  to  the  civil 
codes  of  the  various  states,  for  the  purpose 
of  gain  and  which  do  not  fall  within  the  de- 
finition of  commercial  companies. 

There  are  three  categories  of  these,  'viz.: 
(1)  General,  including  all  property  of  which 
the  partners  are  possessed.  (2)  General 
partnerships  limited  to  all  profits  derived. 
(3)  Special,  or,  those  referring  to  such  prop- 
erty as  may  be  mentioned  as  forming  the 
object  of  the  association,  to  its  fruits  or 
production,  or  to  exercise  of  a stated  indus- 
try or  profession. 

These  companies  may  be  organized  under 
the  provisions  of  the  commercial  code,  with- 
out losing  their  character  as  civil  societies. 

In  this  article  we  shall  only  refer  to  cor- 
porations formed  with  commercial  end  in 
view. 

Domestic  Corporations. 

WHO  MAY  ORGANIZE  A CORPORATION. 

The  organizers  of  a corporation  must  be 
individuals  of  full  age,  in  possession  of  all 
their  civil  rights.  Persons  under  parental 
control,  guardianship  or  disability  by  mar- 
riage. cannot  organize  a corporation,  with 
the  following  exceptions:  Minors  under  21 

but  over  18  years  of  age,  legally  emancipated 
or  licensed  by  the  court,  or  legally  author- 
ized by  their  parents  or  guardians.  Married 
women,  over  18,  duly  authorized  by  their 
husbands,  in  a public  document  (declaration 


before  a notary  public).  This  authorization 
may  be  special  or  general  and  is  subject  to 
be  revoked  by  the  husband  at  pleasure.  This 
authorization  is  not  required  in  case  of  legal 
separation,  declared  absence,  interdiction  or 
privation  of  civil  rights  of  the  husband. 

FORM  OF  ORGANIZATION. 

The  law  recognizes  two  ways  of  organ- 
izing a corporation: 

FIRST  FORM  OF  ORGANIZATION. 

Two  or  more  parties  may  appear  before  & 
notary,  either  in  person,  or  by  a duly  con- 
stituted attorney,  and  execute  articles  of  in- 
corporation, which  must  contain  the  follow- 
ing requisites: 

1.  The  names  and  residences  of  the 
parties. 

2.  The  name  of  the  corporation. 

3.  The  domicile  of  the  corporation. 

4.  The  object  for  which  It  is  organized,  its 
duration  and  how  came  it  to  be  computed. 

5.  The  capital  stock,  specifying  the  kind, 
number  and  value  of  the  shares  Into  which 
It  is  divided,  and  the  value  and  amount  sub- 
scribed. 

6.  The  manner  in  which  the  affairs  of  the 
company  are  to  be  directed,  specifying  the 
powers  of  the  director*  or  managers. 

7.  The  amount  and  form  of  dividing  profits 
or  losses. 

9.  The  part  of  the  profits  reserved  to 
founders’  shares  and  how  to  be  received, 

10.  In  what  cases  the  winding-up  of  the 
corporation  is  to  take  place  before  the  time 
fixed  for  its  expiration. 

11.  The  basis  for  the  liquidation  and  how 
the  liquidators  shall  be  chosen,  if  they  have 
not  been  appointed  beforehand. 

12.  The  proof  of  the  value  attributed  to 
the  securities,  goods  or  chattels,  personal  or 
real  property  which  may  have  been  con- 
tributed by  one  or  more  of  the  organizers. 

Explanation  of  Foregoing  Requisites. 

NAME  OF  CORPORATION. 

After  the  name  of  the  corporation  the 
words,  Socledad  Anonima  or  the  abbrevia- 
tion, S.  A.  (equivalent  to  limited)  must  al- 
ways be  added. 

The  name  or  names  of  the  organizers  must 
not  figure  in  the  denomination  of  the  cor- 
poration, else  the  organizer  or  organizers 
whose  name  or  names  so  figure  will  be  held 
personally  and  jointly  liable  for  the  obliga- 
tions of  the  company.  For  example:  Fried- 
man-Shelby  Shoe  Company,  S.  A.  If  Fried- 
man and  Shelby  are  actively  Interested  in 
the  corporation  thus  denominated,  having 
included  their  names  in  the  title  they  are 
personally  and  jointly  responsible  for  the 
liabilities  of  the  corporation. 

The  name  of  the  corporation  must  be  dif- 
ferent from  that  of  any  existing  corporation. 

DOMICILE  OF  THE  CORPORATION. 

The  founders  may  elect  the  domicile  they 
choose,  always  provided  it  be  within  the 


Vera  Cruz  Banking  Company,  Ltd. 

(Cia.  Banquera  Veracruxana,  8.  A.) 
VESA  CRUZ,  MEXICO 

Capital  and  8urplua  - - $550,00040 

A General  Banking  Business  Transacted 
Collections  Promptly  Handled 


Digitized  by  t^ooole 


LATIN  AMERICA 


221 


limits  of  the  republic.  The  domicile  may  be 
changed  by  modifying  the  articles  of  incor- 
poration on  this  point. 

CAPITAL  STOCK. 

The  capital  stock  must  be  divided  into 
shares  of  equal  value. 

The  capital  stock  must  be  subscribed  in  its 
entirety  when  tl\p  company  is  constituted, 
either  by  the  founders  or  others.  At  least 
ten  per  cent,  of  the  cash  capital  must  be  paid 
in.  The  founders  may  stipulate  a time  for 
the  payment  of  this  per  cent,  or  for  first 
assessment  that  may  be  agreed  upon  by 
them.  In  the  case  of  organization  by  public 
subscription,  shares  on  which  assessments 
are  to  be  paid  at  the  periods  they  fall  due 
will  be  considered  as  not  having  been  sub- 
8Cril)6(] 

The  whole  value  or  any  part  of  the  cap- 
ital stock  may  consist  of  goods,  chattels,  real 
or  personal  property,  shares  or  services  con- 
tributed by  one  or  more  of  the  shareholders, 
the  value  of  which  shall  be  represented  by 
non -assessable  or  paid-up  shares. 

The  capital  stock  may  be  Increased  or  de- 
creased as  may  be  stipulated  in  the  articles 
of  incorporation  or  by-laws.  If  they  contain 
no  stipulations  in  this  respect,  a general 
meeting  in  which  three-fourths  of  the  capital 
stock  Is  represented  may  decree  the  increase 
or  decrease  by  a unanimous  vote  of  share- 
holders representing  half  of  the  capital  stock. 
Such  modifications  as  may  be  made  must  be 
reduced  to  a public  instrument,  and  then 
registered  in  the  Register  of  Commerce. 

SHARES. 

The  articles  of  incorporation  must  state 
the  rights,  privileges  and  obligations  of  the 
different  kinds  of  shares  issued.  If  no  stipu- 
lation is  expressed  in  this  respect  all  shares 
shall  have  equal  standing.  The  shares  or 
certificates  for  them  must  be  signed  by  the 
number  of  directors  specified  in  the  by-laws 
and  must  contain  the  following  requisites: 

1.  Name  and  domicile  of  the  company. 

2.  Date  of  incorporation. 

3.  Capital  stock,  number  of  shares  into 
which  it  is  divided  and  the  assessments  paid. 

4.  The  duration  of  the  company. 

5.  The  rights  reserved  to  shares  by  the 
articles  of  incorporation  or  by-laws. 

For  nominative  shares  a register  must  be 
kept.  This  must  contain  the  names  and 
residences  of  the  shareholders  and  the  num- 
ber of  shares  held,  the  calls  paid,  the  trans- 
fers made  with  their  respective  dates  or, 
when  permitted  by  the  by-laws,  the  change 
of  nominative  shares  to  bearer,  with  the  date 
the  change  is  effected. 

The  transfer  of  the  nominative  shares  is 
made  by  means  of  a declaration  to  that  effect 
in  the  register,  signed  by  both  parties  to  the 
contract  or  their  respective  agents  on  the 
date  the  transfer  is  effected,  the  number  of 
shares  deposited  as  guarantee  by  the  admin- 
istrators, directors  and  examiners. 

CLASSES  OF  SHARES. 

The  shares  are  generally  either  to  bearer 
or  nominative.  In  case  of  the  bankruptcy  of 
a corporation,  such  nominative  shareholders 
as  may  not  have  paid  all  their  assessments 
may  be  required  by  the  receiver  to  con- 
tribute to  the  extent  of  their  liability,  If  nec- 
essary by  the  handing  over  of  the  title. 

Shares  are  again  divided  into  payable  or 
assessable,  paid-up  or  non -assessable,  com- 
mon and  preferred. 

PROHIBITION  FOR  CORPORATIONS  TO 
BUY  THEIR  OWN  SHARES. 

Corporations  are  prohibited  from  pur- 
chasing their  own  shares,  except  in  the  fol- 
lowing cases: 

1.  When  fully  paid-up  shares  are  pur- 

4 


lain  Minn 


CHIHUAHUA,  MEXICO 


Capital  15,000,000.00 

Surplus  Fund  - - 1,475,087.12 


Transacts  a General  Line 
of  Banking  Business. 

Drafts  and  Letters  of  Credit  on 
Europe,  United  States  and 
Mexico. 

Collections  on  any  part  of 
Mexico  Given  Prompt  and 
Careful  Attention. 


CORRESPONDENCE  INVITED 

New  York  Correspondent,  NATIONAL  PARK  RANK 


JUAN  A.  CREEL  E.  C.  CUILTY 

G— aral  Manager  Cashier 


Digitized  by  u.ooQle 


Banco  de  Nuevo  Leon 

MONTEREY,  IN.  L.,  MEXICO 

ESTABLISHED  OCT.  1.  1802 

Capital  paid  ip,  $2,000,000  Reserves,  $747,831.00  Deposits,  $2,830,000.0$ 

GENERAL  BANKING  BU8INE88  TRANSACTED 

Principal  Correspondent# : — NEW  YORK,  National  Park  Bank,  National 
Copper  Bank;  LONDON,  Dreedner  Bank.  Credit  Lyonnais;  BERLIN. 

Deutsche  Bank,  Berliner  Handels  Gesellechaft:  PARIS,  Credit  Lyon- 
nais, Comptolr  National  d’Escompte;  HAMBURG,  Deutsche  Bank  Fin- 
ale Hamburg,  Commers  und  Dlsconto  Bank;  MADRID,  Banco  His- 
pano  Americano,  Banco  de  Castilla;  HABANA,  Banco  de  la  Habana. 

RODOLFO  J.  GARCIA.  Manager 

ARTURO  MANRIQUE,  Accountant  AMADOR  PAZ,  Cashier 


chased  with  the  authorization  of  a general 
meeting  and  with  profits  belonging  to  the  re- 
serve fund. 

2.  When  the  purchase  is  made  by  virtue 
of  an  authorization  already  provided  in  the 
by-laws. 

3.  When  the  purchase  is  made  with  the 
capital  of  the  corporation,  complying  with  all 
the  formalities  prescribed  for  the  reduction 
of  the  capital  stock. 

Shares  purchased  in  the  first  mentioned 
case  have  no  representation  at  general  meet- 
ing, and  cannot  be  computed  in  making  up 
the  majorities  referred  to  in  the  by-laws. 
The  titles  of  shares  purchased  in  the  last 
two  mentioned  cases  shall  be  cancelled. 

Purchases  made  in  spite  of  above  prohibi- 
tion are  not  ipse  facto  void  unless  bad  faith 
is  shown  on  tne  part  of  the  vendor,  but  the 
directors  or  managers  responsible  for  them 
will  be  held  liable  for  any  loss  or  damage  re- 
sulting to  the  corporation  thereby,  and  may 
also  be  criminally  accountable. 

Corporations  cannot  make  loans  on  their 
own  shares. 

ADMINISTRATION. 

The  management  of  corporations  is  tem- 
porary and  revokable.  Shareholders  hold- 
ing such  trust  shall  be  considered  as  agents. 

MANAGERS. 

The  management  of  corporations  is  en- 
trusted to  a board  of  directors  and  one  or 
more  managers.  Corporations  may  appoint 
consulting  committees  outside  of  their 
domicile. 

BOARD  OP  DIRECTORS. 

All  members  of  the  board  of  directors 
shall  be  elected  by  a general  meeting  of 
stockholders;  nevertheless,  the  first  time  they 
may  be  named  in  the  articles  of  incorpora- 
tions. They  may  be  re-elected  as  otherwise 
stipulated. 

Vacancies  in  the  board  of  directors  shall 
be  filled  as  prescribed  in  the  by-laws  of  the 
corporation. 

The  position  of  member  of  the  board  of 
directors  is  personal  and  cannot  be  dele- 
gated. 

DEPOSIT  OF  SHARES. 

The  members  of  the  board  of  directors 
must  deposit  with  the  corporation,  during 
their  term  of  office,  a certain  number  of 
shares  as  security  for  the  performance  of 
their  duties.  The  by-laws  shall  designate  in 
all  cases  the  number  of  such  shares. 

POWERS. 

These  should  be  specified  in  the  articles 
of  incorporation.  The  law  gives  the  board 
ample  powers  to  carry  out  any  and  all  con- 
tracts according  to  the  nature  and  object  of 

222 


the  corporation,  unless  restricted  by  the  arti- 
cles of  incorporation  or  by-laws. 

RESPONSIBILITY  OF  THE  DIRECTORS. 

They  cannot  be  made  personally  liable, 
as  to  third  parties  with  reference  to  any 
contract  made  in  the  name  of  the  company. 
To  the  corporation  they  are  responsible  as 
its  agents.  For  any  responsibility  Incurred, 
however,  they  can  only  be  called  to  account 
through  a general  meeting  or  by  the  person 
appointed  for  the  purpose  by  such  meeting; 

MANAGERS. 

The  management  of  the  affairs  of  the  cor- 
poration as  well  as  its  representation  in 
everything  relative  thereto,  shall  be  intrusted 
to  one  or  more  general  managers,  whose  ap- 
pointment, dismissal  and  duties  shall  be  pre- 
scribed in  the  by-laws.  It  is  advisable  to 
especially  confer  upon  them  the  right  to 
represent  the  company  before  the  courts. 

The  responsibility  of  such  agents  is  regu- 
lated by  the  ordinary  principles  of  law. 

CONSULTING  COMMITTEES. 

These  will  have  the  powers  conferred  on 
them  by  the  articles  of  incorporation  or  by- 
laws.  The  law  does  not  require  their  ap- 
pointment. 

Supervision. 

The  supervision  over  the  affairs  of  cor- 
porations shall  be  entrusted  to  one  or  more- 
shareholders,  styled  examiners,  and  who,  be- 
fore entering  upon  the  discharge  of  their 
duties,  must  deposit  the  number  of  shares 
prescribed  by  the  by-laws. 

The  examiners  shall  be  named  in  a gen- 
eral meeting;  nevertheless,  the  first  time 
they  may  be  designated  in  the  articles  of 
incorporation.  Notwithstanding  any  stipula- 
tion to  the  contrary,  the  examiners  shall  al- 
ways be  eligible  for  re-election  and  their 
trust  revocable. 

The  vacancies  In  the  office  of  examiners 
shall  be  filled  in  the  manner  prescribed  by 
the  by-laws,  but  always  by  election  at  a gen- 
eral meeting. 

POWERS  AND  DUTIES  OF  EXAMINERS. 

The  examiners  have  an  unlimited  right  of 
supervision  over  the  operation  of  the  cor- 
poration. Whenever  they  may  desire,  they 
shall  be  permitted  to  examine  the  books, 
correspondence,  minutes,  and,  in  general,  all 
the  documents  and  papers  of  the  corporation; 
in  consequence,  the  shareholders  cannot  ex- 
ercise these  powers  independently.  The  di- 
rectors shall  deliver  to  them  every  year  the 
general  balance  sheet  for  verification  and  the 
examiner  shall  present  to  the  meeting  the  re- 
sult of  their  labors  with  any  proposals  whichi 


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LATIN  AMERICA 


223 


they  may  deem  fit,  accompanied  by  the  nec- 
essary explanations  and  demonstrations. 

THEIR  RESPONSIBILITY. 

The  responsibility  of  the  examiners  is  reg- 
ulated in  the  same  manner  as  that  of  the 
board  of  directors. 

Meetings* 

A general  meeting  of  shareholders  has  the 
most  ample  power  to  carry  into  effect  and 
ratify  all  the  acts  of  the  corporation.  Such 
meeting,  unless  otherwise  prescribed,  has  the 
right  to  amend  the  by-laws  of  the  corpora- 
tion. 

Meetings  are  ordinary  and  extraordinary. 
ORDINARY  SHAREHOLDERS'  MEETINGS. 

Ordinary  meetings  shall  be  held  annually 
after  the  termination  of  the  corporative  year. 
The  following  matters  shall  be  in  order  at 
the  general  ordinary  meetings: 

1.  To  discuss,  approve,  or  modify  the  gen- 
eral balance  sheet,  after  hearing  the  report 
of  the  examiners. 

2.  To  elect  the  members  of  the  board  of 
directors  that  are  to  serve. 

3.  To  elect  examiners. 

4.  To  determine  the  remuneration  to  be 
paid  to  the  members  of  the  board  of  direc- 
tors and  to  the  examiners,  if  not  prescribed 
in  the  by-laws. 

5.  Any  other  business  Indicated  in  the  call 
for  the  meeting. 

CALLS. 

The  call  for  meetings  shall  be  made  by  the 
board  of  directors  or  the  examiners,  by  pub- 
lishing in  the  official  journal  of  the  state, 
district  or  territory  in  which  the  company 
may  have  its  domicile  an  advertisement  to 
that  effect.  This  notice  must  contain  the 
order  of  the  day. 

- SPECIAL  MEETINGS. 

The  call  for  special  meetings  Is  made  as 
for  the  ordinary  ones,  by  the  board  with  at 
least  one  month’s  notice.  Also  on  the  peti- 
tion of  shareholders  representing  no  less 
than  a third  of  the  special  said  petition  to 
contain  the  points  to  be  discussed  and  voted 
upon. 

QUORUM. 

To  constitute  a quorum  more  than  half  of 
the  capital  stock  must  be  represented.  If 
there  should  be  less,  the  call  will  be  repeated 
and  the  meeting  held  no  matter  what  num- 
ber of  shares  may  be  represented.  Unless 
the  articles  of  incorporation  or  the  by-laws 
provide  otherwise,  the  representation  of 
three-fourths  of  the  capital  stock  and  the 
unanimous  vote  of  shareholders  representing 
half  of  the  capital  stock,  shall  be  necessary 
to  pass  the  following  resolutions:  m 

1.  Dissolution  of  the  corporation  before 
the  time  prescribed,  except  in  case  of  the 
loss  of  half  of  the  capital  stock. 

2.  To  extend  its  duration. 

3.  To  consolidate  with  other  corporations. 

4.  To  reduce  its  capital  stock. 

5.  To  increase  its  capital  stock. 

To  change  the  object  of  the  corporation. 

7.  Any  other  modification  of  the  articles 
of  incorporation  or  of  the  by-laws. 

MINUTES. 

The  minutes  of  the  general  meetings  shall 
be  recovered  in  duplicate  and  to  one  of  the 
copies  a list  of  shareholders  present  with 
the  number  of  shares  and  votes  represented 
by  each,  shall  be  attached. 

MINUTE  BOOKS. 

In  the  minute  books,  which  each  company 
shall  keep,  treating  of  general  meetings,  shall 


be  expressed:  the  respective  date,  those  pres- 
ent, the  number  of  shares  which  each  per- 
son represents,  the  number  of  votes  which  he 
may  make  use  of,  the  resolutions  which  may 
be  passed  which  must  be  recorded  to  the 
latter;  and  wThen  the  voting  is  not  by  ayes 
and  nays,  the  votes  cast,  care  being  taken 
to  record  everything  which  may  conduce  to 
a complete  knowledge  of  what  was  resolved. 

When  the  minutes  refer  to  directors’  meet- 
ings there  shall  be  entered:  the  date,  the 
names  of  those  present  and  an  account  of 
the  resolutions  passed.  These  shall  be  signed 
by  the  persons  designated  in  the  by-laws. 

VOTES. 

The  number  of  votes  to  which  sharehold- 
ers are  entitled,  as  well  as  the  manner  of 
computing  them,  shall  be  determined  by  the 
by-laws.  The  resolutions  adopted  at  general 
meetings  must  be  passed  by  at  least  an  abso- 
lute majority  of  the  votes  of  the  shares  that 
can  be  computed. 

Members  of  the  board  of  directors  cannot 
vote: 

1.  To  approve  the  accounts. 

2.  On  resolutions  that  affect  their  per- 
sonal responsibility. 

GENERAL  RIGHTS  OF  SHAREHOLDERS. 

The  shareholders  cannot  examine  the  books 
and  papers  of  the  company,  that  being  re- 
served to  the  examiners.  At  the  general 
meetings  they  may  be  represented  by  at- 
torney, as  the  by-laws  may  provide.  The 
members  of  the  board  of  directors  cannot 
hold  such  representation. 

DIVIDENDS. 

Corporations  cannot  distribute  to  their 
shareholders  more  profits  than  those  ap- 
pearing in  the  general  balance  sheet  as  hav- 
ing been  obtained  for  their  benefit;  never- 
theless it  may  be  stipulated  in  the  by-laws 
or  articles  of  incorporation  that  the  shares, 
during  a period  not  to  exceed  five  years, 
shall  draw  a rate  of  interest  not  exceeding 
six  per  cent,  per  annum.  In  that  case  the 
amount  of  such  interest  shall  be  considered 
as  forming  part  of  the  expenses  of  the  organ- 
ization. Shareholders  shall  never  be  obliged 
to  return  any  dividends  that  may  have  been 
received. 

RESERVE  FUND. 

From  the  net  profits  of  the  corporation 
there  must  be  set  aside  yearly  a portion, 
which  shall  not  be  less  than  five  per  cent, 
thereof,  to  constitute  the  reserve  fund,  until 
it  aggregates  at  least  one-fifth  of  the  capital 
stock. 

The  reserve  fund  must  be  re-formed  in  the 
same  manner  whenever  It  may,  through 
whatever  cause,  be  diminished. 

DISSOLUTION  OF  CORPORATIONS. 

Corporations  may  be  dissolved: 

1.  By  the  consent  of  the  shareholders,  as 
before  explained. 

2.  By  the  expiration  of  the  period  for 
which  they  were  established. 

3.  By  reason  of  the  loss  of  half  of  their 
capital  stock,  whenever  the  dissolution  is 
approved  at  a general  meeting,  by  vote  of  at 
least  a majority  of  the  shareholders  repre- 
senting half  of  the  capital  stock. 

4.  By  the  bankruptcy  of  the  corporation, 
legally  declared. 

LIQUIDATION  OF  CORPORATIONS. 

When  the  dissolution  of  a corporation  is 
determined  upon  at  a meeting,  the  appoint- 
ment of  liquidators  shall  be  made  and  If  that 
is  not  done,  the  judicial  authority  shall  ap- 
point them  when  requested  to  do  so. 

The  appointment  of  liquidators  terminates 


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224 


THE  BANKERS  MAGAZINE 


the  trust  and  duties  of  the  directors  of  the 
corporation.  The  latter  shall  nevertheless 
lend  their  aid  to  the  liquidators  whenever 
they  are  requested  to  do  so. 

The  accounts  of  the  directors,  during:  the 
period  comprised  from  the  date  of  the  last 
balance  sheet  approved  by  a meeting  and  the 
opening  of  the  liquidation,  shall  be  presented 
to  the  liquidators  for  their  approval. 

When  one  or  more  directors  are  appointed 
liquidators,  the  accounts  referred  to  in  the 
foregoing  paragraph  shall  be  published  in  two 
or  more  newspapers  of  the  domicile  of  the 
corporation,  with  the  final  balance  sheet  of 
the  liquidation;  but  if  the  latter  comprises  a 
period  beyond  the  corporation  year,  the  ac- 
counts mentioned  must  be  annexed  to  the 
first  balance  sheet  that  the  liquidators  shall 
present  to  a general  meeting  of  the  share- 
holders. 

If  the  liquidation  lasts  a year,  the  liquida- 
tors shall  make  up  the  annual  balance  sheet, 
in  conformity  with  the  prescriptions  of  the 
law  and  the  by-laws. 

On  the  termination  of  the  liquidation,  the 
liquidators  must  make  out  the  first  balance 
sheet,  stating  the  portion  which  corresponds 
to  each  share  in  the  distribution  of  the  cap- 
ital stock,  and  such  balance  sheet  shall  be 
published  for  thirty  consecutive  days  in  one 
or  more  newspapers  issued  at  the  domicile 
of  the  corporation.  The  shareholders  within 
fifteen  days  after  the  last  publication  there- 
fore must  present  their  claims  to  the  liquida- 
tors. These  shall  be  passed  upon  at  a meet- 
ing to  be  called  for  that  purpose,  by  a ma- 
jority of  votes,  each  share  to  have  one  vote. 
After  the  expiration  of  the  time  mentioned, 
whether  there  have  been  no  claims  presented, 
or  w'hether  they  have  been  acted  on  by  the 
meeting,  the  final  balance  sheet  shall  be  con- 
sidered as  approved,  the  responsibility  of 
the  liquidators  to  remain  in  force  as  to  the 
distribution  of  the  capital  stock. 

DISTRIBUTION  OF  ASSETS. 

The  amounts  belonging  to  the  sharehold- 
ers that  are  not  demanded  within  two  months 
after  the  day  when  , the  balance  sheet  is  ap- 
proved shall  be  deposited  in  any  banking 
institution  to  the  credit  and  in  the  name  of 
the  shareholders,  if  the  share  is  nominal,  or 
to  the  number  of  the  shares,  if  to  bearer. 
Such  amounts  shall  be  paid  by  the  banking 
institution  w’herein  the  deposit  may  have 
been  made  to  the  person  named,  or  to  the 
bearer  of  the  share. 

TAXES. 

When  the  articles  of  incorporation  are 
completed,  the  notary,  for  account  of  the 
organizers,  pays  the  imposts;  which  are: 


1.  Stamp  tax  on  the  capital  stock,  and 

2.  Stamp  tax  on  the  protocol  and  certified 
copy  of  the  articles  of  incorporation. 

The  tax  on  the  capital  stock  is  as  follows: 

Up  to  $500,000,  on  each  $1,000  or  fraction 
thereof,  $1. 

From  $500,000  to  $1,000,000  or  fraction 
thereof,  $0.50. 

Over  $1,000,000,  each  $1,000  or  fraction 
thereof,  $0.10. 

The  register  in  which  the  articles  of  In- 
corporation are  preserved  is  stamped  at  the 
rate  of  $1  per  sheet,  as  also  the  certified  copy 
Issued  for  registry. 

The  by-laws,  when  protocolized,  are 
stamped  at  the  rate  of  $2  per  sheet. 

There  is  no  annual  tax  on  the  capital 
stock. 

CERTIFIED  COPY. 

The  imposts  being  paid,  the  notary  issues 
the  certified  copy  above  referred  to  showing 
that  the  corporation  has  been  legally  con- 
stituted. 

REGISTRY. 

The  aforesaid  certified  copy  is  presented  to 
the  commercial  section  of  the  public  registry, 
at  the  place  where  the  Incorporation  was 
effected.  The  register  inscribes  the  articles 
of  incorporation  in  the  book  designed  for 
that  purpose  and  returns  the  certified  copy 
with  the  proper  annotation. 

The  registry  involves  no  expense.  The 
office  is  public  and  these  Inscriptions  may, 
therefore,  be  consulted  at  all  times,  for  the 
purpose  of  obtaining  data  regarding  any  cor- 
poration or  partnership. 

Any  change  in  a company  or  dissolution 
must  also  be  Inscribed  as  also  the  naming 
or  removal  of  the  company. 

Neglect  to  register  produces  the  following 
effects: 

1.  The  company  has  no  legal  standing,  and 
cannot,  therefore,  sue  for  the  fulfillment  of 
its  contracts. 

2.  In  case  of  bankruptcy  this  well  be  pre- 
sumed fraudulent,  and,  unless  the  adminis- 
trators are  able  to  prove  the  contrary,  they 
will  be  liable  to  imprisonment  and  debarred 
from  exercising  commerce. 

With  the  certificate  of  the  registry  office 
the  legal  constitution  of  the  company  Is  com- 
pleted. 

Second  Form  of  Organization. 

The  second  manner  of  organizing  a cor- 
poration is  to  formulate  a program  to  be 
signed  by  the  initiators.  This  program  must 
contain  In  full  the  projected  by-laws  of  the 
proposed  corporation,  with  such  explanations 
as  may  be  deemed  expedient;  the  amount  of 
the  capital  to  be  paid  in,  which  in  no  case 


BANCO  MERCANTIL  DE  MONTEREY 

MONTEREY,  N.  L.,  MEXICO  A Corporation 

OFFICIAL  DEPOSITORY  FOR  THE  GOVERNMENT  OF  THE  STATE  OF 

NUEVO  LEON 

Capital  Resources,  $2,500,000.00  Deserves,  $232,869.49 

Manager.  MR.  JOSE  L.  GARZA  Cashier,  MR.  ENRIQUE  MIGUEL 

Accountant,  MR.  EMETERIO  VELARDE 

Buys  and  tell*  domestic  and  foreign  drafts.  Issues  letters  of  credit.  Takes  charge  af  any  eslse* 
tlous  ea trusted  to  It  en  a moderate  rate  for  commission  and  remittance.  Buys  and 
•alls  for  account  of  others,  government,  municipal,  banking,  and  mining  stocks  and  bonds. 

Principal  Correspondents— National  Park  Bank , Now  York  City;  Banco  Hlspano  Amort mao, 
Madrid , Spain;  Credit  Lyonnais*  Paris.  Francs ; Credit  Lyonnais*  London , England;  Hamburger 
Ftlials  der  Deutschen  Bank,  Hamburg,  Germany. 


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LATIN  AMERICA 


225 


must  be  less  than  ten  per  cent.;  besides,  If 
any  portion  of  the  capital  is  represented  by 
other  values  than  cash,  this  must  be  duly 
proven  by  certificates  given  by  experts.  This 
program  must  be  made  public. 

The  next  step  is  to  obtain  the  subscription 
of  the  capital  stock,  which  must  be  fully 
subscribed  and  the  aforementioned  ten  per 
cent,  of  the  portion  to  be  contributed  in  cash, 
paid  in,  viz.,  deposited  in  a banking  or  mer- 
cantile house.  If  all,  or  any  portion  of  the 
capital  stock  is  represented  by  other  values 
than  cash,  these  shall  be  represented  by  fully 
paid  up,  i.  e.,  free  shares. 

The  subscription  of  shares  may  be  taken 
on  one  or  more  copies  of  the  prospectus,  and 
subscribers  must  indicate  their  name,  sur- 
name, firm  name  and  domicile,  number  of 
shares  subscribed,  date  of  subscription  and 
an  express  declaration  on  the  part  of  the 
party  subscribing  that  the  contents  of  the 
proposed  by-laws  are  fully  known  to  him 
and  that  he  accepts  them.  This  declaration 
must  be  attested  by  two  witnesses.  The 
funds  deposited  by  subscribers  shall  be  at  the 
order  of  the  administrators  of  the  company, 
that  may  be  named  by  the  shareholders  at 
the  first  general  meeting. 

After  the  capital  stock  has  been  subscribed, 
and  the  deposit  referred  to  has  been  made,  a 
general  meeting  of  stockholders  shall  be 
called.  The  meeting  shall  transact  the  fol- 
lowing business: 

(1.)  Examine  and  approve  the  assess- 
ments required  by  the  founders,  as  well  as 
the  value  at  which  may  have  been  estimated 
the  titles,  goods,  personal  and  real  property 
that  one  or  more  shareholders  may  have  con- 
tributed to  the  corporation,  those  thus  con- 
tributing not  having  the  right  to  vote. 

(2).  Discussion  and  approbation  of  the  by- 
laws. 

(3.)  Agreement  as  to  the  participation  the 
founders  may  have  reserved  to  themselves  in 
the  profits. 

(4.)  Naming  of  the  administrators  and  ex- 
aminers that  are  to  hold  office  for  the  term 
fixed  in  the  by-laws.  ^ 

The  minutes  of  this  meeting,  signed  by  all 
the  shareholders  present  thereat  with  a sheet 
annexed  showing  the  number  of  shares  rep- 
resented by  each,  also  signed,  are  then  de- 
livered to  a notary  for  protocolization,  with 
the  respective  by-laws. 

These  latter  must  contain  the  requisites 
already  specified  in  the  treating  of  the  or- 
ganization of  companies  under  the  first  form. 


Books  and  Accounts. 

Besides  the  minute  books,  already  men- 
tioned. the  corporation,  as  all  merchants, 
must  keep  a set  of  books,  consisting  of  the 
Inventory  or  balance  book,  journal  and 
ledger.  In  case  sales  are  made,  a stamped 
sales-book  must  also  be  kept,  as  well  as  a 
stamped  book  for  all  bills  over  twenty  pesos, 
with  a stub  which  must  show  that  the 
proper  stamps  have  been  attached  to  the  re- 
spective bills  (five  cents  for  each  ten  dollars 
or  fraction  thereof). 

These  books  must  be  kept  in  Spanish  and 


according  to  the  rules  of  scientific  bookkeep- 
ing universally  accepted. 

The  fact  of  the  merchant  being  a foreigner 
does  not  relieve  him  of  the  obligation  of 
keeping  his  books  in  that  language,  under 
penalty  of  fifty  dollars  brtfflRJ  pesos  and  ex- 
penses of  translating  U4UndcK>ks,  but  as  ho 
need  not  keep  them  persontffly,  that  is  in  no 
way  a difficulty. 

The  aforementioned  books  must  before 
opening  be  presented  to  the  stamp  office  for 
authorization.  This  office  adheres  and  can- 
cels the  necessary  stamps  on  the  first  page 
of  each  book,  the  quota  being  five  cents  per 
leaf,  except  for  the  sales-book,  which  pays 
one  cent  per  leaf. 


PRESIDENT  ELECTED  IN 
COLOMBIA 

CARLOS  E.  RESTREPO,  Vice-President 
of  the  House  of  Representatives,  has 
been  elected  President  of  the  Repub- 
lic of  Colombia. 

He  succeeds  General  R.  Gonzales  Valen- 
cia, who  was  chosen  to  fill  the  unexpired 
term  of  President  Rafael  Reyes  after  the 
latter  left  the  country.  The  elections  were 
conducted  quietly.  General  Gonzales  Valen- 
cia was  elected  first  presidential  substitute 
and  Dr.  Jose  Vicente  Moncha,  Colombian 
minister  to  France,  second  substitute.  The 
newr  President  is  from  the  department  of 
Antioquia. 


NATIONS  OF  THE  WORLD  SE- 
LECT THE  ENVOYS  WHO  WILL 
REPRESENT  THEM  AT  THE 
CENTENNIAL  OF  MEXICO’S 
INDEPENDENCE 

ALL  the  nations  with  which  Mexico  main- 
b tains  diplomatic  relations  were  invited 
to  send  representatives  to  the  cele- 
bration of  tlie  centennial  of  the  independence 
of  this  country  during  the  month  of  Septem- 
ber, and  already  a number  of  them  have 
named  their  envoys.  Some  will  be  repre- 
sented at  the  celebration  by  their  regular 
diplomatic  representatives  in  Mexico,  while 
others  will  send  extraordinary'  ambassadors. 
The  indications  are  that  there  will  be  quite 
a large  number  of  them,  and  it  will  be  a 
brilliant  and  cosmopolitan  gathering  of 
guests  that  the  Mexican  government  will  en- 


Mexico  City  Banking  Company,  S.  A. 

AVENIDA  SAN  FRANCISCO  No.  14 

Capital  and  Surplus  91*000,000 

miilTIINS  AID  ALL  DARKIRI  MATTERS  RIVER  PROMPT  AID  CAREFUL  ATTERTIIN 


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SPECIAL  ENVOYS  WHO  WILL  REPRESENT  THE  UNITED  STATES  AT  THE 
MEXICAN  CENTENNIAL  CELEBRATION  IN  SEPTEMBER 


LEE  S.  OVERMAN 
Senator  from  North  Carolina 


COE  I.  CRAWFORD 
U.  S.  Senator  from  South  Dakota 

CURTIS  GUILD,  JR. 

Former  Governor  of  Massachusetts,  Special  Ambassador  to  the  Centennial 
J.  SLOAT  FASSETT  COL.  CHARLES  A.  ROOK 

Congressman  from  New  York  Editor  Pittsburgh  Dispatch 

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rrSBXlS]  AJHE  TEHEE  DBPABTMBN'TS  OS’  THB 


6t.  Baicaria  di  Fomente  y Bines  Raises,  de  Mexico,  $.  A. 


RIAL  IITAT1 

This  department  buys  and 
sells  all  klodsof  land  in  every 
part  of  the  Bepublio— City  or 
Country.  Houses  bouaht, sold 
and  constructed.  Ranches 
subdivided  into  smaller  ones. 
T.  M.  Gmrcea,  Manager. 


PUBLIC  WORKS 

This  department  does  paving 
work,  makes  surveys,  con- 
structs sewerage  systems,  etc. 
It  has  improved  the  Cities  of 
Mexico,  Puebla,  Guadalajara, 
Durango  and  others. 

Blaaael  Signer*,  Manager. 


BANKING 

This  department  finances  the 
other  two  departments  and 
does  all  kinds  of  business  in 
relation  to  banking. 


Xavier  Icaza  y Lauda,  Mgr. 


CORRESPONDENCE  IS  INVITED 


Compania  Bancaria  de  Fomento  y Bienes  Baices,  de  Mexico,  S.  A. 

MEXICO,  D.  r. 

President— F.  PIMENTEL  Y FAGOAGA 

1st  Tice.Pres.-P.  MACEDO  2nd  Vlce-Pres.-LUI8  BARROSO  ARIAS 


tertain  in  the  beautiful  Cobian  palace  dur- 
ing the  month  of  September. 

Among  the  nations  that  have  already 
named  their  representatives  are  the  follow- 
ing: 

Switzerland—  Henry  Perret,  consul  of  that 
country  in  Mexico. 

Venezuela — Eduardo  - Urdaneta,  consul 
general  in  Mexico. 

Honduras — Dr.  Salvador  Cordoba,  who 
has  also  been  named  as  minister  to  Mexico. 

Italy — Marquis  Capecce  Minutoli  di  Bug- 
nano. 

Santo  Domingo — Americo  Lugo. 

Austria-Hungary — Count  Max  Hadik  de 
Futak,  present  minister  to  Mexico. 

Cuba — Maj.  Gen.  Enrique  Lovnaz  del  Cas- 
triilo,  who  has  also  been  named  as  minister 
to  Mexico. 

Japan — Baron  Yasuya  Uchida,  ambassa- 
dor to  the  United  States;  Kuni  Shinge  Ta- 
naka, Tokutaro  Hiraga  and  Souehi  Taka- 
hashi. 

Curtis  Guild,  former  governor  of  Massa- 
chusetts, has  been  designated  by  President 
Taft  as  special  ambassador  to  represent  the 
United  States. 

The  commission  of  nine,  including  three 
senators,  three  representatives  and  three  men 
appointed  by  the  president  has  been  com- 
pleted by  the  Presidential  appointment  of 
Judge  James  W.  Gerard,  justice  of  the  Su- 
preme Court  of  New  York;  Frank  J.  Mur- 
phy, former  governor  of  New  Jersey,  and 
Col.  Charles  A.  Rook,  editor  of  the  Pitts- 
burgh Dispatch. 

Representative  D.  J.  Foster  of  Vermont 
will  be  the  head  of  commission.  He  will 
leave  New  York  for  Mexico  September  15 
and  be  absent  fifteen  days.  The  rest  of 
the  delegation  is  as  follows:  Senator  Simon 
Guggenheim  of  Colorado;  Senator  Coe  I. 
Crawford,  of  South  Dakota;  Senator  Lee  S. 
Overman,  of  North  Carolina;  Representa- 
tive J.  Sloat  Fassett,  of  New  York,  and 
Representative  William  M.  Howard,  of 
Georgia. 


DIAZ  IS  RE-ELECTED 

Overwhelming  Victory  in  all  the  States  - Presi- 
dent’s Seventh  Term 

GEN.  PORFIRIO  DIAZ,  who  will  be 
eighty  years  old  on  September  13,  was, 
on  July  10  re-elected  by  the  Electoral 
College  as  President  of  Mexico  for  a term 
of  six  years,  this  being  the  seventh  time 
he  has  been  chosen  by  the  people  of  his 
country  as  the  head  of  the  National  Gov- 
ernment. Ramon  Corral  was  elected  Vice- 
President. 

Reports  from  all  the  States  in  the  Mex- 
ican Union  are  to  the  effect  that  in  the 
Electoral  Colleges  Diaz  and  Corral  won 
overwhelming  victories  and  that  no  disorder 
of  any  kind  occurred  anywhere. 

President  Diaz  was  first  elected  President 
in  1876  to  serve  four  years.  He  has  been 
President  of  Mexico  ever  since,  with  the  ex- 
ception of  four  years,  1880  to  1884,  when 
Manuel  Gonzales  was  Chief  Executive. 

Until  1892  the  President  was  chosen  for 
four  years.  Since  that  time  the  term  has 
been  six  years. 


GENERAL  NOTES 

— The  annual  report  of  the  Banco  Na- 
cional  de  Mexico  for  the  year  ended  De- 
cember 31,  1909,  states  that  the  net  profits 
have  amounted  to  $6,833,700  (£683,337). 
The  dividend  is  maintained  at  $20  per  or- 
dinary share  and  $15,  per  founder’s  share. 
An  appropriation  of  $200,000  was  made  to 
the  reserve  fund  before  striking  net  profit, 
bringing  it  up  to  $18,000,000,  and  $116,998 
is  carried  over,  as  against  $406,490  brought 
into  the  accounts.  The  report  states  that 
the  bank,  reflecting  the  conditions  of  trade 
in  the  country,  has  suffered  from  the  stag- 
nation commencing  in  1907  and  not  yet  en- 
tirely brought  to  an  end,  and  considers  it  a 
matter  of  congratulation  that,  in  spite  of  the 
restriction  of  credit  necessarily  imposed 
during  the  year,  there  were  no  important 
failures  in  the  country.  Bills  held  on  De- 

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THE  BANKERS  MAGAZINE 


cember  31,  1909,  amounted  to  $21,273,200,  a 
decrease  of  more  than  $15,000,000;  deposits 
to  $87,953,200,  a decrease  of  more  than 
$6,000,000,  and  specie  to  $47,204,800,  de- 
crease of  $2,000,000.  The  decrease  in  de- 
posits was  caused  by  the  fact  that  the  cash 
deposited  by  the  government  on  account  of 
irrigation  work  has  been  gradually  ex- 
pended. The  note  circulation,  however,  of 
$45,507,950  showed  an  increase  of  $10,000,- 

000,  a new  proof,  the  report  states,  of  the 
confidence  inspired  by  the  National  Bank  of 
Mexico,  which  has  been  unshaken  in  the  past, 
and  on  the  increase  in  the  present. 

— The  men  principally  interested  in  the 
Bank  of  Sonora  have  completed  arrange- 
ments for  the  establishment  at  Hermosillo, 
Hex.,  of  a mortgage  bank  with  a capital  of 
$2,000,000,  Mexican  currency.  The  new  in- 
stitution will  open  for  business  on  January 

1,  1911,  and  its  object  will  be  the  encour- 
agement of  agricultural  development  along 
the  west  coast  of  Mexico.  At  the  start, 
agencies  will  be  established  at  points  in  the 
Yaqui,  Mayo  and  Fuerte  river  valleys,  and 
settlers  will  be  given  assistance  in  the  ac- 
quisition and  development  of  lands. 

The  Bank  of  Sonora  was  established  at 
Hermosillo  in  1898  through  the  efforts  of 
Max  Muller,  now  vice-president  and  the 
credit  for  the  notable  sucess  of  the  insti- 
tution is  largely  due  to  him.  Up  to  the  pres- 
ent time  dividends  of  from  ten  to  twenty 
per  cent,  annually  have  been  paid,  the  dis- 
bursements to  stockholders  totaling  $1,875,- 
250.  The  bank  has  a capital  of  $1,500,000, 
and  a reserve  fund  of  $1,051,133.05.  The 
amounts  are  in  Mexican  currency. 

— Through  Robert  N.  Nugent,  Mexican 
representative,  the  National  Surety  Company 
of  New  York  has  entered  into  a contract 
with  the  Federal  government  of  Mexico  for 
the  bonding  of  employees  of  the  post  office, 
federal  telegraph  and  general  departments 
of  the  government.  The  contract  provides 


for  the  bonding  of  several  thousand  men. 
The  government  was  represented  in  the 
transaction  by  the  treasury  department. 

The  National  Surety  Company  has  re- 
sources that  aggregate  $8,000,000  and  the 
board  of  directors  includes  a number  of  the 
most  prominent  banking  and  financial  men 
in  the  United  States. 

— From  Torreon  comes  the  announcement 
of  the  organization  of  the  Investment  and 
Discount  Company,  Limited,  which,  with  a 
paid-up  capital  of  $500,000,  will  do  a regular 
banking  business  in  Torreon.  It  will  cater 
principally  to  foreign  interests  in  this 
section. 

The  stockholders  of  this  new  institution 
are  already  identified  with  the  Banco  de  la 
Laguna  but  the  new  bank  will  go  after  busi- 
ness which  the  Laguna  bank  has  not  up  to 
this  time  had  the  facilities  for  handling,  hav- 
ing devoted  its  attention  principally  to  very 
large  transactions. 

The  officers  of  the  Investment  and  Dis- 
count Company,  Limited,  are:  J.  F.  Britting- 
ham,  president;  Luis  Garza,  vice-president; 
Praxedis  de  la  Pena,  vice-president;  Lie. 
Pedro  Torres  Saldana,  secretary;  Mariano 
Hernandez,  Ernesto  Madero  and  Juan  Ter- 
razas, members  of  the  executive  board. 

At  the  first  meeting  of  the  board  immed- 
iately after  the  organization  of  the  company 
Mauro  de  la  Pena  was  elected  manager  of 
the  new  bank. 

The  bank  will  operate  without  concession 
and  will  cater  principally  to  financial  trans- 
fers from  the  smallest  to  the  largest  with 
Americans  and  other  foreigners,  much  on 
the  plan  of  several  American  banks  in  the 
republic,  the  rapid  dispatch  of  exchange 
from  Mexican  into  foreign  money  and  vice 
versa  and  for  the  assistance  and  comfort 
of  tourists  and  travelers. 

— E.  R.  Frederick  has  been  appointed 
cashier  of  the  Mortgage  & Loan  Banking 
Company  of  Mexico  City,  vice  L.  O.  Gelbke, 


MERCANTILE  BANKING  COMPANY,  Ltd. 

Avenlda  San  Franolaeo  No.  12 

CITY  OF  MEXICO  

Capital,  $500,000.00  Surplus,  $100,000.00 

Members  tf  the  American  Bankers*  Association 
GEO.  J.  McCARTY,  President  K.  M.  VAN  ZANDT,  Jr.,  Vlce-Pres.  & Mgr. 

H.  C.  HEAD,  Cashier  SHUR  WELCH,  Assistant  Cashier. 

A General  Banking  Business  Transacted  Foreign  Eiehsnse  Bought  and  Sold 
Telegrsphio  Transfers  Letters  of  Credit 

Unsurpassed  collection  facilities.  Correspondence  solicited.  Accounts  of  Banka,  Bank- 
ers, Merchants  and  Individuals  solicited. 


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LATIN  AMERICA 


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who  resigned  to  accept  a position  with  the 
Tabasco  Plantation  Company. 

— Antonio  G.  Canaliiso,  one  of  Mexico’s 
foremost  financiers,  in  conjunction  with  the 
Mexican  government  and  some  of  his  con- 
stituents, is  financing  a series  of  railroads 
that,  connecting  with  the  Frisco  over  the  In- 
ternational bridge  at  Brownsville,  Texas, 
will  give  continuous  interchange  between 
New  Orleans,  through  Houston,  Texas,  to 
Campeche,  Yucatan,  and  connecting  with 
the  National  roads  of  Mexico  and  the 
United  railways  of  Yucatan.  The  line,  or 
series  of  lines,  will  follow  the  gulf  coast, 
touching  at  several  important  seaports, 
and  connecting  with  the  central  lines  of 
Mexico  will  provide  a very  short  route, 
from  New  Orleans  and  Houston  to  Mexico 
City. 

— A recent  report  from  the  Banco  de  Ta- 
basco, S.  A.,  gives  the  deposits  of  that  insti- 
tution at  $-251 ,635.85  and  the  total  resources 
at  $3,195,855.61. 

— Cable  advices  announce  the  sale  in  Lon- 
don ot  $5,000,000  first  mortgage  fifty-year 
gold  four  per  cent,  bonds  of  the  Kansas  City, 
Mexico  & Orient  Railway  Co.  Sale  was 
consummated  by  Arthur  E.  Stilwell,  presi- 
dent of  the  company,  and  Edward  Dicken- 
son, vice-president  and  general  manager.  The 
purchaser  is  a syndicate  of  prominent  Eng- 
lish brokers. 

President  Stilwell  is  stated  as  saying 
that  the  sale  of  these  bonds  will  result  in 
the  early  completion  of  the  extension  from 
San  Angelo  to  Del  Rio,  Texas,  linking  the 
southern  end  of  the  Orient  line  with  the 
Mexican  National  Railway,  thus  giving  the 
former  a direct  through  connection  between 
Kansas  City  and  Mexico  City.  The  route 
so  completed  will  have  a mileage  equal  to 
the  shortest  existing  route  between  those 
two  points,  and  shorter  than  several  com- 
peting lines.  The  railivay  will  also  be 
pushf^d  southwest  from  San  Angelo,  Texas, 
to  connect  with  the  track  east  of  the  Con- 
chos  river  in  Mexico,  so  as  to  bring  the 
main  line  into  Chihuahua,  where  it  will  tap 
the  north  and  south  lines  of  the  Mexican 
Central. 

In  the  United  States  the  Kansas  City, 
Mexico  & Orient  Railway  Co.  has  already 
completed  510  miles  of  line  from  Wichita, 
Krnsas,  south  to  San  Angelo,  Texas,  and  is 
operating  trains  over  this  section  and  into 
Kansas  City,  Mo.,  by  traffic  agreement  with 
the  Missouri  Pacific.  In  Mexico  368  miles 
of  the  road  are  completed,  making  a total 
of  878  miles  in  operation  at  the  present 
time. 

The  company’s  bonds  are  listed  on  the 


London  Stock  Exchange  and  consideration 
is  being  given  the  matter  of  an  early  listing 
of  the  company’s  bonds  and  stock  on  the 
New'  York  Stock  Exchange. 

— The  Banco  Mercantil  de  Monterey  of 
Monterey  N.  Leon,  Mexico,  reports  total 
resources  of  $14,741,259.14,  a capital  of  $2,- 
500,000,  a reserve  fund  of  $251,239.06  and 
deposits  of  $2,184,812.30. 


NEW  ENGRAVING  BUILDING 

Government  Notes  to  be  Printed  in  a Fine 
Structure 

PLANS  have  been  completed  by  the  su- 
pervising architect  of  the  Treasury  for 
the  new  building  for  the  Bureau  of 
Engraving  and  Printing  which  is  to  cost 
$1,750,000.  The  building  is  to  be  850  feet 
long,  four  stories  in  height,  classic  in  style 
of  architecture  and  is  to  be  constructed  on 
the  site  of  the  present  building,  which  will 
be  absorbed  as  the  work  progresses. 


A HAZING  OF  BANKERS 

ACCORDING  to  the  New  York  “Times” 
of  July  21,  a banker  who  read  the 
story  of  the  mock  arrest  of  ex-Vice 
President  Fairbanks  by  the  National  Asso- 
ciation of  Advertising  Men  in  Omaha  on 
July  19  told  an  amusing  story,  up  to  this 
time  kept  very  quiet  in  Wall  Street,  of  the 
somewhat  similar  joke  played  upon  a num- 
ber of  Northern  bankers,  including  one  wrell- 
known  officer  of  this  city,  at  a recent  con- 
vention of  the  Bankers’  Association  of  a 
Southern  State.  There  was  a banquet,  and 
between  courses  vaudeville  acts  wrere  intro- 
duced, one  of  which,  by  prearrangement, 
was  rather  risque.  Just  at  this  point  in  the 
entertainment  the  police  force  of  the  city 
in  which  th°  convention  was  held  broke  into 
the  banqueting  hall  and  put  everybody  it 
could  catch  under  arrest,  including  the  New 
York  banker,  who  was  only  seined  after  an 
exciting  chase  up  an  alley.  The  prisoners 
were  conveyed  to  police  headquarters,  and 
according  to  the  story,  later  taken  to  court 
and  fined  a substantial  sum,  telegrams  hav- 
ing been  sent  in  the  meantime  to  the  banking 
friends  of  the  Northern  men  captured,  re- 
lating how'  people  presumably  masquerading 
under  their  names  had  been  arrested  and 
asking  trustworthy  information  as  to  their 
whereabouts.  Following  the  court  proceeding 
the  joke  was  disclosed,  but  it  is  understood 
that  it  required  some  days  of  perspective 
before  it  was  altogether  relished  by  some 
of  those  involved. 


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BANKING  PUBLICITY 

Conducted  by  T.  D.  MacGregor 


BANK  ADVERTISING  AND  ITS  EDUCATIONAL 

VALUE 


By  George  R.  Glendining,  Manager  Banker  and  Tradesman,  Boston 


BANK  advertising,  particularly  in  its  edu- 
cational phase,  is  rapidly  becoming  a 
very  important  factor  in  the  commer- 
cial advancement  of  this  country.  Through 
it  the  banks  are  coming  into  closer  touch 
with  the  masses  of  the  people,  telling  them 
what  the  banks  can  do  for  them,  and  learn- 
ing in  return  the  needs  of  the  people. 

There  was  a time  when  advertising  was 
considered  beneath  the  dignity  of  a bank. 
Likewise  there  was  a time  when  banks  did 
not  care  for  the  small  man’s  business  and 
made  little  or  no  effort  to  reach  the  mass 
of  the  people.  Coincident  with  the  change 
in  the  latter  attitude  came  a change  in  the 
former.  It  was  found  that  the  small  man 
might  be  helped  to  make  himself  a big  man, 
and  also  that  advertising  could  be  both  dig- 
nified and  effective. 

New  banking  methods,  keener  competi- 
tion, the  introduction  of  adding  machines  and 
other  time  and  labor-saving  devices,  all  had 
a tendency  to  change  the  banker’s  attitude  to- 
ward the  desirability  of  small  accounts.  It 
was,  however,  one  thing  to  desire  this  en- 
larged scope  for  the  banks  and  quite  another 
thing  to  get  it.  It  was  a revelation  to  many 
bankers  to  find  that  there  were  people,  per- 
haps in  their  own  immediate  vicinity,  whose 
failure  to  do  business  with  the  bank  was  due 


The  First  National  Bank 


wninowcAUoriwcownintiiBi  ortwmwuwrv 

*(KT(  UAIIUTIU 


Sent  out  with  Sunday  newspaper 

230 


either  to  a total  ignorance  of  the  advantages 
of  a bank  account,  or  to  some  unjust  sus- 
picion as  to  the  stability  of  the  institution. 
These  conditions  showed  the  banker  the  need 
of  educational  advertising,  and  he,  as  a class, 
has  taken  up  the  study  of  the  matter  care- 
fully. Wonderfully  effective  campaigns  of 
educational  bank  advertising  are  now  being 
carried  on.  Some  of  the  advertising  is 
crude,  much  of  it  is  too  general,  but  in  the 
aggregate  it  is  doing  great  work. 

Through  their  advertising  the  banks  are 
now  telling  fundamental  facts — what  a bank 
is,  what  it  does,  how  it  does  it,  how  its  funds 
are  safeguarded,  and  so  on,  and  they  arc 
overcoming  both  the  ignorance  and  the  sus- 
picion. 

Savings  Banks  Accomplishing  Wondebs. 

Savings  banks  in  particular  are  accom- 
plishing wonders  through  advertising,  not 
only  for  themselves,  but  for  the  communi- 
ties they  serve.  They  are  telling  people  why 
they  should  save,  how  the  banks  can  help 
them  to  save,  what  wonders  are  accom- 
plished by  compound  interest,  and  how  much 
better  it  is  to  have  money  drawing  a sure 
rate  of  interest  in  a savings  bank  than  it  is 
to  trust  it  to  the  uncertainties  of  mining 
schemes. 

The  savings  banks  are  investing  the  money 
deposited  with  them  in  the  community  in 
which  the  depositors  live,  and  by  advertis- 
ing that  fact  are  creating  confidence  in  the 
banks  on  the  part  of  the  depositors.  They 
are  aiding  real  estate  by  advertising  their 
willingness  to  make  loans  for  the  develop- 
ment of  homes  and  business  sites,  and  many 
of  them  are  further  advertising  their  com- 
munities by  letters  to  manufacturers  who 
may  be  seeking  locations  for  new  plants. 

Many  savings  banks,  in  their  advertising, 
are  boldly  outlining  the  conditions  under 
which  they  will  make  loans,  and  in  this  way 
are  saving  many  a man  from  the  clutches  of 
loan  and  mortgage  sharks. 

In  thousands  of  factories  the  envelopes 
in  which  the  men  receive  their  pay  have  a 
savings  bank  advertisement  on  them,  urging 
each  man,  at  this  opportune  moment,  to  save 
part  of  his  pay.  The  advertisement  also 
tells  him  that  the  bank  will  be  open  that 
evening  for  a few  hours  for  his  particular 
beneut.  Statistics  from  manufacturing  towns 
show  that  this  form  of  advertising  has 
brought  to  the  banks  many  of  the  foreign 
workmen  who  formerly  sent  their  savings 
back  to  the  old  country. 


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BANKING  PUBLICITY 


231 


Savings  banks  are  inherently  mutual  or 
semi-charitable  institutions,  and  this  educa- 
tional advertising  constitutes  a real  public 
service. 

Use  of  Travelers’  Cheques. 

Until  this  educational  advertising  was 
started  there  was  little  general  knowledge  or 
use  of  the  travelers*  cheques  issued  by  banks. 
Now  banks  all  over  the  country  issue  them 
and  tell  people  through  their  advertising  of 
their  convenience  and  safety.  As  the  vaca- 
tion and  general  travel  season  approaches 
live  bank  managers  put  out  live  copy  on  this 
subject  with  excellent  results. 

Likewise,  at  the  holiday  season,  many 
banks  advertise  a supply  of  “holiday  gold” 
and  “new  money,”  and  in  that  wav  bring 
people  into  the  bank  who  have  never  used 
the  bank  before,  but  who  may  be  cultivated 
into  good  customers. 

Banks  With  Specialties. 

Many  banks  are  so  located,  either  through 
design  or  circumstance,  as  to  enable  them 
to  draw  business  from  some  particular  line 
of  industry,  and  they  design  their  advertis- 
ing to  that  end.  For  instance,  banks  lo- 
cated in  or  near  a wholesale  leather  or  wool 
district  advertise  facilities  that  are  designed 
to  meet  the  needs  of  the  leather  or  wool  mer- 


chant. The  officers  of  such  a bank  study 
the  needs  and  conditions  of  the  leather  or 
wool  trades  and  fit  themselves  to  be  compe- 
tent judges  of  the  accommodations  that 
may  be  demanded.  'They  also  keep  in  touch 
with  trade  conditions  and  are  frequently 
able  to  give  their  customers  valuable  advice. 
All  of  these  points  make  strong  and  effect- 
ive advertising. 

Advertising  of  this  sort  essentially  sounds 
a personal  note  and  tends  to  introduce  a 
dose  personal  element  into  the  relations  be- 
tween bank  officer  and  customer,  that  is  very 
valuable  to  both.  It  was  once  rather  diffi- 
cult, for  all  but  a favored  few,  to  get  an  in- 
terview with  one  of  the  higher  officials  of  a 
bank.  Today  the  spirit  is  different,  and  in 
nearly  every  bank  the  officers  are  accessible 
to  everyone.  This  fact  is  advertised  in  a 
dignified  way,  and  people  are  urged  to  con- 
sult the  officers  on  matters  even  relating  to 
personal  finances.  Again,  through  advertis- 
ing, the  small  depositor  is  made  to  feel  that 
he  is  welcome,  and  that  the  bank  is  as  inter- 
ested as  he  is  in  making  his  account  grow, 
and  will  aid  him  in  every  reasonable  way. 

Value  of  Special  Audits. 

Of  comparatively  recent  development  is 
the  idea  of  having  special  and  independent 


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282 


THE  BANKERS  MAGAZINE 


audits  made,  showing  the  condition  of  a 
bank  in  detail.  These  audits  attain  the 
acme  of  value  when  used  as  the  basis  of  an 
advertisement,  which  sets  forth  not  only  the 
result  of  the  audit,  but  also  the  fact  that 
the  audit  itself  is  another  guarantee  that 
the  bank  is  keeping  faith  with  its  depositors. 

Advertising  Safe-Deposit  Vaults. 

The  remarkable  development  of  the  safe- 
deposit  business  is  due  largely  to  advertis- 
ing. People  have  been  told  all  about  the 
perfect  protection  afforded  by  the  modern 
safe-deposit  vault,  with  its  steel  and  con- 
crete walls,  time  locks,  electric  devices,  etc.; 


they  have  been  shown  at  what  a low  cost  the 
safety  of  valuable  papers,  jewels  and  the 
like  can  be  assured;  and  they  have  responded 
in  such  numbers  that  this  branch  of  the 
banking  business,  despite  its  tremendous  ini- 
tial cost,  is  wonderfully  profitable. 

Advertising’s  Highest  Phase. 

In  its  connection  with  banking,  advertising 
has  reached  one  of  its  highest  and  most  ef- 
fective phases,  and  the  banks,  through  its 
influence,  are  attaining  a means  of  getting 
in  touch  with  the  lives  of  the  large  majority 
of  the  people  in  this  great  country. 


A SUCCESSFUL  BANK  ADVERTISEMENT 

HOW,  BY  THE  USE  OF  A PECULIAR  SET-UP,  STRONG,  RESULT-PULLING 
NEWSPAPER  COPY  WAS  PRODUCED 

By  G.  P.  Blackiston,  Advertising  Manager  of  The  People’s  Savings  Bank, 

Pittsburgh,  Pa. 


THE  necessity  for  bank  advertising  is  as 
great  as  in  any  other  line  of  commerce, 
and  to  reach  the  class  of  people  de- 
sired by  savings  banks,  continuous  publicity 


is  essential.  But  this  campaign  must  be 
varied  greatly  from  time  to  time  in  order  to 
attract  attention. 

The  mission  of  the  savings  bank  is  a cred- 


A distinctive  style 


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BANKING  PUBLICITY 


233 


QUICKER 

CANADA 

COLLECTIONS 

VOU  can  greatly  facili- 
1 tate  your  Canada  col- 
lections by  sending  them 
to  this  bank  direct  instead 
of  throughyour  local  bank. 

This  method  may  save  you 
several  days’  time.  Through 
our  111  branch  offices  we 
maintain  a thoroughly  organ- 
ized Collections  Department, 
where  American  business  is 
attended  to  with  promptness 
and  dispatch. 

We  are  in  close  touch  with  every 
town  of  importance  in  the  Do- 
minion. Our  local  managers  are 
personally  acquainted  with  the 
business  men  in  their  vicinities. 
Any  special  instructions  regarding 
collections  are  carried  out  to  the 
letter.  American  clients  will  find 
our  service  prompt  and  satisfactory 
in  every  respect. 

A list  of  our  branch  offices  with 
our  last  half-yearly  statement 
mailed  on  request. 

225 

Address  the  General  Manager 

^TRADERS  BANK 

of  CANADA 
HEAD  OFFICE  TORONTO 
BRANCHES  THROUGHOUT 
THE  DOMINION  . 


Real  Advertising 


itable  one.  It  endeavors,  in  particular,  to 
reach  the  working  man  and  encourage  him 
to  systematic  saving  and  thrift.  The  func- 
tions performed  hv  different  savings  banks 
are  usually  identical.  There  is  lacking  the 
“something  new”  of  other  lines  of  modern 
business  which  is  the  life  of  successful  ad- 
vertising. Therefore,  the  only  profitable 
manner  of  advertising  a bank’s  capacities  in 
their  limited  number  of  departments  is  to 


use  the  same  themes,  but  dress  them,  as  it 
were,  in  new  gowns  at  reasonable  intervals. 
This  is  to  attract  attention,  and  is  the  only 
successful  method  left  to  the  progressive 
banking  houses. 

Among  the  most  successful  newspaper  ad- 
vertising done  by  any  bank  is  that  produced 
by  the  People's  Savings  Bank  of  Pittsburgh, 
one  of  the  most  progressive  institutions  in 
the  country.  This  bank  is  a regular  adver- 
tiser in  magazines  and  local  newspapers, 
and  never  is  a piece  of  copy  published  that 
is  not  “different.” 

The  functions  performed  by  this  bank, 
while  always  the  same,  are  yet  clothed  dif- 
ferently and  distinctively,  the  advertise- 
ments being  always  interesting.  The  pres- 
ent series  of  advertisements  being  used  by 
this  bank  gains  success  in  a peculiar  set-up 
of  the  type,  accompanied  by  absorbing  terse 
copy.  The  oddity  of  the  composition  and 
the  strong,  to-the-point  copy  attracts  the 
reader's  attention,  commands  thought  and 
gives  a w’ord  of  timely  advice  to  those  who 
have  not  fallen  into  the  saving  habit. 


HOW  BANKS  ARE  ADVERTISING 

— The  Old  Colony  Trust  Co.  of  Boston,  is 
supplying  its  customers  with  a telephone 
directory  cover  which  is  a handsome  and 
useful  addition  to  any  desk. 


NATIONAL  BANKS  ORGANIZED 

DURING  the  month  of  June,  1910,  thir- 
ty-four applications  to  organized  na- 
tional banks  were  received.  Of  the 
applications  pending,  twenty-six  were  ap- 
proved and  three  rejected.  In  the  same 
month  forty  hanks,  with  total  capital  of 
$2,040,000,  were  authorized  to  begin  business, 
of  which  number  twenty-nine,  with  capital 
of  $7 90,000  had  individual  capital  of  less 
than  .$50,000,  and  eleven  with  capital  of  $1,- 
850,000,  individual  capital  of  $50,000  or  over. 

The  total  number  of  national  banks  or- 
ganized is  9,803,  of  which  2,033  have  dis- 
continued business,  leaving  in  existence  at 
present  7,170  banks,  with  authorized  capital 
of  $1,000,070,135,  and  circulation  outstand- 
ing secured  by  bonds  $085,517,013. 

The  total  amount  of  national  bank  circu- 
lation outstanding  is  $713,450,733,  of  which- 
$27,913,720  is  covered  by  lawful  money  of 
a like  amount  deposited  with  the  treasurer 
of  the  United  States  on  account  of  liquida- 
ting and  insolvent  national  banks  and  asso- 
ciations w hich  have  reduced  their  circulation.. 


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SAN  FRANCISCO’S  NOTABLE  NEW  BANK 

BUILDINGS 

By  Horatio  F.  Stoll 


SAN  FRANCISCO,  on  April  18,  cele- 
brated the  fourth  anniversary  of  her 
great  fire.  In  those  years  that  have 
elapsed,  a wonderful  transformation  has 
been  wrought  in  the  “burned  district/’ 


rebuild,  and  sprinkling  the  financial  sec- 
tions themselves  with  an  array  of  archi- 
tectural gems  of  which  any  city  might  well 
be  proud. 

With  but  few  exceptions,  the  bank  build- 


“ Bankers’  Corner  ” at  the  intersection  of  Market,  Post  and  Montgomery  Streets 


Practically  all  the  banking  institutions  are 
now  permanently  located  in  handsome  new 
structures  and  an  era  of  prosperity  has  set 
in  that  is  very  gratifying  to  bankers  gen- 
erally. 

The  banks  of  San  Francisco  have  played 
a very  important  part  in  the  rehabilitation 
of  the  burned  district,  loaning  vast  sums 
of  money  to  enable  property  owners  to 

234 


ings  erected  immediately  after  the  fire  wens 
skyscrapers.  Office  buildings  were  scarce 
and  proved  a good  investment.  There  were 
thousands  of  desirable  tenants  anxious  to 
get  downtown  again  and  suitable  quarters 
were  almost  at  a premium. 

But  times  have  changed  during  the  past 
two  years.  The  building  activities  have 
been  remarkable  and  as  a result  there  are 


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SAN  FRANCISCO'S  NOTABLE  NEW  BANK  BUILDINGS 


285 


many  towering  structures  that  are  far  from 
filled.  In  fact,  sunny  rooms  can  be  reason- 
ably rented  in  the  most  desirable  locations. 

This  marked  change  in  conditions  may 
account  to  a great  extent  for  the  tendency 
of  the  banks,  which  were  slow  in  rebuild- 
ing^ to  limit  the  height  of  their  new  edifices 


The  first  to  be  ready  for  occupancy  is 
the  home  of  the  Anglo  and  London  Paris 
National  Bank,  which  stands  at  the  inter- 
section of  Market,  Sansome  and  Sutter 
streets.  It  is  a model  of  comfort  and  ele- 
gance and  was  planned  by  Albert  Pissis, 
the  dean  of  San  Francisco’s  architects,  who 


(I  ri 


First  National  Bank  Building 


to  a story  or  two.  The  effect  is  certainly 
more  impressive,  for  the  lines  of  the  build- 
ing can  he  made  more  harmonious,  the  ma- 
terials used  more  costly,  the  lighting  better 
arranged,  and  the  attention  of  the  passers-by 
riveted  oil  the  sole  occupants  instead  of 
being  diverted  by  the  glittering  signs  of  a 
variety  of  tenants  engaged  in  different 
lines  of  business.  Market  street,  the  city’s 
main  artery  of  traffic,  is  flanked  with  nota- 
ble bank  buildings  and  despite  the  great 
value  of  every  front  foot,  three  important 
financial  institutions  have  added  one-story 
granite  temples  that  are  sure  to  attract 
the  attention  of  the  visitor. 


is  responsible  for  many  of  her  new  bank 
buildings. 

The  lot  occupied  by  the  bank  premises  is 
one  hundred  and  twenty-two  feet  six  inches 
on  Sutter  and  forty-six  feet  ten  inches  on 
Sansome  street.  The  excavations  were  be- 
gun in  May,  1909,  and  the  building  has 
been  pushed  to  completion  as  rapidly  as 
the  quality  of  the  work  permitted.  The  ex- 
terior is  of  finely  cut  white  granite,  the 
treatment  being  very  effective.  The  Sutter 
street  front  is  an  arcaded  colonnade,  while 
the  Sansome  street  entrance  takes  the  form 
of  one  large  arch  flanked  by  two  detached 
Doric  columns  that  are  fluted  and  mono- 


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THE  BANKERS  MAGAZINE 


lithic.  The  cornice  is  richly  decorated  and 
Die  building  is  topped  with  a balustrade. 

The  entire  first  floor  is  occupied  by  the 
banking  room  which  is  thirtv-six  feet  high, 
with  vaulted  sides  and  paneled  ceiling.  It  is 
decorated  with  stucco  and  tinted  in  a soft 
gray  tone,  the  effect  being  greatly  enhanced 


with  colored  border,  all  inlaid  with  bronze. 

An  automatic  elevator  and  stairs  lead  to 
the  attic  story  concealed  behind  the  balus- 
trade. Here  arc  located  the  director’s 
room,  private  offices,  and  the  book-keeping 
department  which  is  provided  with  a fire- 
proof vault. 


French  Savings  Bank  and  Temporary  Home  of  the  Savings  and  Loan  Society 


by  bronze  light  fixtures  suspended  from  the 
ceiling  and  from  the  side  wall.  Tw'o  large 
vaults,  faced  with  Escalette  marble,  occupy 
the  rear  of  the  banking  room. 

The  main  floor  is  devoted  to  the  public 
lobby,  the  different  tellers,  the  manage- 
ment of  the  bank  and  the  private  offices. 
A mezzanine  floor  over  the  rear  portion  con- 
tains several  services,  such  as  the  city  col- 
lections, clearing-house  department,  tele- 
phone and  pneumatic  tube  service. 

The  counters  are  of  Escalette  marble,  the 
upper  part  being  a bronze  colonnade  with 
the  necessary  wickets.  The  check  desks  and 
benches  in  the  lobby  are  marble  with  bronze 
supports  and  the  floor  is  of  white  marble, 


The  eastern  portion  of  the  basement  is 
occupied  bv  the  safe  deposit  department, 
equipped  with  the  most  modem  appliances. 
Its  entrance  is  from  the  main  banking  room 
bv  a spacious  stairs  and  special  elevator. 
The  walls  of  the  entire  safe  deposit  de- 
partment are  lined  with  light  pink  Tennes- 
see marble  and  the  3,000  boxes  and  ceiling 
of  the  large  safe  deposit  vault  are  decor- 
ated with  figured  nickel-plated  steel.  A vault 
is  also  provided  for  the  storage  of  trunks  and 
packages.  The  booths,  for  the  convenience 
of  patrons,  are  under  the  sidewalk  area, 
thus  insuring  an  abundance  of  light. 

In  the  designing  and  construction  of  the 
newr  building  of  the  Anglo  and  London 


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SAN  FRANCISCO  S NOTABLE  NEW  BANK  BUILDINGS 


*37 


Yokohama  Specie  Bank,  Sansome  and  Commercial  Streets 


Paris  National  Bank,  which  was  opened  for 
business  on  April  25,  no  cure,  attention  or 
expense  has  been  spared  by  Mr.  Pissis  to 
make  it  one  of  the  most  notable  and  com- 
modious banking  establishments  in  the 
country. 

Massive  granite  blocks  are  rapidly  cover- 
ing the  steel  frame  of  the  monumental 
structure  that  is  being  erected  at  the  north- 
east corner  of  Grant  avenue  and  O'Farrell 
street.  It  will  house  two  of  the  oldest  sav- 
ings banks  which  have  just  arranged  an 
amalgamation— the  Savings  and  Ix>an  So- 
ciety, which  has  hud  an  uninterrupted  finan- 
cial existence  of  fifty-three  years,  and 
the  Savings  Union  Bank  of  San  Francisco 
(name  recently  changed  from  San  Fran- 
cisco Savings  Union),  the  first  institution 
incorporated  under  a banking  law  in  this 
state. 

Both  banks  already  have  the  finest  stand- 
ing and  financial  position.  The  Savings 
Union  Bank  has  a paid-up  capital  of 
$1,000,000,  with  a surplus  of  nearly  $1,300,- 
000  and  deposits  of  more  than  $21,000,000. 
The  Savings  and  Loan  has  a paid-up  capi- 
tal of  $1,000,000,  with  a surplus  of  $150,000 
and  deposits  of  more  than  $5,000,000.  These 
amounts  combined  in  the  new  organization 
will  make  it  one  of  the  richest  institutions 
of  its  kind  in  the  west. 

'The  Savings  Union  Bank  of  San  Francis- 
co, during  the  forty-eight  years  of  its  ex- 
istence, has  conducted  its  business  in  the 
same  block  in  California  street,  between 


Kearny  and  Montgomery  streets.  How- 
ever, since  the  clientele  of  the  bank  is 
drawn  largely  from  the  classes  who  are  at- 
tracted to  the  retail  trade  district,  it  has  been 
deemed  not  only  a convenience  to  them,  hut 
a question  of  business  strategy  to  move  into 
that  district.  So  the  valuable  property  at 
the  junction  of  O'Farrell  street  and  Grant 
avenue  with  Market  street  was  secured  and 
the  work  on  the  construction  of  the  hand- 
some new  building  was  begun  in  November 
last.  It  will  be  finished  during  the  present 
year  and  will  be  devoted  solely  to  the  busi- 
ness of  the  Savings  Union  Bank  in  its  hank- 
ing and  safe  deposit  departments. 

Just  across  Grant  avenue,  at  the  corner 
of  Market,  the  palatial  home  of  the 
Union  Trust  Company  is  nearing  comple- 
tion. It  is  a substantial,  class  “A"  granite 
building,  designed  by  Clinton  Day,  and 
with  the  lot  represents  an  investment  of  a 
million  and  a half  dollars.  However,  ns  it 
has  been  built  entirely  out  of  the  surplus 
funds,  the  bank  officials  do  not  consider  it 
an  extravagance.  The  interior  is  finished 
in  spotless  white  marble  and  bronze  work 
and  a huge  dome  provides  an  abundance 
of  light.  The  building  has  been  under  con- 
struction for  a year  and  a half  and  will  be 
ready  for  occupancy  the  first  of  July. 

As  soon  as  the  Union  Trust  Company 
moves  into  its  new  home  the  Wells  Fargo 
Nevada  National  Bank  will  complete  the 
restoration  of  the  first  floor  of  its  building 
which  it  has  been  sharing  with  the  former 


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238 


THE  BANKERS  MAGAZINE 


institution  since  the  fire.  Everything  is  in 
readiness  and  the  changes  will  shortly  be  ac- 
complished. The  elaborate  plaster  work  on 
the  ceiling  has  been  done  and  the  walls  and 
columns  are  in  readiness  for  the  marble 
that  is  to  be  added.  The  Wells  Fargo  Ne- 
vada National  Building  was  gutted  by  the 


beyond,  is  the  ten-story  Crocker  National 
Bank  and  across  Market  street  is  the  home 
of  the  fourteen-story  Metropolis  Trust  and 
Savings  Bank.  The  $8,000,000  Palace  Ho- 
tel, eight  stories  in  height,  completes  the 
picture. 

This  is  naturally  one  of  the  busiest  cen- 


Italian  Popular  Bank,  Washington  and  Montgomery  Streets 


disastrous  Are  of  1906  and  the  total  cost 
of  rehabilitation,  it  is  estimated,  will  reach 
about  $300,000. 

‘'Bankers'  Corner/' 

This  bank  stands  at  “Bankers’  Corner,” 
at  the  junction  of  Market,  Post  and  Mont- 
gomery streets,  and  is  one  of  the  constella- 
tion of  notable  skyscrapers  that  presents 
an  inspiring  sight  to  the  visitor  as  he  looks 
down  Montgomery  street  from  Sutter.  The 
Wells  Fargo  Nevada  National  and  the 
First  National  Bank  loom  up  impressively 
in  the  foreground.  To  the  right,  just 


ters  of  San  Francisco  and  proved  an  excel- 
lent point  of  vantage  on  the  day  of  the  great 
Portola  Parade  last  October,  when  the  city 
was  thronged  with  hundreds  of  thousands 
of  strangers.  A photographer,  who  sta- 
tioned himself  a block  below,  snapped  the 
leading  features  of  the  spectacular  pageant 
with  the  Crocker  National  Bank  as  a back- 
ground. When  his  views  were  put  on  sale, 
Mr.  John  Cunningham,  the  clever  manager 
of  the  deposit  vaults  of  the  Crocker  Na- 
tional Bank,  was  delighted  to  find  that  he 
could  utilize  to  advantage  in  his  advertising 
one  particular  scene  showing  a monster 


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SAN  FRANCISCO’S  NOTABLE  NEW  BANK  BUILDINGS  239 


Union  Trust  Company,  Grant  Avenue  and  Market  Street 


American  flag  practically  covering  the 
street  in  front  of  the  bank.  It  was  purely 
an  accidental  snap,  but  if  it  had  been  care- 
fully planned  by  the  photographer  the  re- 
sult could  not  have  been  better. 

Tbe  flag  measured  one  hundred  feet  in 
length  by  forty  feet  in  width  and  was  car- 
ried by  150  men.  It  was  made  by  a young 
lady  in  Newark,  N.  J.,  and  is  said  to  con- 
tain a stitch  for  each  enlisted  man  in  the 
American  Army  during  the  Spanish-Ameri- 
can  War.  The  Portola  Committee  secured 
the  flag  as  a feature  of  the  parade  through 
the  combined  efforts  of  the  San  Francisco 
Press,  by  furnishing  a heavy  bond  for  its 
safe  return. 

The  use  of  the  American  flag  in  advertis- 
ing, as  a rule,  seems  cheap  and  almost  a 
desecration,  but  in  this  case,  depicting  a 
scene  from  the  most  elaborate  parade  ever 
seen  in  San  Francisco,  it  does  not  offend 
one's  taste  to  see  it  supplementing  ad- 
vertising in  the  papers  and  magazines  and 
on  the  letter  heads  and  envelopes  of  the 
bank.  Mr.  Cunningham  has  coined  the 
happy  phrase,  “the  acme  of  protection,”  to 
express  the  merits  of  the  Crocker  National 
Bank's  safe  deposit  department  and,  taken 
in  conjunction  with  the  symbolic  significance 
of  our  country’s  flag,  the  four  words  are 
fraught  with  meaning. 

California  street,  from  Kearny  to  Bat- 
tery, is  another  financial  center  that  is 
adorned  with  striking  bank  buildings. 

The  latest  to  be  installed  in  new  quarters 


is  the  German  Savings  and  Loan  Society 
which  enjoys  the  distinction  of  having  been 
the  first  after  the  fire  to  loan  its  money 
for  rebuilding  San  Francisco.  The  new 
building,  which  is  located  on  the  site  of  the 
old  structure,  on  California,  between  Mont- 
gomery and  Kearny  streets,  is  a steel 
frame  class  “A”  structure,  two  stories  in 
height,  with  the  old  front  exactly  repro- 
duced. But  there  the  similarity  ends.  The 
entrance  is  through  a vestibule  of  rare 
Sienna  marble  and  one  of  the  first  things 
that  attracts  your  attention  as  you  view 
the  commodious  banking  rooms  is  the 
openness  of  the  counters.  With  the  excep- 
tion of  five  or  six  cages  for  coin,  all  the 
counters  are  free  from  grill  work.  A mez- 
zanine floor  extends  around  two  sides  of 
the  banking  room  which  is  brilliantly  lighted 
by  a dome  sixty  feet  above  the  floor. 

One  of  the  prime  features  of  a perfect 
bank  building  in  San  Francisco  is  plenty 
of  light,  for  the  fogs  and  overcast  skies 
result  in  many  gray  days  when  poor  light 
is  particularly  trying  to  the  men  at  the 
books.  In  many  cases  they  are  forced  to 
work  wdth  artificial  light  and  this  is  bound 
to  affect  their  health  and  efficiency. 

Faulty  Architecture. 

In  view  of  this  fact,  general  surprise  has 
been  expressed  that  the  architects  of  the 
beautiful  Bank  of  California  building,  a 
block  below  the  German  Savings  Bank,  did 
not  pay  more  attention  to  the  question  of 


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240 


THE  BANKERS  MAGAZINE 


lighting.  From  an  exterior  standpoint, 
this  massive,  classic  structure  is  the  most 
impressive  of  any  bank  building  in  San 
Francisco.  But  when  one  enters,  there  is 
a feeling  of  disappointment.  The  huge 
banking  room  is  one  hundred  and  twelve 
feet  long  and  fifty  feet  high.  The  distance 
from  the  floor  to  the  ceiling  is  so  great 


take  over  $t,000,(KK)  capital  and  the  surplus 
and  undivided  profits  which  are  in  excess 
of  $11,000,000  and  will  continue  to  main- 
tain the  branches  of  the  institution  in  Port- 
land, Tacoma  and  Seattle  as  well  as  the 
agency  in  Virginia  City,  Nevada. 

The  Mercantile  Trust  Company,  a few 
doors  above,  which  is  housed  in  a substan- 


Mechanics  Savings  Bank,  Market  and  Mason  Streets 


that  the  men  and  counters  seem  almost  out 
of  proportion.  The  light  on  a sunshiny  day 
is  only  fair  and  the  whole  appearance  of 
the  banking  room  is  that  of  a dimly  lighted 
church.  It  seems  to  me  that  there  is  no 
excuse  for  this  lack  of  proper  light,  as  the 
building  faces  on  three  streets.  A huge 
skylight  or  dome  would  have  enhanced  the 
beauty  and  effectiveness  of  the  elaborate  in- 
terior a hundred  fold. 

The  Bank  of  California,  by  the  way,  has 
taken  steps  to  enter  the  list  of  national 
banks  and  will  be  known  as  the  Bank  of 
California,  National  Association.  It  will 


tial  one-story  granite  building  that  was  only 
partly  destroyed  by  the  great  fire,  entered 
on  its  career  as  a national  bank  on  March 
.5,  beginning  business  with  a paid-up  capital 
of  $J,000,000.  This  tendency  to  turn  com- 
mercial banks,  operated  under  state  law's, 
into  national  banks  is  said  to  be  due  prin- 
cipally to  the  fact  that  people  on  the  At- 
lantic Coast  understand  all  the  methods  of 
a national  bank  better  than  one  operated  at 
a great  distance  under  state  laws. 

The  San  Francisco  branch  of  the  old 
Bank  of  British  North  America  now  doing 
business  in  a modest  establishment  on  San- 


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SAN  FRANCISCOS  NOTABLE  NEW  BANK  BUILDINGS 


241 


some  street,  near  Pine,  is  to  have  a hand- 
some and  convenient  place  in  the  splendid 
new  Newhall  building,  at  Battery  and  Cal- 
ifornia. It  is  a ten-story  steel  frame 
structure,  built  to  be  earthquake  proof  as 
well  as  fireproof,  and  is  now  practically 
completed. 

A New  Bank  on  Fillmore  Street. 

The  Swiss-American  Bank  and  the  Scan- 
dinavian Savings  Bank  closed  their  branches 
on  Filhnore  street  at  the  first  of  the  year, 
and  transferred  their  business  to  their  Mar- 
ket street  headquarters.  This  move  left 
Filhnore  street,  which  remains  a thrifty 
business  street  in  th?  residence  district, 
without  banking  facilities.  The  property 
owners  and  merchants  in  the  vicinity,  how- 
ever, promptly  organized  a commercial  and 
savings  bank,  known  as  the  Bank  of  Com- 
merce, with  a capital  of  $1 00,000.  The 
quarters  of  the  Swiss-American  Bank,  at 
1452  Fillmore  street,  were  rented  and  on 
January  3,  the  bank  opened  for  business. 

It  is  endorsed  by  the  Filhnore  Street  Im- 
provement Association  and  clears  through 
the  Anglo  and  London  Paris  National  Bank. 
The  organizers  feel  proud  of  their  success 
in  launching  this  institution  to  take  care  of 
the  increasing  business  of  the  Western  Ad- 
dition, and  negotiations  are  being  made  to 
construct  a permanent  home  for  the  bank 
at  a convenient  corner  on  Fillmore  street. 

Mr.  Pissis  is  drawing  plans  for  a $25,000 
branch  bank  of  the  German  Savings  and 
Trust  Society  in  the  Richmond  District. 
It  will  be  located  at  Seventh  and  Clement 


streets.  Ten  years  ago,  this  spot  was  in 
the  midst  of  an  idle  wraste  of  shifting  sand; 
to-day  it  is  the  center  of  a populous  and 
thrifty  community.  The  German  Savings 
and  Loan  Society  also  conducts  a branch 
in  the  Mission  district  which  has  been  or- 
namented by  a number  of  new  bank 
buildings. 

A picturesque  design  in  the  Spanish 
Renaissance  has  been  worked  out  by  Crim 
and  Scott,  for  the  new  Mission  Savings 
Bank  Building,  now  nearing  completion,  at 
the  northeast  corner  of  Valencia  and  Six- 
teenth streets,  one  of  the  busiest  business 
corners  in  the  Mission.  The  bank  has  grown 
to  such  an  extent  that  it  w'as  necessary  to 
enlarge  its  quarters,  and  through  the  op- 
timism of  the  directors,  a ipodern  apart- 
ment building  was  planned.  The  bank  will 
occupy  the  corner,  with  stores  surrounding 
it. 

This  edifice  is  one  of  the  handsomest  mis- 
sion buildings  in  the  city.  The  base  of  the 
clock  tower  is  an  exact  reproduction  of  the 
old  Mission  Dolores,  one  of  the  few  notable 
landmarks  which  survived  the  fire.  The 
clocks  in  the  towrer  will  have  large,  illumi- 
nated dials,  and  will  be  corrected  in  time 
and  wound  hourly  by  the  Western  Union 
Telegraph  Company.  It  is  estimated  that 
the  building,  thoroughly  equipped,  will  cost 
in  the  neighborhood  of  $100,000. 

Foreion  Bank  Buildings. 

The  Italian  population,  w'hich  is  confined 
to  the  North  Beach  district  and  the  Latin 
Quarter,  in  the  neighborhood  of  Telegraph 


The  Bank  of  California 


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242 


THE  BANKERS  MAGAZINE 


Hill,  is  well  provided  with  savings  and 
commercial  banks  carried  on  by  their  own 
countrymen.  They  are  all  located  on  up- 
per Montgomery  street  and  include  the 
Italian- American  Bank,  the  Bank  of  Italy, 
the  Columbus  Savings  Bank  and  the  Italian 
Popular  Bank.  The  latter  is  built  on  a 


Another  interesting  foreign  bank  build- 
ing is  the  San  Francisco  branch  of  the 
Yokohama  Specie  Bank,  Ltd.,  whose  prin- 
cipal aim  is  to  facilitate  trade  between 
Japan  and  all  foreign  countries.  With  but 
few  exceptions,  the  people  employed  in  the 
bank  are  Japanese. 


Passing:  the  Crocker  National  Bank,  “ Bankers’  Corner,"  with  the  American 
Flag  on  the  day  of  the  Great  Portola  Parade 


triangular  gore  lot  and  looks  almost  as  if 
it  had  been  lifted  bodily  from  some  Italian 
city.  It  is  a three-story,  reinforced  con- 
crete building,  in  the  florid  Italian  Renais- 
sance style,  lavishly  ornamented  with  decor- 
ative tiling  and  bronze  work.  A gilded  cu- 
pola, provided  with  a clock,  and  a life  size 
bust  of  J.  F.  Fugazi,  the  founder,  adds 
to  the  foreign  atmosphere.  The  interior 
is  beautifully  finished  in  the  finest  Italian 
marble  and  the  safe  deposit  department 
in  the  basement  is  fitted  up  w'ith  every 
modern  convenience. 


The  building,  which  is  devoted  entirely  to 
banking  purposes,  is  a one-story  structure, 
situated  on  the  corner  of  Commercial  and 
Sansome  streets.  The  main  floor  is  one 
large  room,  sixty  by  eighty  feet,  surmounted 
by  a large  skylight,  which  throws  a flood  of 
light  into  every  corner.  The  roof  is  sup- 
ported by  a peristyle  surrounding  the  sky- 
light area.  The  exterior  is  simple  in  the 
extreme.  Fluted  Greek  columns  flank  the 
entrance,  and  the  light  cream  stone  portico, 
the  bronze  letters  giving  the  name  of  the 
institution,  the  Pompeian  colored  doors  and 


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SAN  FRANCISCO’S  NOTABLE  NEW  BANK  BUILDINGS 


243 


San  Francisco  Savings  Union  at  O'Farrell,  Grant  Avenue  and  Market  Street 


window  frames,  and  the  walls  of  cream 
colored  brick  are  all  important  elements 
in  a charming  composition  that  is  chaste 
yet  distinctive. 

Over  at  the  southwest  corner  of  Clay  and 
Kearny  streets  is  the  three-story  buff 
pressed-brick  building  of  the  Canton  Bank, 
the  first  Chinese  incorporated  bank  of  de- 
posit and  checking  in  the  world.  It  has 
an  authorized  capital  of  $300,000,  a paid-up 
capital  of  $123,650  and  is  owned  entirely 
by  four  hundred  and  thirty-nine  Chinese. 
A general  banking  business  is  conducted 
but  a specialty  is  made  of  Oriental  ex- 
change. Starting  with  Chinese  clients  in 
October,  1907,  the  patronage  has  extended 
until  to-day,  nearly  one-half  of  the  de- 
positors are  Caucasians.  I.  P.  Allen,  the 
manager,  has  been  doing  a banking  busi- 
ness with  the  Chinese  in  San  Francisco  since 
1871  and  enjoys  their  complete  confidence. 

There  are  still  a few  important  banks, 
like  the  Canadian  Bank  of  Commerce  and 
th  Dona  hoe,  Kelly  Banking  Company, 
that  are  occupying  the  temporary  buildings 
erected  on  their  old  sites  immediately  after 
the  fire.  A few  are  in  unpretentious  quar- 
ters until  definite  plans  are  arranged.  Take 
the  Russo-Chinese  Bank,  for  example,  at 
415  Montgomery  street.  This  San  Fran- 
cisco agency  was  opened  in  1904  and  for- 
merly transacted  all  kinds  of  hanking  bus- 
iness, taking  deposits,  etc.,  but  since  the  fire 
it  has  confined  its  operations  to  buying  and 
selling  foreign  exchange,  principally  on 


China  and  Japan  and  Asiatic  Russia.  A 
great  number  of  solid  banking  institutions 
throughout  the  United  States,  Canada  and 
Mexico  avail  themselves  of  the  service  of 
this  San  Francisco  agency  in  selling  their 
Far  Eastern  exchange,  the  amount  of  the 
annual  sales  reaching  several  million  dollars. 

The  head  office  of  the  Russo-Chinese 
Bank  is  in  St.  Petersburg,  the  capital  stock 
amounting  to  $11,707,500;  reserve,  $4^389,- 
000;  deposits,  $26,258,000;  and  loans,  $35,- 
443,000.  The  bank  has  fifty-nine  branches 
and  agencies  in  all  parts  of  the  world,  prin- 
cipally in  Asia,  as  it  was  incorporated  in 
Russia  in  December,  1895,  for  the  especial 
purpose  of  financing  the  Russian  trade  in 
the  countries  of  the  Far  East. 

There  is  a movement  on  foot  to  amalga- 
mate the  Russo-Chinese  Bank  with  the 
Northern  Bank  (also  incorporated  in  Rus- 
sia) with  a joint  capital  stock  of  $25,- 
000,000,  but  nothing  has  been  decided  defi- 
nitely. It  is  said  that  this  amalgamation, 
if  it  comes  to  pass,  will  affect  the  San 
Francisco  agency  in  a considerable  degree. 

There  are  no  longer  any  branch  banks 
on  Van  Ness  avenue,  which  now  presents  a 
sorry  sight.  A few  months  after  it  had 
been  cleared  by  the  flames,  it  became  the 
fashionable  retail  shopping  street  with  all 
the  leading  Anns  well  represented.  For 
two  years  they  were  glad  to  be  accommo- 
dated by  the  banks  that  were  conveniently 
near.  But  last  spring,  when  the  down  town 


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THE  BANKERS  MAGAZINE 


214 

movement  became  general.  Van  Ness  was 
deserted  and  there  was  no  longer  business 
enough  to  warrant  the  branch  banks  re- 
maining. 

Tlie  broad  avenue  to-day  is  undergoing  a 
mighty  change.  Beautiful  club  houses, 
costly  residence  hotels,  pretentious  buildings 
erected  by  fraternal  organizations,  and  pic- 
turesque stone  churches  are  taking  the  place 
of  the  immense  wooden  structures.  There 
arc  still  a strange  array  of  multi-colored 


“auction”  and  “to-let”  signs  to  be  seen,  but 
the  temporary  buildings,  which  are  within 
the  fire  limits,  are  doomed  and  before  long 
the  transformation  of  this  wide  boulevard, 
which  practically  saved  the  Western  Addi- 
tion from  destruction,  will  be  promptly 
accomplished. 

Then  the  rehabilitation  of  San  Francisco 
will  be  complete  and  the  last  important  re- 
minder of  our  great  cata  trophe  will  have 
vanished. 


THE  CROP  AND  BUSINESS  SITUATION 


By  A.  B.  Hepburn,  President  Chase  National  Bank,  New  York 


Dl* 1UXG  my  recent  trip  west  I crossed 
eleven  states,  and  although  not  an  ex- 
pert, the  crop  conditions  seemed  to  me 
to  be  very  good  indeed.  The  oats  and 
wheat  was  practically  all  harvested,  some 
in  process  of  threshing,  and  some  being 
stacked,  but  most  of  it  still  standing  in 
stocks  in  the  fields.  I did  not  go  west  of 
the  Mississippi,  but  am  inclined  to  think  that 
tlie  crop  damage,  especially  in  the  North- 
west, has  been  largely  overestimated.  A 
committee  of  millers  just  returned  to  Min- 
neapolis from  a tour  of  inspection  through 
Minnesota  and  the  Dakotas,  report  that 
the  money  value  of  the  crops  in  Minnesota, 
South  Dakota  and  the  Southern  half  of 
North  Dakota  will  exceed  that  of  any  pre- 
vious crops.  Conditions  in  the  Northern 
half  of  North  Dakota  are  serious  and  they 
estimate  the  crop  value  as  about  one-third 
the  average.  The  price  of  flax  is  $9.65  and 
the  flax  crop  will  go  far  toward  making  up 
the  loss  upon  wheat. 

A conservative  estimate  of  the  crop 
damage  places  the  amount  at  from  $75,- 
000,000  to  $100,000,000.  This  of  course  is 
very  serious  and  affects  a staple  article  of 
export.  It  is  most  valuable  in  protecting 
our  international  balance  of  trade.  The 
Department  at  Washington  estimated  the 
money  value  of  our  crops  in  1909  at  $8,- 
000,000,000.  Conceding  a loss  of  $100,000.- 
000  in  the  Northwest,  it  is  but  little  more 
than  one  per  cent,  of  the  total  value.  How- 
ever serious  it  may  be  to  a locality,  the 
general  statement  remains  true  that  the 
crops  of  the  country  as  a whole  promise 
at  tl»e  present  time  to  exceed  in  value  any 
previous  crops  produced.  There  is  no  oc- 
casion for  pessimism.  The  condition  in 
North  Dakota  is  well  expressed  by  an  im- 
portant business  man  of  that  locality  in 
the  following  words: 

If  North  Dakota,  after  nine  fat  years,  can- 
not stand  one  lean  one.  then  our  confidences 
have  been  misplaced,  and  the  sooner  we  find 
it  out  the  better. 

Suppose  we  raise  forty  or  fifty  per  cent,  of 
a crop,  or  say  40,000,000  bushels.  In  1900 
North  Dakota  raised  13,000,000  bushels  of 


wheat,  and  as  I remember,  the  price  was  be- 
tween sixty-five  and  eighty  cents.  Certainly 
it  can  stand  a short  crop  now  better  than  it 
could  ten  years  ago.  Another  thing  you 
must  not  forget,  and  that  is  that  crop  con- 
ditions at  this  time  of  the  year  are  always 
overestimated,  either  for  good  or  bad.  A 
big  heavy  stand  of  grain  rarely  yields  as 
much  as  is  expected,  whereas  a dry  year  like 
this  one  nearly  always  produces  a better 
yield  and  a higher  grade  than  appearances 
would  indicate. 

Furthermore,  the  half  of  the  crop  which 
w’e  won’t  get  this  year  is  the  half  that  w’ould 
be  spent  for  things  which  we  do  not  need. 
Some  farmers  won’t  buy  automobiles  now, 
others  will  fix  up  the  old  binders  and  sep- 
arators and  be  surprised  to  find  how  well 
they  work.  There  won’t  be  as  many  build- 
ings built,  nor  as  many  pleasure  trips  taken, 
nor  as  much  Canadian  land  or  timber  or 
mining  stock  sold  in  North  Dakota,  but  the 
half  of  the  crop  which  we  get  will  stay  at 
home.  We  won’t  raise  as  much  oats  and  hay 
as  usual,  but  neither  will  burning  straw 
stacks  light  the  way  across  the  State.  We 
will  feed  up  the  straw  Instead  of  burning  it, 
and  find  that  it  makes  pretty  good  feed  at 
that. 

One  very  fortunate  feature  about  the  pres- 
ent condition  is  the  fact  that  our  crop  was 
injured  in  June  instead  of  later  in  the  season. 
If  we  had  the  crop  prospects  in  June  this 
year  that  we  had  last  year,  the  1910  crop 
would  have  been  spent  by  this  time.  Farmers 
would  have  bought  a lot  of  things  that  they 
won't  buy  now,  and  the  banks  would  have 
been  loaded  with  their  paper.  They  if  the 
crop  had  been  hit  in  August,  it  would  have 
been  too  late  to  recuperate. 

That  the  business  of  the  country  as  a 
whole  is  in  good  condition  and  profitable, 
is  evidenced  by  the  very  large  volume  of 
business.  This  large  volume  of  business  is 
shown  by  the  largely  increased  exchanges 
of  ihe  banks  throughout  the  country.  It 
is  also  shown  by  the  very  large  demand  for 
money  which  exists.  The  wonderful  profits 
relaized  by  farmers  have  necessarily  at- 
tracted investors  and  a large  amount  of 
farm  land  has  changed  hands,  and  a large 
amount  of  money  has  been  withdrawn  from 
banks  and  invested  in  real  estate.  The 
Canadian  Government  estimates  that  $100,- 


Digitized  by  t^ooQle 


Old  Colony  Trust  Co. 

BOSTON,  MASS. 

Capital  and  Surplus  - - $12,500,000 
Deposits  - - - - 65,000,000 


OFFICERS 

T.  JEFFERSON  COOLIDGE,  JR.,  Chairman  Executive  Committee 
GORDON  ABBOTT,  Chairman  Board  of  Directors 

FRANCIS  R.  HART,  Vice-Chairman  Board  of  Directors 
PHILIP  STOCKTON,  President 

WALLACE  B.  DONHAM,  Vice-President 
J.  R.  WAKEFIELD,  Vice-President 

FREDERIC  G.  POUSLAND,  Treasurer 

E.  ELMER  FOYE,  Manager  Credit  Dept 
GEORGE  W.  GRANT,  Cashier 

CHESTER  B.  HUMPHREY,  Secretary 


DIRECTORS 

Charles  F.  Adaraa,  2d  Wilmot  R.  Evans  Robert  T.  Paine.  2d 

Oliver  Ames  Frederick  P.  Fish  Henry  Parkman 

F.  Lothrop  Ames  Reginald  Foster  Andrew  W.  Preston 

C.  W.  Amory  George  P.  Gardner  Richard  8.  Russell 

William  Amory  Edwin  Farnham  Greene  Philip  L.  Saltonstall 

Charles  F.  Ayer  Robert  F.  Herrick  Herbert  M.  Sears 

John  S.  Bartlett  Henry  8.  Howe  Quincy  A.  Shaw 

8amuel  Carr  Walter  Hunnewell  Howard  8tockton 

B.  P.  Cheney  Henry  C.  Jackson  Charles  A.  Stone 

T.  Jefferson  Cool  Id  ge  George  E.  Keith  Galen  L.  Stone 

Charles  E.  Cottlng  Gardiner  M.  Lane  Nathaniel  Thayer 

Alvah  Crocker  Thomas  L.  Livermore  Lucius  Tuttle 

Philip  T.  DeNormandle  Arthur  Lyman  H.  O.  Underwood 

Philip  Dexter  Charles  S.  Mellen  Eliot  Wadsworth 

George  A.  Draper  Lawrence  Minot  Stephen  M.  Weld 

Frederic  C.  Dumalne  Maxwell  Norman  Sidney  W.  Winslow 

William  Endlcott.  Jr.  Richard  Olney  Charles  W.  Whittier 


The  OLD  COLONY  TRUST  COMPANY  is  in  every  sense 
of  the  word  an  independent  trust  company,  interested  only  in 
the  welfare  of  its  depositors  and  its  stockholders,  and  the 
development  of  New  England’s  business  interests. 

Resources  in  excess  of  $75,000,000  make  this  Company 
one  of  the  largest  and  strongest  financial  institutions  in  the 
country,  and  insure  to  every  depositor,  large  or  small,  absolute 
security  combined  with  the  highest  type  of  banking  service. 


Digitized  by  t^ooQle 


Building 

Banks 

Well 


IBANKI 


lAiCHITECTUitET^pj^^^jHENClNEEILlNCl 
| OBSTRUCT  lONKV  DECORATION  1 


1 EQUIPMENT  | 


BANK  buildings  are  like  no  other 
buildings.  How  to  build  banks 
well  cannot  be  learned  from 
one  operation  nor  from  several.  It  is 
a field  in  itself.  We  have  worked  in 
it  for  twelve  years  and  have  handled 
every  phase  of  the  building,  remod. 
eling,  equipping,  decorating  and  fur- 
nishing of  banks.  This  experience 
and  our  method  of  handling  our  oper- 
ations under  a single  contract,  cov- 
ering every  detail  from  plans  to  com- 
pletion, are  of  value  to  you.  Write  us. 


We  Build  from 
Coast  to  Coast 


HOGGSON  BROTHERS 

7 East  44th  St.  : New  York 


THE  HALL  MONTHLY  DIARIES 


A PAGE  FOR  EACH  DAY  A BOOK  FOR  EACH  MONTH 

A High  Gra.de  Advertising  &Covelty  used  by  many  Banks  and  Trust  Com- 
panies and  greatly  appreciated  by  business  and  professional  n<en.  Size  of  each  book 
2H  by  4 H inches.  12  Books  to  set,  neatly  bound  in  leatherette  and  packed  in  box. 
Samples  and  Prices  upon  application.  Kindly  state  quantity  you  could  use. 

THE  J.  C.  HALL  COMPANY 

BANK  STATIONERS  PROVIDENCE.  R.  I. 

Orders  for  1911  must  he  placed  now  Delivery  to  he  made  in  December 


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000,000  from  the  States  has  been  invested 
in  Canadian  lands  during  the  last  year. 
This  is  an  important  item  in  our  interna- 
tional balance  of  trade  and  accounts  largely 
for  the  money  demand  now  existing. 
Farmers  who  have  been  carrying  money 
in  banks  have  withdrawn  the  same  and  in- 
vested it  in  the  Dominion,  and  in  very  many 
instances  have  borrowed  additional  amounts 
for  the  purpose.  It  may  be  that  these  in- 
vestments will  prove  proa  table  in  the  long 
run.  1 do  not  believe  there  has  been  any 
such  over-speculation  in  real  estate  in  the 
Middle  and  Far  West  as  is  generally  be- 
lieved. 

I am  very  optimistic  as  to  general  busi- 
ness conditions.  The  one  thing  that  is  radi- 
cally wrong  is  the  wild  extravagance  in 
domestic  enconomy  which  unquestionably  ex- 
ists throughout  the  country.  This  perhaps  is 
most  conspicuously  evidenced  by  the  craze 
for  automobiles,  which  are  expensive  to  buy 


and  still  more  expensive  to  maintain.  This 
extravagance  is  evidence  of  our  every-day 
methods  of  living  and  indulgence  at  home 
and  abroad.  As  a nation  we  have  been 
spending  for  the  last  two  years  more  than 
we  earned,  and  as  a result  an  international 
indebtedness  has  been  piled  up  against  us. 
This  international  indebtedness  may  be  car- 
ried along  by  borrowing,  but  can  only  be 
settled  by  a trade  balance  in  our  favor,  or 
exportation  of  gold. 

If  present  conditions  shall  teach  our  peo- 
ple the  necessity  of  curtailing  expenditure, 
it  will  be  a most  wholesome  and  valuable 
lesson.  The  New  York  banks,  with  $50,- 
000,000  surplus  reserve,  are  in  good  con- 
dition to  meet  the  crop-moving  demand. 
There  is  not  a suggestion  of  crisis  in  the 
situation  and  there  is  no  reason  why  legiti- 
mate commercial  business  should  be  in  the 
least  disturbed. 


MODERN  FINANCIAL  INSTITUTIONS 

AND  THEIR  EQUIPMENT 


THE  HOME  TRUST  COMPANY  OF  NEW  YORK 

198  MONTAGUE  STREET,  BROOKLYN 


RGANTZATION  of  the  Home  Trust 
Company  of  New  York  was  begun 
in  the  early  months  of  1905  and 
brought  to  a close  on  the  fifth  day  of  April 
of  that  year  when  the  new  institution 
opened  for  business  at  184  Montague  street, 
Brooklyn. 

J.  Edward  Swanstrom,  formerly  borough 
president  of  Brooklyn,  was  elected  as  the 
first  president.  Associated  with  him  on  the 
official  staff  and  the  directorate,  were  prac- 
tical level-headed  business  men  of  wealth 
and  influence,  whose  connection  with  the 
new  company  brought  to  it  a constantly 
increasing  tide  of  new  business. 

In  keeping  with  its  modest  pretentions 
and  policy  of  conservatism,  the  quarters 
first  secured  for  the  Home  Trust  Com- 
pany of  New  York  were  neither  elaborate 
nor  large.  But  the  showing  made  during 
the  months  that  immediately  followed  the 
opening  day  was  so  encouraging  that  the 
officers  began  their  search  for  a new  loca- 
tion, one  that  would  not  only  be  very  con- 
venient to  patrons  in  all  parts  of  Brooklyn, 
but  would  also  permit  of  future  growth 
and  expansion. 

New  Quarters. 

In  1908  the  removal  was  made  to  198 
Montague  street,  to  the  building  shown  in 


the  accompanying  cut.  Here  everything  is 
up-to-date  and  the  location  is  an  ideal  one. 
In  addition  to  a well  equipped  banking 
room  for  general  customers,  a specially  ap- 
pointed room  with  private  booth  has  been 
provided  for  the  ladies.  Special  courtesies 
arc  shown  to  them  and  they  are  made  to 
feel  at  home.  This  department  has  had  a 
remarkable  growth  and  all  because  a few 
satisfied  lady  patrons  have  spread  the  gospel 
'round.  Mahogany  of  a very  fine  grain 
has  been  used  to  advantage  throughout  the 
various  rooms  for  the  counters,  doors,  chairs 
and  all  woodwork. 

One  of  the  special  conveniences  to  be 
found  in  the  new  quarters,  is  the  fire  and 
burglar  proof  safe  deposit  vault,  contain- 
ing boxes  of  various  sizes  that  can  be  rented 
for  $5  a year  upward.  This  vault  has 
three  time  locks  and  is  a product  of  the 
modern  safe  builders’  art.  Two  large  stor- 
age vaults  have  also  been  installed.  The 
basement  has  been  utilized  for  a meeting 
room  for  the  directors.  It  is  furnished  in 
keeping  with  the  style  observed  throughout 
the  building. 

Up  to  1907,  the  Home  Trust  Company 
operated  with  a capital  of  $500,000  and  a 
surplus  of  $250,000;  after  1907  the  capital 
was  increased  to  $750,000.  On  June  30  of 
this  year  the  company  reported  surplus 


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THE  BANKERS  MAGAZINE 


and  undivided  profits  of  $326,814.05,  a re- 
serve of  $10,200  for  taxes,  deposits  of  $2,- 
230,474.51,  and  total  assets  of  $3,318,797.99. 

Personnel. 

Following  the  election  of  F.  E.  Gunnison 
as  president  in  1908,  there  have  been  steady 
gains  in  deposits,  the  last  report  placing 
them  at  $2,350,000. 


connected  with  several  other  financial  insti- 
tutions. 

William  M.  Calder,  vice-president,  was 
bom  in  Brooklyn,  N.  Y.,  on  March  3,  1869, 
and  has  resided  there  all  his  life.  He  re- 
ceived his  education  in  the  public  schools 
of  Brooklyn  and  Cooper  Institute  of  the 
City  of  New  York.  He  is  vice-presi- 
dent of  the  Home  Trust  Company,  of  the 


FREDERIC  E.  GUNNISON 
President  Home  Trust  Company  of  New  York 


Frederic  E.  Gunnison,  president,  was  born 
in  Canton,  N.  Y.,  on  May  28,  1869.  He  was 
graduated  from  Columbia  University  in 
1890;  and  the  law  school  of  New  York  Uni- 
versity in  1892.  He  is  a member  of  the 
law  firm  of  Harris,  Corwin,  Gunnison  & 
Meyers,  and  has  had  long  experience  in 
corporation  law.  He  was  the  president  of 
the  New  York  State  Gas  and  Electricity 
Commission,  which  made  the  original  eighty 
cent  gas  order  for  New  York  City.  He  was 
for  several  terms  the  president  of  the  Union 
League  Club  of  Brooklyn,  is  a director  in 
the  East  Brooklyn  Savings  Bank,  and  is 


City  of  New  York,  and  a director  of  the 
Montauk  Bank  of  Brooklyn;  was  a dele- 
gate to  the  Republican  National  Convention 
in  Chicago  in  1908,  was  appointed  building 
commissioner  of  the  borough  of  Brooklyn, 
January  1,  1902,  and  filled  that  office  during 
the  years  of  1902  and  1903;  was  elected  to 
the  Fifty-ninth  and  Sixtieth  Congresses  and 
re-elected  to  the  Sixty-first  Congress. 

James  N.  Brown,  vice-president,  is  also 
president  of  the  Bank  of  North  Hempstead 
at  Port  Washington,  L.  I.,  a director  in  the 
East  Brooklyn  Savings  Bank  and  other 
financial  institutions,  and  is  head  of  the 


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WILLIAM  M.  CALDER 
Vice-President 


JAMES  N.  BROWN 
Vice-President 


WILLTAM  K.  SWARTZ 
Secretary 


JOSEPH  P.  STAIR 
Assistant  Secretary 


PHOTOS  BV  OLIViR  UPPiHCOTT,  N.  V. 


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Building  occupied  by  the  Home  Trust  Company  of  New  York,  at  198  Montague 

Street,  Brooklyn 

l*  is 


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A View  of  Ibe  Public  Corridor  and  Banking  Counters 


Office  of  the  President  and  Secretary 


249 


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MODERN  FINANCIAL  INSTITUTIONS 


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banking  house  of  James  X.  Brown  & Com- 
pany of  New  York  City,  and  a member  of 
the  New  York  Stock  Exchange. 

He  has  had  a thorough  training  as  a 
banker  from  his  youth  up,  starting  in  an  old 
banking  house  in  New  York  City  where  for 
fifteen  years  he  was  schooled  in  the  various 
departments  of  modern  finance.  He  is  a 
student  of  the  economic  questions  of  the 
day,  active  as  a capitalist,  and  an  old  resi- 


cashier  with  a Wall  Street  Jiouse.  Later 
he  was  selected  to  be  cashier  of  the  First 
National  Bank  of  Portage,  Pa.  This  posi- 
tion he  gave  up  to  come  to  Staten  Island. 
As  secretary  of  the  Home  Trust  Company 
of  New  York,  Mr.  Swartz  has  through  his 
personality  and  executive  ability  made  a 
host  of  friends  for  himself  and  for  the 
institution  he  serves. 

Joseph  P.  Stair,  the  assistant  secretary 


Vault  Door  and  Interior 


dent  of  Brooklyn,  having  been  born  there 
over  fifty  years  ago.  His  interest  in  edu- 
cational and  charitable  matters  is  in  close 
alignment  with  his  activity  as  a banker,  and 
he  has  been  honored  in  numerous  financial 
trusts. 

William  K.  Swartz,  secretary,  resigned  the 
cashiership  of  the  Richmond  Borough  Na- 
tional Bank  at  Stapleton,  in  March,  1907, 
to  accept  the  office  of  assistant  secretary  of 
the  Home  Trust  Company  of  New  York. 
He  has  since  been  promoted  to  the  position 
of  secretary.  Mr.  Swartz  was  born  in  Du- 
cannon.  Pa.,  educated  at  Dickinson  Col- 
lege, Carlisle,  Pa.,  and  afterward  came  to 
New  York  where  he  assumed  a position  as 


of  the  Home  Trust  Company,  was  born  and 
educated  in  Brooklyn.  He  was  formerly 
connected  with  the  National  Bank  of  Com- 
merce in  New  York,  and  National  Shoe  and 
Leather  Bank.  He  started  with  the  Home 
Trust  Company  shortly  after  its  organiza- 
tion os  bookkeeper,  from  which  position  he 
has  rapidly  advanced  to  the  position  which 
he  now  holds. 

The  IIome*Trust  Company  is  a designated 
depository  for  the  State  of  New  York  and 
the  City  of  New  York.  It  is  also  a legal 
depository  for  the  United  States  courts  in 
bankruptcy  funds,  and  for  court  and  trust 
funds,  legal  reserve  funds.  State  banks  and 
trust  companies  of  the  State  of  New  York. 


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CHARLES  E.  ROGERSON 

President  Boston  Safe  Deposit  and  Trust  Company,  one  o*  the  Oldast  Trust  Companies  in 

New  England 


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BOSTON  SAFE  DEPOSIT  AND  TRUST  COMPANY 


BOSTON  has  made  many  notable  addi- 
tions to  its  banking  buildings  during 
the  past  few  years  and  now  stands  in 
the  front  rank  of*  American  cities  as  to 
the  beauty  and  appropriateness  of  the 
buildings  erected  to  house  its  financial  in- 
stitutions. 

The  newest  of  these  modern  structures  is 
that  of  the  Boston  Safe  Deposit  and  Trust 
Company,  which  was  opened  for  business 
July  11.  The  building  is  located  on  the 
site  bounded  by  Franklin,  Devonshire  and 
Arch  streets.  In  the  decision  to  provide 
new  quarters  for  the  bank  the  conservative 
spirit  which  has  always  characterized  the 
management  of  the  company  was  made 
manifest;  therefore,  instead  of  constructing 
a building  exclusively  for  the  use  of  the 
bank,  a ten-storied  structure  has  been  built, 
the  upper  eight  stories  of  the  building  by 
reason  of  their  rental  providing  an  increas- 
ingly valuable  investment  for  the  company. 

The  building  itself  is  a substantial,  dig- 
nified structure,  designed  on  lines  to  sug- 
gest an  adaptation  of  the  Iitalian  Renais- 
sance. The  structure  is  carried  by  steel  and 
masonry,  the  exterior  being  finished  in  white 
Dorset  * marble.  Every  modern  detail  has 
been  provided  for  the  convenience  and  safe- 
ty of  the  tenants,  who  already  practically 
occupy  the  entire  available  rental  space  of 
the  new  building. 

Banking  Rooms. 

For  the  new  banking  rooms  of  the  Boston 
Safe  Deposit  and  Trust  Company  the  space 
used  is  that  which  would  ordinarily  be  oc- 
cupied by  the  first  two  stories  and  basement 
and  as  the  the  new  offices  stand  completed 
an  area  of  27,980  square  feet  is  available. 

Entering  the  main  banking  room  directly 
from  the  street  level  by  either  of  the  two 
entrances  an  inspection  will  show  an  ex- 
cellently proportioned  room,  well  lighted 
and  artistically  decorated. 

The  general  dimensions  of  the  main  bank- 
ing room  show  that  the  distance  between 
piers  (across  the  public  space)  is  sixty  feet; 
height  of  ceiling,  public  space,  thirty-one 
feet;  height  of  ceiling  under  fnezzanine 
floors,  seventeen  and  one-half  and  eleven  and 
onc-half  feet.  The  ceiling  structure  is  car- 
ried by  nine  large  steel  girders  weighing 
twenty-five  tons  each,  furnishing  sufficient 
strength  to  give  the  banking  room  as  much 
protection  as  would  be  provided  in  a low 
storied  building. 

The  excellence  of  the  natural  lighting  of 
the  room  is  worthy  of  special  mention  and 
artificial  light  is  supplied  when  necessary 
by  six  finely  wrought  bronze  chandeliers 
and  countless  special  fixtures. 

From  the  public  area,  the  general  plan  of 

s 


the  room  shows  the  space  flanked  on  two 
sides  by  the  bank  screen  of  finely  colored 
marble  and  golden  bronze,  part  way  over 
which  extends  the  enclosed  mezzanine  floors. 
At  the  front  and  at  either  side  of  the  main 
entrance  are  rooms  for  the  president,  at- 
torney, customers  and  general  officers.  At 
the  rear,  is  the  special  elevator  to  the  safe 
deposit  vault  and  staircase  leading  down. 

The  main  features  of  the  public  space  are 
the  handsome  marble  tables  which  have  been 
provided.  These  tables  are  beautiful  pieces 
of  workmanship.  Chairs  are  provided  for 
the  long  table,  a distinct  convenience  not 
always  found  in  banking  rooms. 

The  main  banking  room  receives  its  deco- 
rative effect  from  the  use  of  several  choice 
selections  of  foreign  colored  marbles,  which 
have  been  used  with  excellent  taste  and 
which  in  connection  with  tho  soft  gray  and 
white  tint  of  the  walls  and  ceiung,  the 
points  of  which  are  touched  with  gold,  give 
one  a pleasing  impression  without  any  feel- 
ing that  the  work  has  been  overdone.  The 
bank  screen  of  golden  bronze  further 
brightens  the  room  and  serves  to  dispel  the 
cold  and  somewhat  gloomy  feeling  which  is 
so  often  encountered  in  banking  rooms. 
Some  fifteen  distinctly  different  colored  mar- 
bles have  been  used  and  their  arrangement 
in  the  general  color  effect  is  excellent. 

Space  for  the  various  banking  departments 
is  provided  for  back  of  the  bank  screen 
which  runs  the  entire  length  of  two  sides 
of  the  room.  On  the  right  is  the  banking 
department  proper  with  cages  for  the  loan 
and  discount  clerks,  paying  and  receiving 
tellers,  bookkeepers  and  statement  clerks. 
On  the  left  are  the  bond,  trust,  stock  trans- 
fer and  registration  departments,  with  cages 
for  the  various  clerks. 

Back  of  these  departments  on  the  bank 
side  are  the  long  special  desks  for  bookkeep- 
ers and  accountants,  special  files  and  other 
necessary  details.  On  the  trust  side  are  the 
offices  necessary  for  the  various  divisions  and 
work  required. 

The  arrangement  of  these  departments  is 
quite  the  equal  of  any  to  be  found  in  any 
modern  bank  building  in  Boston,  with  the 
special  advantage  that  each  and  every  de- 
partment is  quickly  within  reach  of  the 
others. 

From  the  trust  side  of  the  room  a private 
stairway  leads  to  the  directors’  room  on  the 
mezzanine  floor.  This  room  is  attractively 
finished  with  long  mahogany  table,  comfort- 
able chairs,  fireplace  and  other  accessories. 

The  remaining  space  on  the  two  mezzanine 
floors  will  be  used  for  special  departments 
and  provide  room  for  expansion  of  the  com- 
pany’s business. 

The  architects  were  Messrs.  Shepley,  Ru- 
tan  & Coolidge  of  Boston. 

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BOSTON  SAFE  DEPOSIT  AND  TRUST  COMPANY  BUILDING 
Franklin,  Devonshire  and  Arch  Streets,  Boston 


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Safe  Deposit  Vault. 

The  safe  deposit  vault  business  of  the 
Boston  Safe  Deposit  and  Trust  Company  has 
for  many  years  received  much  expert  atten- 
tion and  is  today  about  the  largest  in  New 
England.  With  the  new  vault  which  has 
been  built,  and  which  by  the  way  is  the 
largest  in  New  England',  this  department 
has  been  provided  with  ample  opportunity 
for  further  expansion.  The  vault  itself  is 
located  in  the  first  basement  of  the  building 
and  is  wholly  below  the  street  level.  This 
location,  with  the  special  elevator  service 
and  stairway,  offers  the  greatest  possible 
convenience  subordinate  to  the  requirements 
of  the  highest  degree  of  protection. 

The  vault  has  been  constructed  so  that  it 
is  open  to  constant  inspection  by  the  watch 
from  all  sides,  top  and  bottom,  and  stands 
entirely  separate  from  the  walls  of  the  build- 
ing, being  supported  upon  its  own  founda- 
tion. The  outside  dimensions  of  the  vault 
are  sixty-six  by  forty  feet  and  the  weight  is 
3000  tons.  The  walls  are  of  the  strongest 
concrete,  two  feet  and  more  in  thickness,  re- 
inforced by  special  heavy  tee  grillage.  The 
lining  is  made  of  massive  interlocking  steel 
plates  and  forged  sections.  The  steel  used 
is  of  two  kinds — one  of  great  tensile  strength 
and  ductility,  to  resist  the  shock  of  explo- 
sives and  the  tearing  effect  of  wedges,  and 
the  other  of  extreme  hardness  to  resist  drills 
and  all  other  cutting  tools. 

The  two  vault  doors,  with  their  comple- 
ment of  time  locks  and  electrical  protective 
features,  each  weigh  over  twenty  tons,  and 
combine  all  the  known  elements  of  protec- 
tion. The  entrance  ways  or  vestibules,  in- 
cluding the  doors,  each  weigh  over  sixty-five 
tons.  Fresh  air  is  delivered  to  the  vault  by 
protected  ducts,  which  close  automatically 
with  the  vault  doors. 

The  capacity  of  this  immense  vault  is 
about  15,000  safes.  The  vault  was  designed 
by  Frederick  S.  Holmes  and  built  by  the 
Remington  « k Sherman  Company.  Around 
the  vault  on  the  outside  are  arranged  some 
sixty  coupon  rooms  and  consulting  rooms, 
with  a special  room  for  ladies. 

History  of  the  Company. 

The  Boston  Safe  Deposit  and  Trust  Com- 
pany, one  of  the  oldest  in  the  state,  received 
its  charter  by  act  of  legislation  April  13, 
1867,  the  incorporators  being  Samuel  H. 
Walley,  William  Ropes,  William  Endicott, 
Jr.,  their  associates  and  successors.  The 
charter  granted  was  a broad  one  and  pro- 
vided for  the  “receiving  of  deposits,  for  safe- 
keeping government  securities,  stocks,  bonds, 
coin,  jewelry,  plate,  valuable  papers  and 
documents,  and  other  property  of  every 
kind,  and  for  collecting  and  disbursing  the 
interest  or  income  upon  such  of  said  proper- 
ty received  on  deposit  as  produces  interest 
or  income  and  of  collecting  and  disbursing 
the  principal  of  such  of  said  property  as 
produces  interest  or  income  when  it  comes 


due,  upon  terms  to  be  described  by  the 
corporation,  subject  to  certain  statute  re- 
strictions.'” 

Several  amendments  were  made  to  this 
charter  and  on  April  14*,  1875,  the  Boston 
Safe  Deposit  and  Trust  Company  was  in- 
corporated anew  with  a capital  of  $4f00,000. 
The  capital  was  increased  to  $600,000,  Jan- 
uary 25,  1882,  and  later,  on  January  26, 1890, 
to  $1,000,000,  where  it  stands  at  present. 

The  record  of  the  honorable  career  of  this 
leading  Boston  banking  institution  is  con- 
temporary with  the  growth  of  the  financial 
and  commercial  life  of  the  city.  The  com- 
pany has  kept  pace  with  the  general  growth 
of  the  community  and  in  its  new  quarters 
occupies  a position  long  deserved. 

Three  of  Boston’s  mayors  have  been  offi- 
cials of  the  company,  their  names  being 
Frederick  W.  Lincoln,  Samuel  C.  Cobb  and 
Henry  L.  Pierce.  A glance  at  the  succeed- 
ing lists  of  officers  and  directors  would  show 
the  names  of  many  of  Boston’s  leading  busi- 
ness men  and  private  citizens. 

The  present  officers  include: 

Charles  E.  Rogerson,  president. 

James  Longley,  vice-president. 

William  C.  Williams,  vice-president. 

George  E.  Goodspeed,  treasurer. 

Edward  E.  Stevens,  assistant  treasurer. 

Roland  E.  Chafey,  assistant  treasurer. 

Henry  A.  Fenn,  secretary  and  manager 
safe  deposit  department. 

Herbert  D.  Heathfield,  assistant  secretary. 

Francis  J.  Burrage,  assistant  secretary. 

Marvin  Sprague,  trust  officer. 

The  president,  Mr.  Charles  E.  Rogerson, 
hits  been  actively  engaged  in  the  business 
life  of  Boston  and  the  state  for  many  years. 
He  is  a native  of  Boston  and  early  entered 
the  employ  of  the  Bartlett  Steam  Cotton 
Mills,  at  Newbury  port,  and  this  was  the  be- 
ginning of  his  large  interests  in  the  cotton 
industry.  In  1880,  Mr.  Rogerson  became 
treasurer  of  the  Bartlett  Steam  Cotton  Mills, 
which  were  later  destroyed  by  fire  and  went 
out  of  business.  In  the  same  , year  he  be- 
came treasurer  of  the  Peabody  Mills,  resign- 
ing to  go  into  business  as  a cotton  broker, 
in  which  he  was  highly  successful.  In  1899, 
Mr.  Rogerson  entered  into  partnership  with 
Messrs.  William  Almy  and  Theodore  G. 
Bremer,  the  firm  being  known  as  Almy, 
Rogerson  & Bremer.  On  May  1,  1905,  Mr. 
Rogerson  severed  his  connection  with  the 
firm  and  since  has  devoted  his  entire  time 
and  attention  to  the  constantly  increasing 
business  of  the  Boston  Safe  Deposit  and 
Trust  Company. 

Mr.  William  C.  Williams,  vice-president, 
has  been  with  the  bank  for  many  years  and 
is  recognized  as  one  of  the  most  active  bank 
men  in  Boston,  practically  his  entire  busi- 
ness life  having  been  spent  in  the  banking 
field.  Mr.  Williams  was  educated  in  the 
Phillips  Grammar  and  Boston  Latin  Schools, 
entering  business  life  in  1877.  Mr.  Williams. 


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256 


Main  Banking  Room— View  from  the  Rear 


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MODERN  FINANCIAL  INSTITUTIONS 


257 


The  President's  Room 

became  identified  with  the  Suffolk  National 
Bank  on  January  1,  1879.  After  working 
up  through  the  successive  positions  to  that 
of  assistant  cashier  and  passing  through  the 
consolidation  of  the  Suffolk  and  Washington 
National  Banks,  which  resulted  in  the  Na- 
tional Suffolk  Bank  on  January  27,  1902, 
Mr.  Williams  became  cashier  of  the  new  in- 
stitution, of  which  a short  time  later  he  was 
made  vice-president.  On  September  29,  1903, 
the  National  Suffolk  Bank  was  absorbed  by 
the  Second  National  and  the  vice-presidency 


The  Officers*  Quarters 

was  offered  to  and  accepted  by  Mr.  Wil- 
liams. Six  months  later  the  directors  of  the 
Boston  Safe  Deposit  and  Trust  Company 
sought  his  services,  and  on  March  1,  1904,  he 
was  made  vice-president  of  this  company. 

Mr.  George  E.  Goodspeed,  who  became 
treasurer  of  the  Boston  Safe  Deposit  and 
Trust  Company  in  1896,  entered  the  com- 
pany as  a bookkeeper  in  1881.  Mr.  Good- 
speed  is  a native  of  Connecticut  and  grad- 
uated from  the  Sheffield  Scientific  School  at 
Yale. 

Mr.  Henry  A.  Fenn’s  connection  with  the 
company  dates  from  June,  1875,  when  he  be- 
came clerk,  succeeding  Edward  P.  Bond  as 


secretary  and  manager  of  the  safe  deposit 
vaults  in  the  spring  of  1893. 

The  following  is  a partial  list  of  past  of- 
ficers of  the  Boston  Safe  Deposit  and  Trust 
Company  and  is  interesting  because  it  con- 
tains the  names  of  many  men  whose  business 
ability  and  public  spirit  have  contributed  in 
no  small  measure  to  the  city’s  progress  and 


The  Directors'  Room 

prosperity  and  who  did  much  to  furnish  the 
foundation  for  the  present  sphere  of  useful- 
ness occupied  by  the  company. 

Presidents:  Francis  M.  Johnson,  1875- 
1877;  Frederick  M.  Stone,  1877-1897;  Wil- 
liam E.  Putnam,  1897-1905. 

Vice-presidents:  Frederick  W.  Lincoln, 
1875-1897;  Francis  Dane,  1875;  Thomas  Tal- 
bot, 1875-1881;  Samuel  C.  Cobb,  1876-1877; 
Francis  M.  Johnson,  1878;  Oliver  Ditson, 
1879-1888;  William  E.  Putnam,  1891-1897. 

Treasurer:  Frank  C.  Miles,  1875-1896. 

Assistant  treasurer:  George  -i.  Goodspeed, 
1896-1899. 

Secretary  and  manager  of  safe  deposit  de- 
partment: Edward  T.  Bond,  1875-1893. 

Solictor:  Benjamin  F.  Brooks,  1875-1897. 

The  present  board  of  directors  of  the  Bos- 
ton Safe  Deposit  and  Trust  Company  is  as 


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THE  BANKERS  MAGAZINE 


The  3000-Ton  Vault 


follows:  James  Longley,  Henry  S.  Shaw, 
Gerard  C.  Tobey,  Nathaniel  J.  Rust,  Frank 
G.  Webster,  Arthur  F.  Estabrook,  George 

B.  Wilbur,  Charles  F.  Fairbanks,  Wallace  L. 
Pierce,  George  R.  White,  Costello  C.  Con- 
verse, Edward  W.  Hutchins,  James  R.  Dun- 
bar, Elwyn  G.  Preston,  Charles  E.  Rogerson, 
Richard  M.  Saltonstall,  Jerome  Jones,  Nehe- 
miah  W.  Rice,  Nathaniel  F.  Ayer,  Richard 

C.  Humphreys,  George  W.  Wheelwright,  John 
W.  Farwell,  C.  Minot  Weld,  William  H. 
Wellington. 

The  following  condensed  statement  of  the 
financial  condition  of  the  Boston  Safe  De- 
posit and  Trust  Company  at  the  close  of 
business  June  30,  1910,  will  prove  of  par- 
ticular interest,  as  it  shows  in  detail  the 
financial  growth  and  influence  of  the  insti- 
tution. 

Special  attention  is  called  to  the  figures 
of  the  trust  department,  the  largest  in  New 
England.  At  the  present  tiem  the  trusts 
amount  to  over  $14,000,000,  embracing  130 
trust  estates. 

Condensed  Statement. 

ASSETS. 


Bonds  and  Stocks  $1,267,485.43 

Loans  .'.  9.917,843.06 

Cash  in  Office 1,070,207.91 

Due  from  Banks  2,303,912.94 


Overdrafts 748.42 

Accrued  Interest 21,624.42 

Real  Estate  2,211,725.95 

Real  Estate  by  foreclosure 21,785.96 

Stock  B.  S.  D.  & T.  Co.  In  hands 
of  Directors  for  Distribution...  14,800.00 


$16,820,134.09 

LIABILITIES. 

Capital  Stock  $1,000,000.00 

Surplus  Fund  2,000,000.00 

Profit  and  Loss  826,068.28 

Reserved  for  Taxes  25,259.69 

Deposits  12,968.806.12 


$16,820,134.09 

Trust  Department. 

ASSETS. 


Mortgages  $4,864,045.00 

Real  Estate  2,106.348.84 

Stocks  and  Bonds  3,942,832.16 

Stocks  and  Bonds  held  under 

Special  Instructions  1,875,725.00 

Sundry  Securities  1,224,816.26 

Cash — Principal  and  Income 219,396.73 


$14,233,163.99 

LIABILITIES. 

In  Trust  under  Wills  and  Trust 

Agreements  $13,180,320.34 

Income  138,536.84 

As  Executor,  Administrator,  etc.  914,306.81 


$14,233,163.99 


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BANK  OF  MONTREAL 

HEAD  OFFICE,  MONTREAL- NEW  YORK  OFFICE,  64  WALL  STREET 


Head  Office  Building  at  Montreal 


THAT  sound  old  institution,  the  Bank 
of  Montreal,  has  after  considerable 
trouble,  secured  a desirable  location 
for  its  New  York  City  agency  and  quite  re- 
cently removed  the  business  to  the  ground 
floor  of  No.  64  Wall  street. 

While  the  rooms  at  this  address  cannot  be 
compared  in  sise  or  beauty  with  those  of  the 
home  office,  they  are,  nevertheless,  preten- 
tious enough  to  merit  recognition. 

The  main  entrance  to  64  Wall  street  leads 


into  a hall  containing  the  elevator  shafts. 
From  this  hall  a wide  door  gives  entrance 
at  the  right  to  the  interior  of  the  bank. 
Running  north  and  south  for  half  the  length 
of  the  room  is  a bronze-screened,  mar  ole 
banking  counter.  Here  the  visitor  will 
probably  note  for  the  first  time  that  the 
walls  and  counters  are  of  a dull,  lustreless, 
Tennessee  marble  that  blends  perfectly  with 
the  cream  tint  of  a beautifully  paneled 
ceiling. 

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THE  BANKERS  MAGAZINE 


At  the  southern  end  of  the  room,  fronting 
on  Wall  street,  stand  the  agents’  desks. 

Italian  walnut  of  a very  fine  grain  and 
polish  is  the  wood  that  has  been  used 
throughout  the  building  for  desks,  chairs 
and  paneling.  The  effect  is  very  pleasing. 

From  the  agents’  quarters  the  visitor,  on 
his  tour  of  inspection,  will  pass  behind  the 
tellers’  cages,  take  note  of  the  ample  space 
provided  for  the  clerical  force,  and  proceed 
down  a marble  stairway  to  the  basement. 


Then  there  is  a steel  lined  room  which 
can  also  be  used  for  storage  purposes. 
An  engine  located  in  the  basement  provides 
a steady  current  of  cool  air  to  the  upper 
room  and  also  removes  the  foul  heated  air. 

Historical. 

The  Bank  of  Montreal  opened  for  busi- 
ness on  Monday,  November  3,  1817,  in 
premises  in  a building  belonging  to  the 
Armour  estate,  situated  on  St.  Paul  street. 


Interior  View  of  the  Head  Office  at  Montreal 


Here  he  will  find  an  immense  vault,  whose 
doors  weigh  137,000  pounds,  built  for  the 
exclusive  use  of  the  Bank  of  Montreal.  In 
the  compartments  of  this  electrically  pro- 
tected vault,  there  are  millions  of  dollars’ 
worth  of  securities.  To  further  insure  the 
safety  of  these  papers,  the  mirror  system 
of  protection  has  been  installed.  By  means 
of  mirrors  placed  below  the  surface  of  the 
floor  ic  is  possible  at  all  times  to  see  every 
square  inch  of  surface  on  the  bottom  of  the 
vault,  thereby  precluding  the  possibility  of 
anyone  boring  up  into  the  compartments 
from  beneath  unseen. 

In  addition  to  this  great  steel  storage 
place,  a smaller  vault  is  provided  for  tjbe 
accommodation  of  the  ledgers  and  other 
books. 


Montreal,  between  St.  Nicholas  and  St. 
Francois  Zavier  streets,  with  a paid  up 
capital  of  $350,000. 

The  first  president  was  John  Gray,  and 
the  first  cashier  was  Robert  Griffin. 

In  the  year  1819  the  capital  was  in- 
creased to  $650,000,  and  in  the  following 
year  to  $750,000.  In  1829  the  capital  was 
$850,000;  in  1841,  $2,000,000;  in  1845,  $3,- 
000,000;  in  1855,  $4,000,000;  in  1860,  $6,- 
000,000;  in  1873,  $12,000,000;  in  1903,  $14,- 
000,000;  in  1905,  $14,400,000. 

In  the  first  full  year  (1819)  of  the  bank’s 
operation,  a dividend  was  paid  at  the  rate 
of  eight  per  cent,  per  annum,  and  since  then 
(with  the  exception  of  the  years  1827  and 
1828  when  the  bank  did  not  pay  any  divi- 
dend), the  annual  dividends  have  ranged 


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PHOTO  BY  OLIVER  UPPINCOTT.  N.  V. 

Interior  View  of  the  New  York  Agency 


PHOTO  BY  OLIVER  UPPINCOTT,  N.  Y. 

A Partial  View  of  the  Agent’s  Quarters  in  the  New  York  Agency 

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THE  BANKERS  MAGAZINE 


from  six  per  cent,  to  sixteen  per  cent,  (or 
say,  a dividend  of  twelve  per  cent,  with  a 
bonus  of  four  per  cent.),  according  to  the 
earning.  But  of  late  years  ten  per  cent, 
per  annum  has  been  the  rate  paid. 

After  eight  per  cent,  had  been  paid  as 
dividend  in  1819,  a balance  of  £*,168 
remained  on  hand,  and  was  laid  aside  as  a 
rest.  From  that  date  of  small  beginnings 
the  rest  has  steadily  grown.  In  1835  there 
was  $30,780  going  down  to  $13,004  in  the 
following  year,  and  then  up  again  to  $107,- 
084  two  years  later;  in  1830  it  stood  at 
$31,360.  Five  years  later,  it  stood  at  $80,- 
660,  reaching  $197,838  in  1837;  in  1840  it 
showed  $89,480;  in  1850,  $130,193;  in  1860, 
$740,000;  in  1870,  $3,000,000;  in  1880,  $5,- 
000,000;  in  1883,  $5,750,000;  in  1884,  $6,- 
000,000;  in  1900,  $7,000,000;  and  now  it 
stands  at  $13,000,000. 

On  January  1,  1858,  the  system  of 
decimal  currency  was  adopted  in  "the  Bank 
of  Montreal,  and  since  that  date,  all  mone- 
tary transactions  have  been  recorded  in  the 
bank’s  books  in  dollars  and  cents.  Previous 
to  that  date,  the  bank’s  books  were  kept  in 
what  was  styled  Halifax  currency — pounds, 
shillings  and  pence — the  pound  being  of  a 
value  of  $4. 

On  January  1,  1858,  the  Montreal  branch 
was  established  as  a distinct  and  separate 
business  from  the  head  office,  E.  H.  King 
being  appointed  as  its  first  manager. 

In  the  year  1863,  the  designation  of  the 
chief  officer  of  the  bank  was  changed  from 
cashier  to  that  of  general  manager.  David 
Davidson  was  the  first  general  manager. 

In  1863,  the  Bank  of  Montreal  was  ap- 
pointed banker  in  Canada  for  the  Canadian 
Government  and  on  January  1,  1893,  E.  S. 


Clouston  being  general  manager  at  the  time, 
the  bank  became  their  financial  agent  in 
Great  Britain  also. 

The  New  York  agency  was  first  opened 
on  January  1,  1859,  at  33  Pine  street  with 
Richard  Bell  as  agent.  On  May  1,  1869, 
the. bank  moved  to  59  Wall  street,  where 
it  remained  until  May  1,  1906,  when  it 
returned  to  Pine  street,  this  time  to  No. 
31.  The  new  quarters  at  64  Wall  street 
have  been  occupied  since  the  thirty-first  day 
of  May. 

According  to  its  last  published  report,  the 
Bank  of  Montreal  completed  the  half-year, 
ended  April  30,  with  net  profits  of  $797,- 
765.14  and  carried  forward  a balance  of 
$681,561.44.  Capitalized  for  $14,400,000,  the 
bank  maintains  a rest  fund  of  $13,000,000 
and  has  all  told  deposits  of  $306,995,187.04. 
It  reports  also,  total  assets  of  $334,438,- 
318.99. 

The  present  board  of  directors  is  as  fol- 
lows: 

Rt.  Hon.  Lord  Strathcona  and  Mount 
Royal,  G.C.M.G.,  G.C.V.O.,  honorary  presi- 
dent; R.  B.  Angus,  president;  Sir  Edward 
Clouston,  Bart.,  vice-president;  E.  B. 
Greenshields,  Hon.  Robert  Mackay,  David 
Morrice,  C.  R.  Hosmer,  Sir  William  Mac- 
donald, James  Ross,  Sir  Thos.  Shuaghnessv, 
K.C.V.O.,  Alfred  Baumgarten  and  H.  V. 
Meredith. 

Sir  Edward  Clouston,  Bart.,  is  the  gen- 
eral manager  and  R.  Y.  Hebden,  W.  A. 
Bog  and  J.  T.  Molineux  are  the  New  York 
agents.  Both  Mr.  Hebden  and  Mr.  Bog 
are  from  the  head  office;  the  former  came 
to  New  York  in  1893  and  the  latter  came 
in  1906. 


SEVENTEENTH  ANNUAL  CONVENTION  OF  THE 
NEW  YORK  STATE  BANKERS'  ASSOCIATION 


WITH  Ledyard  Cogswell  presiding,  the 
seventeenth  annual  convention  of  the 
New  York  State  Bankers’  Associa- 
tion was  called  to  order  in  the  Hotel 
O-te-se-ga,  Cooperstown,  Thursday  morning, 
July  14.  The  convention  was  opened  with 
prayer  by  the  Rev.  Sidney  S.  Conger,  D.  D., 
of  Cooperstown,  after  which  the  president 
delivered  his  address. 

Hon.  Edward  B.  Vreeland  was  the  speaker 
for  the  first  day.  He  delivered  an  able  ad- 
dress, taking  for  his  subject,  our  banking 
and  currency  system,  and  prophesying  the 
establishment  of  a central  bank,  to  be  free 
from  political  control. 

On  the  evening  of  this  first  day  the  dele- 
gates and  visitors  gathered  in  the  hotel  ban- 
quet hall  for  the  yearly  banquet.  The  room 
was  decorated  with  a profusion  of  flowers, 
and  on  the  walls  were  displayed  banners 
representing  nearly  every  bank  that  is  a 
member  of  the  association.  Grace  was  said 


by  Rev.  Dr.  Kittell,  of  Albany,  and  before 
beginning  the  post-prandial  exercises  Presi- 
dent Cogswell  called  the  diners  to  their  feet 
to  drink  to  the  toast  The  President  of  the 
United  States.  The  speakers  were:  Comp- 
troller William  A.  Prendergast,  of  New 
York  City,  David  R.  Forgan,  president  of 
the  National  City  Bank  of  Chicago;  Rev. 
Jas.  S.  Kittell  of  Albany,  and  Thomas  A. 
Daly,  of  Philadelphia. 

O.  H.  Cheney,  superintendent  of  the  New 
York  State  Banking  Department,  was  the 
speaker  at  the  final  business  session.  He 
spoke  on  “Bank  Supervision,”  and  said  in 
part: 

“In  discussing  the  subject  of  bank  su- 
pervision, we  must  remember  that  bank  ex- 
amination is  not  an  object  in  itself.  Its 
purpose  is  to  secure  soundness  and  con- 
servatism in  the  banking  system.  A bank- 
ing department  is  primarily  the  representa- 
tive of  every  depositor  in  the  State,  and  its 


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BOOK  REVIEWS 


26* 


efforts  must  be  directed  toward  securing 
for  them  absolute  protection.  It,  therefore, 
becomes  a department  of  conservation  and 
construction,  firm  in  its  .work  of  removing 
the  dangerous  growths  and  tendencies,  but 
always  anxious  to  upbuild  and  strengthen. 
Indeed  there  can  be  no  greater  satisfaction 
than  to  help  an  institution  rid  itself  of 
unfortunate  conditions  and  then  see  it  grow 
strong  because  of  increased  care  and  at- 
tention. The  records  of  such  accomplish- 


ments are  not  public  and  never  will  be  but 
they  are  written  in  the  hearts  of  men.” 

Clark  Williams,  the  State  Controller,  also? 
briefly  addressed  the  gathering. 

The  officers  elected  for  the  ensuing  year 
are:  Luther  W.  Mott  of  Oswego,  presi- 
dent; William  H.  Bennett  of  the  American 
Exchange  National  Bank  of  New  York, 
vice-president;  W.  C.  Morgan  of  Cuba,  N. 
Y.,  treasurer;  William  J.  Henry  of  White 
Plains,  X.  Y.,  secretary,  re-elected. 


BOOK  REVIEWS 


Moody's  Manual  for  1910—  The  1910 
Moody  Manual,  now  ready  for  delivery,  is 
a much  more  complete  and  comprehensive 
volume  in  even*  particular  than  any  of  its 
predecessors.  The  manifest  advantage  of 
confining  the  publication  to  one  volume 
necessitated  the  excision  of  some  ancient 
history  and  the  rearrangement  of  many  of 
the  statistical  tables;  despite  this  the  cur- 
rent issue  contains  some  350  pages  more 
than  the  1909  edition — the  increase  being 
about  equally  distributed  over  all  sections 
of  the  work — and  no  pertinent  information 
has  been  sacrificed  in  the  pruning  process. 

The  series  of  signed  analytical  articles  on 
leading  steam  railroads,  by  Roger  W.  Bab- 
son,  introduced  in  the  1909  edition,  has  been 
brought  up  to  date,  and  the  usefulness  and 
value  extended  by  the  addition  of  compara- 
tive tables,  covering  a series  of  years,  show- 
ing the  capitalization  and  maintenance 
charges  per  mile.  'These  tables,  used  in 
conjunction  with  Mr.  Babson’s  index,  which 
appears  in  the  Monthly  Digest  of  Corpora- 
tion Xews,  furnish  the  basis  for  reliable  de- 
ductions as  to  the  respective  merits  of  the 
securities. 

Especial  pains  have  been  taken  to  secure 
uniformity  of  style  and  phraseology  in  all 
the  divisions  of  the  work,  and  systematic 
efforts  have  been  made,  with  a large  meas- 
ure of  success,  to  obtain  full  details  of 
properties,  bond  securities,  etc.,  particu- 
larly in  the  industrial  and  public  utilities 
section. 

'The  industrial  section,  which  has  always 
been  a strong  feature  of  this  Manual,  has 
been  considerably  amplified  and  improved 
in  every  respect.  The  statements  of  350  ad- 
ditional corporations  have  been  included — 
nearly  half  of  this,  covering  companies  with 
an  aggregate  capitalization  of  $500,000,000, 
cannot  be  found  in  any  other  publication. 

The  statements  in  the  public  utilities 
section  have  all  been  carefully  revised  and 
many  of  the  statements  of  the  larger  sys- 
tems practically  rewritten.  Considers  ole 

new  matter  has  been  added  in  relation  to  a 


number  of  large  holding  companies;  as  an 
instance  of  this,  it  may  be  said  the  state- 
ment of  the  Public  Service  Corporation  of 
New  Jersey  extends  over  18  pages  in  the 
new  edition,  as  compared  with  10  pages  in 
the  former  edition.  The  judicious  use  of 
distinctive  headings  and  sizes  and  style  of 
type  permits  the  reader  to  apprehend  at  a 
glance  the  intercorporate  relationship  of  the 
several  companies. 

The  entire  Manual  has  been  especially  de- 
signed to  promote  ready  reference  and  to 
further  this  end,  initial  letters  have  been 
placed  at  the  head  of  each  page,  in  every 
section  of  the  book,  thereby  indicating  at 
a glance  the  exact  alphabetical  location  of 
every  division  of  the  Manual.  By  this 
means,  the  frequent  user  of  the  Manual  will 
be  enabled,  in  many  instances,  to  locate  the 
particular  statement  he  desires,  without  re- 
course to  the  general  index. 


Gold  Production  and  Future  Prices.  By 
Harrison  H.  Brace.  New  York:  The 
Bankers  Publishing  Co.  (Price  $1.50) 

An  important  addition  to  existing  liter- 
ature on  the  subject  is  “Gold  Production 
and  Future  Prices”  by  Harrison  H.  Brace, 
L.L.M.  Approaching  the  question  in  a 
spirit  of  open-mindedness  rarely  found  in 
works  of  this  kind,  Mr.  Brace  presents  an 
unusually  clear  and  interesting  discussion 
not  only  of  the  influence  which  increasing 
gold  production  may  be  expected  to  exert 
on  prices,  but  of  the  counteracting  influences 
as  well. 

In  the  first  part  of  the  book  Mr.  Brace 
takes  up  the  history  of  the  production  of 
gold,  showing  how  prices  have  been  affected 
by  the  great  mining  movements  of  the  past. 
The  conclusion  reached  may  best  be  stated 
in  the  author’s  own  words:  “The  central 
point  intended  to  be  brought  out  in  this  re- 
view is  that,  ignoring" minor  changes,  due  to 
crops  wars,  and  the  alternate  ebb  and  flow 


Digitized  by  uooQle 


264 


THE  BANKERS  MAGAZINE 


of  business,  and  other  causes,  the  most  im- 
portant influence  which  determines  price  is 
the  cost  of  producing  gold  as  compared 
with  the  cost  of  producing  other  commodi- 
ties ; and  that  anything  which  either  in- 
creases or  decreases  the  supply  of  the  stand- 
ard money  metal  has  a tendency  in  lower- 
ing or  raising  the  price  of  commodities.” 
The  second  part  of  the  book  shows  how 
the  experience  of  the  past  is  being  repeated 
at  present.  Handling  the  subject  always  in 
a spirit  of  fairness,,  the  author  comes  to  the 
conclusion  that  owing  to  the  increased  pro- 
duction of  gold,  commodity  prices  are  likely 


to  have  an  important  advance  from  their 
present  level — an  advance  which  will  be 
broken  by  minor  surface  reactions  caused 
by  the  alternations  of  good  and  bad  times 
and  the  numerous  price  making  factors  de- 
described.  After  a few  years,  however, 
this  advance  in  prices  will  halt,  and  before 
it  can  be  resumed  it  will  be  necessary  for 
the  production  of  gold  to  greatly  increase 
from  present  average  yearly  output. 

Mr.  Brace’s  book  is  an  interesting  and 
popular  treatment  of  a difficult  subject, 
and  is  of  fully  as  much  interest  to  the  prac- 
tical business  man  as  to  the  student. 


A.  E.  STILWELL  ON  CONDITIONS  ABROAD 


ARTHUR  E.  STILWELL,  president  of 
the  Kansas  City,  Mexico  & Orient 
Railway  Company,  returning  from  a 
two  months’  trip  abroad,  during  which  he 
effected  the  sale  of  $5,000,000  first  mortgage, 
fifty-year  gold  four  per  cent,  bonds,  in  an 
interview,  says: 

‘‘The  sale  was  made  to  a syndicate  of 
prominent  English  bankers.  The  proceeds 
of  the  sale  of  these  bonds  will  be  applied 
on  construction  work  on  the  line  from  San 
Angelo  to  Del  Rio,  Texas.  This  line  will 
be  completed  so  as  to  establish  a connection 
with  the  Mexican  National  Railway,  thus 
giving  the  Orient  line  direct  entrance  into 
Mexico  City,  and  making  possible  the  trans- 
portation of  through  freight  between  that 
city  and  Kansas  City. 

“The  route  so  established  will  have  a 
mileage  equal  to  the  shortest  existing  route 
betw'een  those  two  points  and  shorter  than 
that  of  several  competing  lines.  Work  will 
also  be  pushed  on  the  line  running  south- 
w'estward  from  San  Angelo,  Texas,  to  con- 
nect with  the  tracks  east  of  the  Conchos 
river,  in  Mexico,  so  as  to  bring  the  main 
line  into  Chihuahua,  where  it  will  tap  the 
north  and  south  lines  of  the  Mexican  Cen- 
tral. 

“Present  indications  are  that  the  road,  as 
projected,  will  be  completed  in  about  two 
and  a half  years.  This  includes  the  section 
of  line  that  will  convey  trains  right  into 
Kansas  City.” 

Commenting  upon  the  general  attitude  of 
London  and  Paris  bankers  towards  Ameri- 
can railroad  securities,  Mr.  Stilwell  says 
that,  “a  general  unanimity  of  opinion  pre- 
vails to  the  effect  that  for  some  time  to 
corne,  no  more  American  railway  securities 
can  be  placed  abroad,  for  the  reason  that 
American  securities,  already  underwritten, 
had  not  been  taken  up  by  investors  as 
readily  as  it  was  expected  they  would  be. 
Little  enthusiasm  is  displayed  over  them, 
and  bankers  are  not  inclined  to  take  up  any 
more,  while  a part  of  \be  earlier  underwrit- 
ten securities  are  as  yet  undisposed  of. 


“Business  conditions  in  England  as  re- 
flected by  the  trade  balances  are  excellent. 
Crops  are  likely  to  suffer  a bit  on  account 
of  the  prolonged  and  heavy  rains  during 
the  past  month  or  five  weeks.  Early  in  July 
sixteen  days  of  continuous  rain  fell.  Crop 
conditions  on  the  continent  in  Germany, 
France  and  Switzerland  appeared  to  be 
good.” 

Regarding  conditions  in  this  country. 
President  Stilwell  said:  “The  railroads  ought 
to  be  allowed  to  share  in  the  prosperity  of 
the  country  to  a greater  extent,  because 
they  are  the  greatest  general  contributors 
towards  that  prosperity.  They  should  be 
put  in  a position  where  they  could  expend 
$500,000,000.  That  is  a sum  that  could  be 
most  judiciously  expended  by  them  in  the 
next  eight  or  ten  years,  in  bringing  about 
better  operating  conditions  and  increased 
facilities.  The  conditions  of  unrest  that 
prevail  in  consequence*  of  the  constant  agi- 
tation is  doing  this  country  harm  abroad  as 
evidenced  by  the  general  closing  of  the 
markets  there  against  American  securities 
and  the  giving  admission  to  South  American 
securities.” 

Mr.  Stilwell  will  spend  a short  time  in 
New*  York  before  leaving  for  an  inspection 
of  tlie  latest  work  done  on  his  line  in  this 
country  and  Mexico.  No  new  financing  is 
contemplated  at  this  time  and  no  traffic 
arrangements  of  any  kind  are  pending.  Con- 
struction work  on  both  extensions  is  to  be 
pushed  with  all  dispatch.  The  opening  of 
the  Panama  canal  Mr.  Stilwell  expects  to 
be  a direct  benefit  to  the  Orient  line  by 
bringing  about  a development  of  the  en- 
tire Southwest  territory.  The  tonnage  that 
will  be  developed,  he  says,  will  greatly  out- 
weigh any  established  tonnage  that  is  likely 
to  fall  aw’ay  upon  the  opening  of  that  canal. 
The  matter  of  constructing  “feeder”  lines  to 
the  system  has  not  been  considered,  and  it 
is  regarded  as  one  that  will  not  present  it- 
self for  ten  or  twelve  years. 


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BANKING  AND  FINANCIAL  NOTES 


NEW  YORK  CITY 

— Acting  on  the  suggestion  made  by 
Franklin  MacVeagh,  Secretary  of  the 
Treasury,  representatives  of  twenty-six  na- 
tional banks  of  New  York  City  met  July  29 
at  the  Clearing  House  and  organized  the  Na- 
tional Currency  Association  of  the  City  of 
New  York  under  the  terms  of  the  Aldirich- 
Vreeland  Act.  After  electing  officers,  ap- 
pointing an  executive  committee  and  adopt- 
ing the  by-laws,  the  bank  presidents  ad- 
journed with  the  hope  of  never  being  called 
upon  to  meet  again. 

A.  Piatt  Andrew,  Assistant  Secretary  of 
the  Treasury,  represented  Mr.  MacVeagh 
at  the  meeting.  “I  do  not  expect,”  he  said, 
“that  this  association  or  any  other  currency 
association  will  ever  be  asked  to  issue  emer- 
gency currency.  There  is  not  the  slightest 
indication  that  any  such  currency  will  be 
needed  this  fall,  or  at  any  time  during  the 
next  four  years,  when  the  present  law  ex- 
pires. But  it  is  certainly  desirable  that  the 
banks  should  get  the  machinery  ready  for 
resort  to  in  case  it  should  ever  be  necessary. 

“The  law  was  enacted  two  years  ago,  the 
Government  has  been  put  to  a large  expense 
to  print  the  currency  and  there  has  been  a 
great  deal  of  work  connected  with  the  other 
details.  For  that  reason,  the  least  that  the 
banks  of  the  country  could  do,  it  seems 
to  me,  would  be  to  organize  the  currency 


Bronze  and  Iron  Work  for  Banks 


Cast  Bronze  Signs  and  Tablets 

BRONZE  COUNTER  SCREENS 
Wire  Mesh  Euoloauru* 

To  Special  Design 

JHO.  WILLIAMS  INC.  Bronze  Foundry, 
256  Went  27th  8 tree  t.  New  York,  publishes  the 
Mngnsine 44 American  Art  in  Bronze  and  Iron,**  11* 
lnstratin*  Bank  Counter  Screens,  Tablets,  Signs, 
elo.  Copies  free  to  Bankers. 

44  Your  Architect  k note  a Jno,  Williama  Inc:* 


Merchants  National  Bank 

RICHMOND,  VA. 

Oapltal  S200.000 

Surplus  and  Profits,  920,000 

This  bank  is  the  largest  depository  for 
banks  between  Baltimore  and  New  Orl- 
eans. It  is  Virginia’s  most  successful 
National  Bank.  It  has  the  best  facilities 
for  handling  items  on  the  Virginias  and 
Carolines.  Collections  carefully  routed. 

Correspondence  Solicited 


associations,  and  thereby  supply  the  ma- 
chinery that  the  law  provided  for.  We  are 
hearing  from  banks  in  large  cities  through- 
out the  country,  and  the  movement  seems 
to  be  unanimously  in  favor  of  following 
Secretary  MacVeagh’s  suggestion  concern- 
ing the  wisdom  of  forming  these  associations 
according  to  law.” 

Officers  of  the  Association. 

A.  Barton  Hepburn,  president  of  the 
Chase  National  Bank,  was  elected  president 
of  the  association,  and  Frank  A.  Vanderlip, 
president  of  the  National  City  Bank,  vice- 
president;  Alexander  Gilbert,  president  of 
the  Market  & Fulton  National  Bank,  was 
chosen  treasurer,  and  Edward  Townsend, 
president  of  the  Importers’  & Traders’  Na- 
tional Bank,  was  elected  secretary. 

The  executive  committee  consists  of  Wil- 
liam H.  Porter,  president  of  the  Chemical 
National  Bank;  Valentine  P.  Snyder,  presi- 
dent of  the  National  Bank  of  Commerce; 
Francis  L.  Hine,  president  of  the  First  Na- 
tional Bank;  Richard  Delafield,  president 
of  the  National  Park  Bank,  and  William 
Woodward,  president  of  the  Hanover  Na- 
tional Bank.  The  president  and  vice-presi- 
dent of  the  Currency  Association  make  up 
the  sixth  and  seventh  members  of  the  exec- 
utive committee. 

Following  are  the  twenty-six  banks  which 
have  signed  the  certificate  of  formation  of 

265 


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BINDERS 

AND 

BLANKS 

OF  UNIFORM  EXCELLENCE 

FOR  ALL  DEPARTMENTS  OF  BANK  ACCOUNTING 

BAKER-VAWT  ER  COMPANY 

CHICAGO  HOLYOKE,  MASS. 


the  currency  association:  Bank  of  New  York 
& National  Banking  Association,  Mechanics 
& Metals'  National  Bank,  National  City 
Bank,  Chemical  National  Bank,  Gallatin 
National  Bank,  National  Butchers’  & Drov- 
ers’ Bank,  American  Exchange  National 
Bank,  National  Bank  of  Commerce,  Mer- 
cantile National  Bank,  Chatham  National 
Bank,  Hanover  National  Bank,  Citizens’ 
Central  National  Bank,  Market  & Fulton 
National  Bank,  Importers’  & Traders’  Na- 
tional Bank,  National  Park  Bank,  East 
River  National  Bank,  Fourth  National 
Bank,  Second  National  Bank,  First  Nation- 
al Bank,  Irving  National  Exchange  Bank, 
Chase  National  Bank,  Lincoln  National 
Bank,  Garfield  National  Bank,  Seaboard 
National  Bank,  Liberty  National  Bank  and 
the  Coal  & Iron  National  Bank. 

Provisions  of  the  Law. 

The  law  provides  that  there  must  be  at 
least  ten  national  banks  in  each  national 
currency  association,  and  the  aggregate 
capital  and  surplus  of  such  national  banks 
must  be  at  least  $5,000,000.  No  national 
bank  may  join  a national  currency  asso- 
ciation unless  it  has  an  unimpaired  capital, 
and  surplus  of  not  less  than  twenty  per 
cent.  After  the  formation  of  an  association 
any  member  bank,  whose  outstanding  cir- 
culating notes  actually  issued  by  United 
States  bonds  amount  to  not  less  than  forty 
per  cent,  of  its  capital  may  obtain  additional 
circulating  notes  by  depositing  with  the 
association  in  trust  for  the  United  States 
any  securities,  including  commercial  paper. 
But  additional  notes  will  only  be  issued 
upon  the  recommendation  of  the  Comp- 
troller of  the  Currency  and  the  approval  of 
the  Secretary  of  the  Treasury,  and  then 
not  exceeding  seventy-five  per  cent,  of  the 
cash  value  of  the  securities  or  commercial 
paper  so  deposited.  There  is  a proviso  also 
that  no  national  bank  association  shall  be 
authorized  in  any  event  to  issue  circulating 
notes  based  upon  commercial  paper  in  ex- 
cess of  thirty  per  cent,  of  its  unimpaired 
capital  and  surplus. 

266 


— Edward  Earl,  president  of  the  Nassau 
Bank,  has  just  passed  his  fortieth  birthday. 
The  momentous  occasion  fell  on  July  22,  and 
was  fittingly  remembered  by  his  legions  of 
friends.  Mr.  Earl  is  one  of  the  youngest 
bank  presidents  in  the  United  States  and 
has  been  instrumental  in  bringing  the  Nas- 
sau Bank  to  its  present  prosperous  condi- 
tion. The  bank’s  total  resources  on  June 
30  were  $10,268,976.63.  Loans  and  discounts 
were  $6,946,790.05 ; bonds  and  mortgages, 
$178,140;  due  from  banks,  $817,889.88;  cash 
and  exchange,  $2,310,156.70.  The  Nassau 
Bank  is  capitalized  at  $500,000  and  has  sur- 
plus and  profits  of  $531,843.35.  Deposits 
aggregate  the  handsome  total  of  $9,209,- 
906.13. 

— The  report  of  the  Garfield  National 
shows  deposits,  $9,585,105,  with  capital  of 
$1,000,000;  surplus,  $1,000,000,  and  undi- 
vided profits,  $177,077.  The  cash  and  due 
from  banks  amounts  to  $3,471,882,  and  total 
resources,  $12,156,782.  R.  W.  Poor  is  presi- 
dent, and  W.  L.  Douglass,  cashier. 

— Col.  Edward  H.  R.  Green  has  been 
elected  a director  of  the  Seaboard  National 
Bank  and  hereafter  will  reside  in  New  York. 
Colonel  Green  has  extensive  interests  in 
Texas.  He  is  president  of  the  Texas  Mid- 
land Railroad,  which  extends  125  miles 
from  Ennis,  on  the  Houston  and  Texas  Cen- 
tral, to  Paris.  This  property  was  purchased 
seventeen  years  ago  by  Mrs.  Green,  and, 
with  her  son  as  president,  it  has  done  much 
toward  developing  a part  of  the  Lone  Star 
State.  Colonel  Green  is  a bachelor  and  an 
enthusiastic  automobilist.  He  is  also  inter- 
ested greatly  in  aviation.  The  Seaboard 
National  Bank,  according  to  its  statement 
of  June  30  last,  had  deposits  of  $30,037,322, 
and  a surplus  of  $1,913,000.  It  is  capitalized 
at  $1,000,000.  Samuel  G.  Bayne  is  presi- 
dent. 

— A large  forward  stride  in  deposits  is 
shown  by  the  Bankers  Trust  Company  in 
its  report  of  condition  at  the  close  of  busi- 
ness June  30.  From  $59,951,926.98  on 


Digitized  by  L^OOQle 


Capital  - $6,000,000 
Surplus  - $6,000,000 

The  Mechanics 


Depository  of  the 
United  States,  State 
and  Gty  of  New  York 

and  Metals  National  Bank 


OF  THE  CITY  OF  NEW  YORK 


OATES  W.  McGARRAH,  President. 
ALEXANDER  E.  ORR,  Vice-President 
NICHOLAS  F.  PALMER,  Vice-President. 
ANDREW  A.  KNOWLES,  Vice-President. 
FRANK  O.  ROE,  Vice-President. 


WALTER  F.  ALBERTSEN,  Vlce-Pres. 
JOSEPH  S.  HOUSE,  Cashier. 

ROBERT  U.  GRAFF.  Asst.  Cashier. 
JOHN  ROBINSON.  Asst.  Cashier. 
CHARLES  E.  MILLER.  Asst.  Cashier. 


March  25,  1910,  the  deposits  have  grown  to 
$68,108,353.46 — an  increase  which  speaks 
highly  for  the  growing  estimation  in  which 
the  company  is  held  by  the  banking  public. 
In  total  resources,  as  well,  the  Bankers 
shows  a splendid  increase,  from  $72,353,157 
to  $84,694,147.79. 

— J.  E.  Blackburn,  Wright  Gillies  and 
William  Reimer  have  been  elected  directors 
of  the  Audubon  National  Bank,  to  All  va- 
cancies in  the  board.  The  Audubon  Na- 
tional reports  loans  and  discounts  of  $411,- 
177.26;  total  resources  of  $706,968.50;  capi- 
tal of  $200,000;  surplus  fund  of  $50,000; 
individual  deposits  of  $359,951.05;  demand 
certificates  of  deposit  of  $1,000;  and  time 
certificates  of  deposit  of  $5,000. 

— The  Liberty  National  has  presented  its 
usual  gratifying  report  at  the  call  of  the 
Comptroller  of  the  Currency  June  30.  Loans 
and  discounts  are  $19,50*5,966.43;  United 
States  and  other  bonds  and  securities,  $2,- 
159,878.86;  cash  and  due  from  banks,  $11,- 
161,325.98.  The  total  resources  are  $32,- 
827,171.27.  The  capital  of  the  Liberty  Na- 
tional is  $1,000,000,  surplus  and  profits  $2,- 
717,748.45.  The  deposits  amount  to  $28,- 
583,756.15. 

— Comparing  the  June  thirtieth  statement 
of  the  Phoenix  National  with  the  statement 
of  November  16,  1909,  which  was  the  date 
of  the  last  official  call  before  the  close  of 
the  year,  the  surplus  and  profits  account 
shows  an  increase  of  $18,229,  making  the 
total  surplus  and  profits  account  $703,754. 
A dividend  of  $30,000  was  paid  in  January 
of  this  year  and  $40,000  is  reserved  in  the 
statement  for  a dividend  paid  on  July  1. 
This  makes  the  stockholders’  profits  $88,229 
since  last  November.  It  is  also  noticeable 
that  the  amount  reserved  for  taxes  is  $23,000, 
whereas  in  November  it  was  but  $17,000. 
Total  deposits  are  $14,302,665,  against  $10,- 
600,767,  and  total  resources  have  increased 
to  $16,912,238,  against  $13,149,283  seven 


months  ago.  Pierre  S.  du  Pont  has  been 
recently  added  to  the  directorate. 

— The  Broadway  Trust  Company  has 
moved  to  new  banking  rooms  on  the  south- 
east corner  of  Broadway  and  Eighth  street. 
The  company’s  offices  were  formerly  on  the 
northeast  corner. 

— Stockholders  of  the  Century  Bank  oi 
New  York  have  voted  to  increase  its  capital 
stock  from  $200,000  to  $250,000.  The  new 
stock  will  be  offered  to  stockholders  at  $150 
per  share,  at  the  rate  of  one  share  for  each 
tour  now  held. 

— The  Irving  National  Exchange  Bank 
shows  continued  prosperity  in  its  very  grati- 
fying report  made  to  the  Comptroller  of 
the  Currency  at  the  close  of  business  June 
30.  Loans  and  discounts  are  $19,298,174.12; 
United  States  and  other  bonds  and  securi- 
ties, $2.325,813.72 ; cash  and  due  from  banks, 
$9,660,934.76;  total  resources,  $31,515,093.09. 
The  Irving  has  a capital  of  $2,000,000,  sur- 
plus and  profits  $1,646,823.66.  Deposits 
reach  the  handsome  total  of  $27,056,869.33. 

— Julian  M.  Gerard  has  been  elected  a 
vice-president  of  the  Knickerbocker  Trust 
Company.  The  directors  have  elected  B.  L. 
Allen  a member  of  the  board.  Mr.  Allen 


RUDOLPH  GUENTHER 

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Advertisers  Pocket  Guide  on  request . 


267 


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THE  BANKERS  MAGAZINE 


THE 

GARFIELD 
NATIONAL  BANK 

Fifth  Avenue  Building 

Corner  Fifth  Are.  and  Twenty-Third  Street 

NEW  YORK 

CAPITAL  SURPLUS 

$1,000,000  $1,000,000 

OFFICERS 
RUEL  W.  POOR,  President 

JAMES  McCUTCHEON,  Vice-Prea. 
WILLIAM  L.  DOUGLAS S,  Cashier 
ARTHUR  W.  SNOW,  Asst.  Cash. 

DIRECTORS 

James  McCntcheoa  Samuel  Adams 
Charles  T.  Wills  William  H.  Oelshenea 
Reel  W.  Poor  Morgan  J.  O’Briea 

Thomas  D.  Adams 


has  been  connected  with  the  trust  company 
for  many  years,  beginning  as  paying  teller. 
He  was  a branch  manager  at  the  time  of  the 
crisis  in  1907,  and  as  a reward  for  his  valu- 
able assistance  in  the  reorganization  of  the 
trust  company  he  was  made  a vice-president. 
His  elevation  to  the  board  of  directors  is  in 
line  with  former  promotions. 

— In  its  annual  statement  as  of  June  30, 
the  United  States  Mortgage  and  Trust  Com- 
pany reports  total  deposits  of  over  $50,000,- 
000.  A year  ago  its  deposits  totaled  $42,- 
000,000,  showing  an  increase  during  the 
twelve  months  of  about  $8,000,000. 

— Deposits  of  $25,140,997  are  reported  in 
the  statement  issued  by  the  Merchants’  Na- 
tional Bank.  The  capital  is  $2,000,000; 
surplus  and  undivided  profits,  $1,761,988; 
loans,  $13,875,826;  United  States  bonds  and 
other  securities,  $$,229,696;  cash  and  due 
from  banks,  $11,734,755,  and  total  resources, 
$30,835,536.  The  bank  was  founded  in  1803 
and  is  therefore  107  years  old.  It  has  just 
paid  its  214th  semi-annual  dividend. 

— Walter  H.  Bennett,  who  was  promoted 
from  the  assistant  cashiership  to  the  cashier- 
ship  of  the  American  Exchange  National 
Bank  last  January,  has  been  accorded  an- 
other advancement.  He  has  been  elected  a 
vice-president  and  will  serve  in  the  dual  of- 
fice of  vice-president  and  cashier.  Three 
new  assistant  cashiers  of  the  bank  were  also 
chosen,  namely,  Arthur  P.  Lee,  Elbert  A. 
Bennett  and  George  C.  Halgh.  Walter  H. 
Bennett  was  also  elected  vice-president  of 


the  New  York  State  Bankers’  Association 
at  its  meeting  at  Cooperstown  July  14  to  16. 

— Louis  S.  Brady,  formerly  of  the  Fifth 
Avenue  Bank,  has  been  appointed  assistant 
cashier  of  the  New  Netherland  Bank  of 
New  York,  at  41  West  Thirty-fourth  street. 

— For  June  30  the  Market  and  Fulton  Na- 
tional Bank  reports  loans  and  discounts  of 
$8,346,807,  cash  items  of  $3,835,943,  surplus 
and  profits  of  $1,698,799,  circulation  of 
$237,700  and  deposits  of  $10,123,951.  Alex- 
ander Gilbert,  the  president  of  the  bank, 
can  well  be  proud  of  this  splendid  showing. 
The  Market  and  Fulton  National  is  a 
purely  commercial  bank  and  prides  itself 
on  having  built  up  a business  that  is  en- 
tirely independent  of  Wall  Street. 

— On  June  30  the  Coal  and  Iron  National 
Bank  reported  total  resources  of  $8,673,720, 
loans  and  discounts  of  $4,414,332,  surplus 
and  profits  (earned)  of  $373,171,  and  depos- 
its of  $6,870,671.  The  bank,  on  July  13, 
declared  its  sixteenth  quarterly  divi- 
dend of  one  and  one-half  per  cent.  This 
report,  condensed  from  that  made  to  the 
Comptroller  of  the  Currency,  shows  that  the 
bank  has  earned  two  and  one-half  times  the 
amount  of  the  dividend  payment— $15,000. 
W.  J.  Harohan,  assistant  to  the  president 
of  the  Erie  Railroad,  has  been  elected  a di- 
rector of  the  Coal  and  Iron  National,  in 
place  of  George  Sheffield,  resigned. 

— The  Hanover  National,  in  response  to 
the  call  of  the  Comptroller  of  the  Currency, 
has  rendered  a splendid  report  of  condition 
at  the  close  of  business  June  30.  The  Han- 
over now  has  total  resources  of  $119,574,- 
062.02,  of  which  the  following  are  some  of  the 
principal  items:  Loans  and  discounts,  $51,- 
504,543.46;  United  States  and  other  bonds 
and  securities,  $9,964,580.79;  cash  and  due 
from  banks,  $52,441,095.05.  With  its  capital 
of  $3,000,000,  the  Hanover  boasts  a surplus 
and  undivided  profits  account  of  $11,707,- 
416.11,  which  places  it  among  the  most  sub- 
stantial institutions  in  the  country.  Deposits 
aggregate  $102,893,863.91. 

— For  the  period  ending  June  30,  the 
Columbia  Trust  Company  reports  total  loans 
of  $5,199,131,  and  other  assets  to  the  total 
amount  of  $15,727,126.  The  company  has 
surplus  and  profits  amounting  to  $1,572,510, 
and  deposits  of  $13,136,101. 

—John  E.  Backus  has  been  elected  presi- 
dent of  the  Queens  County  Trust  Company, 
of  Jamaica,  L.  I.,  to  succeed  William  M. 
Griffith,  who  resigned  in  February.  The  new 
president  advances  from  the  office  of  first 
vice-president. 

— William  M.  Rosendale  has  recently  been 
appointed  an  assistant  cashier  of  the  Market 
and  Fulton  National  Bank.  He  has  long 


Digitized  by  t^ooQle 


BANKING  AND  FINANCIAL  NOTES 


269 


been  connected  with  the  bank  and  prior  to 
this  appointment  was  in  charge  of  the  dis- 
count department.  He  has  been  active  in 
the  work  of  the  American  Institute  of 
Banking,  having  served  on  the  transporta- 
tion and  educational  committees  of  the  na- 
tional organisation.  He  was  president  of 
New  York  Chapter  last  year,  also  served 
for  several  terms  as  a member  of  the  finance 
and  transportation  committees  and  as  first 
and  second  vice-president.  He  is  at  present 
chairman  of  the  speakers*  committee.  Mr. 
Rosendale  has  written  a number  of  articles 
on  department  methods  and  read  them  be- 
fore various  chapters.  He  addressed  the 
Detroit  convention,  1907,  on  the  credit  de- 
partment. He  has  contributed  articles  to 
a number  of  financial  journals  and  has  writ- 
ten three  chapters  for  the  proposed  Ameri- 
can Institute  of  Banking  text  book.  Aside 
from  his  various  duties  he  is  treasurer  of 
a Hospital  Bed  Fund  Association  in  New 
York  that  cares  for  about  200  men  yearly, 
and  is  vice-president  of  the  Collegiate  Club 
of  New  York. 

— One  of  the  best  statements  ever  issued 
by  the  Chase  National  Bank  is  this  last 
one  dated  June  30,  with  total  assets  of 
$106,325,069,  a capital  of  $5,000,000,  and  a 
like  amount  of  surplus,  the  bank  has  se- 
cured $92,786,537  of  deposits.  Net  profits 
total  $2,472,531. 

NEW  ENGLAND  STATES 

— By  their  action  in  declaring  a semi- 
annual dividend  of  ten  per  cent.,  the  direc- 
tors of  the  United  States  Trust  Company 
of  Boston,  have  raised  the  annual  rate  from 
sixteen  per  cent,  to  twenty  per  cent,  per 
annum.  Besides  paying  this  dividend  the 
company  carried  another  $100,000  to  its 
surplus  account,  increasing  this  to  $800,- 
000.  The  Unites  States  Trust  Company 
started  just  fifteen  years  ago  with 
$200,000  capital  and  $50,000  surplus 
paid  in.  The  company  has  not  only  paid 
its  shareholders  in  fifteen  years  142  per 
cent,  in  dividends,  but  from  earnings  has 
raised  its  capital  and  surplus  account  from 
$250,000  to  $1,000,000  and  has  besides  be- 
tween $50,000  and  $100,000  in  its  undivided 
profit  account.  Paying  an  average  of  near- 
ly ten  per  cent,  per  annum  in  dividends. 


SAVOY  TRUST 
COMPANY 

(Formerly  the  It&ltan-American  Trust  Co.) 

52#  BROADWAY  - NEW  YORK 


Capital  - $500,000.00 


This  company  has  a thoroughly  equipped 
Foreign  Department,  under  the  personal 
supervision  of  an  officer  of  the  bank.  We 
transact  a general  banking  business,  and 
have  the  best  facilities  for  collecting 
checks — domestic  or  foreign. 


ACCOUNTS  OF  BANKS  SOLICITED. 


KMANUEIi  GEBLI,  - - President 

C.  PTVA,  - - - Vice-President 

- * Vice-President 

45E5E5  DAY,  - * Vlce-Preeident 

ABTHUB  BA  UR,  Secretary  and  Treasurer 


and  at  the  same  time  multiplying  its  capi- 
tal four-fold,  is  a record  which  it  is  believed 
will  be  a difficult  one  to  surpass. 

— The  First  National  of  Boston,  in  its  re- 
port to  the  Comptroller  of  the  Currency  at 
the  close  of  business  June  30,  makes  the 
following  gratifying  showing:  Notes  dis- 
counted, $31,434,624.78;  demand  loans,  $10,- 
038,820.32;  United  States  and  other  bonds 
and  securities,  $2,994,908.75;  cash  and  due 
from  banks,  $23,127,830.99;  total  resources, 
$68,656,184.84.  With  its  capitalization  of 
$3,000,000,  the  First  National  now  has  a 
surplus  and  undivided  profits  account  of 
$5,758,579.44.  Deposits  total  $58,702,605.40. 

— That  there  is  room  in  Boston  for 
progressive  and  conservative  trust  com- 
panies with  small  capital  is  evidenced  by 
the  success  which  has  been  attained  by  the 
Liberty  Trust  Co.,  which  has  been  in  op- 
eration only  since  September  10,  1907,  and 
which  has  just  declared  a quarterly  divi- 
dend of  one  and  one-quarter  per  cent,  on 
its  stock. 

Starting  during  the  1907  panic,  which 
was  an  inopportune  time  from  a banking 
standpoint,  the  company,  which  had  a paid- 
in  capital  of  $800,000  and  no  surplus  showed 
on  June  30,  1910,  deposits  of  $2,400,000,  and 
surplus  and  undivided  profits,  after  all  ex- 
penses had  been  paid,  of  $103,000,  or  fifty 
per  cent,  more  than  its  original  capital. 
The  entire  $103,000  has  been  earned  in  the 
two  years  and  nine  months  that  the  com- 
pany has  been  in  business.  Earnings,  there- 
fore, have  averaged  better  than  18  per  cent, 
per  annum  on  the  original  $200,000  capital. 


Digitized  by  t^ooQle 


270 


THE  BANKERS  MAGAZINE 


Albany 

©mat  (Emnpang 

ALBANY,  N.  Y. 

ACTIVE  And  Reserve  cAocotmU 
Are  solicited  And  interest  paid 
on  detty  bAlAnces * cDesianAted 
depository  for  reserve  of  Nev) 
York  Stete  Anks  And  Trust 
Compenies  : : : : t : : 

Capital  and  Surplus,  $725,000 


Dividends  could  easily  have  been  paid 
considerably  sooner,  but  the  directors  felt 
that  it  was  wise  to  accumulate  the  $100,000 
surplus  before  distributing  any  of  the 
earnings  to  stockholders. 

The  officers  of  the  company  are:  George 
B.  Watson,  president;  Melvin  O.  Adams, 
vice-president;  and  Allan  H.  Sturgis,  vice- 
president  and  treasurer. 

— Francis  H.  Burrage  has  been  ap- 
pointed assistant  secretary  of  the  Lincoln 
Trust  Company  of  Boston.  The  institu- 
tion began  business  last  October. 

— Arthur  H.  Steele  has  been  appointed 
cashier  of  the  Rockport  (Mass.)  National 
Bank  to  succeed  Geo.  W.  Tufts.  He  as- 
sumes his  duties  August  1. 

— Charles  A.  Chapman,  treasurer  of  the 
Chicope  Savings  Bank,  has  been  unanimous- 
ly elected  treasurer  of  the  Southbridge 
Savings  Bank. 

— The  Merchants  National  of  Providence, 
R.  I.,  at  the  close  of  business  June  30 
makes  the  following  gratifying  report  to 
the  Comptroller  of  the  Currency:  I>oans 
and  discounts,  $5,327,993.36 ; United  States 
and  other  bonds  and  securities*  $2,105,- 
857.41 ; cash  and  due  from  banks,  $1,481,- 
653.84;  total  resources,  $9,015,504.61.  The 
capital  is  $1,000,000,  surplus  and  profits 
$754,672.10,  deposits  $6,392,332.51. 

— William  H.  Burrows  has  been  chosen 
president  of  the  Middletown  National  Bank 
of  Middletown,  Conn.,  to  fill  the  vacancy 
caused  by  the  resignation  of  E.  K.  Hub- 
bard on  April  5.  On  July  1 Francis  A. 
Beach  assumed  the  position  of  cashier,  to 
which  he  was  elected  on  January  11. 

— The  Aetna  National  of  Hartford  makes  a 
flattering  showing  in  its  report  of  condition 
June  30.  Loan  and  discounts,  $2,703,757.03; 


United  States  and  other  bonds,  $793,650; 
cash  and  due  from  banks,  $581,150.18;  total 
resources,  $4,104,807.21.  The  capital  is 
$525,000,  surplus  and  profits  $795,866.55  and 
deposits  $2,169,975.96. 

EASTERN  STATES 

— .Tames  T.  Hamilton  has  been  elected 
president  of  the  Third  National  Bank  of 
Pittsburgh  to  succeed  the  late  Julius  Bieler. 
Mr.  Hamilton  is  a member  of  the  glass- 
manufacturing  firm  of  J.  T.  & A.  Hamilton. 
He  has  served  as  a director  of  the  bank  for 
a longer  period  than  any  of  his  present  as- 
sociates on  the  board. 

— With  the  exception  of  the  Duquesne 
National,  which  took  over  the  Guarantee's 
banking  business,  the  Columbia  National 
Bank  of  Pittsburgh  had  the  distinction  of 
making  the  largest  gain  in  deposits  be- 
tween calls  of  all  the  Pittsburgh  banks. 
The  total  reported  by  the  Columbia  was 
$7,304,572,  an  increase  of  $1,467,000  since 
March  29  last. 

— The  Exchange  Naional  Bank  of  Pitts- 
burgh keeps  up  its  remarkable  record  for 
growth  under  the  present  management. 
While  the  gain  between  calls  was  not  so 
large  as  three  months  ago,  it  nevertheless 
was  a gain.  As  compared  with  the  nearest 
corresponding  date  last  year  the  increase 
in  total  deposits  is  $2,056,902,  or  105  per 
cent.  Within  the  same  period  there  has 
been  an  increase  of  ninety  per  cent,  in  the 
number  of  depositors. 

— The  big  banks  of  Pittsburgh,  as  a rule, 
have  made  substantial  gains  between  calls 
by  the  Comptroller  of  the  Currency.  The 
Federal  National,  which  has  a capital  of  $1,- 
000,000  and  surplus  and  profits  of  $1,317,- 
645.39,  reports  deposits  of  $3,761,961.72, 
which  marks  an  advance  of  over  $400,000 
since  March  20.  Total  resources,  also,  have 
increased  from  $6,612,124.36  to  $7,088,707.11. 

Deposits  of  the  Keystone  National  are  now 
$3,862,863.32,  a gain  of  half  a million  dol- 
lars since  the  beginning  of  the  year.  The 
Keystone  is  capitalized  at  $500,000  and  is 
especially  strong  in  surplus  and  undivided 
profits,  which  aggregate  $847,460.55. 

The  Bank  of  Pittsburgh,  N.  A.,  reports 


BANK.  PICTURES 
Large  portraits  of  past  officers,  etc., 
made  from  any  good  pnotograph.  Splen- 
did for  directors’  room  or  bank  offloes. 

Write  for  particulars. 

Oliver  Lippi ncott,  Photographer  of  Men 
Singer  Bldg.,  149  B’way,  New  York 

Reference*— The  Banker*  Magazine 


Digitized  by  i^ooole 


25  % More  Light— 50  % Less  Current 


The  Merchants  Bank.  Rochester,  N.  Y.f  replaced  38  16  c.  p. 
carbon  filament  lamps  (the  type  commonly  in  use),  with  an 
equal  number  of  G-E  MAZDA  Lamps.  This  change  re- 
sulted in  more  light  on  of  the  former  consumption 
of  current. 


General  (14)  Electric 
Mazda  Lamps 


An  installation  of  these  lamps  in  your  bank  will  give  the 
same  gratifying  results. 

G-E  MAZDA  Lamps  give  more  light  on  less  current  than 
any  other  type  of  electric  incandescent  lamps. 

Ask  your  lighting  company  for  further  information— or 
address  nearest  office. 


Main  Lamp  Sales  Office 
Harrison,  N.J. 


Principal  Office . 
Schenectady,  N.  Y. 


271 


Digitized  by  t^OOQle 


272 


THE  BANKERS  MAGAZINE 


ASK  YOUR 

STATIONER 

FOR 

BANKERS 

LINEN 

AND  BANKERS  LINEN 
BOND 

Made  la  flat  papers.  Typewriter 
papers  and  envelopes 

They  are  fully  appreciated  by 
the  discriminating  banker  de- 
siring high  grade,  serviceable 
paper  for  correspondence  and 
typewriter  purposes.  . . . 


SOLS  AGENT* 

F.  W.  ANDERSON  & CO. 

34  BEEKMAN  STREET,  NEW  YORK 


deposits  of  $17,559,576.51  and  total  resources 
of  $25,279,777.34.  It  has  surplus  and  profits 
of  $3,085,303.33,  the  capital  being  $2,400,000. 
It  is  interesting  to  note  that  shortly  after 
the  bank  began  business  100  years  ago  its 
total  resources  were  $127,908.98  and  de- 
posits $17,155.23. 

The  Mellon  National  in  its  statement 
of  June  30,  shows  a growth  in  surplus  and 
profits  since  March  29  of  $133,000.  In  ad- 
dition to  this  the  bank  has  just  paid  a 
dividend  of  $60,000,  making  its  net  earnings 
in  the  past  three  months  over  $190,000. 

Deposits  of  the  First  National  Bank  of 
Pittsburgh  at  the  close  of  business  on  June 
30  totaled  $22,586,073.69,  an  increase  of 
$300,000  since  the  corresponding  call  of 
1909.  Resources  now  total  $26,768,771.20. 

The  Diamond  National  reports  loans  and 
investments  of  $4,600,756,  cash  in  vault 
amounting  to  $1,920,226,  surplus  and  un- 
divided profits  of  $1,653,413,  and  deposits 
of  $5,304,429.  Deposits  of  the  Diamond 
Savings  Bank  amount  to  $1,203,206.  It  has 
a surplus  of  $125,000. 

— One  of  the  best  of  the  many  excellent 
reports  of  condition  called  for  by  the  Comp- 
trollers call  of  June  30,  comes  from  the 
Peoples  National  Bank  of  Pittsburgh. 


Forty  years  ago  this  institution  reported 
surplus  and  profits  of  $89,675  and  deposits 
of  $507,644;  on  June  30,  1910,  it  reported 
surplus  and  profits  of  $1,874,482  and  de- 
posits of  $13,661,865.  These  figures  tell 
the  story  of  a remarkably  successful  ex- 
istence. 

— The  Girard  National  of  Philadelphia, 
in  connection  with  the  current  statement  of 
June  30,  makes  a comparison  of  its  increase 
in  surplus  and  profits  over  the  past  seven 
years,  which  is  little  less  than  remarkable. 
The  surplus  and  profit  item  on  June  30  this 
year  stood  at  $4,190,954,  and  on  June  9, 
1903,  at  $2,579,868.  The  earned  increment 
in  seven  years  has  been  therefore  $1,611,086, 
and  as  the  bank  paid  cash  dividends  during 
that  period  amounting  to  $1,700,000,  the 
total  net  earnings  in  seven  years  have  been 
$3,311,086,  or  average  earnings  on  the  capi- 
tal of  $2,000,000  of  23.65  per  cent.  The 
bank’s  deposits  on  June  30  were  $36,179,- 
134.  Altogether  the  Girard  National  has 
had  an  extraordinarily  prosperous  career, 
one  which  reflects  credit  on  its  able  staff 
of  officers  and  board  of  directors. 

— F.  Leighton  Kramer  has  been  elected  a 
vice-president  of  the  Ridge  Avenue  Bank  of 
Philadelphia,  to  replace  the  late  Frank  R. 
Whiteside.  Edward  C.  Bell  has  been  elected 
assistant  cashhier  of  the  institution. 

— On  July  12  the  stockholders  of  the 
Tradesmen’s  National  Bank  of  Philadelphia 
authorized  the  proposed  change  with  respect 
to  the  par  value  of  the  stock,  whereby  it  will 
be  made  $100  per  share  instead  of  $50,  as 
at  present.  In  its  statement  of  June  30 
the  Tradesmen's  National  reports  loans  and 
investments  of  $4,641,593;  cash  and  due 
from  banks,  $2,413,313;  capital,  $500,000; 
surplus  and  undivided  profits,  $792,082;  de- 
posits, $5,628,149;  total  resources,  $7,417,632. 

— In  rounding  out  its  tenth  anniversary, 
which  occurred  July  2,  the  directors  of 
the  Franklin  National  Bank  of  Philadelphia 
carried  $250,000  to  surplus,  raising  that 
fund  to  $2,500,000.  The  bank  opened  for 
business  in  July,  1900,  with  a capital  of 
$1,000,000  and  a surplus  of  like  amount. 
It  has  paid  from  its  earnings  in  dividends 
$1,010,000  and  added  $1,500,000  to  its  sur- 
plus, making  that  fund  $2,500,000  and  the 


A No.  1 Adding  Machine  Rolls 

Lint  less  Fall  Yardage  Quality  Guaranteed 

2 5-16"  Rolls  per  100 $5.50 

8 15-32"  Rolls  per  100 8.00 

Plain  or  Ruled. 

Ask  for  samples  and  prices  on  other  widths 
Lansing  Paper  Co.,  Box  166,  Lansing,  Mich. 


Digitized  by  t^ooQle 


I 


BANKING  AND  FINANCIAL  NOTES 


273 


Modern  Sky-Scraper  Home  of  the  Franklin  National  Bank  of  Philadelphia' 
at  Broad  and  Chestnut  Streets 


total  net  earnings  for  the  ten  years,  in- 
cluding undivided  profits,  approximately 
$2,650,000.  In  October,  1908,  the  bank  took 
possession  of  the  large  office  building  at 
the  northeast  corner  of  Broad  and  Chest- 
nut streets,  which  had  been  purchased  from 
the  Girard  Trust  Company  in  1902  and 
which  is  now  carried  on  the  books  at  an 
amount  less  than  the  present  assessed  valu- 
ation. This  location  is  perhaps  the  most 
desirable  in  the  city.  The  property  is  rap- 
idly enhancing  in  rental  value  and  is  now 
very  satisfactorily  tenanted.  Occupying  the 
greuter  portion  of  the  street  floor,  the  bank 
enjoys  ample  accommodation  for  its  officers 
and  the  various  departments  of  its  expand- 
ing business.  Starting  with  $3,404,231  of 
deposits  the  Franklin  National  recently  re- 
ported deposits  of  $33,123,873. 

— Alterations  in  the  building  of  the  Market 
Street  National  Bank  of  Philadelphia,  which 
were  begun  some  months  ago,  have  been 
completed,  and  the  institution  is  now  housed 


in  practically  a new  structure.  One  of  the 
marked  features  of  the  remodeled  quarters 
is  the  light  afforded  through  the  alterations, 
making  the  use  of  artificial  illumination  no 
longer  necessary.  The  exterior  of  the  build- 
ing has  been  converted  into  a marble  front 
of  Doric  design.  The  bank  continued  busi- 
ness on  the  premises  during  the  work  of  re- 
construction. 

— For  June  30  the  Com  Exchange  Na- 
tional Bank  of  Philadelphia  reports  loans 
and  investments  of  $13,830,263,  a sum  of 
$2,868,780  as  due  from  banks,  $3,332,800  of 
cash  and  reserve,  a circulation  of  $440,000, 
surplus  and  profits  of  $1,465,766,  and  de- 
posits of  $19,103,221. 

— On  July  1 the  First  National  Bank  of 
Philadelphia  and  the  Merchants  National 
Bank  of  that  city  were  merged,  no  intima- 
tion of  the  impending  move  having  been 
made  public  until  its  actual  accomplishment. 
The  stockholders  will  meet  on  August  S to 


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274 


THE  BANKERS  MAGAZINE 


ratify  this  action.  By  the  terms  of  the  mer- 
ger the  capital  stock  of  the  First  National 
Bank  will  be  increased  by  $500,000,  or  up  to 
$1,500,000,  to  take  over  the  $1,000,000  capi- 
tal stock  of  the  Merchants’  National  Bank. 
To  every  holder  of  two  shares  of  Merchants’ 
National  Bank  stock  one  share  of  First  Na- 
tional Bank  stock  and  $100  in  cash  will  be 
given.  This  fixes  the  valuation  of  the 
Merchants*  National  Bank  stock  at  $155  per 


served  as  cashier  and  assistant  cashier  re- 
spectively of  the  Merchants’.  The  board  of 
the  First  National  will  be  increased  to 
eighteen  members  through  the  addition  of 
seven  directors  from  the  directorate  of  the 
Merchants’. 

— Thirty-seven  years  ago  Mr.  Budd  en- 
tered tlie  employ  of  the  Tihrd  National 
Bank  of  Philadelphia  as  a messenger  boy. 


THOMAS  J.  BUDD 

Cashier  Third  National  Bank  of  Philadelphia 


share.  The  surplus  and  profits  of  the  First 
National  were  $1,019,245  in  the  March  state- 
ment, while  its  deposits  on  June  25  were 
$10,418,000.  J.  Tatnall  Lea,  who  has  been 
president  of  the  First  National  since  April, 
1904,  will  continue  in  the  presidency,  and 
William  A.  Law,  who  became  president  of 
the  Merchants’  National  last  January,  will 
be  identified  with  the  First  National  as  first 
vice-president.  The  full  roster  of  the  en- 
larged bank  will  be  as  follows:  J.  Tatnall 
Lea,  president;  William  A.  I .aw  and  Ken- 
ton Warne,  vice-presidents;  Thomas  W.  An- 
drew, cashier;  C.  H.  James  and  Freas  B. 
Snyder,  assistant  cashiers.  Messrs.  Warne 
and  James  were  heretofore  respectively 
cashier  and  assistant  cashier  of  the  First 
National,  and  Messrs.  Andrew  and  Snyder 


Possessed  of  grit  and  ambition  he  worked 
his  way  up  from  one  department  to  another 
and  eventually  was  made  cashier.  This  of- 
fice he  has  held  for  more  than  ten  years. 

— As  usual,  the  oldest  bank  in  the  United 
States,  the  Bank  of  North  America,  N.  A., 
of  Philadelphia,  has  rendered  an  exception- 
ally good  statement  of  its  condition.  This 
call  it  reports  loans  and  discounts  of  $12,- 
763,319,  cash  and  reserve  of  $2,901,740,  sur- 
plus and  undivided  profits  of  $2,621,980,  a 
circulation  of  $497,300,  and  deposits  of 
$14,626,016. 

— A splendid  statement  comes  to  us  from 
the  Keystone  National  Bank  of  Reading, 
Pa.  It  was  rendered  at  the  close  of  busi- 


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BANKING  AND  FINANCIAL  NOTES 


275 


ness,  June  30,  and  contains  the  following  im- 
portant items:  Loans  and  discounts,  $550,- 
528;  capital  stock  paid  in,  $100,000;  surplus 
fund,  $200,000;  undivided  profits,  less  ex- 
penses and  taxes  paid,  $9,882;  undividual  de- 
posits, $484,277;  total  deposits,  $486,636. 
The  Keystone  has  total  resources  of  $878,- 
949. 

— John  A.  Kloepfer,  on  July  1,  assumed 
the  presidency  of  the  Union  Stock  Yards 
Bank  of  Buffalo,  N.  Y.,  succeeding  Irving  E. 


JOHN  N.  KLOEPFER 
Newly  Elected  President  Union  Stock  Yards 
Bank  of  Buffalo.  N.  Y. 


Waters,  who  resigned.  Mr.  Kloepfer,  who 
is  but  thirty-seven  years  of  age,  comes  to 
Buffalo  from  the  Bank  of  Hamburg,  New 
York,  where  he  has  served  since  1904  as 
vice-president. 

Last  year  he  served  as  treasurer  of  the 
New  Y'ork  State  Bankers’  Assoication  and 
also  labored  in  behalf  of  Group  1 as  chair- 
man. 

The  Union  Stock  Yards  Bank  has  just 
completed  a fine  edifice  at  the  corner  of 
Broadway  and  Fillmore  avenue,  of  cut  gran- 
ite, with  white  glazed  terra  cotta  and 
bronzed  trimmings,  having  a frontage  of 
thirty-one  feet  on  Broadway  and  ninety  feet 
on  Fillmore  avenue.  The  interior  is  of 
steel,  bronze  and  marble.  The  bank’s  capi- 
tal stock  is  $150,000. 

— In  its  statement  of  condition  for  June 
30,  the  First  National  Bank  of  Baltimore 
shows  general  improvement.  It  carries  $4,- 
346,141  of  loans  and  discounts,  has  a capital 
of  $1,000,000,  a surplus  of  $450,000,  and  un- 


AMERICAN 

NATIONAL  BANK 

RICHMOND,  VIRGINIA 


(Organized  Nov.  1,  1899) 

Capital,  - - • $500,000.00 
Surplus  and  Profits,  300,000.00 

Located  In  the  capital  and  metrop- 
olis of  the  state  and  fully  equipped 
In  every  respect  for  prompt  and 
efficient  service,  this  bank  seeks  the 
Richmond  and  Virginia  business  of 
Banks,  Firms,  Corporations  and  In- 
dividuals everywhere. 

The  large  number  of  this  institu- 
tion’s present  correspondents  and  de- 
positors is  ample  proof  of  the  satis- 
factory service  rendered. 


UNITED  STATES  AND  STATE  DEPOSITORY 


divided  profits  of  $97,301.  It  maintains  a 
lawful  money  reserve  of  $478,000  and  on  the 
date  named  reported  deposits  of  $6,581,156. 

— The  Albany  Trust  Company  of  Albany, 
N.  Y.,  reports  favorably  as  of  June  3*0. 
This  well-known  institution  has  deposits  of 
$6,676,540,  a surplus  and  profits  fund  of 
$319,810,  and  resources  of  $7,454,914. 

— The  Lincoln  National  Bank  of  Roches- 
ter, X.  Y.,  makes  a gratifying  report  under 
date  of  June  30.  Its  total  resources  are 
$15,308,745;  its  reserve  in  bank  is  $1,028,884, 
and  its  surplus,  $1,000,000.  It  has  at  the 
present  time  deposits  of  $12,100,132  and  un- 
divided profits  of  $372,013. 

-On  June  30  the  Second  National  Bank 
of  Cooperstown,  X.  Y.,  reported  deposits  of 
$1,439,283,  undivided  profits  of  $46,135,  a 
surplus  of  $160,000,  a capital  of  $150,000, 
and  total  resources  of  $1,892, 133.  Charles 
T.  Brewer  is  president;  Fred  L.  Quaif  is 
vice-president;  George  M.  Jarvis  is  cashier 
and  F.  W.  Spraker  is  the  assistant  cashier. 


Advertiser*  in  THE  BANKERS  MAGA- 
ZINE ere  assured  of  a bona  fide  circula- 
tion among  Banks.  Bankers.  Capitalists 
and  others  in  this  and  foreign  countries, 
at  least  double  that  of  any  other  monthly 
banking  publication 


Digitized  by  t^ooQie 


276 


THE  BANKERS  MAGAZINE 


The 


Berlitz  School 

of 

Languages 

MADISON  SQf,  1122  BROADWAY 


Harlem  Branch,  843  Lenox  Are., 
abort  127th  St. 

Brooklyn  Branch,  218  Livingston  St. 
Branohea  in  over  250  lending  cities 
Summer  School  Asbury  Pack,  N.  J. 


Hotel  Touraine  Annex 
Fifth  At.  near  Grand 


Teachers  sent  all  points  within  50  miles 
Day  and  Evening  Lessons,  in  Classes  or 
Privately,  at  School  or  at  Residence. 


AWARDS 


PARIS  EXPOSITION, 

1900, 

Lille  “ 

1902, 

ZURICH 

1902, 

8t.  Louis  “ 

1904, 

Liege  « 

1906, 

London  “ 

1908, 

2 Gold  Medals 
Gold  Medal 
gold  Medal 
Grand  prize 
grand  prize 
grand  prizb 


— H.  Fessenden  Meserve,  of  the  banking 
firm  of  Middendorf,  Williams  & Co.,  has 
been  elected  first  vice-president  and  director 
of  the  Commercial  and  Farmers’  National 
Bank  of  Baltimore,  to  succeed  James  M. 
Easter,  who  resigned  on  account  of  outside 
duties. 

Mr.  Easter,  proposes,  however,  to  retain 
an  interest  in  the  bank.  Mr.  Meserve  was 
formerly  an  extensive  mine  operator  in 
Korea,  and  has  had  considerable  banking  ex- 
perience. Frederick  H.  Gottlieb  was  also 
elected  a director  in  the  bank. 

— Substantial  growth  has  occurred  in  the 
business  of  the  Second  National  Bank  of 
Washington,  D.  C.  Its  deposits  increased 
from  $1,440,905,  February  5,  1909,  to  $1,609,- 
510,  March  99,  1910,  tne  date  of  the  previous 
statement  to  the  U.  S.  Comptroller.  In  the 
same  period  surplus  and  profits  advanced 
from  $294,907  to  $955,698,  and  total  assets 
from  $9,744,164  to  $2,958,208.  The  bank  is 
a United  States  depositary.  It  was  estab- 
lished in  1872  and  has  $500,000  capital. 
William  V.  Cox,  its  president,  is  well  known 
to  bankers  throughout  the  country  for  his 
active  work  in  the  interests  of  the  American 
Bankers’  Association.  Walter  C.  Clephane 
is  vice-president;  John  C.  Eckloff,  cashier, 
and  Jacob  Scharf,  assistant  cashier. 

— Edward  Floyd  Caverly,  who  was  on 
June  23  elected  cashier  of  the  National  City 
Bank  of  Washington,  D.  C.,  assumed  his 
duties  July  15.  Mr.  Caverly  was  born  in 
Brooklyn,  N.  Y.,  December  9,  1875.  He  at- 
tended schools  in  Washington  until  March 
1891,  at  which  time  he  was  offered  a position 


as  errand  boy  with  the  firm  of  J.  H.  Chesley 
& Co.,  hardware  merchants,  at  a weekly 
compensation  of  $1.50,  with  working  hours 
from  7 a.  m.  to  6 p.  m.  After  six  months' 
constant  attention  to  business  he  accepted  a 
place  as  runner  for  the  firm  of  Arms  & Dru- 
ry, money  brokers,  of  Washington.  By  hard 
work  and  not  watching  the  clock , Mr.  Caver- 
ly was  gradually  advanced  and  after  twelve 


PHOTO  BY  HARRIS  A EWINO,  WASHINGTON,  D.  C. 


EDWARD  FLOYD  CAVERLY 
Cashier  National  City  Bank  of  Washington,  D.  C. 


years’  service  was  promoted  to  manager  and 
confidential  clerk  for  that  firm,  remaining  in 
that  capacity  until  the  fall  of  1907,  at  which 
time  he  was  offered  and  accepted  the  assist- 
ant managership  for  the  Washington  branch 
office  of  E.  R.  Chapman  & Co.,  bankers  and 
brokers  of  80  Broadway,  New  York  City. 
He  remained  with  that  firm  until  E.  F.  Hut- 
ton & Co.  of  New  York  City,  bankers,  suc- 
ceeded them,  when  he  became  the  manager, 
and  it  is  this  position  he  has  given  up  to  ac- 
cept the  cashiership  of  the  National  City 
Bank  of  Washington,  D.  C. 

—Charles  L.  Farrell,  who  recently  became 
vice-president  of  the  Essex  County  National 
of  Newark,  N.  J.,  has  been  elected  president 
of  the  bank  to  succeed  Benjamin  Atha,  re- 
signed. Mr.  Farrell  was  formerly  a vice- 
president  of  the  Irving  National  Exchange 
Bank  of  New  York,  and  is  a banker  of  un- 
usual ability. 

— William  Growney,  for  seven  years  con- 
nected with  the  First  National  Bank  of 
Perth  Amboy,  N.  J.,  has  been  elected  secre- 
tary and  treasurer  of  the  West  Hudson 


Digitized  by  t^ooQle 


Capital,  $1,000,000.00  Earned  Surplus,  $1,000,000.00 


JOHN  B.  PURCELL 
President 


JOHN  M.  MILLER,  JR. 
Vice-Pres.  and  Cashier 


FREDERICK  E.  NOLT1NG,  2nd  Vice-President 

CHA3.  R.  BURNETT 
J.  C.  JOPLIN  Assistant 

W.  P.  SHELTON  f Cashier* 

ALEX.  F.  RYLAND  J 


BILL  OF 
LADING  DRAFTS 
ON  RICHMOND  A SPECIALTY 


Strong  In  resources,  oonservatlvo 
In  management,  progressive  In  polloy 

OF  RICHMOND,  VIRGINIA 


County  Trust  Company  of  Newark,  N.  J.,  to 
succeed  Peter  B.  Fox,  who  for  the  last  five 
years  has  filled  the  office  with  credit.  Mr. 
Fox  resigned  so  that  he  might  accept  a more 
lucrative  position  in  one  of  the  largest  banks 
in  Butte,  Mont. 

SOUTHERN  STATES 

— From  the  Planters*  National  Bank  of 
Richmond,  Va.,  comes  an  exceedingly  grati- 
fying statement  of  condition.  This  old  bank 
reports  total  resources  of  $7,051,284,  a capi- 
tal of  $300,000,  surplus  and  profits  of  $1,- 
258,393  and  deposits  of  $5,099,099.  The  fact 
that  the  total  capitalization  is  but  one-fourth 
of  the  surplus  and  profits  fund  is  note- 
worthy. 

— Another  bank  consolidation  in  Rich- 
mond, Va.,  has  been  suggested  and  it  is  like- 
ly that  before  long  steps  will  be  taken  to 
bring  about  a merger  of  the  Bank  of  Com- 
merce and  Trusts  of  that  city  with  the  Capi- 
tol Savings  Bank.  The  recommendation  has 
been  made  by  the  directors  of  the  Capitol 
Bank,  a controlling  interest  in  which  is 
owned  by  the  Bank  of  Commerce  and  Trusts. 
Oliver  J.  Sands,  president  of  the  latter  insti- 
tution, will  probably  head  the  merged  bank, 
and  the  officers  and  clerks  of  both  banks  will 
be  retained.  The  new  institution  will  have  a 
capital  of  $300,000,  a surplus  of  $100,000, 
and  deposits  exceeding  $1,600,000.  It  will 
add  greatly  to  the  financial  growth  of  Rich- 
mond. 

— For  June  30  the  First  National  Bank  of 
Richmond,  Va.,  reports  loans  and  discounts 
of  $6,663,026;  cash  and  due  from  banks, 
$1,137,585;  a surplus  of  $1,000,000,  undi- 
vided profits  of  $15,784  and  deposits  of  $5,- 
922,127.  Total  resources  are  $9,516,787. 

— The  Merchants’  National  Bank  of  Rich- 
mond reports  loans  of  $4,338,584,  resources 
of  $6,786,762,  a capital  of  $200,000,  a sur- 
plus and  undivided  profits  fund  of  $920,305 
and  deposits  of  $5,405,557. 


— The  American  National  Bank  of  Rich- 
mond, Va.,  reports  a capital  of  $500,000, 
a surplus  and  profits  fund  of  $310,534,  loans 
and  discounts  of  $3^60,584  and  deposits  of 
$3,458,391.  Total  resources  on  June  30  were 
$5,052,894. 

I 

—With  an  increased  capital  stock — now 
$300,000 — the  People’s  National  Bank  of 
Lynchburg,  Va.,  has  secured  considerable 
new  business.  This  is  evident  by  comparing 
the  bank’s  two  latest  statements.  Surplus  ana 
profits  have  been  increased  from  $325,000  to 
$414,408,  while  the  $1,234,428  of  deposits 
represents  a gain  over  the  last  report.  The 
present  officers  are:  John  Victor,  president; 
Walker  Pettyjohn,  vice-president;  G.  E. 
Vaughan,  cashier;  W.  W.  Dickerson,  assist- 
ant cashier. 

— Control  of  the  Columbia  (S.  C.)  Savings 
Bank  and  Trust  Company  has  passed  to  the 
Norris  interests  and  B.  F.  P.  Leaphart,  who 
has  for  years  been  assistant  cashier  of  the 
Bank  of  Columbia,  has  been  elected  presi- 
dent under  the  new  regime,  and  George  R. 
Norris  has  been  elected  vice-president.  Mr. 
Leaphart  has  been  in  the  banking  business 
*or  twenty  years  and  is  well  and  popularly 
known  in  Columbia.  A.  R.  Heyward,  Jr., 
has  been  retained  as  cashier  of  the  bank. 

The  bank  has  been  in  successful  operation 
for  many  years  and  gives  promise  of  in- 
creased business.  The  board  of  directors  of 
the  Columbia  Savings  Bank  and  Trust  Com- 
pany consists  of  the  following:  John  B.  Nor- 
ris, George  R.  Norris,  John  L.  Mimnaugh, 
William  D.  Melton,  August  Kolin,  William 
J.  Murray,  F.  H.  Hyatt,  W.  K.  Keenan  and 
B.  F.  P.  Leaphart. 

— The  Fourth  National  of  Atlanta,  Ga., 
makes  the  following  excellent  report  to  the 
Comptroller  of  the  Currency  at  the  close  of 
business  June  30:  Loans  and  discounts,  $4,- 
930,547.92;  U.  S.  bonds  and  other  securities, 
$676,647.75;  cash  and  due  from  banks, 
$1,211,085.47 ; total  resources,  $7,445,575.66. 
The  capital  is  $600,000;  surplus  and  profits, 
$790,822.65,  and  deposits,  $4,754,733.01. 

277 


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278 


THE  BANKERS  MAGAZINE 


— Beginning  August  1,  the  seventh  anni- 
versary of  the  Atlantic  National  Bank  of 
Jacksonville,  Fla.,  a plan  becomes  effective 
whereby  the  bank’s  employees  will  be  insured 
against  sickness,  accident,  the  stress  of  old 
age  and  death.  The  remarkable  feature  of 
the  plan  is  in  the  fact  that  there  will  be  no 
assessment  upon  the  salaries  of  the  em- 
ployees. The  fund  will  be  made  up  exclu- 
sively from  a percentage  of  the  net  profits 
of  the  bank  to  be  placed  at  the  end  of  each 
six  months  into  the  savings  department  of 
the  bank,  where  it  will  grow  with  the  inter- 
est and  the  accumulations  thereupon.  A 
fixed  schedule  will  be  made,  based  upon  the 
character  of  the  accident  or  other  disability, 
the  length  of  service  of  the  employee  and  the 
importance  of  his  position,  so  that  a faithful 
employee  of  long  service  is  reasonably  cer- 
tain that  his  family  will  receive  a substantial 
sum  in  case  he  dies,  or  that  he  himself  will 
be  provided  for  when  old  age  puts  her  win- 
ter snows  upon  his  head. 

— The  First  National  Bank  of  Birming- 
ham, Ala.,  reports  June  30,  1910,  loans  and 
discounts,  $6,880,588;  total  cash,  $3,085,947; 
capital  stock,  $1,000,000;  surplus  and  profits, 
$881,185;  total  deposits,  $8,561,351;  total  re- 
sources, $11,458,137.  The  increase  in  depos- 
its over  June  30,  1909,  was  $1,395,792.  W. 
P.  G.  Harding,  president;  J.  H.  Woodward 
and  J.  H.  Barr,  vice-presidents;  Thomas 
Hopkins,  cashier,  and  F.  S.  Foster  and 
'Thomas  Bowron,  assistant  cashiers.  J.  E. 
Ozburn  is  secretary  savings  department. 

— J.  J.  Baskett,  president  of  the  Alabama 
Bank  and  Trust  Company  of  Gadsden,  Ala., 
has  sold  a majority  of  his  stock  to  Harry 
Bellenger,  the  cashier,  who  becomes  presi- 
dent. The  bank  is  capitalized  at  $50,000. 
Mr.  Baskett  retains  some  stock  in  the  insti- 
tution. 

— According  to  Walker  Broach,  vice-pres- 
ident of  the  First  National  Bank  of  Meri- 
dian, Miss.,  the  past  six  months  have  been 
the  most  prosperous  his  bank  has  ever  en- 
joyed. On  June  30  it  reported  loans  and 
discounts  of  $1,132,090,  total  resources  of 
$2,082,389,  a surplus  of  $170,000,  undivided 
profits  of  $18,422  and  deposits  of  $1 ,376,387. 
The  bank’s  total  earnings  amounted  to  $58,- 
431.18. 

— Compilations  appearing  in  the  Mobile 
papers  July  1 relative  to  the  standing  of  the 
city’s  financial  institutions  at  the  end  of  the 
half  year  depict  noteworthy  advancement. 
For  June  30,  1910,  the  deposits  of  the  eight 
banking  institutions  are  $10,874,545,  while 
their  combined  capital,  surplus  and  undi- 
vided profits  is  $3,948,470.  Ten  years  ago 
(in  1900),  the  combined  deposits  were  but 
$4,309,322  and  the  aggregate  capital,  surplus 
and  profits  only  $1,667,379.  The  City  Bank 
and  Trust  Company  heads  the  list  "in  the 


June  30,  1910,  statistics,  having  on  that  date 
capital,  surplus  and  profits  of  $1,007,355  and 
deposits  of  $3,240,080,  the  latter  having 
grown  from  $2,480,175  on  June  30,  1909.  The 
People’s  Bank  is  second  with  deposits  of 
$2,029,392,  and  capital,  surplus  and  profits 
of  $833,330.  On  a total  capital  of  $1,620,- 
000,  the  seven  clearing-house  banks  paid  out 
in  dividends  on  the  1st  instant,  $109,000. 
There  has  also  been  considerable  gain  in  the 
clearances  of  the  banks,  the  increase  amount- 
ing to  $5,900,717  for  the  year,  Secretary  J. 
L.  Taylor  of  the  Clearing-House  Association 
reporting  the  amount  for  the  twelve  months 
ending  June  30,  1910,  as  $73,186,199  and 
those  for  the  year  ending  June  30,  1909,  as 
$67,285,48 2. 

—J.  H.  Fulton  has  been  chosen  president 
of  the  Commercial  National  of  New  Orleans, 
to  succeed  William  Mason  Smith.  Mr. 
Fulton  was  formerly  vice-president. 

— The  Calcasieu  National  Bank  of  Lake 
Charles,  La.,  reports  loans  and  discounts  of 
$1,546,202,  a capital  of  $150,000,  a surplus 
of  $100,000,  undivided  profits  of  $2,519,  a 
circulation  of  $121,000,  resources  of  $2,- 
229,175,  and  deposits  of  $1,8469508.  The 
Calcasieu  Trust  and  Savings  Bank  reports 
resources  of  $1,799,958  and  deposits  of 
$1,532,421. 

— By  voting  unanimously,  the  directors  of 
the  Bankers’  Trust  Company  of  Houston, 
Texas,  have  increased  the  companv’s  capital 
stock  from  $500,000  to  $1,000,000.  When 
paid  for  the  new  stock  will  be  the  same  as 
the  old,  but  it  has  been  divided  into  5,000 
shares  of  $100  each,  and  to  be  sold  for  $150 
per  share,  payable  on  September  1,  1910. 
There  is  to  be  no  expense  incident  to  the 
placing  of  the  stock,  and  the  additional 
amount  paid  in  will  be  placed  to  the  sur- 
plus fund.  It  is  estimated  that  the  book 
value  of  the  stock  after  the  capital  has  been 
increased  will  be  $135  per  share,  it  being 
considered  that  the  $15  per  share  is  a very 
small  premium  to  pay  for  stock  that  has  a 
demonstrated  earning  capacity  of  twenty- 
four  per  cent,  per  annum.  The  stock  has 
been  offered  to  the  stockholders  of  record 
on  July  20,  1910,  who  will  waive  their  privi- 
lege of  subscribing  if  their  applications 
have  not  been  sent  in  by  August  1,  1910. 

It  is  the  purpose  of  the  management  to 
pay  twelve  per  cent,  dividends,  and  it  is 
reasonable  to  suppose  that  the  market  value 
of  tlie  stock  will  materially  enhance  in  value 
during  the  year,  inasmuch  as  the  present 
market  value  of  the  stock  is  $150. 

The  Bankers’  Trust  Company  is  one  of 
the  best  organized  institutions  in  the  State, 
lias  a very'  strong  board  of  twenty-five  di- 
rectors, and  confines  its  business  strictly  to 
trust  company  transactions.  It  does  not 
speculate  in  any  way  and  all  loans  are  well 
and  absolutely  secured,  and  it  is  run  with 


Digitized  by  t^ooQle 


Capital,  • • $2,500,000.00 

FIRST 

ACCOUNTS  SOLICITED. 

Sarplas  $ Frants,  1250, 000.00 

BANK 

CORRESPONDENCE  INVITED. 

lapasita,  • • 27,000,000.00 

COLLECTIONS  1 SPECIALTY. 

1 

Oltwfauri,  Ohk 

the  aim  of  perpetuity.  There  are  many  op- 
portunities that  a trust  company  has  to  serve 
a community,  which,  perhaps,  all  people  do 
not  understand,  as  there  are  twenty-four 
distinct  departments,  all  properly  outlined 
and  handled  systematically.  The  business 
Is  evfp  more  beneficial  to  the  community 
than  that  of  banking;  it  is  also  more  profit- 
able. H.  N.  Tinker  is  the  president  and 
active  head  of  this  going  concern. 

— At  the  close  of  business,  June  30,  the 
Commercial  National  Bank  of  Houston, 
Texas,  reported  total  resources  of  $5,223,- 
931.  The  condensed  report  shows  that  this 
institution  has  a capital  of  $500,000,  a like 
amount  of  surplus,  net  profits  of  $88,139, 
bank  deposits  of  $1,265,647  and  individual 
deposits  of  $2,370,144. 

— The  Houston  National  Exchange  Bank 
of  Houston,  Texas,  reports  as  follows  at  the 
close  of  business  June  30:  Loans  and  dis- 
counts, $2,026,003.15;  U.  S.  bonds,  $50,- 
207.19;  cash  and  exchange,  $1,003,431.27; 
total  resources,  $3,085,141.61.  The  bank  is 
capitalized  at  $200,000  and  has  surplus  and 
profits  of  $7,312.33.  Deposits  aggregate 
$2,763,829.28. 

— On  the  last  day  of  June  the  South 
Texas  National  Bank  of  Houston  reported 
totul  deposits  of  $3,754,785,  a capital  stock 
of  $500,000,  surplus  and  profits,  earned,  of 
$339,342,  and  total  resources  of  $4,753,127. 
This  conservative  old  bank  was  organized 
May  10,  1890,  and  has  paid  consecutive 
semi-annual  dividends  without  a break. 

— One  of  the  best  balanced  statements 
ever  rendered  by  the  American  Exchange 
National  Bank  of  Dallas,  Texas,  is  the  one 
just  published  under  date  of  June  30. 

With  a capital  of  $1,000,000,  a surplus  of 
$500,000,  and  undivided  profits  of  $500,000, 
this  institution  carries  loans  and  discounts 
of  $6,986,418  and  can  show  $8,188,307  of  de- 
posits. 

— Another  Texas  bank  proclaims  by  its 
official  statement  the  general  prosperity  of 
the  Lone  Star  State.  This  is  the  American 
National  of  Austin.  On  the  last  day  of 
June  it  reported  total  resources  of  $2,808,- 
065.  It  also  reported  deposits  of  $2,099,199, 
an  earned  surplus  of  $280,000  ($80,000  more 
than  its  capital),  and  undivided  profits  of 
$27,118. 

— The  Central  Trust  Company  of  San 
Antonio,  Texas,  has  been  chartered  with  a 


capital  of  $500,000.  Three  per  cent,  of  the 
company’s  capital  stock,  namely  $15,000,  is 
to  be  deposited  with  the  State  bank  guaran- 
ty fund.  Following  are  the  officers:  J.  O. 
Terrell,  president;  B.  G.  Barnes,  secretary- 
treasurer;  Alex.  Joske,  first  vice-president. 

— The  consolidation  of  the  National  Bank 
of  Commerce  with  the  First  National  Bank 
of  El  Paso,  Texas,  took  place  on  July  16. 
The  capital  stock  of  the  First  National  will 
be  increased  from  $500,000  to  $600,000  and 
the  surplus  from  $100,000  to  $200,000.  The 
additional  stock  will  be  taken  by  the  stock- 
holders of  the  National  Bank  of  Commerce. 

— The  First  National  Bank  of  Beaumont, 
Texas,  reported  June  23  loans  and  discounts 
of  $1,103,688,  as  compared  with  $885,601  on 
June  23,  1909;  deposits  have  also  increased 
during  the  year  from  $963,496  to  $1,213,050 
and  total  resources  from  $1,638,795  to  $1,- 
921,926. 

— On  June  30  the  American  National 
Bank  of  Nashville,  Tenn.,  reported  that  it 
was  carrying  $5,051,560  of  loans  and  dis- 
counts, aiso  that  it  had  resources  of  $7,870,- 
016  and  deposits  of  $4,665,434.  Taking  the 
capital  of  $1,000,000,  the  shareholders’  lia- 
bility of  $1,000,000,  the  surplus  and  undi- 
vided profits  fund  of  $804,000,  and  adding 
the  figures  together,  the  result  is  $2,804,000 
of  security  to  depositors.  The  American 
National  is  the  only  million  dollar  national 
bank  in  Tennessee. 

MIDDLE  STATES 

— State  banks  in  Chicago,  reporting  their 
condition  as  at  the  beginning  of  business 
July  1,  in  response  to  a call  from  the  auditor 
of  public  accounts,  show  an  increase  of 
something  more  than  $9,000,000  in  deposits 
over  the  amount  reported  March  30.  The 
totul  of  thirty-seven  State  banks  July  1 was 
in  excess  of  ‘$413,000,000,  and  half  a dozen 
more  banks  in  the  outlying  districts  proba- 
bly brought  the  figure  above  $415,000,000,  a 
new  high  mark  for  the  State  institutions. 

The  amount  of  deposits  gained  by  the 
State  banks  between  the  dates  of  the  last 
two  calls  w-as  a little  more  than  half  the 
amount  lost  by  the  national  banks  in  the 
same  period,  so  that  the  total  deposits  in 
fifteen  national  and  thirty-seven  State  banks, 
as  of  July  1,  $829,914,515,  was  $8,981,573 
less  than  the  total  March  30. 

In  the  same  period  the  State  banks  in- 

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creased  their  loans  only  $2,358, 000  and  added 
$7,598,000  to  their  total  cash  resources. 
The  loans  in  all  the  banks  decreased  $8,460,- 
000  between  the  dates  of  the  last  two  calls 
for  statements,  and  the  total  cash  resources 
increased  $8,073,000.  The  cash  resources  in 
all  the  banks  figure  about  thirty-four  per 
cent,  of  the  total  deposits. 

While  a few  of  the  State  banks  reported 
deposit  decreases,  the  majority  of  them 
showed  larger  figures  for  July  1 than  those 
of  March  30.  The  gains  of  more  than 
$1,000,000  were  as  follows:  First  Trust  and 
Savings,  about  $4,000,000;  Illinois  Trust  and 
Savings,  $1,700,000;  American  Trust,  $1,- 
400,000;  Merchants*  Loan  and  Trust, 
$1 ,200,000,  and  the  Hibernian,  $1,100,000. 

— The  Illinois  Trust  and  Savings  Bank  of 
Chicago  has  transferred  an  additional  $200,- 
000  from  the  undivided  profits  to  the  sur- 
plus account,  raising  the  surplus  to  $8,600,- 
000.  The  bank’s  total  capital  and  surplus 
arc  $13,600,000  and  in  addition  it  has  about 
$200,000  of  undivided  profits. 

— An  advance  in  the  stock  of  the  Central 
Trust  Company  of  Illinois,  Chicago,  111., 
prepared  the  way  for  an  announcement  of 
an  increase  in  the  dividend  from  seven  to 
eight  per  cent.  The  net  profits  after  divi- 
dends will  be  roundly  $400,000,  an  increase 
of  $150,000,  compared  with  the  previous 
year.  The  earnings,  therefore,  for  the  cur- 
rent fiscal  year  will  be  approximately  fifteen 
per  cent,  on  the  capital  stock,  amounting  to 
$2,000,000. 

— Steady  and  continuous  growth  is  exhib- 
ited by  the  National  Stock  Yards  National 
of  National  Stock  Yards,  111.,  in  its  report 
to  the  Comptroller  made  at  the  close  of 
business  June  30.  Total  resources  now  ag- 
gregate $4,154,076.19,  the  principal  items 
being  loans  and  discounts,  $2,857,459.01; 
United  States  and  other  bonds,  $374,762.50; 
cash  and  sight  exchange,  $904,354.68.  The 
bank  has  a capital  of  $350,000  und  surplus 
and  undivided  profits  of  $187,961.06;  depos- 
its, $3,269,715.13.  Wirt  Wright  is  president 
and  Owen  J.  Sullivan,  cashier. 

— E.  W.  Harden  has  resigned  as  vice- 
president  and  director  of  the  Monroe  Na- 
tional Bank  of  Chicago. 

— According  to  a published  report,  the 
combined  deposits  of  the  Continental  and 
Commercial  National  Banks  of  Chicago, 
which  are  to  be  consolidated  August  1,  are 
$166,702,000.  If  the  deposits  of  the  Ameri- 
can Trust  are  included  the  total  would  be 
$181,435,000. 

— The  directors  of  the  First  National 
Bank  of  Chicago  have  passed  the  following 
resolution : 

Whereas,  the  experiment  in  organization, 
which  this  bank  entered  into  some  few 


years  since,  by  which  divisions  were  insti- 
tuted corresponding  to  a classification  which 
was  made  of  the  bank’s  customers,  has 
proved  successful  and  thoroughly  satisfac- 
tory, except  that  the  titles  of  manager  and 
assistant  manager  have  been  found  not  fully 
and  clearly  to  indicate  to  customers  and  the 
public  the  officer’s  position  and  rank;  and. 

Whereas,  it  is  desired  now  to  make  the 
form  of  organisation  permanent,  changing 
only  the  titles  of  the  officers  by  whom  it  ia 
administered; 

Now  resolved,  that  the  organization  of  the 
bank  into  divisions,  as  the  same  are  now 
established  and  operating,  be  and  the  same 
hereby  Is  officially  established  and  continued; 
each  division  to  continue  In  the  charge  of 
the  same  members  of  the  official  staff  as  at 
present;  but  the  titles  of  manager  and  as- 
sistant manager  are  hereby  abolished. 

Resolved  further,  that  Emile  K.  Boisot, 
Charles  N.  Gillett,  Charles  H.  Newhall, 
Moses  D.  W'itkowsky  and  Arthur  W.  Newton 
be  and  they  hereby  are  appointed  vice-presi- 
dents of  this  bank,  and  Edward  S.  Thomas, 
Henry  A.  Howland,  John  P.  Oleson,  H.  H. 
Heins,  A.  C.  C.  Timm  and  John  F.  Hagey 
be  and  they  hereby  are  appointed  assistant 
cashiers  of  this  bank. 

The  management  of  the  First  National 
Bank  of  Chicago  was  some  years  ago  organ- 
ized into  six  divisions  or  groups  of  custom- 
ers engaged  in  allied  lines  of  business. 
Each  of  these  divisions  was  placed  in  charge 
of  a senior  and  junior  officer,  with  the 
titles  of  manager  and  assistant  manager. 

The  plan  was  new  and  more  or  less  ex- 
perimental. Its  one  defect  is  that  it  does 
not  conform  to  the  ordinary  nomenclature 
of  bank  officialdom  in  this  country,  in 
which  the  titles  manager  and  assistant  man- 
ager are  unknown.  The  public,  accustomed 
to  the  usual  titles  of  president,  vice-presi- 
dent, cashier  and  assistant  cashier,  have 
had  difficulty  in  ranking  the  managers  and 
assistant  managers  as  to  their  official  stand- 
ing and  responsibility. 

Finding  bank  management  by  divisions 
eminently  successful  and  satisfactory,  the 
directors  have  decided  to  place  it  on  a per- 
manent footing  and  to  correct  the  one  de- 
fect in  the  organization  by  giving  the  of- 
ficers the  titles  to  which  their  duties  and  po- 
sitions entitle  them  in  accord  with  estab- 
lished banking  custom. 

The  division  managers  will  hereafter  be 
known  as  vice-presidents  and  their  assist- 
ants as  assistant  cashiers.  This  will  entail 
no  change  in  their  duties,  but  it  will  enable 
customers  and  the  public  generally  better 
to  appreciate  their  official  rank  and  au- 
thority. Charles  N.  Gillett,  the  cashier,  will 
for  the  present  fill  the  two  positions  of  vice- 
president  and  cashier.  Deposits  of  the 
First  National  on  June  30  were  $106,979,588. 

— Leading  all  the  national  banks  of  Peo- 
ria, III.,  the  Commercial-German  National 
reports  loans  and  discounts  of  $3,900,701,  a 
surplus  of  $450,000,  undivided  profits  of 
$161,483,  and  deposits  of  $4^234,122. 


Digitized  by  t^ooQie 


IF  If  you  are  in  the  market  for  new  BANK 
FIXTURES  and  FURNITURE  it  will  be  very  much 
to  your  advantage  to  get  our  ideas.  The 
name  ANDREWS  stands  for  all  that  is  modem 
in  every  detail  of  office  equipment,  and  the 
ANDREWS  produce  has  been  the  standard  for 
nearly  half  a century. 

IF  We  make  only  the  best  that  skill  and  un- 
equalled manufacturing  facilities  can  pro- 
duce, and  charge  you  only  a fair  price  for  it. 
IF  One  of  our  experienced  traveling  men  will 
be  glad  to  call  on  you  at  your  convenience. 
Illustrated  Booklet  Upja  Request 

THE  A.  H.  ANDREWS  CO. 

17-4-176  W.b..h  Av.„  CHICAGO  1161-1173  Broadv.r,  NEW  YORK 


In  harmony  with  the  policy  of  continually 
strengthening  its  position,  to  which  the  Com- 
mercial-German National  Bank  has  con- 
sistently adhered  during  its  entire  history, 
the  board  of  directors  took  action  on  July  5, 
transferring  $100,000  from  the  undivided 
profits  account  to  the  surplus  fund,  thus  in- 
creasing it  to  $550,000,  an  amount  equal  to 
the  capital  stock. 

— The  Continental  National  of  Indian- 
apolis exhibits  a gratifying  growth  in  its  re- 
port to  the  Comptroller  as  of  June  30. 
Loans  and  discounts,  $866,893.54;  U.  S.  and 
other  bonds,  $465,833;  cash  and  due  from 
banks,  $418,505.92;  total  resources,  $1,795,- 
360.24.  The  capital  is  $400,000;  surplus  and 
profits,  $33,002.98,  and  deposits,  $926,357.26. 

— Comfortably  ensconsed  in  its  new  build- 
ing, the  First  National  Bank  of  Fort  Wayne, 
Ind.,  sends  out  a splendid  statement.  This 
old  banking  institution,  whose  original  char- 
ter number  was  eleven,  has  a capital  stock  of 
$500,000,  a surplus  fund  of  $200,000,  undi- 
vided profits  of  $45,620,  and  deposits  of 
$3,639,646.  It  maintains  a splendidly 
equipped  safe  deposit  department  and  has 
provided  a lady  teller  for  the  women’s  de- 
partment. 

— The  First  National  of  Cleveland,  Ohio, 
keeps  up  its  enviable  record  of  progress  and 
prosperity  in  its  statement  made  to  the 
Comptroller  of  the  Currency  at  the  close  of 
business  June  30.  Since  the  Comptroller 
assigned  to  the  First  National  the  number 
seven,  its  original  charter  number,  the  in- 
stitution has  assumed  its  proper  designation 
as  one  of  the  oldest  national  banks  in  the 
country.  It  has  had  an  uninterrupted  pe- 
riod of  healthy,  permanent  growth  since  its 
organization  in  1863.  The  statement  of  J une 
30  shows  the  following  excellent  condition: 
Loans  and  discounts,  $19,265,954.60;  United 
States  and  other  bonds,  $3,492,542.30;  cash 
and  due  from  banks,  $10,401,403.22;  total 
resources,  $33,950,224.93.  The  capital  is 
$2,500,000;  surplus  and  profits,  $1,344,641.- 
04,  and  deposits,  $27,605,731.04. 

The  First  National  now  ranks  as  one  of 


the  strongest  financial  institutions  in  the 
Middle  West,  and  has  an  organization  and 
equipment  that  embraces  the  latest  and  best 
methods  of  transacting  all  branches  of  busi- 
ness pertaining  to  banking. 

— In  its  report  to  the  Comptroller  of  the 
Currency  made  in  response  to  the  call  of 
June  30,  the  Wisconsin  National  of  Mil- 
waukee presents  a splendid  statement  of 
condition.  Deposits  reach  the  sum  of  $17,- 
914,495.56,  while  total  resources  are  $22,- 
910,203.91.  Some  of  the  details  follow: 
Loans  and  discounts,  $1 2,021, 072.85;  United 
States  and  other  bonds,  $3,627,300.25;  cash 
and  due  from  banks,  $6,721,330.81.  The 
Wisconsin  National  is  capitalized  at  $2,000,- 
000,  and  has  surplus  and  undivided  profits 
of  $1,256,720.68. 

— William  C.  Brumder  has  succeeded 
George  Brumder  as  president  of  the  Ger- 
mania National  Bank  of  Milwaukee. 

M.  W.  Tobey,  recently  resigned  as  assist- 
ant cashier,  has  gone  to  Fort  Benton,  Mont., 
as  cashier  of  the  Stockman’s  National  Bank. 
Mr.  Tobey  “originated”  in  Sterling,  111., 
where  he  began  business  as  a messenger  in 
a bank.  For  four  years  after  going  to  Mil- 
waukee he  was  with  the  Milwaukee  Trust 
Company,  and  later  served  as  assistant  cash- 
ier for  three  years  with  the  Germania  Na- 
tional. 

— Walter  Scotten  has  been  elected  a di- 
rector of  the  Old  Detroit  National  Bank  of 
Detroit,  Mich.,  to  succeed  the  late  Henry 
Stephens. 

— The  National  Bank  of  Commerce  in  St. 
Louis  makes  its  usual  strong  report  in  its 
statement  of  June  30.  Total  resources  are 
$82,950,128.67,  of  which  loans  and  discounts 
are  $46,727,780.01 ; United  States  and  other 
bonds  and  stocks,  $13,953,988.04;  cash  and 
exchange,  $20,768,360.62.  Although,  in  com- 
mon with  the  other  big  banks  of  the  coun- 
try, the  bank’s  deposits  have  dropped  off  in 
comparison  with  the  figures  given  at  the  last 
previous  call,  that  item  will  show  a hand- 

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some  total,  namely,  $55,389,153.75.  The  bank 
has  a capital  of  $10,000,000  and  surplus  and 
undivided  profits  of  $8,107,041.4-2. 

! 

— Last  January  the  Washington  National 
Bank  of  St.  I/Ouis  was  authorized  to  add 
$300,000  to  its  capital  stock.  This  sum  has 
now  been  paid  in.  The  bank  reports  surplus 
and  profits  of  $50,000. 

— Measured  by  its  statement  as  of  July 
1,  the  Mercantile  Trust  Company  of  St. 
Louis  is  enjoying  an  era  of  prosperity.  It 
reports  total  assets  of  $71,857,325,  a capital 
stock  of  $2,000,000,  a surplus  of  $7,000,000, 
undivided  profits  of  $253,054,  and  deposits 
of  $62,411,271.  In  the  trust  department, 
$14,816,895  of  securities  are  held  in  trust 
for  individuals  and  $7,998,329.12  in  trust  for 
corporations. 

— The  Iowa  National  Bank  of  Des 
Moines,  with  its  affiliated  institution,  the 
Des  Moines  Savings  Bank,  reports  total  de- 
posits of  $8,561J>36.  The  national  bank 
alone  has  $5,997,349  deposits,  leaving  $2,- 
564,600  in  the  savings  bank.  It  is  capital- 
ized for  $1,000,000,  has  $291,246  of  surplus 
and  undivided  profits,  a circulation  of  $580,- 
200,  and  total  resources  of  $7,875,555.  Homer 
A.  Miller  is  president,  H.  S.  Butler  is  the 
vice-president  and  H.  T.  Blackburn  is  the 
cashier.  The  same  officers  look  after  the 
savings  bank. 

— The  Northwestern  National  of  Minne- 
apolis makes  its  usual  excellent  statement  in 
response  to  the  call  of  the  Comptroller  of 
the  Currency,  J une  30.  Loans  and  dis- 
counts, $19,731,725.42;  U.  S.  and  other  bonds, 
$3,071,211.50;  cash  and  due  from  banks, 
$9,642,172.99;  total  resources,  $33,021,193.06. 
The  capital  is  $3,000,000;  surplus  and  prof- 
its, $2,190,000,  and  deposits,  $26,266,193.96. 

— On  June  30  the  Security  National  Bank 
of  Minneapolis  reported  as  follows:  Loans 
and  discounts,  $12,616,554;  cash  on  hand  and 
due  from  banks,  $6,916,758;  resources,  $20,- 
372,165;  capital,  $1,000,000;  surplus  and  un- 
divided profits,  $1,615,189;  deposits,  $17,- 
212,576. 

— The  name  of  the  I^eds  National  of  Kan- 
sas City  has  been  changed  to  the  Park  Na- 
tional, and  the  bank  moved  from  I^eds  to 
Forty-seventh  street  and  Troost  avenue.  It 
was  organized  with  a capital  of  $25,000  be- 
fore I^eeds  was  taken  into  the  city.  Tt  is 
permitted  under  the  law,  however,  to  con- 
tinue in  the  city  with  a small  capitalization. 
Had  it  been  within  the  city  when  organized 
it  could  not  have  opened  with  less  than  one- 
quarter  million  dollars  capital. 

— John  J.  McHenry  has  resigned  as  presi- 
dent of  the  Third  National  Bank  of  Louis- 
ville, Ky.  A.  S.  Rice,  who  has  been  con- 


nected with  the  institution  since  last  Sep- 
tember in  the  capacity  of  active  vice-presi- 
dent, becomes  acting  president.  It  is  likely 
that  he  will  be  elected  president  of  the  bank 
at  the  next  meeting  of  the  directors. 

The  resignation  of  Mr.  McHenry  did  not 
come  as  a surprise,  as  he  had  been  intimat- 
ing for  some  time  that  he  desired  to  return 
to  the  active  practice  of  law.  He  is  already 
a member  of  the  law  firm  of  Burnett,  Mc- 
Henry, Batson  & Carey,  and  practiced  law 
successfully  for  twenty  years  before  he  be- 
came identified  with  the  Third  National. 
He  had  been  associated  in  the  practice  of 
law  at  different  times  with  Judge  James  P. 
Gregory  and  Judge  George  DuRelle.  The 
holdings  of  Mr.  McHenry  in  the  Third  Na- 
tional, it  is  understood,  will  pass  to  another. 

Mr.  McHenry  has  been  president  of  the 
Third  National  since  the  winter  of  1907. 
During  his  administration  the  bank  has 
prospered,  the  capital  stock  having 
increased  since  1907  from  $200,000  to 
$300,000.  A.  S.  Rice,  who  is  now  acting 
president  of  the  bank,  has  had  wide  experi- 
ence. He  came  to  Louisville  from  Cyn- 
thiana  the  first  of  last  September.  He  has 
been  successful  as  a banker.  For  some  time 
lie  was  connected  with  a bank  in  Cincinnati. 

— J.  J.  Hayes  has  been  chosen  cashier  of 
the  National  Bank  of  Commerce  of  Louis- 
ville, Ky.  Mr.  Hayes  has  been  connected 
with  the  bank  for  the  past  fifteen  years, 
and  for  the  past  two  years  has  been  acting 
cashier.  He  is  regarded  as  one  of  the  most 
capable  bankers  in  the  city.  His  father  held 
the  same  position  many  years. 

— A consolidation  is  planned  between  the 
Southern  National  and  the  Third  National 
Banks  of  Louisville,  Ky.  The  proposition 
has  been  agreed  to  by  the  directors  of  the 
two  institutions  and  will  be  submitted  to 
the  stockholders  for  ratification  on  August 
5.  It  is  proposed  that  the  Third  National 
be  taken  over  by  the  Southern,  the  latter  in- 
creasing its  capital  from  $250,000  to  $500,- 
000.  The  Third  National  has  a capital  of 
$300,000;  its  shareholders  are  to  receive 
$200,000  of  the  new  $250,000  issue  of  the 
Southern;  the  other  $50,000  will  be  sold  at 
$150  per  share,  thus  providing  for  an  addi- 
tion of  $25,000  to  the  surplus.  Each  of  the 
banks  has  deposits  of  about  $2,200,000. 
The  Southern  National  was  established  in 
1899  and  the  Third  National  in  1874.  John 
J.  McHenry  resigned  the  presidency  of  the 
Third  on  June  28  and  Vice-President  A.  S. 
Rice  was  made  acting  president. 

WESTERN  STATES 

— Official  notice  of  the  consolidation  of  the 
Union  Stock  Yards  National  Bank  of  South 
Omaha  and  the  South  Omaha  National  Bank 
of  the  same  city,  has  just  been  made. 

According  to  the  official  statement  the 


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consolidation  will  go  into  effect  on  October 
1 next.  The  paid-up  capital  stock  will  be 
$750,000,  with  a surplus  of  $250,000  and  un- 
divided profits  of  $125,000. 

Tlie  building  now  occupied  by  the  Union 
Stock  Yards  National  Bank  will  be  enlarged 
to  afford  suitable  quarters  for  the  new  in- 
stitution, and  all  of  the  active  officers  of 
both  of  the  old  banks  will  be  retained. 

The  name  of  the  amalgamation  will  be  the 
Omaha  Stock  Yards  National  Bank. 

The  official  announcement  is  signed  bv 
President  E.  F.  Floda  of  the  Union  Stock 
Yards  National  Bank,  and  by  N.  C.  Bost- 
wick,  president  of  the  South  Omaha  Na- 
tional Bank. 

— The  First  National  of  Norton,  Kan.,  and 
the  National  Bank  of  Norton  have  been 
consolidated  under  the  name  of  the  former. 

— At  the  close  of  business,  June  30,  the 
Central  National  Bank  of  Tulsa,  Okla.,  ren- 
dered the  following  statement:  Loans  ami 
discounts,  $588,605;  total  resources,  $1,246,- 
216;  capital  stock,  $100,000;  surplus  and 
profits,  $58,304;  circulation,  $24,500;  depos- 
its, $1,058,411.  The  bank  opened  for  busi- 
ness March  4,  1907. 

— Paul  Hardey,  manager  of  the  bond  de- 
partment of  the  Inter-State  Savings  Bank  of 
Denver,  Colo.,  has  been  elected  a director  of 
the  institution  to  take  the  place  of  Law- 
rence C.  Phillips,  resigned.  As  recently 
stated,  the  bank  has  increased  its  capital 
from  $50,000  to  $100,000;  its  surplus  has 
been  increased  from  $20,000  to  $40,000,  and 
its  combined  assets  are  now  about  $875,000. 

— J.  A.  Givens,  the  new  president  of  the 
Idaho  Bankers’  Association,  who  was  elected 
at  Idaho  Falls  June  22,  is  a strictly  western 
man,  having  been  born  in  Washington  and 
educated  in  the  West.  After  completing 
his  education  he  entered  the  stock  raising 
business.  Realizing  the  resources  of  the 
Gem  State  he  disposed  of  his  stock  business 
and  entered  the  banking  business  by  organ- 
izing the  D.  L.  Evans  Company,  bankers, 
Albion,  Idaho,  holding  the  position  of  cash- 
ier in  that  institution  until  three  yaers  ago 
when  he  was  made  vice-president  and  man- 
ager of  the  bank  of  Nampa,  Nampa,  Idaho. 
Since  taking  charge  of  that  bank,  through 
his  management,  the  deposits  of  that  insti- 
tution have  more  than  doubled. 

Last  July  the  Bank  of  Nampa  lost  its 
banking  house  in  the  conflagration  which 
visited  Nampa  on  that  date.  The  directors 
decided  to  rebuild  at  once,  and  through  Mr. 
Givens’  efforts  there  has  been  erected  one 
of  the  best  banking  buildings  in  the  State  of 
Idaho.  A building  known  as  Class  A,  being 
absolutely  fireproof,  not  a stick  of  timber 
being  used  in  its  construction,  even  the  desks 
and  fixtures  being  made  of  steel. 


J . A.  GIVENS 

Vice-President  of  the  Bank  of  Nampa,  Ltd., 
Nampa.  Idaho,  who  was  recently  elected 
President  of  the  Idaho  Bankers' Asso- 
ciation 


Mr.  Givens  is  a young  man,  thirty-four 
years  of  age,  who  stands  for  conservative, 
yet  progressive,  banking  principles,  and  the 
Idaho  Bankers*  Association  is  to  be  con- 
gratulated on  electing  such  a man  as  its 
president. 

PACIFIC  STATES 

— Consolidation  of  the  Central  Trust 
Company  and  the  Farmers  and  Mechanics’ 
Bank  as  a new  corporation,  the  Central 
Bank  and  Trust  Company,  has  been  ef- 
fected at  North  Yakima,  Wash.  The  capi- 
tal is  $50,000.  George  C.  Mitchell  is  presi- 
dent and  R.  S.  Wickersham  is  cashier  of 
the  new  bank. 

— Coming  so  soon  after  adopting  the  new 
title,  the  June  30  report  of  the  Dexter  Hor- 
ton National  Bank  of  Seattle  is  an  excel- 
lent one.  Ix>ans  and  discounts  total  $7,- 
642,451 ; the  total  resources  arc  placed  at 
$13,172,628,  the  capital  stock  is  $1,000,000, 
and  surplus,  $200,000;  deposits  run  up  to 
$11,972,589. 

— Through  the  declaration  on  June  23  of 
a semi-annual  dividend  of  $3  per  share,  pay- 
able July  1,  the  stock  of  the  Portland  Trust 


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Company  of  Oregon,  at  Portland,  has  been 
placed  on  a six  per  cent,  basis.  The  insti- 
tution, of  which  Benjamin  I.  Cohen  is  presi- 
dent, had  heretofore  paid  four  per  cent,  per 
annum  on  its  capital  of  $300,000. 

— Continued  progress  is  shown  in  the 
statement  made  by  the  Old  National  Bank 
of  Spokane  at  the  close  of  business  June  30. 
Loans  and  discounts  are  $6,706,738.29 ; U. 
S.  and  other  bonds,  $1,342,513.75;  cash  and 
due  from  banks,  $3,185,937.35;  total  re- 
sources, $11,654,403.79.  The  bank  is  capi- 
talised at  $1,000,000,  and  has  surplus  and 
undivided  profits  of  $291,095.58;  deposits, 
$9,363,308.21. 


— The  First  National  of  San  Francisco, 
as  usual,  has  a splendid  report  to  make  to  the 
Comptroller  at  the  close  of  business,  June 
30.  With  a capital  of  $3,000,000,  the  First 
National  has  a surplus  and  profits  of  $1,- 
959,799.26,  and  deposits,  $11,563,712.41. 
Total  resources  are  $18,344,711.67,  the  lead- 
ing items  being  as  follows:  Loans  and  dis- 
counts, $11,695,858.03;  United  States  and 
other  bonds  and  securities,  $2,277,389.78; 
cash  and  exchange,  $4,120,965.46. 

— The  statement  made  by  the  First  Na» 
tional  Bank  of  Seattle  at  the  close  of  busi- 
ness, June  30,  is  extremely  gratifying  to  the 
officers  of  the  institution.  With  total  re- 
sources of  $4,207,409.84,  the  bank  has  a 
loan  account  of  $2,549,653.84;  United  States 
and  other  bonds  and  stocks,  $473,040.80; 
cash  and  exchange,  $1,145,513.20.  Deposits 
aggregate  $3,730,690.58.  The  bank  has  a 
capital  of  $300,000  and  surplus  and  profits 
of  $77,319.26. 

CANADA 

— A dividend  at  the  rate  of  nine  per 
cent,  per  annum  has  been  declared  by  the 
Merchants’  Bank  of  Canada  for  the  quar- 
ter ending  August  31.  This  is  an  increase 
of  one  per  cent. 

— Negotiations  have  just  been  concluded 
by  which  the  Royal  Bank  of  Canada,  whose 
head  office  is  in  Montreal,  absorbs  the  Union 
Bank  of  Halifax.  Notices  have  been  sent 
to  shareholders  of  both  institutions  calling 
for  special  meetings  to  ratify  the  deal.  As 
a result  of  this  combination,  the  Royal  Bank 
of  Canada,  which  is  already  one  of  the  fore- 
most banks  of  the  Dominion,  will  have  a 
capital  and  reserve  of  nearly  $13,000,000, 
with  total  assets  of  over  $90,000,000.  The 
bank  will  have  170  branches,  which,  aside 
from  those  in  Canada  and  Newfoundland, 
located  in  every  important  city,  include 
eleven  branches  in  Cuba,  two  in  Porto  Rico, 
one  in  Nassau,  Bahamas,  and  one  in  Port 
of  Spain,  Trinidad;  also  an  agency  in  New 
York  City. 


BANK  OF  NEW  SOUTH  WALES 

FOR  the  half  year  to  March  31  the  Bank 
of  New  South  Wales  reports  a profit 
slightly  below  that  shown  for  the  cor- 
responding period  of  1908,  the  respective 
totals  being  £183^00  and  £186,400.  The 
reduction  is  negligible,  especially  when  the 
expansion  shown  in  previous  half  years  is 
remembered,  while,  owing  to  the  large 
amount  brought  in,  the  disposable  balance 
of  £229,600  is  about  £6,000  above  that  of 
a year  ago.  The  dividend  is  again  at  the 
rate  of  ten  per  cent,  per  annum,  £50,000 
is  placed  to  reserve  and  £5,000  to  officers’ 
provident  fund,  leaving  £49,600  to  be  car- 
ried forward.  A feature  of  the  balance 
sheet  is  the  large  addition  to  deposits  dur- 
ing the  half  year,  the  present  total  of 
£30,348,600  comparing  with  £27,297,30 O. 
while  the  high  money  rates  recently  pre- 
vailing in  this  country  are  reflected  in  an 
increase  of  £1,425,000  to  £2,370,000  in  the 
“money  at  short  call  in  London.” 


THE  NATIONAL  BANK  OF  CUBA 

LAST  February  the  National  Bank  of 
Cuba,  head  office,  Havana,  reported 
total  assets  of  $26,773,792,  and  this 
sum  represented  an  increase  for  the  year 
then  closed  of  over  $4,500,000.  It  also  re- 
ported deposits  of  $15,506,657,  an  increase 
over  the  previous  year  of  $1,189,928. 

Now  op  June  30  the  bank  comes  forward 
and  reports  total  assets  $32,900,684,  a gain 
of  $6,126,892  since  February.  Again  the 
report  shows  $23,772,701  of  deposits,  a 
clear  gain  of  $8,266,044.  These  are  re- 
markable gains.  The  National  Bank  of 
Cuba  has  a capital  of  $5,000,000,  and  a re- 
serve fund  of  $900,000.  It  has  branches 
scattered  all  over  the  Island  of  Cuba.  The 
New  York  agency  is  located  at  No.  1 Wall 
street,  with  H.  C.  Niese,  a practical  banker, 
as  manager. 


THE  MACHINE  FOR  BANKS 

UNDER  the  above  title  the  Remington 
Typewriter  Company  has  issued  a 
well-designed  pamphlet  calling  spe- 
cial attention  to  the  Walil  Adding  and  Sub- 
tracting attachment  of  the  Remington 
Typewriter.  This  attachment,  as  pointed 
out  by  the  pamphlet,  enables  the  operator 
to  write  and  add  or  subtract  on  the  same 
machine,  making  a valuable  adjunct  to  th± 
bank  equipment,  especially  in  sending  re- 
mittance letters,  country  bank  statements 
and  customers*  monthly  statements.  Views 
are  shown  of  the  machines  in  use  in  the 
Continental  National  Bank,  Chicago,  and 
the  Mechanics-Amcrican  National  Bank,  St. 
Louis.  Any  bank  may  secure  a copy  of  this 
interesting  publication  by  writing  to  the 
Remington  Typewriter  Company,  327 
Broadway,  New  York. 


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LEWIS  L.  CLARKE 

President  American  Exchange  National  Bank  of  New  York 


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THE 


BANKERS  MAGAZINE 

ELMER  H.  YOUNGMAN.  Edtot 


SIXTY -FOURTH  YEAR  SEPTEMBER,  1910  VOLUME  LXXXI,  NO.  3 


A PLEA  FOR  HONEST  BUSINESS  METHODS  AND 
LEGISLATIVE  SANITY 


JN  a book  recently  published,*  Mr. 

Arthur  E.  Stilwell,  one  of  the 
country's  well-known  railway  men, 
makes  a strong  and  stirring  plea  for 
honest  business  methods  and  for  legis- 
lative sanity  in  dealing  with  business 
problems,  particularly  those  relating  to 
the  railways. 

Mr.  Stilwell  has  no  words  of  apol- 
ogy  for  the  past  disgraceful  practices 
of  a few  of  the  railways  and  corpora- 
tions whose  actions  have  undoubtedly 
done  much  to  discredit  American  securi- 
ties at  home  and  abroad;  on  the  con- 
trary, he  unsparingly  denounces  the 
frauds,  deceits  and  tricks  that  have  been 
revealed,  and  urges  upon  our  corpora- 
tions an  observance  of  the  strictest 
standards  of  business  morality.  He  is 
hard  upon  the  bears,  or  financial  wolves, 
as  he  styles  them,  who  make  raids  upon 
securities,  artificially  depressing  their 
values  and  bringing  on  panic  and  ruin. 

But  the  chief  argument  of  Mr.  Stil- 
well's  book  is  for  just  treatment  of  the 
railroads.  It  is  his  belief  that  were  the 
railroads  permitted  to  make  very  slight 
advances  in  their  freight  and  passenger 
rates,  and  to  be  assured  that  these  rates 
could  be  maintained  for  fifteen  years  or 
longer,  a great  era  of  railroad  building 
and  improvement  would  ensue,  and  the 
prosperity  of  the  people  would  be  won- 


“ Confidence  or  National  Suicide?”  By  Ar- 
thur E.  • Stilwell,  president  Kansas  City, 
Mexico  St  Orient  Railway;  price  $1.00.  New 
York:  The  Bankers  Publishing  Co. 


derfully  enhanced.  He  points  out  the 
example  of  Mexico,  which,  in  order  to 
attract  railway  capital,  fixes  the  rates 
for  a period  of  ninety-nine  years. 

Many  phases  of  American  business 
life  are  aptly  summed  up  in  this  new 
volume.  “Grabitis" — the  never-ending 
desire  for  the  accumulation  of  wealth — 
is  declared  to  be  fast  assuming  the 
shape  of  an  epidemic  in  this  country. 
There  is  an  eloquent  chapter  on  “The 
Englishman,"  showing  his  remarkable 
achievements  as  an  empire  builder,  and 
an  appreciation  of  the  work  done  by 
James  J.  Hill  in  developing  the  North- 
west. Of  the  latter  it  is  pointed  out 
that  Mr.  Hill  has,  by  building  the 
Great  Northern,  added  several  billions 
to  land  values  along  the  line,  besides 
conferring  other  very  large  benefits 
upon  the  people  in  the  territory  served, 
and  that  actually  instead  of  there  being 
“water"  in  the  Great  Northern,  the  shoe 
is  on  the  other  foot,  and  the  “water" 
might  as  justly  be  said  to  be  in  the  land 
values. 

Mr.  Stilwell  proposes  a National 
Order  of  Merit,  or  American  Legion  of 
Honor,  that  shall  honor  men  who  have 
performed  distinguished- public  service. 
He  also  thinks  that  such  an  organiza- 
tion, properly  qualified  to  represent 
public  opinion,  would  have  much  influ- 
ence in  counteracting  rumors  calculated 
to  injure  the  country's  business  and  to 
arouse  distrust  of  our  securities. 

We  believe  the  plea  made  by  Mr. 

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Stilwell  for  fair  treatment  of  the  rail- 
roads is  both  timely  and  just.  It  may 
indeed  be  true  that  the  railroads  are 
largely  responsible  for  the  hostility 
shown  toward  them  by  Congress  and 
many  of  the  State  legislatures.  But  it 
seems  that  the  railroads  thoroughly  un- 
derstand that  they  must  mend  their 
ways  and  obey  the  laws.  That  being 
the  case,  legislative  attacks  upon  them 
are  certainly  no  longer  justifiable.  The 
railroads  must  have  a great  deal  of  new 
capital,  and  this  they  will  find  difficulty 
in  procuring  unless  they  are  permitted 
to  advance  their  rates  so  they  can  make 
reasonable  returns  on  the  capital  al- 
ready invested  in  them.  A policy  of 
hostility,  or  even  of  uncertainty,  can  not 
fail  to  be  injurious  alike  to  the  rail- 
roads and  the  people.  With  nearly  fifty 
legislative  bodies  in  a position  to  “regu- 
late” railroad  rates,  and  with  the  pres- 
ent disposition  of  the  people  to  allow 
politicians  to  ride  into  power  by  cheap 
attacks  upon  the  railroads,  the  situation 
of  the  roads  is  not  a very  enviable  one. 
They  must  regain  the  favor  of  thinking 
men  by  treating  the  public  fairly  and 
by  obeying  the  laws;  and,  on  the  other 
hand,  the  public  must  realize  that  the 
railroads  cannot  be  essentially  harmed 
without  injury  to  all  business. 

It  is  to  be  hoped  that  the  railroads 
and  other  corporations  will  not  soon  re- 
quire such  drastic  treatment  as  they 
have  recently  received.  The  country 
needs  relief  from  political  agitation, 
and  the  railroads  especially  need  just 
treatment. 

Mr.  Stilwell's  book  deals  with  rail- 
way and  other  business  problems  from 
the  standpoint  of  a successful  American 
who  is  proud  of  his  country’s  achieve- 
ments and  who  would  see  its  business 
standards  unsullied.  It  is  a business 
book  by  a business  man,  but  is  as  bright, 
witty  and  entertaining  as  a romance.  It 
is  a book  that  will  set  the  people  think- 


ing, and  thinking  in  a way  that  will 
tend  to  erect  a structure  of  prosperity 
upon  a basis  of  confidence. 


IMPENDING  POLITICAL  CHANGES 

^l^ITHOUT  entering  into  the  do- 

T main  of  partisan  politics,  one 
may  yet  take  note  of  changes  that  seem 
to  be  impending. 

The  battle  that  has  been  going  on  be- 
tween the  “insurgents”  and  the  “regu- 
lars” in  the  Republican  party  has  at- 
tracted wide  attention  and  intense  inter- 
est throughout  the  country. 

The  Republican  party  was  born  at  a 
time  when  issues  more  or  less  senti- 
mental and  humanitarian  were  engaging 
popular  attention.  Slavery  and  seces- 
sion were  of  course  the  dominant  ques- 
tions. Even  long  after  the  Civil  War, 
theje  were  collateral  issues  growing  out 
of  this  great  conflict  on  which  the 
parties  divided.  Slavery  and  dismem- 
berment of  the  Union  have  long  been  in 
the  category  of  dead  and  all  but  for- 
gotten issues.  But  probably  no  Repub- 
lican of  national  prominence  cares  to- 
day for  some  of  the  other  fruits  of  the 
Civil  War.  Amendments  to  the  Consti- 
tution secured  while  the  passions  en- 
kindled by  the  great  struggle  were  yet 
alive  have  been  allowed  to  lapse  into 
desuetude. 

After  the  war  fever  had  passed  away 
the  public  mind  became  engaged  with 
the  resumption  of  specie  payments  and 
the  tariff.  In  other  words,  politics  be- 
came less  occupied  with  sentimental  and 
humane  matters  and  turned  to  the  con- 
templation of  business  problems.  The 
Republican  party  brought  about — not 
without  some  Democratic  aid,  of  course 
— the  resumption  of  specie  payments. 
It  dallied  with  silver,  however,  and  has 
never  had  the  courage  to  retire  the 
greenbacks  nor  the  wisdom  to  provide  a 
sound  and  efficient  bank-note  currency. 
But  it  has  maintained  the  gold  standard. 


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287 


The  protectionist  policy  to  which  the 
Republicans  have  adhered  has  unques- 
tionably aided  in  building  up  the  man- 
ufacturing industries  of  the  country.  It 
is  claimed,  indeed,  by  the  opposing 
party  that  the  protective  duties  are  no 
longer  necessary,  or  at  least  that  they 
should  be  greatly  lowered.  They  are 
described  as  favors  bestowed  upon  the 
trusts  and  big  manufacturing  concerns. 

Still  more  lately  the  questions  upper- 
most in  the  public  mind  have  related  to 
the  railroads  and  other  corporations. 

With  this  change  in  the  nature  of  po- 
litical problems  it  is  not  surprising  that 
the  charge  of  "commercialism”  should 
be  brought  against  the  ruling  party.  It 
seems  to  be  true  of  late  years  that  peo- 
ple are  more  concerned  about  laying  up 
treasure  where  moth  and  rust  corrupt 
than  they  are  about  less  material  things. 
Mr.  Bryan  in  1896  grandiloquently 
proclaimed  that  the  people  should  ^not 
be  crucified  on  a cross  of  gold — but  to 
no  purpose.  The  anti-imperialists, 
mostly  cultured  gentlemen  from  Boston, 
shed  tears  for  the  Filipinos,  but  the 
policy  of  "benevolent  assimilation”  went 
on  unchecked.  Who  has  not  listened  to 
the  heart-breaking  descriptions  of  the 
ravages  of  the  "rum  power,”  made  by 
the  temperance  advocate  and  prohibi- 
tionist? Yet  the  demon  seems  fairly 
well  entrenched  in  power  yet.  When  it 
can  be  shown  that  alcohol  is  unprofit- 
able, a different  story  may  be  told. 

It  is  hardly  a just  reproach  to  a 
party  that  it  has  legislated  with  some 
regard  to  the  business  interests  of  the 
country.  But  the  "insurgents”  evident- 
ly think  that  legislation  has  become  too 
much  a matter  of  special  favor. 

Messrs.  Aldrich  and  Cannon  are 
generally  regarded  as  the  chief  obstacles 
to  the  adoption  of  progressive  policies 
by  the  Republicans,  and  it  is  announced 
that  these  gentlemen  are  to  be  elimi- 
nated from  their  present  places  of  con- 
trol. 

If  this  factional  fight  shall  bring  the 
l 


Democrats  into  power,  important 
changes  may  be  made  in  the  legislative 
policies  of  the  country.  On  the  other 
hand,  it  may  result  in  placing  the  lead- 
ership of  the  ruling  party  with  those 
who  are  in  closer  touch  with  present- 
day  sentiment  among  the  people. 

The  insurgent  movement  is,  appar- 
ently, indicative  of  an  awakening  of  the 
national  conscience.  We  have  no  rea- 
son to  discuss  the  tariff  or  other  politi- 
cal issues.  But  we  can  not  fail  to  re- 
member the  course  of  Mr.  Aldrich  and 
Mr.  Cannon  in  1908  with  respect  to 
currency  legislation.  The  stand  taken 
by  these  gentlemen  made  possible  the 
miserable  inflation  measure  known  as  the 
Aldrich- Vreeland  law  and  indefinitely 
postponed  the  enactment  of  a wiser 
measure. 

Aldrich  and  Cannon  have  been  the 
obstacles  in  the  way  of  sound  and  intel- 
ligent banking  and  currency  legislation, 
and  their  elimination  from  a dominating 
influence  in  politics  would  be  welcomed 
by  every  man  who  wishes  to  see  a cur- 
rency and  banking  system  adopted  that 
will  contribute  to  stable  business  condi- 
tions and  the  prosperity  of  all  classes 
and  all  sections. 


IS  SUSPENSION  THE  PROPER 
REMEDY  IN  A CRISIS  ? 

J^ROM  the  numerous  suggestions  made 
for  meeting  or  preventing  bank 
runs  in  time  of  panic,  we  take  the  fol- 
lowing from  a communication  from  Mr. 
F.  E.  Lyford,  president  of  the  First 
National  Bank,  Waverly,  New,  York: 

"Banks  receive  from  customers  over 
ninety  per  cent,  in  exchange.  Repeal 
the  present  law  allowing  depositors  to 
demand  one  hundred  per  cent,  cash; 
permit  the  banks  at  their  option  to  pay 
depositors  in  exchange  to  the  amount  of 
fifty  per  cent,  of  their  demands,  and  no 
currency  famine  will  ever  come.  * * * 
If  the  people  knew  they  could  not  get 


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£88 


THE  BANKERS  MAGAZINE 


currency  on  demand,  they  would  not  be 
very  apt  to  try  to  get  it.” 

Experience  might,  of  course,  show 
that  if  people  know  they  could  not  get 
currency  on  demand,  they  would  not 
deposit  in  banks  at  all. 

But  it  is  not  our  purpose  to  criticise 
Mr.  Lyford's  suggestion.  It  is  in  line 
with  the  current  opinion  and  practice  of 
the  times — that  the  way  to  meet  a crisis 
is  by  suspending  payments  in  whole  or 
in  part.  This  is  the  clearing-house  cer- 
tificate plan  and  the  Aldrich- V reeland 
emergency  currency  plan.  For,  of 
course,  bank  notes  emitted  by  the  banks 
en  bloc  to  prevent  insolvency  represent 
a suspension  of  actual  cash  payments. 

Such  remedies  may,  indeed,  succeed 
— that  is,  they  will  tide  the  banks  and 
commercial  houses  over  the  crisis  (and 
that  is  something,  to  be  sure).  But  the 
trouble  with  remedies  of  this  character 
is  that  they  are  not  applied  until  the 
era  of  inflation  has  run  its  course  and 
has  culminated  in  a crisis,  and  when  ap- 
plied it  merely  postpones  the  liquida- 
tion that  must  take  place  before  busi- 
ness can  regain  a healthful  tone. 

It  seems  to  us  that  opinion  on  bank- 
ing and  currency  reform  has  been  set- 
ting pretty  steadily  of  late  in  the  wrong 
direction — favoring  an  “elasticity”  that 
means  more  and  more  stretching  of  the 
string.  We  do  not  believe  confidence  in 
the  banks  will  be  promoted  by  a sus- 
pension of  payments  in  times  of  crisis, 
and  the  covering  up  of  this  suspension 
by  calling  it  “emergency  currency”  will 
not  long  deceive  the  people. 


REGULATION  OF  “PRIVATE  BANK- 
ING” IN  NEW  YORK 

N September  1 a new  law  went  into 
effect  regulating  certain  classes 
of  private  bankers  in  the  State  of  New 
York  who  receive  money  on  deposit  or 
for  transmission  abroad. 

The  new  law  will  require  a deposit  of 


$10,000  in  cash  or  approved  securities 
with  the  State  Comptroller,  also  the 
filing  of  a surety  bond  in  a sum  of  $10,- 
000  to  $50,000. 

Private  bankers  not  engaged  in  the 
class  of  business  aimed  at  in  the  law 
may  secure  exemption  from  the  provis- 
ions of  the  act. 

While  the  majority  of  the  private 
bankers  are  conducting  a safe  and 
reputable  business,  the  fact  that  there 
are  a few  of  the  other  kind  has  tended 
to  injure  those  whose  business  is  legiti- 
mate, and  has  besides  entailed  consider- 
able losses  on  the  public. 

The  regulation  of  banking  in  New 
York  by  legal  enactments  has  been  along 
wise  lines,  and  the  new  act  will  further 
strengthen  the  already  excellent  bank- 
ing system  of  the  State. 


DEPOSIT  GUARANTY  DEFENDED 

KLAHOMA'S  bank  deposit  guar- 
anty law  is  defended  by  Bank 
Commissioner  Cockrell  of  that  State 
in  a letter  addressed  to  one  of  the  New 
York  newspapers.  He  cites  the  case  of 
a national  bank  that  failed  five  or  six 
years  ago  with  liabilities  of  about  $1,- 
000,000,  and  which  has  only  paid  sixty- 
five  cents  on  the  dollar  to  depositors, 
while  a State  institution  that  failed  less 
than  a year  ago,  owing  $8,000,000,  has 
been  completely  liquidated  and  all  de- 
positors have  received  one  hundred  cents 
on  the  dollar. 

One  swallow  does  not  make  a sum- 
mer, and  further  experience  may  be 
necessary  to  determine  exactly  how  the 
deposit-insurance  law  will  work  out  in 
practice.  But  the  experiment  will  no 
doubt  be  watched  by  all  bankers  with 
interest,  and  by  at  least  a few  with  open 
minds. 

Oklahoma  has  a good  general  bank- 
ing law  and  the  banks  operating  under 
it  have  made  a creditable  record,  both 
for  profits  and  for  safety. 


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COMMENT 


289 


THE  COUNTRY’S  FOREIGN  TRADE 

TM’UCH  concern  has  been  expressed 
^ ^ lately  about  the  falling  off  in  the 
“favorable”  balance  of  our  foreign 
trade.  For  the  fiscal  year  ended  June 
80  we  exported  only  $187,000,000  more 
merchandise  than  we  imported,  com- 
pared with  $851,000,000  in  1909  and 
$666,000,000  in  1908.  This  is  indeed  a 
big  difference  in  our  net  annual  export 
of  merchandise,  and  it  may  have  a very 
important  bearing  on  the  banking  and 
financial  situation.  But  it  need  not, 
necessarily,  alarm  anybody.  As  is  gen- 
erally known,  an  excess  of  imports  was 
the  rule  from  1850  to  1875.  It  was  not 
until  1897  that  our  net  exports  passed 
the  $200,000,000  mark,  yet  the  country 
was  prosperous  even  when  it  was  im- 
porting more  than  it  exported. 

We  should  not  attempt,  to  treat  the 
present  situation  with  airy  indifference. 
But,  on  the  other  hand,  we  fail  to  see 
any  cause  for  a scare  in  the  foreign 
trade  figures.  They  may  change  sud- 
denly in  the  future  as  they  have  done 
in  the  past.  Anyway,  one  year  does  not 
establish  permanent  foreign  trade  con- 
ditions permanently  any  more  than  one 
swallow  makes  a summer. 


DEPARTMENT  STORE  BANKING  , 

TK7HILE  the  department  stores  that 
T are  receiving  deposits  contend 
that  they  are  not  doing  a banking  busi- 
ness, the  Supreme  Court  of  Wisconsin, 
in  the  case  of  MacLaren  vs.  State,  has 
taken  the  opposite  view,  saying:  “A 

department  store  receiving  deposits  of 
money,  which  may  be  withdrawn  in 
cash,  or  used  by  the  depositor  for  the 
purchase  of  goods  at  the  store,  is  doing 
a banking  business  within  the  statute  of 
Wisconsin.”  In  this  case  the  decision 
seemed  to  hinge  upon  the  point  that  the 
receiving  of  deposits  in  the  manner 
stated  constituted  the  transaction  of  a 
banking  business  within  the  Wisconsin 


statute,  and  therefore  such  business 
could  not  be  carried  on  except  as  pro- 
vided for  by  the  banking  law. 

There  are  great  department  stores 
all  over  the  country  engaged  in  similar 
practices.  These  stores  are  generally 
of  admitted  solvency;  but,  as  the  Wis- 
consin Supreme  Court  said  in  the  de- 
cision cited,  that  is  not  the  question;  if 
they  are  doing  a banking  business,  they 
are  amenable  to  the  laws  regulating  that 
business. 

Banking  has  become  a term  signify- 
ing many  things.  Originally,  it  meant 
the  receipt  of  money,  plate  or  other 
valuables  for  safe-keeping,  and  later 
transfers  of  these  valuables  or  their 
equivalents  by  means  of  checks  and 
bank  notes.  Of  late  years  the  functions 
of  banks  have  been  greatly  multiplied, 
as  will  be  illustrated  by  a story  told  by 
Mr.  D.  R.  Forgan,  president  of  the  Na- 
tional City  Bank  of  Chicago.  Mr. 
Forgan  had  a friend,  a Presbyterian, 
living  in  one  of  the  smaller  cities  of 
Illinois.  The  pastor  of  this  man’s 
church  happened  to  notice  that  there 
was  a desirable  vacancy  in  the  pulpit  of 
a Presbyterian  church  in  Milwaukee, 
and  mentioned  the  matter  to  Mr.  For- 
gan’s  friend,  who  said,  “Oh,  I guess  we 
can  fix  that  up  all  right.  I’ll  ask  my 
bank.  I think  their  Chicago  correspon- 
dent can  arrange  the  matter.”  Com- 
munications were  opened,  and  the  vacant 
pulpit  was  soon  filled. 

. A Philadelphia  banker  related  once 
that  regularly  every  week  he  executed  a 
commission  for  a box  of  peppermint 
candy  for  a New  York  banker — pre- 
sumably not  because  the  price  of  that 
commodity  was  lower  in  Philadelphia 
than  in  New  York,  but  because  of  the 
better  quality. 

The  department  store  bank  is  simply 
a means  of  borrowing  from  the  public 
without  security  or  legal  safeguards. 
The  receipt  of  money  on  deposit  and  the 
payment  of  interest  thereon  certainly 
constitute  a form  of  banking.  It  would 


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290 


THE  BANKERS  MAGAZINE 


be  the  part  of  wisdom  for  all  the  States 
to  follow  the  rule  of  the  Wisconsin  Su- 
preme Court,  which  holds  that  such  busi- 
ness is  subject  to  the  banking  law. 

It  is  not  without  interest  in  this  con- 
nection to  note  that  the  same  question 
has  arisen  in  England.  “The  Econo- 
mist” of  London  sharply  criticises  this 
mixing  up  of  banking  and  trading  ac- 
counts, and  justly  says  that  “depositors 
are  not  protected  by  the  many  safe- 
guards of  publicity  and  experience  pro- 
vided by  an  ordinary  joint-stock  bank.” 

REGULATION  OF  THE  EXPRESS 
BUSINESS 

/COMPLAINTS  are  not  infrequently 
made  of  the  inadequate  regulation 
of  the  business  of  the  express  compa- 
nies. For  many  years  a committee  of 
the  American  Bankers’  Association  has 
labored,  with  no  great  success,  to  regu- 
late the  money-order  business  carried 
on  by  these  companies,  and  lately  the 
“express  capital  earnings  and  rates” 
have  formed  the  subject  of  a report  to 
the  Merchants'  Association  of  New 
York.  This  report  finds  that  the  re- 
turns to  the  express  companies  from 
capital  actually  and  necessarily  em- 
ployed in  the  operation  of  express  ser- 
vice are  from  forty-three  to  115  per 
cent,  or  more ; that  the  rates  which  yield 
these  excessive  returns  should  be  re- 
duced to  a basis  which  would  afford 
only  a normal  commercial  profit  on  the 
fair  value  of  the  property  employed; 
that  the  present  basis  of  rates,  besides 
being  excessive,  is  false  and  unjust,  as  it 
imposes  widely-varying  charges  for 
nearly  identical  services.  It  is  rec- 
ommended, finally,  that  the  entire  sys- 
tem of  express  rates  should  be  read- 
justed by  the  Interstate  Commerce  Com- 
mission. 

Many  perishable  commodities  used 
for  food  are  shipped  by  express,  and 
the  maintenance  of  high  rates  of  ex- 


pressage  has  undoubtedly  been  a consid- 
erable factor  in  keeping  up  the  prices 
of  food.  If  the  report  made  to  the 
Merchants’  Association  is  correct,  the 
express  companies  could  easily  bear  a 
reduction  of  about  fifty  per  cent,  in 
their  present  rates. 

Besides,  the  politicians  who  gave  the 
people  the  postal  savings  banks  should 
now  do  something  that  would  be  of  real 
public  benefit.  They  should  establish  a 
parcels  post  that  would  go  far  towards 
relieving  the  business  of  the  country 
from  the  exorbitant  exactions  of  the  ex- 
press companies. 

In  France,  a package  may  be  sent  by 
parcels  post  for  any  distance  within  the 
country  for  an  unvarying  rate;  in  Ger- 
many, the  rate  varies  from  a cent  and 
a half  for  distances  up  to  about  forty- 
six  miles  to  a little  less  than  twelve 
cents  for  a distance  of  nearly  700  miles. 

A writer  in  the  “Technical  World 
Magazine”  recently  pointed  out  that  an 
eight-pound  package,  by  reason  of  its 
weight,  can  not  be  sent  by  mail  from 
New  York  to  Boise,  Idaho,  but  that  a 
package  of  that  weight  can  be  sent  to 
Boise  by  post  from  Berlin,  Vienna, 
Rome,  London,  or  from  any  other  place 
in  Europe  for  ninety-six  cents.  To  send 
an  eight-pound  package  from  New  York 
to  Boise  by  express  costs  $2.20,  or  more 
than  twice  as  much  as  the  European 
consignor  is  required  to  pay. 

It  has  been  said  that  John  Wana- 
maker,  when  Postmaster-General,  de- 
clared there  were  three  reasons  against 
the  establishment  of  a parcels  post: 
First,  the  railroads;  second,  the  rail- 
roads, and  third,  the  railroads.  He 
might  well  have  said  express  companies 
instead  of  railroads,  and  perhaps  he 
did.  But  it  is  suspected  that  the  rail- 
roads are  deeply  interested  in  the  own- 
ership of  the  express  companies. 

The  business  of  these  companies  is  in 
need  of  wise  and  careful  public  regula- 
tion, such  as  would  permit  the  return  of 


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COMMENT 


291 


a fair  rate  of  interest  on  the  capital  in- 
vested and  at  the  same  time  assure  rea- 
sonable rates. 


THE  STRAINING  OF  CREDIT 

T^*ANY  explanations  are  offered  for 
the  crises  which  occasionally  ap- 
pear to  check  the  growth  of  enterprise 
and  business.  We  have  seen  none  that 
states  the  real  difficulty  more  clearly 
and  forcibly  than  this,  taken  from  an 
address  delivered  some  time  ago  by  Mr. 
Wm.  A.  Mackie,  cashier  of  the  First 
National  Bank  of  New  Bedford,  Mass.: 
“If  the  people  will  insist  on  continuous 
inflation,  straining  credit  beyond  its  pos- 
sible endurance,  periodically  something 
is  going  to  drop.” 

In  a country  of  such  boundless  oppor- 
tunities for  investment,  it  is  not  much  to 
be  wondered  at  that  the  hunger  for 
more  and  more  capital  continues,  even 
after  the  signs  indicate  that  the  avail- 
able loanable  funds  are  practically  ex- 
hausted. 

As  was  pointed  out  by  Mr.  Alex- 
ander Gilbert,  after  the  panic  of 
1907,  only  two  courses  were  open — to 
continue  to  feed  the  inflation  movement 
or  to  apply  a brake  to  it.  The  emer- 
gency currency  advocates  evidently  be- 
lieve in  the  feeding  process — the  print- 
ing of  practically  unlimited  supplies  of 
paper  “money,”  so  that  the  inflation 
process  may  go  on  like  Tennyson's 
brook.  To  apply  the  brake,  to  check 
the  inflation  process,  so  that  business 
may  sober  up  as  it  were,  is  less  agree- 
able but  undoubtedly  wiser.  “The 
brake,”  in  this  case,  is  manifestly  the  in- 
terest rate,  but  with  our  disjointed  bank- 
ing system,  watered  reserves  and  other 
weak  factors,  it  is  all  but  impossible  to 
apply  any  check  until  disaster  ensues. 

“Something  will  drop,”  as  Mr. 
Mackie  says,  “if  the  people  will  insist 


on  continuous  inflation  and  the  straining 
of  credit  beyond  its  possible  endurance.” 
But  we  see  no  evidence  that  the  people 
or  the  banks  mean  to  insist  on  anything 
else. 


DEATH  OF  EMINENT  FINANCIERS 

ECENTLY  death  has  claimed  two 
men  of  exceptional  eminence  in 
the  world  of  banking  and  finance — ex- 
Secretary  John  G.  Carlisle  and  Mr.  J. 
Edward  Simmons. 

Mr.  Carlisle  was  Secretary  of  the 
Treasury  in  Mr.  Cleveland's  second 
Administration,  and  instead  of  going 
with  his  party  in  favor  of  free  silver,  he 
fought  vigorously  and  effectively  for 
sustaining  the  nation’s  honor  and  credit. 
The  speeches  made  by  Mr.  Carlisle  in 
the  campaign  of  1896  against  the  free 
and  unlimited  coinage  of  silver  were 
masterpieces  of  financial  argument,  and 
were  in  fact  unanswerable.  It  is  prob- 
able that  few  men,  if  any  one,  did  so 
much  as  he  to  check  the  free-silver 
craze. 

Although  Mr.  Carlisle  had  long 
been  out  of  public  life,  and  was  indeed 
politically  discredited  among  his  party 
associates  for  his  stand  against  free  sil- 
ver, the  honorable  service  he  rendered 
his  country  should  not  be  forgotten. 
Fortunately,  he  lived  long  enough  to  see 
that  even  his  political  enemies  recog- 
nized his  wisdom  and  foresight. 

Mr.  Simmons  had  been  for  many 
years  president  of  the  Fourth  National 
Bank  of  New  York,  was  formerly  pres- 
ident of  the  New  York  Stock  Exchange 
and  at  the  time  of  his  death  president 
of  the  Chamber  of  Commerce  of  the 
State  of  New  York.  He  also  held  nu- 
merous other  positions  affording  him  an 
opportunity  of  rendering  faithful  ser- 
vice to  the  public  and  where  his  knowl- 
edge of  financial  matters  was  especially 
valuable.  He  j ustly  bore  a high  reputa- 


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tion  among  bankers  and  the  commercial 
community,  and  was  distinctly  of  that 
type  of  men  who  build  up  and  conserve 
wealth.  His  judgment  was  held  in  great 
esteem  by  the  clearing-house  banks,  and 
his  wise  counsels  will  be  seriously 
missed. 


PRICES  AND  PRODUCTION 

"l^’UCH  ink  has  been  shed  of  late  to 
account  for  the  prevailing  prices 
— which  most  people  regard  as  high, 
not  always  being  careful  to  make  com- 
parisons with  former  periods  when 
prices  were  not  so  much  below  the  pres- 
ent level. 

But  admitting  that  the  prices  of  most 
commodities  are  high,  and  admitting  also 
that  nearly  all  the  explanations  given 
for  this  condition  contain  more  or  less 
truth,  the  question  arises,  If  prices  are 
so  high,  why  does  not  the  law  of  supply 
operate  to  reduce  the  price  level?  Of 
course,  many  answers  to  this  inquiry 
could  be  given.  If  we  take  farm  pro- 
ducts, it  might  be  said  that  the  manu- 
facturing and  urban  population  has  in- 
creased so  rapidly  that  the  output  of 
the  farms  can  not  keep  pace  with  it, 
and  that  changed  conditions  have  vastly 
enhanced  the  cost  of  farm  labor. 

In  considering  prices,  the  consumer 
always  views  the  matter  from  the  point 
of  consumption ; that  is,  the  retail  price. 
Even  an  advance  in  wholesale  prices  can 
not  be  taken  as  an  accurate  index  of  the 
rise  of  prices  at  the  point  of  production. 
Indisputably  there  is  a relation,  and  a 
close  one,  between  the  retail  price  of 
pork,  for  example,  the  wholesale  price, 
and  the  price  which  the  farmer  obtains 
for  his  hogs.  But  this  relation  does  not 
always  appear  to  be  properly  propor- 
tioned. 

It  would  seem  that  the  great  advance 
in  prices,  and  especially  of  farm  pro- 
ducts, ought  to  have  enhanced  the  profits 
of  farming  enormously  and  to  an  extent 
that  would  attract  capital  and  enter- 


prise into  farming  to  a degree  that 
would  have  measurably  counteracted 
this  rise  in  prices,  if  it  would  not  have 
overcome  it  altogether.  No  doubt  this 
movement  of  capital  and  enterprise 
toward  the  farms  may  have  been  hin- 
dered to  some  extent  by  the  higher  price 
of  farming  lands  and  the  greater  cost  of 
labor ; but  after  allowing  for  these,  one 
might  reasonably . expect  to  see  a vast 
increase  in  farming  activity  owing  to 
the  better  prices  for  farm  produce. 

What,  then,  is  hindering  this  move- 
ment? Can  it  be  true  that  while  the 
consumer  finds  that  he  must  pay  more 
for  potatoes,  flour,  bacon,  beef,  etc.,  the 
farmer  is  not  getting  a fair  share  of  this 
advance?  Is  too  much  of  it  going  to 
middlemen,  to  the  trusts,  or  being  ab- 
sorbed by  costly  methods  of  retail  dis- 
tribution? If  this  is  the  case,  the  law 
of  supply  will  not  have  free  play,  for 
the  chief  incentive  to  increased  produc- 
tion— greater  profit — will  be  lessened. 

After  allowing  for  transportation  and 
a reasonable  profit  to  commission  men, 
wholesalers  and  retailers,  the  prices  of 
many  things  grown  on  the  farm  are  so 
high  that  one  would  expect  to  see  peo- 
ple rushing  from  the  factories  and  the 
stores  to  go  into  farming  as  the  most 
profitable  business  in  sight.  That  this 
is  not  the  case  may  indicate  that  the 
farmer  is  not  getting  his  full  share  of 
the  profits  somebody  is  making  on  the 
commodities  produced  on  the  farm. 


PRACTICAL  BANKING  CONTRI- 
BUTIONS WANTED 

HELPFUL  articles  relating  to  the  every- 
day work  of  banks,  savings  banks 
and  trust  companies  are  desired  for  publics 
tion  in  The  Bankers  Magazine. 

Short,  bright  paragraphs,  telling  in  a clear 
and  interesting  way  of  some  of  the  methods, 
systems  and  ideas  employed  In  the  most 
progressive  banks  of  the  country,  will  be 
especially  welcome. 

Contributions  accepted  by  the  editor  will 
be  paid  for  on  publication. 


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CANADIAN  BANKING  AND  COMMERCE  — THE 
HALF-YEAR  REVIEWED 

By  H.  M.  P.  Eckardt 


IN  one  or  two  respects  the  first  half 
of  1910,  in  Canadian  banking,  has 
resembled  the  first  half  of  1907.  In 
both  years  there  was  at  the  ontset  an 
important  expansion  of  the  domestic 
commercial  loans ; also  the  monetary 
situation  in  1910  as  in  1907  has  shown 
signs  of  stringency,  and  the  industrial 
and  mercantile  demand  for  loans  stead- 
ily increased.  However,  the  conditions 
of  the  two  years  are  by  no  means  identi- 
cal, and  those  who  fear  that  the  second 
half  will  witness  troubles  similar  to 
those  experienced  three  years  ago  will 
do  well  to  consider  the  points  in  which 
the  present  differs  from  the  panic  year. 

In  the  first  place  there  is  a marked 
difference  in  the  course  of  the  deposits. 
The  year  1907  began  with  a sharp 
downward  movement  of  the  deposits. 
This  movement  was  more  .or  less  in  evi- 
dence during  the  whole  year.  As  a 
matter  of  fact  it  continued  until  the  end 
of  February,  1908,  when  deposits  again 
turned  definitely  upwards.  Throughout 
1907  there  was  no  statement  date  of  the 
banks  on  which  the  total  of  their  de- 
posits reached  the  high  level  set  at  the 
end  of  the  preceding  year.  It  was  the 
combination  of  the  two  movements — 
loss  of  deposits  and  expansion  of  loans 


— which  quickly  brought  the  banking 
institutions  into  a position  that  com- 
pelled them  to  liquidate  loans  and  to 
cease  making  advances  required  for  new 
construction  or  extensions  by  their  cus- 
tomers. 

In  the  present  year,  although  loans 
have  increased  rapidly,  there  has  been 
So  far  no  net  fall  in  deposits.  The  bal- 
ance of  deposits  has  continued  to  in- 
crease. Such  measure  of  stringency 
as  has  been  experienced  has  been  caused 
in  part  by  the  fact  that  the  growth  of 
the  deposits  has  not  been  quite  equal 
to  the  increase  of  the  loan  account.  Dur- 
ing January  and  February,  particularly 
in  January,  there  is  usually  seen  a re- 
duction of  the  deposit  balances.  It  is 
due  primarily  to  the  contraction  of  the 
check  circulation,  which  always  takes 
place  when  general  business  assumes  its 
quiet  mid-winter  aspect.  This  year, 
however,  the  accumulation  of  deposits 
was  resumed  in  March  on  such  a scale 
as  to  place  the  total  at  the  end  of  that 
month  well  above  the  total  shown  at 
the  end  of  the  preceding  year. 

The  following  table  shows  the  posi- 
tion of  the  banks  as  at  June  80,  1910, 
qnd  December  31,  1909: 


Liabilities. 


Note  circulation  

Dominion  Government  deposits  . 
Provincial  Government  deposits  . 
Deposits  of  the  public,  (demand) 
Deposits  of  the  public,  (notice) 
Deposits  elsewhere  than  Canada 
Loans  from  other  banks,  Canada 
Deposits  of  other  banks,  Canada 
Due  to  banks  in  Great  Britain  . . 
Due  to  banks  in  foreign  countries 
Other  liabilities  


Capital  paid  

Rest  or  surplus  . . . 
Profit  and  loss,  etc. 

Total  


June  30,  1910. 
$79,781,631 
16,257,010 
29,575,438 
263,417,539 
534,432,054 
85,017,152 
4,128,191 
5,149,955 
5,771,777 
5,109,386 
11,684,258 

Dec.  31,  1909. 

$81,325,732 

8,204,717 

24,592,223 

261,268,387 

499,082,094 

75,088,499 

4,420,738 

4,186,788 

2,011,871 

3,558,235 

7,236,868 

$1,040,324,464 

$970,976,157 

98,728,342 

97,809,617 

79,370,321 

77,847,333 

12,402,178 

11,151,522 

$1 ,230,825,305 

$1,157,783,629 

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Assets. 


Specie  

Dominion  Notes  

Circulation  redemption  fund 

Notes  and  checks,  other  banks  .... 
Loans  to  other  banks,  Canada .... 
Deposits  in  other  banks,  Canada. . 
Due  by  banks  in  Great  Britain  . . 
Due  by  banks  in  foreign  countries 
Dominion  and  provincial  securities 
Canadian  municipal,  etc.,  securities 

Railway  and  other  bonds  

Call  loans,  Canada  

Call  loans,  elsewhere  

Current  loans,  Canada  

Current  loans,  elsewhere 

Loans  to  provincial  governments  . . 

Overdue  debts  

Real  estate,  other  than  premises  . . 

Mortgages  on  real  estate  

Bank  premises  

Other  assets  


$27,586,533 

$27,456,690 

74,349,645 

73,225,789 

4,942,846 

4,554,938 

44,456,771 

45,791,783 

4,011,327 

4,299,806 

8,526,815 

8,740,953 

21,919,472 

7,295,757 

24,242,023 

24,114,082 

17,010,315 

12,824341 

22,531,011 

22,920,683 

56,567,789 

50,051,831 

61,598,958 

63,554^322 

130,173,902 

138,505,379 

649,145,920 

592,741,812 

38,471,443 

1,774,740 

7,028,522 

40,072,793 

3,080,086 

6,059,861 

1,106,601 

1,235,367 

707,071 

624,284 

23,031,758 

21336,631 

11,641,656 

9396356 

Total $1,230,825,305  $1,157,783,699 


These  foregoing  figures  show  clearly 
enough  that  the  half  year  has  been  one 
of  satisfactory  progress  in  the  Do- 
minion. The  two  principal  classes  of 
deposits  of  the  Canadian  public  have  in- 
creased altogether  by  $37,000,000,  near- 
ly all  of  the  gain  being  in  the  notice  de- 
posits. The  statement  of  this  bald  fact 
does  not,  however,  illustrate  fully  the 
extent  of  and  force  of  the  forward 
movement  during  the  period. 

The  end  of  December  in  every  year 
finds  the  banking  institutions  with  fig- 
ures swollen  by  the  activity  of  the  grain 
moving  season  and  the  Christmas  holi- 
day trade.  As  remarked  above,  Jan- 
uary invariably  sees  a sharp  contraction' 
of  the  instruments  of  credit  in  general 
circulation.  This  contraction  affects 
chiefly  the  note  circulation  and  the  de- 
mand deposits.  Sometimes  the  reaction 
enters  into  the  month  of  February  also. 
It  did  so  in  the  case  of  the  current  ac- 
count balances  in  the  present  year.  To 
illustrate:  During  January,  1910,  the 

demand  deposits  fell  $23,000,000  and 
the  note  circulation  $8,000,000.  Then, 
in  February  the  demand  deposits  fell 
$2,000,000,  the  note  circulation  rose 
$1,300,000. 

The  total  volume  of  deposits,  how- 
ever, was  not  so  greatly  affected  in 
January  because  there  occurred  also  in 
that  month  an  increase  of  $8,000,000  in 


the  deposits  outside  of  Canada  and  of 
$9,000,000  in  the  notice  deposits. 

But  the  last  day  of  February  repre- 
sents the  real  starting  point  for  the  busi- 
ness of  the  year  in  regard  to  this  mat- 
ter of  deposits.  Taking  it  from  that 
date  the  increase  for  the  two  items  of 
deposits  of  the  public,  up  to  the  end  of 
June,  amounted  to  $54,000,000;  and  in 
all  classes  of  deposits  the  increase  for 
the  same  four  months  was  about  $71,- 
000,000.  When  it  is  considered  that 
under  ordinary  or  normal  conditions  the 
greater  part  of  deposit  increase  occurs 
in  the  second  half  of  the  year  this  is  to 
be  taken  as  a favorable  exhibit. 

Why  Deposits  Increased. 

As  in  the  preceding  year  the  ex- 
planation of  the  increase  of  deposits  is 
to  be  found  in  three  leading  causes. 
They  are:  Issue  of  new  securities  by 

Canadian  governments  and  corporations 
in  London;  immigration  of  well-to-do 
settlers  from  the  United  States  and 
Europe;  and  expansion  of  the  domestic 
mercantile  loans  of  the  banks.  With 
regard  to  the  first  named  of  these 
causes  the  movement  has  proceeded  on  a 
scale  probably  equal  to  that  seen  in  the 
first  half  of  1909-  The  “Monetary 
Times/*  of  Toronto,  estimates  the  total 
Canadian  issues  in  London  during  the 
first  half  at  about  $120,000,000. 


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295 


In  the  second  half  of  the  year  there 
are,  so  far,  some  indications  that  the 
British  market  has  had  somewhat  of  a 
surfeit  of  Canadian  bonds.  At  any  rate, 
a number  of  issues  of  some  importance 
were  left  upon  the  underwriters'  hands 
to  the  extent  of  seventy  or  eighty  per 
cent,  and  more.  It  remains  to  be  seen 
whether  this  is  a temporary  glut.  The 
best  authorities  here  regard  it  as  tem- 
porary. There  will  be  continual  need 
in  the  Dominion  of  financial  support 
from  Britain;  and  as  the  corporations 
seeking  it  are  possessed  of  good  credit 
in  London,  it  seems  reasonable  to  con- 
clude that  there  will  be  no  permanent 
cessation  of  the  stream  of  funds  this 
way  across  the  Atlantic. 

Possibly  the  receipt  of  new  deposits 
by  the  Canadian  banks  through  the 
opening  of  accounts  by  the  new  settlers 
has  been  on  a larger  scale  this  year 
than  last.  The  settlers  from  the  West- 
ern States  were  more  numerous,  and 
they  brought  with  them  more  cash  cap- 
ital than  ever  before.  The  immigration 
from  the  States,  however,  occurs  largely 
in  the  spring  of  the  year.  It  is  said 
that  the  unfavorable  condition  of  the 
Western  Canadian  wheat  crop  this  sea- 
son is  the  cause  of  a return  movement 
of  settlers  from  Canada  to  the  States; 
but  as  a matter  of  fact  nothing  can  be 
pronounced  on  that  subject  until  next 
spring.  If  the  movement  then  shows  a 
falling  off,  it  may  be  taken  as  a tem- 
porary setback. 

Inasmuch  as  much  the  same  condition 
of  dry  weather  damage  prevails  in  Min- 
nesota and  the  Dakotas,  one  such  sea- 
son in  Saskatchewan  and  Alberta  will 
hardly  kill  the  desire  of  American  farm- 
ers to  possess*  the  cheap  and  fertile 
Canadian  lands.  Difference  in  prices 
at  which  fertile  lands  can  be  bought  in 
the  States  and  in  Canada  is  the  real 
cause  of  the  movement;  and  while  that 
difference  is  as  wide  as  it  is  to-day  the 
pulling  force  exerted  by  Canada  is  like- 
ly to  be  in  evidence. 

The  increase  of  deposits  through  ex- 
pansion of  loans  has  apparently  been 
greater  in  1910  than  in  1909 — for  com- 
mercial loans  (domestic)  increased  $57,- 


000,000  this  year  as  compared  with  an 
increase  of  but  $24,000,000  in  the  first 
six  months  of  1909* 

Increases  of  Capital. 

In  capital  account  the  change  has 
been  but  slight.  A number  of  impor- 
tant banks  have  increased  the  amount  of 
authorized  capital,  but  so  far  the  actual 
issue  of  new  stock  has  not  been  large. 
If  general  conditions  remain  favorable 
during  the  second  half  of  the  year,  it  is 
expected  that  some  large  additions  will 
be  made  to  this  account. 

New  Banks. 

One  new  bank — the  Bank  of  Vancou- 
ver— opened  its  doors  in  the  half  year. 
It  appeared  for  the  first  time  in  the  list 
of  banks  reporting  to  the  Ottawa  Gov- 
ernment in  the  June  statement.  With 
an  authorized  capital  of  $2,000,000,  it 
shows  $611,500  subscribed  and  $291,- 
995  paid  up.  The  bank  act  requires  a 
subscribed  capital  of  $500,000  and  a 
paid  up  capital  of  $250,000  before  per- 
mission to  begin  business  will  be  given. 

Mergers. 

Although  no  bank  merger  went  into 
effect  during  the  half  year  an  impor- 
tant deal  was  announced.  The  Royal 
Bank  of  Canada  entered  into  an  agree- 
ment to  purchase  the  stock  of  the  Union 
Bank  of  Halifax.  The  agreement  has 
yet  to  receive  the  shareholders'  assent, 
but  it  is  expected  that  that  will  be  a 
mere  matter  of  form.  The  agreement 
is  to  take  effect  on  November  1,  next. 
Upon  its  consummation  the  Royal  will 
have  assets  of  approximately  $100,000,- 
000  and  some  185  or  190  branches. 
This  marks  the  passing  of  the  last 
Canadian  bank  with  head  office  in  the 
province  of  Nova  Scotia. 

Profits. 

So  far  as  profits  are  concerned,  the 
reports  issued  during  the  first  half  of 
the  year*  are  not  materially  different 
from  those  of  the  preceding  year.  In 


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some  cases  they  are  a little  below  and 
in  others  a little  above  last  year's  level. 
But  as  the  most  of  the  important  in- 
stitutions report  in  the  second  half  of 
the  year,  a detailed  statement  with  com- 
parisons will  be  deferred  till  the  next 
half-yearly  article  is  written.  Owing 
to  the  measure  of  stringency  that  has 
prevailed,  the  earnings  of  the  banks 
during  the  whole  year  1910  should  be 
better  than  those  shown  for  1909* 

Commerce  and  Industry. 

The  several  trade  barometers  have 
continued  to  point  favorably.  Bank 
clearings  amounted  to  $2,842,020,698, 
as  compared  with  $2,408,675,328  in 
1909;  $1,857,258,086  in  1908,  and  $2,- 
074,992,271  in  1907. 

Gross  earnings  of  the  three  big 
Canadian  railways  compare  as  follows: 


First  six  months: 
Canadian  Pacific  .... 

Grank  Trunk  

Canadian  Northern  . 


The  foreign  trade  is  tending  sharply 
upwards  and  it  is  expected  that  a total 
of  $800,000,000  will  be  reached  if  no 
check  is  experienced  before  the  end  of 
the  year. 

At  the  beginning  of  the  year  the  out- 
look was  especially  bright.  There  had 
been  an  increase  of  2,359,800  acres  in 
the  area  of  all  held  crops  planted.  The 
wheat  area  in  the  three  Western  prov- 
inces increased  from  7,103,300  acres  to 
8,453,200  acres,  and  great  expectations 
were  cherished  until  about  the  middle  of 
July,  when  it  was  seen  that  the  drouth 
had  done  much  damage  to  the  prairie 
provinces.  It  might  be  said  that  trade 
and  industry  for  the  whole  of  Canada 
got  much  of  their  impetus  from  the  good 
crop  outlook  at  seeding  time. 

As  everybody  knows,  a considerable 
change  came  over  the  situation  with  the 
advent  of  July — so  far  at  least  as  the 


Western  wheat  crop  is  concerned.  It 
is  to  be  expected  that  the  modification 
of  the  estimates  of  yield  in  the  West 
will  cause  some  slackening  down  of  in- 
dustrial business  in  Eastern  Canada 
and  perhaps  in  the  volume  of  the  import 
trade,  but  at  the  same  time  it  is  to  be 
remembered  that  in  Ontario  and  Quebec 
and  in  the  East  generally  agricultural 
conditions  are  excellent. 

There  was  a short  spell  of  dry 
weather,  but  it  was  broken  before  any 
serious  damage  was  done;  and  since 
then  the  rains  have  been  coming  at  sat- 
isfactory intervals.  So  the  fall  wheat, 
the  pastures,  the  corn,  roots  and  vege- 
tables, fruits,  etc.,  have  been  making 
good  progress  and  results  on  the  whole 
have  been  highly  satisfactory.  The 
Grand  Trunk  strike  has,  however,  in- 
flicted injury  upon  the  localities  de- 
pending upon  that  railway  system  for 


Increase 
or  deorease 

1909 

1910 

p.  c. 

$35,353,000 

$43,982,000 

+24.4 

18,319,863 

21,656,136 

+18.8 

6,401,000 

5,955,700 

— 6.9 

$59,973,863 

$71,593,836 

+19.3 

transportation  of  products  to  market 
and  upon  the  large  industrial  centers  as 
well.  If  it  is  prolonged  and  if  the 
company  is  unable  to  make  satisfactory 
progress  in  moving  its  freight  the  loss 
will  be  very  large  indeed. 

From  the  foregoing  it  can  be  seen 
that  the  immediate  future  is  somewhat 
uncertain.  The  tendencies  noted  do  not 
all  pull  in  the  direction  of  prosperity, 
and  there  are  some  who  consider  that 
the  heavy  fall  in  stock  prices  in  New 
York  and  in  the  Canadian  markets  may 
indicate  that  a depression  of  some  sort 
is  in  prospect.  But,  of  course,  as  to  the 
longer  outlook  there  is  no  difference  of 
opinion  in  the  Dominion.  Bankers, 
other  financiers,  manufacturers,  mer- 
chants, farmers  have  the  strongest  con- 
fidence that  prosperity  and  progress 
will  be  the  dominating  factors. 


Digitized  by  t^ooQle 


SAVINGS  BANKS 

Conducted  by  W.  H.  Kniffln,  Jr. 


THE  TELLER  AND  HIS  CASH 


By  W.  H.  Kniffln,  Jr. 


DY  law,  all  banks  of  discount  are  re- 
quired  to  carry  a minimum  cash 
reserve  and  the  character  of  that  reserve 
is  usually  stipulated.  But  mutual  or 
trustee  savings  banks  are  not,  as  a rule, 
restricted  as  to  the  minimum,  but  quite 
generally  a maximum  reserve  is  named. 
The  character  of  that  reserve  is  not  de- 
fined, and  it  is  usually  in  bank  credits. 
The  amount  of  such  credits  in  other 
banks  is  also  limited,  but  as  to  the  cash 
on  hand,  it  is  a matter  of  judgment, 
and  is  left  to  the  discretion  of  the  bank 
officials.  Thus  in  New  York  City,  a na- 


tional bank  is  required  to  keep  a reserve 
of  twenty-five  per  cent,  of  its  deposits 
in  actual  cash  in  its  vaults,  and  in  “law- 
ful money,”  of  which  national  bank 
notes  may  not  form  a part.  A State 
bank  must  keep  a reserve  of  twenty- 
five  per  cent.,  of  which  two-fifths  must 
be  in  cash,  and  a trust  company  fifteen 
per  cent.,  all  in  cash,  of  which  national 
bank  notes  may  form  a part,  while  the 
savings  banks  are  forbidden  to  keep 
more  than  ten  per  cent,  of  their  de- 
posits either  in  cash  or  on  deposit. 

Not  more  than  twenty-five  per  cent. 


Foroi  1— Teller’s  Cash  Proof  designed  and  adapted  to  banks  running  with  but  one  teller. 
Can  be  expanded  to  suit  the  needs  of  banks  up  to  about  assets  and 

open  accounts.  Home  Savings  Bank,  Brooklyn 


107  t 


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298 


THE  BANKERS  MAGAZINE 


CONNECTICUT  SAVINGS  BANK 


OF  NEW  HAVEN 


Form  2— Teller’s  Cash  Summary.  Receiving  Teller.  Connecticut  Savings  Bank, 
New  Haven,  Conn. 


of  the  capital  and  surplus  of  a deposi- 
tory bank  may  be  placed  in  any  one  in- 
stitution. The  cash  on  hand  may  be 
as  little  or  as  much  as  necessity  de- 
mands^— the  intent  being  that  no  great 
part  of  savings  bank  money  shall  re- 
main idle  or  uninvested  according  to 
law.  According  to  the  last  report  of 
the  New  York  State  savings  banks,  to 
meet  deposits  aggregating  $1,488,- 
449,494.00,  the  banks  held  cash  on  hand 
of  but  $9,847,995.00,  or  .0065, — a trifle 
over  one-half  of  one  per  cent.,  and  on 
deposit  in  addition  to  this  sum,  $79,- 
021,564.00  was  subject  to  call,  making 
a cash  reserve  of  about  six  per  cent. 

Any  Kind  of  Money — But  Good. 

The  teller  of  the  commercial  bank 
must  concern  himself  not  only  with  the 


amount  of  cash  on  hand,  but  the  variety, 
and  if  he  works  in  a national  bank 
must  keep  the  different  kinds  of  money 
separate.  The  teller  of  a savings  bank, 
however,  need  not  worry  about  the 
varieties  of  money,  and  can  give  due 
attention  that  it  shall  all  be  good  money 
and  correct  in  amount.  It  matters  noth- 
ing to  him  what  kind  he  takes  in  and 
least  of  all  what  kind  he  pays  out. 
Money  is  money.  And  it  need  not  be 
kept  in  packages  convenient  for  making 
up  pay  rolls,  for  he  makes  up  no  pay 
rolls.  He  can  strap  his  money  as  he 
pleases,  but  should  endeavor  to  conform 
to  custom  in  his  locality,  so  that  it  may 
not  cause  undue  annoyance  to  his  de- 
pository bank  and  customers.  A uni- 
form method  of  strapping  bills  and 
wrapping  coin  is  much  to  be  desired, 


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SAVINGS  BANKS 


m 


and  is  coming  to  be  given  attention  in 
banking  circles. 

The  notion  that  savings  bank  tellers 
are  merely  figureheads  and  do  little  or 
nothing  in  the  line  of  handling  money 
is  erroneous.  As  a matter  of  fact,  it  is 
doubtless  true  that  the  tellers  of  a large 
bank  like  the  Bowery,  or  Bank  for  Sav- 
ings, or  Emigrant  Industrial,  in  New 
York,  handle  as  much  real  money  as  the 
tellers  in  large  commercial  banks.  The 
cash  transactions  for  the  Bowery  in 
1909  were  over  $44,000,000 — or  nearly 
a million  a week,  and  all  in  coin  of  the 
realm. 

The  Overs  and  Shorts. 

In  small  banks,  one  man,  or  it  may 
be  several,  have  access  to  the  cash  and 
receive  and  pay  over  the  counter.  This 


is  so  of  necessity.  This,  of  course, 
makes  it  difficult  to  trace  an  error,  or  to 
place  the  blame,  for  in  the  language  of 
Nast’s  famous  cartoon,  one  uday  point 
to  the  other  and  say,  “’Twasn't  me; 
*twas  him." 

In  large  banks,  where  the  work  is 
properly  apportioned,  and  the  receiving 
and  paying  entrusted  to  designated  men, 
an  overage  is  usually  "up  to"  the  re- 
ceiving teller,  and  a shortage  quite  like- 
ly to  be  an  error  on  the  part  of  the  pay- 
ing teller.  Some  banks  run  an  "over 
and  short"  account,  while  others  make 
the  tellers  responsible  for  their  own 
errors.  Some  banks  run  a "suspense 
account"  on  the  deposit  ledger,  to  which 
overages  are  credited  and  to  which 
shortages  are  charged. 

Inasmuch  as  cash  over  is  usually  an 


CONNECTICUT  SAVINGS  BANK 

OF  NEW  HAVEN 

Paying  Teller’s  Summary  190  <f 


Digitized  by  t^ooQLe 


CASH  RECORD,  "5  WM  ll. 


CHECKS' AND  OTHER  ITEMS 

Held  as  Cash. 


Currency  in  Safe, 

“ Drawer. 

“ received  during  the  day. 

Gold  Coin  in  Safe, 

..  ..  t rlyf 

" **  received  during  the  day. 

Stiver  Coin  in  Safe, 

“ ..  ..  jray, 

“ “ received  during  The  day, 

Other  Minor  Coin' in  Safe. 

..  - « . « Tray, 

" “ ••  received  during  the  day, 

Tetal  Comocy  and  Coin  on  Hand 


BALANCES  ON  DEPOSIT  IN  BANKS 
OR  TRUST  COMPANIES .• 


Mucawtilk  Tnurr  Comvany. 
Albany  Taerr  Company, 
Piut  National  Bank. 


Total  Cain  on  Hand  and  in  Banks  oi  Tmtnr  Co's,* 


PROOF  OF  CASH  ON  HAND. 


General  Cash  Balances* 
Total  Cash  on  hand,' 


■BESBBBg 


5/tA.OL  |}<rp 

*1/  ^ 
CsSaX,  oau)  ce-vuctWK 


Summary  of  Transactions  with  Depositors  for  the  Period 
Beginning  (at  Opening  of  Business),  and  Ending  this  Date.* 


Amount  due  Depositors  at  the  beginning  of  the  period. 

“ received  from  Depositors  during  the  period, 

“ of  Interest  credited  to  Depositors  during  the  period. 

Amount  paid  to  Depositors  during  the  period. 

“ due  Depositors  this  date,* 


Number  of  Depositors’  Accounts  open  at  the  beginning  of  the  period 
“ " " " opened  or  rc-opened  during  the  period, 

Number  of  Depositors'  Accounts  jblosed  during  the  period, 

“ “ “ " open  this  date.* 


Number  of  Deposits  received  during  the  period, 

“ “ Payments  to  Depositors  during  the  period. 


Form  4 — Cash  Record.  Teller's  Cash  Summary  and  Record  of  Transactions  with 
Depositors,  both  number  and  amount.  Albany  Exchange  Savings  Bank 


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SAVINGS  BANKS 


SOI 


error  in  making  tickets  (as  frequently 
happens  in  small  banks  where  no  check 
is  placed  upon  such  work),  or  money 
taken  in  for  which  no  ticket  is  made 
(as  also  sometimes  happens),  and  such 
money  belongs  to  somebody,  the  proper 
course,  if  the  system  permits  such  er- 
rors, is  to  open  account  to  take  care  of 
the  items,  and  in  due  time  the  proper 
entry  is  made  when  the  book  turns  up 
with  the  omitted  deposit.  This  is  not  to 
say  that  such  practices  should  be  en- 
couraged, or  even  permitted,  but  as  a 
matter  of  fact  they  are. 

As  evidence  of  how  few  and  insig- 
nificant are  such  in  well-regulated 
banks  may  be  cited  the  instance  of  the 
Bowery,  which  reports  deficits  in  1909 
of  but  $837.11  out  of  forty-four  mil- 
lions handled;  the  Bank  for  Savings, 
handling  about  thirty-five  millions  re- 
ports $678  “loss  at  the  counter/*  while 
a very  small  bank  newly  opened  whose 
transactions  in  cash  amounted  to  about 
two  millions  in  three  years  had  but  one 
dollar  overage. 

If  these  items  were  put  through  the 
deposit  ledger,  they  would  not  appear 
in  the  reports.  It  has  been  held  with 
no  little  degree  of  wisdom  that  to  make 
a man  responsible  for  his  shortages  is 
to  open  the  temptation  to  reimburse 
himself  from  the  overages.  And  if  such 
errors  are  reported  and  recorded  against 
him,  this  is  all  the  penalty  necessary  to 
insure  careful  work. 

The  Art  op  Counting  Money. 

In  the  handling  of  money,  a few  gen- 
eral and  well  established  rules  may  be 
opportune.  First:  Count  your  money; 
count  all  your  money;  count  all  your 
money  all  the  time.  Take  this  instance : 
Upon  receiving  a large  amount  in  pack- 
ages from  another  bank,  one  package 
was  inadvertently  placed  in  the  vault 
without  proving,  where  it  laid  for  some 
weeks,  when  it  was  taken  out  and  placed 
in  the  drawer,  and  found  to  be  ten  dol- 
lars short.  The  bank  that  strapped  the 
package  refused  to  make  good  after  so 
long  a time,  and  it  cost  the  teller  just 
ten  dollars. 

Second:  If  uncertain  about  the  count. 


especially  in  paying,  count  it  twice,  or 
thrice.  It  will  be  time  well  spent. 

Third:  Always  prove  package  money 
after  strapping.  Date  the  packages 
and  initial  them. 

It  cost  another  teller  just  one  hun- 
dred of  his  salary  to  learn  this  trick. 
Upon  strapping  money,  he  took  from 
piles  of  one  hundred  each,  six  hundred 
and  made  a package  of  five ' hundred, 
and  the  other  four  hundred  he  labeled 
likewise  five  hundred.  He,  sure  that 
only  one  thousand  was  on  the  counter. 


Form  5— Teller’s  Cash  Summary.  German 
Savings  Bank,  New  York 


did  not  prove  his  strapping  and  shortly 
afterward  handed  somebody  the  pack- 
age with  the  one  hundred  too  much. 
Subsequently,  still  unconscious  of  the 
error,  he  handed  the  short  package  out 
for  five  hundred,  when  the  shortage  was 
discovered.  Six  and  four  make  ten,  as 
well  as  twice  five!  He  now  eounts  all 
his  money,  all  the  time,  and  especially 
when  he  straps  packages. 

Silver,  when  deposited  in  rolls,  may 


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302 


THE  BANKERS  MAGAZINE 


Receiving  Teller's  Proof  c '?/*> 


Form  6— Receiving  Teller’s  Proof.  Peterson  Savings  Institution,  Paterson.  N.  J. 


be  initialed,  or  numbered  with  the  ac-  paying  departments,  the  cash  is  usually 
count  to  which  the  amount  was  credited,  in  charge  of  a superior  officer,  who  doles 
The  proper  method  for  counting  bills  it  out  as  needed  in  the  business.  The 
was  discussed  in  a previous  number,  receiving  teller,  after  reserving  barely, 
suffice  it  here  to  say,  use  as  few  motions  enough  to  make  change,  or  none  at  all, 
as  possible  in  handling  paper  money;  turns  his  receipts  daily  over  to  this 
count  by  the  multiple  system,  and  strap  officer,  or  to  the  paying  teller,  who 
but  one  denomination  together.  draws  from  the  reserve  supply  as  the 

In  large  banks,  running  receiving  and  demands  require. 


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SAVINGS  BANKS 


308 


Paying  Teller’s  Proof  £>ec  enter  /o  190  f 


The  Journal.  payments,  no  better  scheme  was  ever 

The  problem  of  the  receiving  and  devised  than  the  teller’s  cash,  which  is 
paying  teller,  or  the  two  offices  com-  ‘“tended  to  be  a quick,  accurate  and 
bined,  resolves  itself  into  having  a de-  comprehensive  account  of  the  day  s busi- 
posit  ticket  for  every  transaction,  and  neS8#  *n  smaller  banks,  it  is  quite 
correct  in  amount,  and  a receipt  for  common  to  adhere  to  the  journal-cash 
every  payment,  corresponding  to  the  book,  cumbersome  and  slow,  with  full 
amount  paid  out.  details  of  each  transaction. 

In  summarising  these  receipts  and  The  usual  details  are,  number  of  ac- 


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304 


THE  BANKERS  MAGAZINE 


count,  name,  in  full  or  abbreviated, 
amount  of  deposit  or  draft,  and  the 
same  properly  distributed  among  the 
groups.  This  book  has  its  place,  and 
will  be  fully  treated  later,  but  it  is  too 
slow  a method  of  proving  the  cash.  The 
point  now  is,  to  get  a quick  proof  of 
cash.  And  it  is  very  plain,  that,  say  in 
a day  of  five  hundred  transactions,  to 
write  up  the  journal-cash,  with  all  the 
details,  add  the  amounts,  and  strike  a 
balance  before  the  cash  can  be  proven 


The  attention  of  the  reader  is  espe- 
cially directed  to  this  form,  which  is  in 
many  ways  the  best  of  its  kind  that  has 
come  to  the  writer's  attention.  It  af- 
fords a simple  yet  complete  proof  of 
cash  and  also  acts  as  a check  on  the 
journalizing. 

In  its  present  form  it  is  intended  for 
use  in  only  those  banks  where  the  re- 
ceiving and  paying  is  done  through  one 
window  (or  where  the  proof  of  receiv- 
ing and  paying  is  not  separated,  which 


Form  8— ‘ Teller’s  Proof  of  Cash  Receipts  and  Withdrawals;  also  proof  of  amount  due 
depositors.  See  text.  Union  Dime  Savinas  Institution,  New  York 


is  neither  necessary  nor  desirable.  And 
to  properly  enter  the  items,  and  group 
them  correctly  and  obtain  a quick  proof 
is  absolutely  impossible*. 

How  much  better,  therefore,  to  sim- 
ply take  the  cash  balance  of  the  day 
before,  add  the  credits  and  subtract  the 
debits,  and  arrive  at  the  proper  amount 
quickly.  This  can  be  done  by  adding 
machine  or  by  hand,  and  when  cash  has 
proven,  journalize  the  items  at  leisure, 
either  in  detail  or  in  totals.  The  point 
is,  proof  of  cash  is  the  important  and 
pressing  thing  and  the  less  the  book 
work  in  arriving  at  this  proof,  the 
better. 

The  Teller's  Cash. 

The  teller's  cash  sheet  shown  in  Form 
1 is  the  result  of  long  experience  in 
these  matters  and  may  be  adapted  to 
any  bank  of  any  size. 


amounts  to  the  same  thing) . The  opera- 
tion is  as  follows : As  the  deposits  and 
drafts  are  handled,  they  are  listed 
without  regard  to  sequence,  in  the  de- 
posit and  draft  column,  by  number  and 
amount,  only.  When  the  doors  are 
closed,  the  columns  are  added  and  the 
amounts  carried  to  '‘Proof  of  Cash" 
column,  which  starts  with  the  cash  on 
hand  of  the  previous  day.  The  cash  is 
counted  and  listed  as  counted,  in  the 
proper  places  and  footed,  and  if  the 
count  agrees  with  the  amount  called  for 
above,  the  work  for  the  day  is  over. 

The  next  morning  the  deposits  and 
drafts  are  posted  to  the  journal,  either 
in  bulk  or  itemized.  The  different 
ledgers  are  separated  on  the  journal 
(see  next  paper  for  full  discussion  of 
this  subject)  and  footings  carried  along 
until  the  end  of  the  month.  The  total 


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305 


amount  received  for  the  fifteen  days  past 
as  shown  in  the  form,  less  the  amount 
paid  out  during  that  time,  must  equal  the 
cash  on  hand, — providing  the  items  have 
been  properly  entered.  These  totals  are 
carried  to  “Proof  of  Cash  Book" 
column,  and  a balance  struck,  which 
must  agree  with  the  cash  on  hand,  or  a 
mistake  has  been  made  in  entering  or 
footing.  Thus  we  have  a triangle,  and 
one  process  checks  the  other,  and  the 
only  error  possible  is  in  distributing  the 
items  to  the  wrong  ledger  column,  which 
throws  the  next  trial  balance  out  of 
proof.  This  can  be  verified  by  run- 
ning through  the  items  to  see  that  such 
error  has  not  crept  in.  A thorough  test 
of  this  sheet,  and  its  admirable  adapta- 
bility to  small  banks  has  amply  demon- 
strated its  value,  and  it  is  most  heartily 
recommended  for  this  purpose.  As  will 
be  seen  it  is  a copyrighted  form. 

Perhaps  the  most  unique  system  ex- 
tant, in  this  connection,  is  that  of  the 
Union  Dime  Savings  Bank,  New  York, 
in  which  all  pass  book  entries  are  made 
by  adding  machine.  The  machines  run 
continuously,  as  will  be  seen  by  perusal 
of  Form  8.  The  deposits,  as  received, 
are  listed  on  the  machine,  and  at  the 
same  time  on  the  pass  book,  and  the 


totals  automatically  footed.  Starting  at 
the  opening  of  business  with  a certain 
amount,  and  running  through  the  day, 
the  total  shown  on  the  machine  at  the 
close,  less  the  amount  at  beginning,  is 
the  cash  required. 

Four  machines  are  used,  two  for  pay- 
ing and  two  for  receiving.  As  will  be 
seen  from  Form  8,  the  totals  on  these 
machines  added  together  represent  the 
receipts  of  the  bank  from  the  beginning 
of  its  history,  and  also  the  payments; 
these  items,  together  with  the  interest 
credited,  subtracted  the  one  from  the 
other  represent  what  is  due  the  deposit- 
ors at  a given  time. 

Checks. 

Checks  received  on  deposit  are  carried 
as  cash  over  night,  or  turned  over  to  the 
proper  officer  and  by  him  deposited  in 
the  depository  bank,  after  making  due 
record  as  has  already  been  explained. 
Some  banks  do  not  hold  checks  over 
night,  but  deposit  every  day,  even  in 
very  small  banks.  In  New  York  only 
cash  is  carried  over  the  last  days  of 
June  and  December,  the  banking  de- 
partment requiring  that  every  check 
held  as  cash  be  explained  in  full  on  the 
reports. 


A MORTGAGE  LOAN  REGISTER  FOR  SAVINGS 

BANKS 

By  O.  H.  P.  La  Farge,  Secretary  The  Bank  for  Savings  in  Seattle 


HTHE  necessity  for  an  accurate  record 
of  the  mortgage  loans  of  a sav- 
ings bank  is  at  once  apparent  to  every 
banker.  A record  which  is  complete  and 
easily  read  at  a glance  is  often  sought 
for,  and  not  so  easily  found.  Loan 
records  are  not  complete  unless  there  is 
a record  of  all  notes  and  coupons,  if 
such  are  used;  also  all  papers  used  in 
making  the  loan,  all  of  which  are  held 
by  the  bank.  It  is  not  always  essential, 
but  a great  advantage,  to  show  in  the 
^record  book  the  recording  of  deeds,  ex- 
piration of  insurance  papers  and  such 
records  of  minutes  as  may  have  been 
passed  relative  to  the  loan. 

The  mortgage  loan  register  of  any 


bank  making  a large  number  of  records 
is  in  constant  use  at  all  times  of  the 
day  and  must  be  always  in  a position 
that  will  make  it  easy  to  refer  to.  Con- 
ciseness, therefore,  is  more  easily  es- 
tablished by  the  use  of  one  volume  than 
by  the  use  of  two  or  three.  The  average 
mortgage  loan  record  sold  in  stock  by 
stationers  and  supply  houses  is  of  very 
small  dimensions  and  has  no  reasonable 
allowance  made  for  complete  records. 
It  is  usually  printed  for  the  recording 
of  farm  loans  entirely.  For  a book 
which  is  really  the  heart  and  soul  of  the 
savings  bank,  the  ordinary  register  is 
very  meagre.  The  writer,  after  many 
attempts  to  find  a register  complete  for 


Digitize  t^ooQle 


THE  BANK  FOR  SAVINGS 


SAVINGS  BANKS 


807 


the  details  needed,  had  a register  made 
for  the  bank  with  which  he  is  connected, 
illustration  of  which  is  given  herewith. 
This  register  has  proved  so  successful, 
not  only  in  its  completeness,  but  also  in 
its  size  and  adaptibility  for  handlipg, 
that  a description  of  it  may  be  valuable 
to  other  banks. 

The  papers  generally  in  use  in  a 
mortgage  loan  and  necessary  for  the 
mortgagee  to  care  for,  are  abstracts  of 
title,  mortgage  deed,  insurance  papers, 
appraisal,  opinon  and  application.  The 
abstracts  of  title  give  the  legal  descrip- 
tion, plenty  of  room  for  which  should 
be  left  in  the  record.  Spaces  are  left 
for  the  appraiser’s  report,  usually  in- 
dependent of  whatever  report  may  be 
attached  to  the  application,  the  attor- 
ney’s opinion  of  the  title  and  finally 
the  mortgage  deed,  insurance  papers  and 
the  original  signed  application  for  the 


200 


Amount 


Seal  Eetatp  Hoait 


of 


O'g/fxr  QyW/S^  e£ 


car 


Oforr^Q  6k, 

PROPERTY 

(§>/ocA^ 

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o/fO&aTrfc- 


p«tad  Ff>  27W09 

27  m 

Intorost  at 


10 

!• 

% 


Land  Value 

l—f  w— *° 

ratal  . 


THE  BANK  FOR  SAVINGS 

IN  SEATTLE 


| C«.  " 

TMM  OUT 

•t  whom 

f MTumitO 

s 

Appraisal 

Applicaticn  

Insurance  Policies  . 
Mortgage  Deed 

s 

V 

S 

/*Udj  4 

/ *r 

y 

y 



Figure  2 


Loan  No... 


200 


Amount.. 


£ 


Ural  Estate  Coatt 

Of 


Interest  Payable 
Soml- Annually 
Doe.  I and  Juno  I 

at % 


THE  BANK  FOR  SAVINGS 

IN  SEATTLE 
Figure  3 


loan.  Enough  is  left  in  this  record  for 
a portion  of  the  most  valued  informa- 
tion to  be  obtained  from  these  papers, 
besides  an  itemized  list  of  coupon  notes 
and  dates  due  (when  coupon  notes  are 
used).  Thus,  at  a glance,  as  may  be 
seen  by  Figure  1,  the  whole  record  is 
present  in  its  entirety.  Plenty  of  room 
has  been  used  for  the  use  of  date  stamps 
and  for  the  use  of  such  other  stamps  as 
may  be  necessary.  In  recording  of 
deeds  there  is  room  provided  for  date, 
volume  and  page  in  the  county  records, 
so  that  in  case  of  question,  the  legal 
records  may  be  found  at  once.  The 
date  of  the  minutes  of  the  meeting  at 
which  loan  was  passed  upon,  also  the 
page  in  the  minutes,  has  a space,  this 
being  of  great  value  to  directors  or  ex- 
amining committees. 

Insurance  expirations  are  minutely 
kept  in  a record  book  on  record  cards, 
but  enough  is  given  here  to  enable  ex- 


Digitized  by  L^OOQle 


308 


THE  BANKERS  MAGAZINE 


pirations  to  be  looked  after.  The  check- 
ing of  the  actual  papers  received  is  also 
cared  for  on  the  document  file,  so  that 
papers  taken  out  may  be  entered  there- 
on and  also  the  date  of  their  return  (see 
Figure  2).  Notes  are  kept  separately 
in  note  files  similar  to  Figure  3. 

The  size  of  the  pages  of  the  book  in 
use  by  the  writer  are  12x22*4  inch,  100 
in  a volume,  allowing  seven  loans  to 
each  page  and  a space  1*4  inches  in 
width  to  each  loan.  The  sheets  are 
made  of  heavy  ledger  paper,  and  the 
whole  book  bound  in  heavy  linen.  This 
size  and  shape  makes  a long  book,  not 
too  heavy,  very  easy  to  read  and  easily 
referred  to  on  the  counter. 

The  mortgagee  enters  all  his  records 
at  once  when  the  loan  is  made  and  by 
dating  the  periods  at  which  interest  has 
been  paid  his  records  are  complete  at 
all  times  for  him  to  refer  to. 


NEW  YORK  SAVINGS  BANKS 
SHOW  LARGE  ‘GAINS 

TK7TTH  the  exception  of  the  year 
* * 1905,  when  the  net  gain  in  de- 

posits was  $93,775,724,  and  the  year 
1909,  when  the  gain  was  $87,006,167, 
the  year  ending  July  1,  1910,  shows  the 
largest  gain  in  deposits  the  New  York 
savings  banks  have  ever  known.  The 
deposits  for  the  twelve  months  amount 
to  $405,176,261.96,  of  which  $377,028,- 
477*96  was  paid  out,  leaving  an  increase 
over  the  counter  of  $28,147,784.00,  to 
which  was  added  by  the  automatic 
credits  of  dividends,  nearly  twice  as 
much,  $53,828,625.03,  making  the  total 
gain  $81,976,409.03. 

Of  the  total  amount  on  deposit  ($1,- 
526,955,581.84),  the  banks  of  New 
York  and  Kings  Counties  hold  over  two- 
thirds,  or  $1,043,472,069.50,  and  of  the 
net  gain  these  banks  furnished  $54,496,- 
910.61,  or  about  two-thirds. 

Out  of  the  142  banks  reporting, 
ninety-five  paid  four  per  cent.,  nine 
paid  three  and  one-half  and  four  per 
cent.,  ten  paid  three  and  four  per  cent., 
twenty-six  paid  three  and  one-half  per 
cent,  and  one  paid  three  per  cent., 
while  one  recently  started  did  not  de- 


clare its  first  dividend.  All  the  banks 
in  Kings  County,  of  which  there  are 
twenty-one,  paid  four  per  cent.,  while 
twenty-one  out  of  thirty-three  in  New 
York  paid  the  four  per  cent.  rate.  The 
reduction  in  the  dividend  rate  did  not 
have  such  disastrous  results  as  were  an- 
ticipated. The  five  banks  which  made 
the  cut  in  December,  thus  affecting  the 
subsequent  six  months’  business,  report 
deposits  for  the  half  year  of  $36,808,- 
017.06,  and  payments  of  $41,684,- 
870.78,  a loss  of  $4,876,853.72.  The 
largest  loss  was  $5,464,552,  while  two 
banks  made  quite  satisfactory  gains,  re- 
ducing the  loss  for  the  group  as  above 
stated. 

The  accounts  opened  during  the  year 
total  531,454,  and  those  closed  out, 
431,055,  a gain  of  100,399,  making  a 
total  “membership”  in  the  savings  banks 
of  2,886,910. 

Thus  far  the  high  cost  of  living  does 
not  seem  to  have  seriously  affected  the 
volume  of  business,  although  it  has 
doubtless  reduced  the  number  of  small 
deposits.  The  deposits  show  a gain  of 
$29,577,756  over  the  twelve  months  end- 
ing July  1,  1909,  and  $14,466,792  over 
the  year  1909,  while  the  withdrawals 
were  $16,095,560  more  than  from  July, 
’08,  to  July,  ’09,  and  $20,160,582  more 
than  for  the  year  1909  as  a whole, 
which  would  seem  to  indicate  that  the 
good  results  above  set  forth  have  come 
about  through  increased  deposits  that 
have  more  than  counterbalanced  the 
heavy  withdrawals. 

BIG  INCREASE  IN  SAVINGS  DE- 
POSITS 

■T\ESOURCES  of  the  142  savings 
banks  in  New  York  State  in- 
creased $88,488,767  during  the  year 
ending  July  1 last,  and  now  total  $1,- 
676,416,322,  according  to  the  statement 
of  Superintendent  Cheney  of  the  State 
Banking  Department.  The  number  of 
open  accounts  increased  by  100,396, 
while  the  amount  deposited  showed  an 
increase  of  $429,577,767  over  the  pre- 
vious year.  A shrinkage  of  values  in 
the  securities  market  caused  a conse- 
quent decrease  in  the  surplus  of  the 


Digitized  by  t^ooQle 


SAVINGS  BANKS 


309 


savings  banks  on  market  values  of 
stocks  and  bonds  of  $7,446,833.  De- 
posits exceeded  withdrawals  by  $88,- 
147,795. 


Brooklyn,  N.  Y.  August  2,  1910. 
Editor  Bankers  Magazine : 

Dear  Sir:  I have  for  several  years  been 
a depositor  in  the  East  Orange  Savings 
Bonk  in  New  Jersey.  The  book  bore  my 
name  and  that  of  my  daughter.  We  could 
each  withdraw  money  on  presenting  the 
book  the  signature  of  either  one  only  being 
required. 

Having  now  removed  to  Brooklyn  I am 
desirous  of  depositing  in  some  institution 
here  on  the  same  conditions  but  have  been 
refused  at  three  different  places.  We  are 
asked  to  sign  a contract  by  which  one  be- 
comes as  much  the  owner  of  the  funds  as 
the  other,  although  my  daughter  does  not 
propose  or  wish  to  make  any  deposits  or 
become  in  any  way  the  owner  of  the  money 
which  I deposit.  We  simply  wish  to  provide 
a way  to  draw  the  whole  or  part  when  it 
might  be  inconvenient  or  impossible  for  me 
to  do  so.  I am  told  that  such  a contract 
as  I have  named  is  necessary  to  protect 
the  bank  but  this  is  not  asked  for  in  at 
least  two  savings  institutions  in  New  Jer- 
sey as  I know  from  experience. 

C.  P.  B. 

Answerr  Savings  banks  in  New  York 
open  three  classes  of  accounts,  other 
than  accounts  with  societies  and  ac- 
counts under  order  of  court,  as  follows : 
(1)  Single  name  accounts,  payable  to 
the  individual  named  therein,  or  on  his 
order  in  writing,  or  upon  power  of  at- 
torney properly  executed;  at  death  the 
balance  is  payable  to  the  legal  reprer 
sentative;  (2)  joint  accounts,  payable 
to  either  during  life  and  the  balance  due 
at  death  belongs  to  and  is  payable  to  the 
survivor;  (3)  trust  accdhnts,  which  un- 
der a later  ruling  of  the  Court  of  Ap- 
peals come  under  the  rule: 

“A  deposit  by  one  person  of  his  own 
money  in  his  own  name  as  trustee  for 
another,  standing  alone,  does  not  estab- 
lish an  irrevocable  trust  during  the  life- 
time of  the  depositor.  It  is  a tentative 
trust  merely,  revocable  at  will,  until  the 
depositor  dies  or  completes  the  gift  in 
his  lifetime  by  some  unequivocal  act  or 
declaration,  such  as  delivery  of  the  book, 
or  notice  to  the  beneficiary.  In  case 
the  depositor  dies  before  the  beneficiary 
without  revocation,  or  some  decisive  act 


or  declaration  of  disaffirmance,  the  pre- 
sumption arises  that  an  absolute  trust 
was  created  as  to  the  balance  on  hand 
at  the  death  of  the  depositor."  Matter 
of  Totten,  179  N.  Y.  112. 

The  latter  account  gives  the  depositor 
absolute  control  of  the  money  during 
life  and  at  death  it  goes  to  the  bene- 
ficiary without  cost  or  delay.  Outside 
of  these  three  rules,  you  will  not  be  able 
to  find  a savings  bank  that  is  willing  to 
enter  into  special  agreement  with  you,' 
and  your  object  may  be  accomplished  in 
either  of  two  ways:  (A)  Open  a joint 
or  trust  account  in  the  name  of  yourself 
and  daughter  and  enter  into  agreement 
with  her  as  to  the  disposition  of  the 
fund  after  death,  with  which,  of  course, 
the  bank  will  have  nothing  to  do.  Or 
(B),  open  a single  name  account  and 
give  your  daughter  checks  as  you  need 
money,  or  better,  a power  of  attorney, 
which  will  give  her  the  right  to  draw 
any  or  all  at  will,  but  the  power  ceases 
at  your  death.  Judging  from  your  let- 
ter, the  latter  would  meet  your  case 
fully. 


THE  AMERICAN  ASSOCIATION  OF 
COMMERCE  AND  TRADE, 
BERLIN,  GERMANY 

THIS  organization,  an  American  Cham- 
ber of  Commerce,  was  founded  seven 
years  ago  by  Americans  and  is  run 
by  Americans  on  American  lines  for  the 
purpose  of  promoting  American  trade  with 
Germany  and  German  trade  with  the  United 
States.  It  is  prepared  to  assist  American 
firms  to  start  branches  in  Germany.  The 
organization  has  the  largest  and  most  com- 
plete American  reading-room  in  the  Empire, 
thirty  daily  American  papers  and  150  trade 
publications,  all  United  States  government 
reports  and  statistics,  all  the  directories  of 
the  leading  American  and  German  cities,  all 
the  principle  telegraph  codes,  all  of  which 
it  places  at  the  disposal  of  American  busi- 
ness men  and  American  travelers  visiting 
Berlin.  The  association  appeals  to  all  Amer- 
ican business  men  intending  to  do  business 
in  Germany  whether  temporary  or  perma- 
nent. It  deserves  the  unqualified  support 
of  American  business  firms,  as  it  can  help 
them  as  no  other  institution  or  commercial 
agency  can.  Information  given  regarding 
business  conditions  in  Germany,  agents 
found,  inquiries  answered  thoroughly  and 
satisfactorily  and  firms  actively  assisted  in 
establishing  branches  in  Germany. 


Digitized  by  t^ooQle 


FOREIGN  BANKING  AND  FINANCE 

Conducted  by  Charles  A.  Conant 


NEW.  CAPITAL  ISSUES  IN 
GERMANY 

A CCORDING  to  a compilation  made 
by  a leading  German  newspaper, 
the  amount  of  new  capital  applications 
in  Germany  for  the  first  half  of  1910 
were  $500,555,000,  par  value,  compared 
with  $568,235,000  for  a like  period 
last  year. 

In  Germany  it  is  a growing  practice 
for  the  banks  to  bring  out  securities 
without  public  subscriptions,  so  that  it 
is  not  possible  in  all  cases  to  obtain  the 
amount  of  the  issue  or  how  much  of  it 
has  been  taken  by  investors. 


BANKING  PROFITS  IN  GREAT 
BRITAIN 

REAT  BRITAIN  seems  to  be  hav- 
ing  a general  trade  revival,  which 
reflects  itself  in  added  profits  to  the 
banks.  Recent  reports  of  the  foreign 
trade  indicate  that  previous  high  rec- 
ords have  been  surpassed,  and  the  earn- 
ings of  industrial  and  railway  compa- 
nies have  lately  shown  marked  gains. 

Commenting  of  the  bankers’  profits 
for  the  first  half  of  1910,  the  London 
“Bankers'  Magazine’’  says  that  “The 
first  half  of  the  present  year  has 
proved  to  be  an  exceptionally  favorable 
one  for  bankers.  Throughout  the  period 
conditions  have  favored  their  opera- 
tions, and  in  every  department  they 
have  gained.’’  The  enhanced  prosperity 
of  the  banks  has  been  due  to  several  fac- 
tors. Money  rates  have  been  fairly 
maintained,  trade  has  steadily  revived, 
and  there  has  been  unusual  Stock  Ex- 
change activity. 


BRITISH  CAPITAL  INVESTMENTS 

l^OR  the  first  half  of  1910  British 
*“*  subscriptions  to  new  loans  and 
companies  reached  £139,000,000,  indi- 
cating a probable  total  of  £250,000,000 
for  the  entire  twelve  months.  Com- 


menting on  the  present  state  of  British 
investments,  “The  Statist”  (London) 
says: 

A few  years  ago  home  Government  and 
municipal  loans  were  made  on  a great  scale 
for  purposes  mainly  unproductive,  large 
sums  of  capital  were  also  subscribed  for 
British  railways,  and  the  outlays  upon  house 
building  were  of  vast  extent.  As  these  ex- 
penditures added  little  to  the  productive 
power  of  the  country,  they  gave  cause  for 
anxiety  lest  the  nation's  income  should  in 
future  grow  more  slowly  than  previously. 
But  in  recent  years  all  this  has  changed; 
borrowings  for  the  British  Government  for 
unproductive  purposes  have  stopped,  mu- 
nicipal loans  have  been  greatly  reduced,  our 
railways  have  discovered  new  methods  of 
operation  which  enable  them  to  deal  with 
their  growing  traffic  without  any  appre- 
ciable expenditure  of  new  capital,  ana  the 
expenditures  upon  new  houses  have  been 
reduced  to  what  is  necessary.  On  the  other 
hand,  capital  expenditures  for  purposes 
which  will  greatly  increase  the  income  of 
the  nation  are  now  greater  than  ever  before, 
our  reproductive  industries  are  rapidly  ex- 
panding, and  our  investments  in  other  coun- 
tries, the  income  from  which  will  give  us 
power  to  command  increasing  supplies  of 
primary  products,  have  never  been  greater 
than  they  now  are. 


THE  CREDIT  FONCIER  BANK 

HTHE  London  “Statist”  says  that  re- 
cently  the  Credit  Fonder  Bank 
held  a special  meeting  to  approve  of 
modifications  in  the  statutes  authorized 
by  the  Government.  Hitherto  the  bank 
has  been  authorized  to  receive  deposits, 
with  or  without  interest,  for  a sum  not 
exceeding  100  million  francs.  The  limit 
is  now  raised  to  125  millions.  The  cap- 
ital forming  the  guarantee  of  the 
mortgage  and  communal  bonds  issued  is 
fixed  at  200  million  francs,  and  the 
amount  of  bonds  in  circulation  must  not 
exceed  twenty  times  that  sum.  As  that 
limit  is  now  approached,  the  Govern- 
ment has  authorized  an  extension  to  250 
millions,  the  new  shares  to  be  created 
as  may  be  required.  By  the  statutes 
of  the  bank  the  capital  must  be  rep- 
resented one-fourth  at  least  by  Rentes 


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KNAUTH,  NACHOD  & KUHNE 


HEW  YORK 


LEIPZIG 


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Issue  Letters  of  Credit  and  Traveler’s  Checks 
Available  Everywhere 
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Interest  Paid  on  Deposits  Subject  to  Check 

■ ■ PRINCIPAL  CORRE8PONPENTS=  — 

ABROAD  IN  THE  UNITED  SPATES 


ABROAD 

Parr*s  Bank  (Limited)  Leaden 
Credit  Lyonnais,  Parle 
Dresdner  Bank,  Berlin 


Corn  Exchange  Bank*  New  York 
Philadelphia  National  Bank,  Philadelphia 
First  National  Bank,  Chicago 


Knanth.  Nachod  «fe  Kahne,  Leipzig  Crocker  National  Bank,  Nan  Francisco 


The  Elements  of  Foreign  Exchange 

BY  FRANKLIN  ESCHER 

A BOOK  FROM  WHICH  THE  MAN  WITHOUT 
TECHNICAL  KNOWLEDGE  CAN  POST  HIMSELF 


A short,  practical  treatise  on  foreign  exchange  designed  to  supply  the  need  for  a 
book  from  which  a working  knowledge  of  Foreign  Exchange  can  readily  be  obtained. 
Carefully  avoiding  technicalities  and  confusing  terms,  the  author  explains  his  subject 
in  language  so  simple  and  plain  that  it  can  be  understood  by  everybody. 

Why  exchange  rises  and  falls  as  it  does,  what  can  be  read  from  its  movements 
and  how  merchants  and  bankers  take  advantage  of  them,  the  effect  that  these  move- 
ments exert  on  the  other  markets — these  and  like  questions  are  taken  up  in  the  first 
part  of  the  book.  The  second  part  describes  intimately  the  practical  operation  of 
exchange  and  the  exchange  markets,  and  contains  special  chapters  on  arbitrage,  In- 
ternational trading  in  securities,  the  financing  of  export  and  imports,  gold  shipments, 
and  other  important  phases  of  the  subject. 

The  happy  combination  of  a thorough,  practical  training  in  foreign  exchange  and 
long  experience  in  lecturing  on  the  subject  at  New  York  University,  has  made  it 
possible  for  the  author  to  plan  and  write  his  book  in  such  a way  as  to  make  it  of  a 
great  value  both  to  the  practical  business  man  and  the  student. 

PRICE  $1.00  POSTPAID 


The  Bankers  Publishing  Company 


253  BROADWAY 


NEW  YORK 


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Gold  Production 
and  Future  Prices 

By  HARRISON  H.  BRACE 

The  important  question  which  bankers  and  other  business 
men  must  keep  in  mind  is  discussed  in  this  book.  Will 
the  recent  increased  production  of  gold  result  in  a further 
rise  in  prices?  Or  has  the  advance  spent  itself,  and  are  we 
at  the  beginning  of  a period  of  declining  or  stationary  prices? 

The  history  of  prices  is  examined  in  order 
to  ascertain  the  effects  of  previous  periods 
of  increased  gold  production. 


The  influences  which  have  served  to  aug- 
ment the  effects  of  the  recent  increased 
gold  production  and  the  important  counter- 
acting influences  are  considered. 


The  aim  of  this  book  is  to  marshal  and  discuss  all  the  facts 
which  may  throw  any  light  upon  the  future  course  of 
average  prices.  Beautifully  printed.  Just  issued  from  the 
press.  Price  $1.50  net. 


PUBLISHED  BY 

The  Bankers  Publishing  Company 

253  BROADWAY,  NEW  YORK 


Digitized  by  t^ooQle 


BANKING  LAW 


311 


or  other  Treasury  securities;  one-fourth 
at  most  by  the  buildings  of  the  com- 
pany’s offices,  loans  to  the  colonies  or 
protectorates,  or  by  securities  on  which 
the  Bank  of  France  is  authorized  to 
make  advances;  and  the  rest  by  mort- 
gage or  communal  loans,  continuations, 
or  advances  on  securities  which  the 
Bank  of  France  is  authorized  to  accept 
as  guarantee,  or  commercial  bills  with 
at  least  two  signatures  and  endorsed  to 
the  order  of  the  company.  The  pro- 
posed modifications  of  the  statutes  were 
adopted  without  dissent  by  the  meeting. 
The  chairman  stated  in  reply  to  ques- 
tions that  the  board  had  wished  to  raise 
the  limit  for  deposits  to  150  millions, 
but  the  Minister  of  Finance  refused  to 
authorize  more  than  125  millions.  In 
the  issue  of  the  new  shares  the  present 
proprietors  will  have  a right  of  priority. 


GENERAL  NOTES 

— It  is  estimated  by  the  Spanish  Minister 
of  Finance,  Senor  Cobian,  that  Spain’s  re- 
venues for  the  fiscal  year  1910-11  will 


be  $216,290,000  and  the  expenditures  $209,- 
170,000.  But  it  will  be  necessary  grad- 
ually to  issue  a loan  of  $16,200,000  of  three 
per  cent.  Treasury  bonds  to  cover  deficits 
in  the  revenues  of  the  two  preceding  fiscal 
years. 

— As  reported  by  the  Department  of  Fi- 
nance Japan’s  foreign  trade  for  the  first 
five  months  of  1910  amounted  to  377,703,459 
yen,  an  increase  of  41,120,022  yen  over  the 
same  period  last  year.  Net  imports  of  specie 
to  the  end  of  May  amounted  to  6,889,197  yen. 

— At  the  general  meeting  of  the  share- 
holders of  the  London  Joint  Stock  Bank, 
Ltd.,  held  at  Winchester  House,  July  28, 
the  directors  presented  a statement  which, 
after  certain  usual  deductions,  showed  a 
net  profit  of  £226,053  13s  lid.  for  the  cur- 
rent half-year.  Of  this  sum  £148,500  was 
applied  in  payment  of  a dividend  at  the 
rate  of  ten  per  cent  per  annum  on  the 
£2,970,000  of  the  bank's  paid-up  capital; 
£15,000  for  the  half-year’s  depreciation  in 
securities;  £5,000  in  reduction  of  premises 
account  and  a like  sum  to  the  credit  of 
superannuation  allowance  fund,  leaving 
£52,553  13s.  lid.  to  be  carried  forward  to 
the  new  profit  and  loss  account. 


BANKING  AND  COMMERCIAL  LAW 

Conducted  by  John  J.  Crawford,  Esq.,  Author  Uniform  Negotiable  Instruments  Act 


RECENT  DECISIONS  OF  INTEREST  TO  BANKERS 


CASHIER— POWERS  OF. 

PENSACOLA  BANK  AND  TRUST  CO. 
vg.  NATIONAL  BANK  OF  ST. 
PETERSBURG. 

SUPREME  COURT  OF  FLORIDA,  DIVISION  B, 
APRIL  2,  1910. 

A bank  dealing  with  the  cashier  of  an- 
other bank,  who  is  permitted  by  the  direc- 
tors to  have  complete  control  of  its  business 
relations  with  other  banks,  has  a right  to 
trust  in  the  integrity  of  the  cashier  of  the 
latter,  and  transact  business  with  him  ac- 
cordingly, where  there  is  nothing  in  the 
known  state  of  affairs  of  the  latter  bank,  or 
of  the  cashier’s  relation  to  it,  to  excite  sus- 
picion that  he  is  using  his  position  to  the 
prejudice  of  his  bank. 

S.  was  the  cashier  of  a bank  in  the  city  of 
P.,  and  was  permitted  by  the  directors  to 
have  complete  control  over  the  dealings  of 


his  bank  with  other  banks  and  of  its  mail. 
In  February,  1907,  he,  in  behalf  of  his  bank, 
entered  into  business  relations  with  a bank 
at  St.  P.,  by  which  his  bank  was  to  keep  a 
balance  of  $5,000  with  the  bank  of  St.  P., 
and  the  latter  would  receive  certain  collec- 
tions for  the  former  bank  and  credit  the 
same  to  bank  at  P.  A business  of  several 
thousand  dollars  a month  was  thus  carried 
on  between  the  two  banks,  including  the 
discounting  of  a note  by  one  of  the  stock- 
holders of  the  P.  bank,  which  was  finally 
charged  up  to  the  P.  bank  at  the  request  of 
S.  On  the  26th  of  July,  1907,  S.  wrote  the 
cashier  of  the  St.  P.  bank  inclosing  his  own 
note  for  $5,000,  accompanied  by  good  col- 
lateral, and  requested  that  his  note  be  dis- 
counted and  the  proceeds  placed  to  the 
credit  of  the  P.  bank.  This  was  done,  and 
on  September  11,  1907,  at  the  request  of  S., 
this  note  was  charged  up  to  the  P.  bank 
and  the  collateral  returned  to  it.  Regular 


Digitized  by  t^ooQle 


THE  BANKERS  MAGAZINE 


312 

monthly  statements  showing  these  and  all 
other  transactions  were  sent  by  the  St.  P. 
hank  to  the  P.  bank,  and  no  objection  to 
the  charging  of  S.’s  note  to  the  P.  bank  was 
made  until  the  latter  part  of  November, 
1907.  In  a suit  by  the  P.  bank  against  the 
St.  P.  bank  to  recover  the  amount  of  the 
$5,000  note  of  S.  which  was  charged  up  to 
the  P.  bank;  it  is  held  that  under  this  state- 
ment of  facts  the  P.  bank  is  not  entitled  to 
recover. 

(Syllabus  by  the  court.) 

HTHIS  was  an  action  to  recover  dam- 
ages  in  the  sum  of  ten  thousand 
dollars.  The  material  facts  are  stated 
in  the  official  syllabus  above. 

Hocker,  J.  (omitting  part  of  the 
• opinion) : It  is  insisted  by  the  plaintiff 
in  error  that  Scudamore  was  simply  the 
cashier  of  the  Pensacola  Bank,  and  an 
agent,  and  that  an  agent  cannot  bind  his 
principal  when  he  is  known  to  be  acting 
for  himself,  and  his  interest  is  adverse 
to  that  of  his  principal.  Several  cases 
are  cited  by  the  plaintiff  in  error  in 
which  this  principle  is  applied  to  the 
cashiers  and  presidents  of  banks. 

In  the  case  of  Hier,  Administrator, 
vs.  Miller,  Receiver,  68  Kan.  258,  75 
Pac.  77,  68  L.  R.  A.  952,  it  is  held  that 
a cashier  of  a bank  has  no  implied  au- 
thority to  pay  his  individual  debts  by 
entering  the  amount  of  them  as  a credit 
upon  the  passbook  of  his  creditor  who 
keeps  an  account  with  the  bank,  and 
permitting  the  creditor  to  exhaust  such 
account  by  checks  which  are  paid,  the 
bank  having  received  nothing  of  value  in 
the  transaction;  that  the  personal  inter- 
est of  the  cashier  was  sufficient  to  put 
the  creditor  on  notice;  and  that  he  was 
liable  to  the  bank  for  the  amount  he 
thus  received. 

In  the  case  of  Chrystie  vs.  Foster,  61 
Fed.  551,  9 C.  C.  A.  606,  the  principle 
is  applied  as  follows:  “C.,  in  order  to 
obtain  a credit  on  his  personal  account 
with  a bank  of  which  he  was  the  presi- 
dent, procured  the  defendants,  a bank- 
ing firm,  to  discount  his  individual  note, 
credit  the  amount  to  the  bank,  and  noti- 
fy the  bank  that  he  had  deposited  the 
amount  with  them  to  the  credit  of  the 
bank.  The  bank  had  previously  given 
C.  credit  for  the  amount,  and,  after 
being  notified  by  the  defendants  that 


the  deposit  had  been  actually  made  with 
them,  allowed  C.  to  overdraw  his  ac- 
count. Thereafter,  and  while  his  ac- 
count with  the  bank  was  overdrawn,  C., 
in  his  official  character  as  president,  au- 
thorized the  defendants  to  charge  the 
note  to  the  account  of  the  bank,  and  the 
defendants  did  so.  Held,  in  a suit  by 
the  receiver  of  the  bank  to  recover  the 
deposit,  that,  unless  expressly  author- 
ized to  do  so,  the  president  of  the  bank 
could  not  use  the  funds  of  the  bank  to 
pay  his  personal  obligation,  and,  there 
being  no  proof  of  such  express  authori- 
ty, the  authorization  given  by  him  to 
the  defendants  was  not  a defense  to  the 
claim.** 

An  examination  of  the  facts  of  that 
case  as  they  appear  in  the  opinion 
shows  them  to  be  different  from  those 
of  the  instant  case.  In  that  case  Col- 
lins was  president  of  the  Cheyenne  Na- 
tional Bank.  In  order  to  credit  himself 
with  $10,000  in  his  own  bank  for  his 
own  use,  he  procured  the  defendants,  a 
banking  firm  of  New  York,  to  take  his 
note  for  $10,000,  and  to  notify  his  bank 
he  had  deposited  with  them  that  amount 
to  the  credit  of  his  bank.  The  banking 
firm  did  so,  and  wrote  Collins*  bank: 
“Your  account  is  credited  this  day  $10,- 
000  for  use — J.  W.  Collins  with  you.** 

It  is  stated  that  the  defendants  knew 
Collins  was  representing  himself  and 
not  his  bank,  and  that  the  object  of  the 
transaction  was  to  give  Collins  a per- 
sonal credit  with  the  bank  for  $10,000. 
In  the  instant  case  the  evidence  does  not 
show  that  the  St.  Petersburg  Bank 
knew,  or  had  reason  to  believe,  that 
Scudamore  was  acting  for  himself  in 
having  his  personal  note  discounted  and 
placed  to  the  credit  of  his  bank. 

The  most  rational  conclusion  to  be 
placed  on  this  act  was  that  he  was  act- 
ing for  his  bank  and  lending  it  his  per- 
sonal credit  to  keep  up  the  balance  of 
$5,000  to  the  credit  of  his  bank  with  the 
St.  Petersburg  Bank,  as  he  had  promised 
to  do.  There  was  nothing  to  indicate 
to  the  latter  bank,  so  far  as  we  can  dis- 
cover, that  Scudamore  was  making  this 
transaction  a basis  for  taking  money 
out  of  the  Pensacola  Bank  or  of  getting 
personal  credit  with  it. 


Digitized  by  t^ooQle 


BANKING  LAW 


8 IS 


It  is  clear  from  the  evidence  that  no 
officer  of  the  Pensacola  Bank  ever  gave 
the  St.  Petersburg  Bank  any  such  in- 
formation either  by  letter,  statement,  or 
otherwise,  until  some  time  after  the 
Scudamore  note  had  been  charged  to 
the  Pensacola  Bank,  and  this  note  with 
its  collateral  security  had  been  returned 
to  the  Pensacola  Bank  or  its  cashier,  and 
the  money  derived  from  its  discount  had 
been  paid  out  on  the  order  of  the  Pensa- 
cola Bank,  and  a statement  rendered 
showing  these  facts,  and  no  timely  ob- 
jection was  made  to  the  transaction. 

In  the  case  of  Burton,  Receiver,  vs. 
Burley,  Receiver  (C.  C.)  13  Fed.  811, 
it  is  held  that  “where  the  president  of  a 
national  bank  instructed  its  correspond- 
ent bank  to  charge  up  against  the  bank 
of  which  he  was  president  the  amount 
of  a note  given  by  him  in  payment  of 
such  a note,  and  an  account  was  rendered 
showing  the  transactions,  the  bank  was 
estopped  from  denying  the  correctness 
of  the  charge  in4  an  action  by  a receiver, 
subsequently  appointed,  seeking  to  set 
aside  the  transaction/'  The  facts  in 
this  case  are  nearly  analogous  to  those 
of  the  instant  case. 

In  the  course  of  the  opinion  the  court 
says:  “What  security  can  there  be  in 
the  business  relations  between  banks  if 
accounts  of  this  kind  are  not  considered 
conclusive  and  binding  upon  the  respect- 
ive banks,  unless,  indeed,  there  is  a mis- 
take, or  it  can  be  shown  that  there  has 
been  a fraud  practiced  upon  the  bank 
against  which  the  charges  are  made,  and 
that  fraud  known  to  the  other  bank"  oi 
its  officers?  Unless  that  can  be  done, 
there  would  be  no  safety  in  the  transac- 
tions of  banks  with  each  other.  One 
bank  would  never  know  what  to  do  on 
instructions  given,  or  a charge  made. 
Here  is  an  individual  account  which  one 
bank  has  against  a particular  person. 
Another  bank  with  which  it  is  transact- 
ing business,  and  with  which  it  has  an 
account,  instructs  that  bank  to  charge 
this  individual  indebtedness  to  it.  The 
charge  is  made  and  the  account  is 
rendered  showing  it  is  done,  and  the 
bank  which  makes  the  charge  knows 
nothing  of  any  wrong  being  done,  or  of 


any  mistake  or  of  any  fraud  being  prac- 
ticed by  the  officers  of  the  bank.  That 
being  so,  it  must  foreclose  the  bank,  or 
else  banks  must  cease  doing  business 
with  each  other.  And  it  ought  to  be  so. 
Where  a bank  established  under  an  act 
of  Congress,  or  any  other  way,  elects  its 
own  officers,  the  men  who  are  interested* 
in  the  bank — the  stockholders,  the  de- 
positors— ought  to  be  bound  by  the  au- 
thorized acts  of  the  officers,  or  those 
which  appear  to  be  authorized,  whether 
they  are  or  not,  and  by  the  general 
usage  of  banks." 

In  the  case  of  Merchants'  Bank  vs. 
State  Bank,  10  Wall.  604,  the  Supreme 
Court  of  the  United  States  held  that: 
“Evidence  of  powers  habitually  exer- 
cised by  a cashier  of  a bank,  with  its 
knowledge  and  acquiescence,  defines  and  . 
establishes  as  to  the  public  those  powers 
provided  that  they  be  such  as  the  direc- 
tors of  the  bank  may,  without  violation 
of  its  charter,  confer  on  such  cashier." 

In  the  case  of  Chemical  Nat.  Bank  of 
New  York 'vs.  Armstrong  (C.  C.)  76 
Fed.  339,  it  is  laid  down  as  law  that  “a 
bank  dealing  with  the  chief  executive 
officer  of  another  bank  has  a right  to 
trust  in  his  integrity  and  transact  busi- 
ness with  him  accordingly;  there  being 
nothing  in  the  known  state  of  the  affairs 
of  his  bank  or  his  relations  to  it  to  ex- 
cite suspicion."  In  this  case  the  powers 
of  executive  officers  of  banks  are  dis- 
cussed, and  it  is  clearly  shown  that  they 
cannot  from  the  nature  of  the  business 
in  which  banks  are  engaged  be  always 
limited  by  the  rules  which  govern  ordi- 
nary agencies. 

The  facts  in  the  case  of  Aldrich  vs. 
Chemical  Nat.  Bank,  176  U.  S.  618,  20 
Sup.  C^t.  498,  44  L.  Ed.  611,  are  stated 
as  follows:  “H.,  as  vice-president  of  a 
Cincinnati  bank,  made  application  to  a 
New  York  bank  for  a loan  of  $300,000. 
The  request  was  granted  and  that 
amount  was  placed  to  the  credit  of  the 
Cincinnati  bank  upon  the  books  of  the 
New  York  bank.  Immediately  thereaf- 
ter H.  fraudulently  caused  himself  to  be 
personally  credited  upon  the  books  of 
his  own  bank  with  a like  sum  of  $300,- 
000.  The  action  of  H.  in  negotiating 


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314 


THE  BANKERS  MAGAZINE 


the  above  loan  with  the  New  York  bank 
was  unauthorized  by  the  board  of  di- 
rectors of  the  Cincinnati  bank;  but, 
after  the  arrangement  had  been  made, 
that  bank  drew  out  by  check  the  money 
that  had  been  placed  to  its  credit  by  the 
New  York  bank  and  used  the  same  in 
discharging  its  valid  obligations/’ 

On  these  facts  “it  is  held  that,  by  so 
using  the  money  obtained  from  the  New 
York  bank  by  H.  in  his  capacity  as 
vice-president,  the  Cincinnati  bank  be- 
came bound  to  account  for  the  same  as 
for  money  had  and  received,  and  could 
not  escape  liability  to  the  New  York 
bank  upon  the  mere  ground,  supposing 
it  to  be  true,  that  it  was  not  permitted 
by  its  charter  to  borrow  money. 

“The  fraud  perpetrated  by  H.  upon 
his  own  bank  in  having  himself  person- 
ally credited  upon  its  books  with  the 
amount  of  the  loan  was  a matter  with 
which  the  New  York  bank  had  no  con- 
nection, and  its  rights  to  recover  could 
not  be  affected  thereby.  The  liability 
of  the  Cincinnati  bank  rested  upon  the 
fact,  and  the  implied  obligation  arising 
therefrom,  that  that  bank  used  in  its 
business  and  for  its  benefit  the  money 
which  the  other  bank  placed  to  its  credit 
in  consequence  of  the  loan  negotiated 
by  H.,  who  assumed  to  represent  it.” 
(See  the  reasoning  of  Mr.  Justice  Har- 
lan in  the  opinion.) 

We  see  no  reason  why  the  rule  thus 
laid  down  should  not  be  applied  in  the 
instant  case.  The  greater  part  of  it,  if 
not  the  whole,  of  the  proceeds  of  the 
Scudamore  note  credited  to  the  Pensa- 
cola Bank,  were  used  by  the  latter  bank 
in  its  business,  and  we  can  see  no  reason 
why  it  should  again  recover  it  in  this  ac- 
tion. If,  instead  of  giving  his  own 
note  to  the  St.  Petersburg  Bank,  Scuda- 
more had  given  the  note  of  the  Pensaco- 
la Bank,  and  it  had  been  discounted  and 
the  proceeds  used  by  the  latter  bank,  we 
do  not  think  it  could  be  contended  that 
it  would  not  have  been  liable  on  the  note 
to  the  St.  Petersburg  Bank.  But  the 
result  is  just  the  same  as  if  this  had 
been  done. 

An  examination  of  the  cases  shows 
that  it  is  impossible  to  formulate  a defi- 


nition of  the  duties  of  a cashier  that 
will  be  applicable  to  all  cases.  (See 
Morse  on  Banks  & Banking  [4th  Ed.] 
pars.  151-180,  incl.)  He  is  said  to  have 
several  inherent  powers  (paragraph  153, 
supra),  among  them  the  power  to  bor- 
row money  on  behalf  of  the  bank,  and 
may  bind  the  bank  by  a promissory  note 
executed  therefor  (paragraph  160,  su- 
pra). Besides  his  inherent  powers, 
“he  may  be  authorized  to  act  for*  the 
bank,  by  the  organic  law,  by  action  of 
the  stockholders,  by  a vote  of  the  board 
or  their  verbal  order,  by  usage  and  tacit 
approval,  and  by  necessity  or  emergen- 
cy calling  for  action  manifestly  to  the 
interest  of  the  bank.”  Paragraph  165, 
supra. 

It  is  also  said  that  “if  the  directors 
have  for  many  years  allowed  the  cashier 
to  do,  without  interference,  all  the  busi- 
ness of  the  bank,  they  are  held  thereby 
to  have  conferred  upon  him  authority  to 
do  anything  and  everything  on  the  cor- 
porate behalf  which  the  charter  or  law 
does  not  absolutely  prohibit  and  forbid 
a cashier  to  do,  and  so  render  illegal 
under  all  circumstances.  If  the  cashier 
has  a power  so  wide  and  liberal  as  this, 
it  is  needless  to  prove  a usage  to  do  any 
particular  act  which  he  may  have  under- 
taken. . 4 

“If  the  act  does  not  fall  within  the  lim- 
its of  unavoidable  and  inherent  illegali- 
ty, it  is  valid  and  binds  the  bank,  though 
a precisely  similar  act  may  never  before 
have  been  undertaken  by  the  cashier 
since  the  creation  of  the  institution.” 
(Paragraph  165,  supra.)  It  is  evident 
from  the  testimony  in  the  instant  case 
that  the  directors  of  the  Pensacola  Bank 
gave  to  Scudamore  a very  wide  latitude 
in  managing  the  affairs  of  the  bank. 
He  seems  to  have  had  complete  control 
of  its  business  relations  with  other 
banks,  and  of  its  mail.  No  one  else 
seems  to  have  taken  any  interest  in  these 
matters. 

The  bookkeeping  also  seems  to  have 
been  entirely  under  his  control.  If  he 
used  the  latitude  thus  given  him  to  the 
prejudice  of  the  bank,  it  seems  to  us  it 
would  be  most  unjust  to  make  the  St. 
Petersburg  Bank  pay  for  the  negligence 


Digitized  by  t^ooQle 


BANKING  LAW 


315 


of  the  directors  of  the  Pensacola  Bank. 

Upon  a consideration  of  the  whole 
evidence  in  the  light  of  the  principles 
of  law  applicable  thereto,  a verdict  for 
the  plaintiff  could  not  lawfully  have 
been  rendered;  therefore,  the  court  did 
not  err  in  directing  a verdict  for  the 
defendant.  (See  Wade  vs.  Louisville  & 
N.  R.  Co.,  54  Fla.  277,  45  South.  472; 
Bass  vs.  Ramos,  58  Fla.  — , 50  South. 
945.) 

The  judgment  is  affirmed. 


GUARANTY  OF  INDORSEMENTS 
—EFFECT  OF— RECOVERY  OF 
MONEY  PAID . 

NEW  YORK  PRODUCE  EXCHANGE 
BANK  vs.  TWELFTH  WARD  BANK. 

SUPREME  COURT  OF  NEW  YORK,  APPEL- 
LATE DIVISION,  FIRST  DEPARTMENT. 

The  words  “endorsements  guaranteed” 
placed  upon  the  back  of  a check  is  equiva- 
lent to  a guaranty  of  the  genuineness  of  the 
whole  of  the  instrument,  including  the  in- 
dorsements, excepting  only  the  signature  of 
the  drawer. 

The  drawee  is  entitled  to  rely  upon  such 
guaranty,  and  owes  the  guarantor  no  duty 
to  make  an  investigation. 

Mere  lapse  of  time  in  discovering  the 
fraud  constitutes  no  defense  in  discovering 
the  fraud. 

CCOTT,  J.:  This  is  an  appeal  by 

^ plaintiff  from  a judgment  in  favor 
of  defendant  upon  the  verdict  of  a jury. 
Although  there  is  no  certificate  that  the 
case  contains  all  the  evidence  the  excep- 
tions are  ample  to  raise  all  the  questions 
it  is  necessary  to  consider.  . 

The  action  is  to  recover  the  amount 
paid  upon  an  altered  check  under  a mis- 
take of  fact.  The  evidence  tended  to 
show  the  following  state  of  facts: 

The  firm  of  S.  & W.  Bauman,  on  No- 
vember 24,  1906,  drew  its  check  on 
plaintiff,  in  favor  of  E.  Jacob  & Co.,  for 
$5.69*  On  December  3,  1906,  that 
check  was  deposited  in  defendant  bank 
to  the  credit  of  Alexander  Seidman,  a 
customer.  When  so  deposited  the  check 
had  been  raised  to  $2,105.90;  the  date 
had  been  altered ; the  name  of  the  payee 
had  been  erased  and  the  name  of  Wil- 
liam Seidman  written  in  as  payee,  and 


the  check  indorsed  by  William  Seidman 
and  Alexander  Seidman. 

The  plaintiff  bank  paid  the  amount  of 
the  check  as  raised  through  the  Clearing 
House  and  received  back  the  check  with 
the  following  indorsement  upon  it 
signed  by  defendant:  “Received  pay- 
ment through  New  York  Clearing 
House,  December  3,  1906.  * * * 

Endorsements  guaranteed/'  Under  the 
authorities  this  was  equivalent  to  a guar- 
anty of  the  genuineness  of  the  whole  of 
the  instrument,  including  the  indorse- 
ments, excepting  only  the  signature  of 
the  drawer,  and  in  case  of  forgery  ren- 
dered the  defendant  liable  prima  facie 
to  refund  to  plaintiff  the  amount  re- 
ceived on  the  check  on  the  ground  that 
the  payment  had  been  made  under*  a 
mistake  of  fact.  (White  vs.  Continen- 
tal Nat.  Bank,  64  N.  Y.  319;  Metropoli- 
tan Nat.  Bank  vs.  Loyd,  90  id.  535; 
Corn  Exchange  Bank  vs.  Nassau  Bank, 
91  id.  74.)  It  was  the  custom  of  S.  & 
W.  Bauman  to  have  their  bank  book 
balanced  monthly  and  when  they  re- 
ceived back,  about  January  1,  1907,  the 
checks  paid  out  by  plaintiff  during  De- 
cember, they  discovered  the  altered 
check,  and  on  January  2,  1907,  notified 
plaintiff,  who  at  once  notified  defend- 
ant and  demanded  repayment  of  the 
amount  received  on  the  check.  Seidman 
meanwhile  had  drawn  down  his  balance 
in  defendant  bank. 

There  is  nothing  in  the  evidence,  so 
far  as  contained  in  the  case  on  appeal, 
to  suggest  that  the  plaintiff  bank  failed 
in  any  respect  in  the  diligence  it  owed 
to  defendant.  It  was  entitled  to  rely 
upon  the  guaranty  of  the  defendant  as 
to  the  genuineness  of  the  check,  and  in 
the  absence  of  notice  of  its  alteration  it 
owed  defendant  no  duty  to  make  an  in- 
vestigation. It  appears  that  it  did  noti- 
fy defendant  as  soon  as  it  received  no- 
tice of  the  forgery,  and  it  is  not  sug- 
gested, except  in  the  charge  of  the 
court,  that  plaintiff  failed  to  communi- 
cate to  defendant  any  information  re- 
ceived from  Bauman.  It  was  also  erro- 
neous to  charge  that  if  Bauman  had 
knowledge  of  facts  sufficient  to  have 
warranted  a person  of  ordinary  care 
and  prudence  of  suspecting  that  there 


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316 


THE  BANKERS  MAGAZINE  • 


was  something  wrong  about  the  check  it 
was  his  duty  to  have  stopped  payment 
on  the  check.  Bauman  owed  no  such 
duty  to  defendant,  and  if  he  had  there  is 
enough  in  the  case  to  show  that  the  only 
charge  of  lack  of  care  in  this  regard  was 
based  upon  the  fact  that  the  check,  al- 
though drawn  on  November  24,  was  not 
returned  to  Bauman  with  the  checks 
paid  in  November. 

No  duty  of  extraordinary  vigilance 
rested  either  upon  plaintiff  or  Bauman, 
and  mere  lapse  of  time  in  discovering 
the  fraud  constitutes  no  defense.  (Corn 
Exchange  Bank  vs.  Nassau  Bank,  su- 
pra; Frank  vs.  Lanier,  91  N.  Y.  112.) 
The  case  was  submitted  to  the  jury  un- 
der instructions  which  left  as  the  crucial 
point  in  the  case  the  supposed  negli- 
gence of  S.  & W.  Bauman,  the  drawers 
of  the  check.  This  was  wholly  foreign 
to  the  real  issues  in  the  case  and  may 
easily  have  ^influenced  the  verdict. 

The  judgment  should  be  reversed  and 
a new  trial  granted,  with  costs  to  the  ap- 
pellant to  abide  the  event. 

Ingraham,  McLaughlin,  Clarke  and 
Houghton,  JJ.,  concurred. 


PRESENTMENT  OF  DRAFT  FOR 
PAYMENT— EFFECT  OF  RE- 
TENTION BY  DRAWEE . 

FIRST  NATIONAL  BANK  OF  OMAHA 
vs.  WHITMORE. 

UNITED  STATES  CIRCUIT  COURT  OP  AP- 
PEALS, EIGHT  CIRCUIT  MARCH  5,  1910. 

.The  provision  of  the  Negotiable  Instru- 
ments Law  that  “where  a drawee  to  whom  a 
bill  is  delivered  for  acceptance  destroys  the 
same  or  refuses  within  twenty-four  hours 
after  such  delivery  or  within  such  other 
period  as  the  holder  may  allow  to  return 
the  bill  accepted  or  non-accepted  to  the 
holder,  he  will  be  deemed  to  have  accepted 
the  same,”  applies  only  to  such  instruments 
as  are  by  their  terms  negotiable. 

r | SHIS  provision  of  the  act  does  not 
apply  where  the  paper  presented 
and  withheld  or  destroyed  has  been  pre- 
sented for  payment. 

Appeal  from  the  District  Court  of 
the  United  States  for  the  District  of 
Nebraska. 


In  the  matter  of  the  bankruptcy  pro* 
ceedings  of  William  J.  Crandall.  From 
an  order  affirming  the  disallowance  of  & 
claim  by  the  First  National  Bank  of 
Omaha,  on  objection  of  Howard  J. 
Whitmore,  trustee,  the  bank  appealed. 
Affirmed. 

Before  Hook  and  Adams,  C.«7.«/.,  and 
Carland,  D.J. 

Carland,  D.J.:  The  appellant  filed 
a claim  against  the  state  of  William  J. 
Crandall,  a bankrupt,  amounting  to 
$9*000.  The  foundation  of  this  claim 
was  four  drafts  drawn  by  one  Mc- 
Whorter upon  Crandall  and  deposited 
by  the  former  for  credit  with  the  ap- 
pellant, which  forwarded  them  by  mail 
to  the  Citizens*  Bank  at  Firth,  Neb., 
of  which  Crandall  was  president,  for 
collection  and  return.  The  appellant 
gave  McWhorter  credit  for  the  amount 
of  the  draft.  The  Citizens*  Bank  re- 
ceived the  drafts ; but  Crandall,  its  pres- 
ident, about  the  time  the  drafts  were 
received,  absconded.  The  drafts  were 
not  returned  to  appellant,  and  what  be- 
came of  them  does  not  appear  from  the 
record.  The  appellant  claims  that  un- 
der the  law  of  Nebraska  these  drafts 
must  be  deemed  to  have  been  accepted 
by  Crandall,  and  that  his  estate  is  liable 
for  the  amount  of  the  same. 

This  claim  of  appellant  is  based  upon 
section  136  of  what  is  known  as  the 
“Negotiable  Instruments  Law,**  of  Ne- 
braska. Comp.  St.  1909,  c.  41,  art.  10. 
The  section  referred  to  reads  as  fol- 
lows: 

“Where  a drawee  to  whom  a bill  is 
delivered  for  acceptance  destroys  the 
same  or  refuses  within  twenty-four  hours 
after  such  delivery  or  within  such  other 
period  as  the  holder  may  allow  to  return 
the  bill  accepted  or  nonaccepted  to  the 
holder,  he  will  be  deemed  to  have  ac- 
cepted the  same.** 

So  far  as  the  character  of  the  drafts 
are  concerned  and  their  mode  and  pur- 
pose of  delivery  to  Crandall,  the  burden 
of  proof  was  upon  appellant  to  show 
that  they  were  negotiable  and  were  de- 
livered to  Crandall  for  acceptance.  We 
find  it  unnecessary  to  determine  whether, 
under  the  facts  appearing  in  the  record. 


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BANKING  LAW 


SIT 


there  was  a destruction  of  the  drafts,  or 
a refusal  to  return  the  same  accepted  or 
nonaccepted,  by  Crandall,  within  the 
meaning  of  section  1S6  herein  quoted, 
for  the  reason  that  we  are  of  the  opin- 
ion that  appellant  failed  to  sustain  the 
burden  of  proof  imposed  upon  it  in 
showing  that  the  drafts  were  negotiable 
paper  of  the  nature  and  kind  that  could 
be  presented  for  acceptance,  or  that 
they  were  actually  delivered  to  Crandall 
for  acceptance.  There  were  introduced 
in  evidence,  at  the  hearing  before  the 
referee,  letters  of  transmittal  which  ap- 
pellant claims  were  exactly  similar  to 
the  letters  used  in  transmitting  the 
drafts  in  question  to  the  Citizens’  Bank. 
In  these  letters  the  following  language 
is  used: 

44 We  inclose  the  following  for  collec- 
tion and  returns  in  Omaha  or  Eastern 
exchange.” 

On  the  deposit  slip  issued  to  Mc- 
Whorter by  appellant,  when  the  former 
was  credited  with  the  amount  of  the 
drafts  by  the  appellant,  is  the  following 
statement:. 


“For  drafts  and  checks  credited  or 
taken  as  collections,  this  bank  acts  only- 
as  agent,  and  assumes  no  liability  on 
them,  nor  on  drafts  in  payment  for 
them.” 

The  conclusion  is  irresistible  that  the 
appellant  simply  took  the  drafts  for  col- 
lection ; that  they  were  sight  drafts,  and 
were  delivered  to  Crandall  for  payment,, 
and  not  for  acceptance.  Presentment 
for  payment  and  presentment  for  ac- 
ceptance are  two  different  acts,  well 
known  to  the  law  of  negotiable  instru- 
ments. Presentment  for  payment  can- 
not be  made  until  the  instrument  pre- 
sented for  payment  is  due.  Present- 
ment for  acceptance  must  be  made  be- 
fore the  instrument  presented  for  ac- 
ceptance is  due. 

We  do  not  think  that  the  appellant 
has  brought  itself  within  said  section 
136,  herein  quoted,  in  the  particular* 
specified,  and  therefore  the  decree  ap- 
pealed from  must  be  affirmed. 

And  it  is  so  ordered. 

Hook,  CJ .,  dissents. 


NOTES  ON  CANADIAN  CASES  AFFECTING  BANKERS 

[Edited  by  John  Jennings,  B.A..  L.L.B.,  Barrister,  Toronto] 


SURETYSHIP  — SIMPLE  CON- 
TRACT-DISCHARGE OF  ONE 
SURETY  UNDER  SEAL— CON- 
FIRMATION OF  ORIGINAL 
GUARANTEE  — DEATH  OF 
SURETY— POWERS  OF  EXECU- 
TORS — CONTINUANCE  OF 
GUARANTEE. 

THE  UNION  BANK  OF  CANADA  VS.  JANE  E. 
CLARK  AND  ALEXANDER  GRAY  FAR- 
RELL, EXECUTORS  OF  JAME8 
MAITLAND  CLARK  (43  S. 

C.  R.  299). 

Clark  and  others  by  writing  not  under 
seal,  agreed  to  guarantee  payment  of  ad- 
vances by  a bank  to  a company.  Later  by 
writing  under  seal,  all  the  sureties  but  one 
consented  to  discharge  the  latter  from  lia- 
bility under  the  guarantee,  the  document 
providing  that  the  parties  did  in  every 
respect  “ratify  and  confirm  the  said  guar- 
antee and  consent  to  be  bound  thereby  as 
if  the  said  Ogle  Carss  had  never  been  a 
party  thereto.*’ 


Held,  that  the  last  mentioned  instrument' 
did  not  convert  the  original  guarantee  into 
a specialty  and  Clark  having  died  an  action 
thereon  by  the  bank  against  his  executors- 
instituted  more  than  six  years  after  his 
death  was  barred  by  the  Statute  of  Limita- 
tions. 

Held,  per  Davies,  Idington,  and  Duff, 
J.J.,  that  the  executors  had  no  power  to 
continue  the  guarantee  terminated  at 
Clark’s  death  by  consenting  to  an  exten- 
sion of  time  for  payment  of  the  amount 
then  due  notwithstanding  the  provision  in 
the  guarantee  that  it  was  to  be  continuing 
and  that  the  doctrines  of  law  and  equity 
in  favor  of  a surety  should  not  apply 
thereto. 

PPEAL  from  a decision  of  the 
Court  of  Appeal  for  Ontario  af- 
firming the  judgment  at  the  trial  by 
which  the  action  of  the  plaintiff  bank 
was  dismissed. 

The  material  facts  are  stated  above. 

Judgment  (Girouard,  Davies,  Id- 
ington, Duff  and  Anglin,  J.J.):  The* 


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318 


THE  BANKERS  MAGAZINE 


following  is  taken  from  the  judgment 
of  Mr.  Justice  Davies: 

The  question  in  this  appeal  is  as  to 
the  liability  of  the  estate  of  the  late 
James  Clark  for  the  sum  of  $28,450, 
due  to  the  bank  by  the  Perrin  Plow  Co., 
Ltd.,  at  the  time  of  Clark's  death  and 
for  which  he  was  liable  as  guarantor. 

The  guarantee  as  given  by  Clark  and 
four  other  shareholders  of  a company 
called  the  Perrin  Plow  Co.,  Ltd.,  to  the 
bank,  in  the  year  1898.  It  was  very 
loosely  and  carelessly  drawn  and  it  is 
exceedingly  difficult  to  determine  just 
what  it  means.  But  it  was  a continuing 
guarantee  for  advances  made  to  the 
Plow  Co.  by  the  bank  either  by  dis- 
counting negotiable  securities  or  by 
overdrafts.  It  contained  this  sentence: 

This  is  a continuing  guarantee  intended 
to  cover  any  number  of  transactions,  and 
agree  (sic)  that  the  said  bank  may  deal 
or  compound  with  any  of  the  parties  to 
the  said  negotiable  securities,  and  take  from 
and  give  up  to  them  again  security  of  any 
kind  in  their  discretion,  and  that  the  doc- 
trines of  law  or  equity  in  favor  of  a surety 
shall  not  apply  hereto. 

There  was  nothing  to  indicate  that 
the  guarantors  were  to  be  or  become 
primary  debtors,  and  the  only  meaning 
I can  put  upon  the  above  sentence  read 
in  conjunction  with  the  other  parts  of 
the  guarantee  is  that  in  dealing  with  or 
compounding  with  the  parties  to  the  ne- 
gotiable securities  they  discounted  for 
the  Plow  Co.  they  could  “deal  or  com- 
pound" and  take  from  and  give  up  to 
them  again  security  of  any  kind  in  their 
discretion,  and  in  so  doing  or  acting 
the  law  or  equity  in  favor  of  a surety 
should  not  apply  to  discharge  the  surety. 
But  I cannot  construe  the  sentence  to 
have  any.  such  wide  meaning  as  the  ap- 
pellant contends  for,  namely,  that  it  ab- 
solutely disclaimed  the  application  of 
all  rules  of  law  or  equity  to  the  dealings 
between  the  bank  and  its  guarantors  and 
gave  the  bank  plenary  powers  of  extend- 
ing the  times  for  payment  without 
prejudice  to  its  rights  as  against  the 
guarantors.  Subsequently  to  the  giving 
of  this  guarantee  one  of  the  guarantors 
desired  to  be  released,  and  a document 
was  drawn  up  and  signed  by  the  other 
guarantors,  “ratifying  and  consenting" 


to  his  discharge  and  confirming  the  said 
original  guarantee  and  consenting  to  be 
bound  thereto  as  if  the  said  Ogle  Carss 
had  never  been  a party  thereto. 

The  obvious  and  only  intent  of  this 
document  which  had  seals  attached  was 
to  discharge  one  of  the  original  guaran- 
tors upon  the  original  guarantee.  It 
was  not  to  create  any  new  or  extended 
or  varied  guarantee  and  whatever  object 
there  may  have  been  in  attaching  seals 
to  it  I cannot  assent  to  the  proposition 
that  its  effect  was  to  transform  the  orig- 
inal guarantee  into  a specialty  or  other- 
wise to  vary  or  alter  it  further  than  dis- 
charging Carss  might  have  such  effect. 

In  January,  1900,  Clark  died,  having 
made  a will  appointing  the  respondents 
executors  and  trustees.  On  February 
28,  1&00,  an  agreement  was  entered  into 
under  seal  between  the  executors  of  the 
first  part,  Brodie,  La  veil  and  Patterson, 
the  surviving  guarantors  of  the  second 
part,  and  the  Union  Bank  of  the  third 
part,  by  which  the  executors  agreed 
inter  alia  to : 

consent  to  renewal  from  time  to  time  as 
may  be  desired  of  all  notes  of  the  Perrin 
Plow  Company,  Limited,  in  existence  at  the 
time  of  the  death  of  the  said  James  Maitland 
Clark,  deceased,  given  under  the  aforesaid 
guarantee  and  to  an  extension  of  time  for 
the  payment  of  same  and  the  interest  there- 
on, and  to  the  carrying  on  of  the  same 
according  to  the  requirements  of  the  busi- 
ness of  the  said  company  until  six  months 
after  notice  in  writing  withdrawing  consent 
to  further  extension  is  given  to  said  bank 
by  said  executors. 

The  bank  evidently  assuming  and, 
from  the  correspondence  put  in  evi- 
dence, construing  this  agreement  as  a 
continuing  guarantee,  not  only  for  ad- 
vances made  to  the  Perrin  Plow  Com- 
pany, Ltd.,  in  Clark's  lifetime,  but  for 
further  advances  to  be  made  after  his 
death,  until  his  executors  called  a halt 
by  “giving  six  months’  notice  withdraw- 
ing consent  to  further  extension,"  went 
on  advancing  to  the  Plow  Company 
from  $28,500,  which  amount  that  com- 
pany owed  the  bank  at  Clark’s  death,  up 
to  $298,334  in  March,  1907,  when  it 
was  wound  up. 

The  question  on  this  agreement  for 
our  purposes  is  whether  or  not  the  ex- 
ecutors had  any  power  whatever  to  bind 


Digitized  by  t^ooQle 


BANKING  LAW 


319 


the  estate  in  the  way  they  attempted  to 
do  by  agreeing  to  the  continuance  of  the 
business  of  the  Perrin  Plow  Company 
and  the  continuance  of  Clark’s  guar- 
antee and  liability  for  the  notes  in  ex- 
istence at  his  death  guaranteed  by  him, 
and  to  an  indefinite  extension  of  time 
for  payment  of  such  notes  until  they 
should  by  six  months’  notice  put  an  end 
to  such  extension. 

They  had  no  power  as  executors  to 
bind  the  estate  by  agreeing  to  “the  car- 
rying on  of  the  same,”  that  is  of  the 
negotiable  securities  guaranteed  by  the 
testator,  “according  to  the  requirements 
of  the  business  of  the  company.”  Such 
a delegation  of  powers  to  third  parties 
to  extend  the  liabilities  of  the  estate 
was  of  course  illegal.  It  practically 
placed  the  estate  at  the  mercy  of  the 
Perrin  Plow  Company.  It  attempted 
not  only  to  continue  and  extend  the  lia- 
bility of  the  estate  practically  for  an 
indefinite  time,  but  made  that  contin- 
uance and  extension  dependent  “upon 
the  requirements  of  the  business  of  the 
company.” 

It  was  not  an  attempted  exercise  of 
the  reasonable  but  limited  powers  ex- 
ecutors may  possess  of  extending  time 
for  payment  of  debts  due  the  estate.  It 
was  a delegation  of  their  judgment  as 
executors  as  to  the  priority  of  giving  an 
extension  of  time  for  payment  of  a debt 
guaranteed  by  the  testator  to  the  pri- 
mary debtor  to  be  exercised  by  such  pri- 
mary debtor  as  the  requirements  of  its 
business  called  for. 

The  liability  of  the  estate  as  guaran- 
tor for  the  payment  of  the  $28,500  was 
attempted  to  be  pledged  as  a credit  asset 
of  the  Plow  Company  to  the  bank  in  the 
interest  and  for  the  benefit  of  that  Plow 
Company,  and  to  be  used  “according  to 
the  requirements  of  that  company.”  It 
was  not  the  interests  of  the  estate  but 
of  the  primary  debtor  and  its  creditor 
the  bank  that  were  considered. 

There  was  no  power  of  any  kind  in 
the  will  to  enable  the  executors  to  carry 
on  Clark’s  business  or  to  enter  into  any 
arrangement  for  the  continuance  of  his 
guarantee  and  the  extreme  stretch  of 
the  reasonable  common  law  powers  of 
executors  entitling  them  where  the  busi- 
2 


ness  of  the  deceased  is  a valuable  asset 
to  carry  it  on  for  such  reasonable  time 
as  may  be  necessary  for  them  to  sell  it 
as  a “going  concern.” 

The  executors’  duty  was  to  wind  up 
the  testator’s  business  and  estate,  not  to 
enter  into  an  agreement  to  continue  a 
business  in  which  the  testator  only  had 
a collateral  interest  or  to  continue  in- 
definitely their  testator’s  guarantee  of 
a debt  owed  by  a limited  business  com- 
pany to  a bank.  Such  an  agreement 
was  quite  beyond  their  powers  and,  as 
against  the  estate,  void.  Its  disastrous 
consequences  are  of  course  apparent 
now,  but  they  might  well  have  been  an- 
ticipated. The  bank,  strangely  enough, 
without  appearing  to  have  taken  proper 
advice  went  on  enlarging  enormously 
their  advances  to  the  Plow  Company, 
and  treated  as  an  asset  of  that  company 
under  the  executors*  agreement  the  tes- 
tator’s guarantee  for  at  any  rate  the 
amount  of  the  company’s  indebtedness 
at  his  death,  however,  many  extensions 
were  given  in  the  interests  of  the  pri- 
mary debtor  for  its  payment. 

To  hold  valid  and  binding  on  the 
estate  such  an  agreement  as  that  by 
which  the  executors  of  the  estate  of  a 
deceased  party  could  put  the  estate  into 
the  melting  pot  of  a precarious  and 
speculative  business  would  be  indeed  to 
add  to  a new  terror  of  death. 

My  conclusions  are  that  the  judgment 
of  the  Court  of  Appeal  is  right ; that  the 
original  guarantee  was  not  altered  in 
form  or  character  by  the  document  en- 
tered into  subsequently,  releasing  one  of 
the  guarantors ; that  the  agreement 
signed  by  the  executors  while  good  to 
the  extent  of  the  admission  of  the 
amount  of  the  debt  existing  at  Clark’s 
death,  was  bad  in  so  far  as  it  attempted 
to  bind  the  estate  in  the  carrying  on  of 
the  business  of  the  company  with  the 
aid  of  the  continued  and  continuing  lia- 
bility and  guarantee  of  the  estate;  that 
these  varied  and  prolonged  extensions 
discharged  the  estate  from  any  further 
liability  on  the  testator’s  guarantee,  and 
that  in  any  event  and  whether  they  did 
or  not  so  discharge  the  estate  the 
Statute  of  Limitations  is  a bar  to  the  re- 
covery of  the  only  claim  the  bank  seeks 


Digitized  by  t^ooQle 


320 


THE  BANKERS  MAGAZINE 


to  enforce,  namely,  the  payment  of  the 
$28,500  due  on  Clark's  guarantee  at  the 
time  of  his  death  as  admitted  by  the 
executors. 

The  appeal  should  be  dismissed  with 
costs. 

PROMISSORY  NOTE  — INCOM- 
PLETE INSTRUMENT  — DE- 
LIVERY-HOLDER IN  DUE 
COURSE  — BILLS  OF  EX- 
CHANGE ACT,  SECS . 31,  32— 
LEAVE  TO  APPEAL. 

HUBBARD  VS.  HOME  BANK  OF  CANADA 

(20  O.  L.  R.,  651). 

Where  a document  in  the  form  of  a 
promissory  note,  but  “wanting”  in  some 
“material  particular,”  is  not  “delivered  in 
order  that  It  may  be  converted  into”  a 
promissory  note,  payment  cannot  be  en- 
forced against  the  maker,  even  by  a holder 
in  due  course,  under  Secs.  31  and  32  of 
the  Bills  of  Exchange  Act. 

'T^HE  plaintiff  was  a depositor  in  the 
savings  department  of  the  Home 
Bank  of  Canada,  Church  Street  branch. 
On  December  4,  1908,  the  plaintiff  had 
to  his  credit  in  the  said  bank  a sum  ex- 
ceeding $440.50. 

About  October  1,  1908,  one  W.  G. 
Stirton,  who  represented  himself  to  be 
an  agent  for  the  Canada  Life  Assurance 
Co.,  canvassed  the  plaintiff  and  endeav- 
ored to  persuade  him  to  make  an  appli- 
cation for  insurance  upon  his  life.  The 
result  was  that  a blank  form  of  promis- 
sory note  was  presented  by  Stirton  and 
signed  by  the  plaintiff.  The  form  was: 


$....  190.. 

After  date promise 

to  pay  to  the  order  of 

dollars 

at  

value  received. 


No due. 

The  plaintiff  will  not  say  that  the 
blank  form  was  not  in  part  filled  up 
when  he  put  his  name  upon  it.  Writing 
may  have  been  on  it  to  the  extent  of  the 
following: 

$440.50  October  1,  1908. 

December  1.  After  date  I promise  to 

pay  to  the  order  of  myself dollars 

at  

value  received. 


That  is  as  far  as  the  plaintiff  would 
say.  There  was  no  more,  if  so  much, 
upon  the  form,  when  the  plaintiff 
signed. 

There  was  some  question  about  the 
plaintiff's  signature  upon  the  back  of 
the  form.  The  evidence  established 
that  both  signatures,  the  one  as  maker 
and  the  one  as  indorser,  are  the  hand- 
writing of  the  plaintiff.  This  paper 
was  left  with  Stirton  upon  the  under- 
standing and  condition  that  nothing  was 
to  be  done  with  it  until  and  unless  the 
plaintiff  passed  the  requisite  medical 
examination  by  the  company's  medical 
man  for  the  purpose.  If  the  plaintiff 
presented  himself  for  examination  and 
was  passed,  then  the  paper  signed  by 
the  plaintiff,  as  representing  the  first 
premium  upon  the  life  assurance,  would 
be  taken  up.  The  plaintiff  said  he 
would  give  his  check  for  it,  and  there  is 
no  question  that  the  amount  to  be  paid 
was  $440.50.  Almost  immediately  after 
the  interview  between  the  plaintiff  and 
Stirton,  the  plaintiff,  upon  reflection 
and  upon  consultation  with  Mr.  Cox, 
thought  he  could  not  afford  to  carry  so 
large  an  amount  of  insurance,  and  he 
did  not  present  himself  for  examination, 
but,  on  the  contrary,  notified  Stirton  of 
his  intention  not  to  take  the  insurance. 
The  plaintiff  omitted  to  get  the  paper 
from  Stirton,  and  Stirton,  in  fraud  of 
and  without  the  knowledge  of  the 
plaintiff,  ascertained  in  some  way  that 
the  plaintiff  had  an  account  with  the 
defendant’s  bank,  and  wrote  the  words 
“Home  Savings  Bank,  Toronto,"  upon 
the  paper. 

On  October  6,  1908,  Stirton  disposed 
of  the  paper  to  the  United  Empire  Bank 
for  value.  Prior  to  December  4,  1908, 
this  paper  was  handed  by  the  United 
Empire  Bank  to  the  Dominion  Bank  for 
collection.  On  December  4 it  was  pre- 
sented by  the  Dominion  Bank  to  the  de- 
fendants for  payment.  The  defend- 
ants stamped  their  acceptance  upon  it, 
charging  the  amount  to  the  plaintiff 
against  his  savings  bank  deposit  ac- 
count. It  went  through  the  clearing 
house,  and  was  subsequently  paid  by  the 
defendants,  the  money  reaching  the 
United  Empire  Bank. 


Digitized  by  t^ooQle 


BANKING  LAW 


321 


Judgment:  This  case  turns  upon  the 
application  of  the  Bills  of  Exchange 
Act.  Assuming  for  the  moment  that 
this  paper,  and  I will  for  convenience 
call  it  a note,  was  delivered  to  Stirton 
as  a note  and  for  the  purpose  of  being 
used  by  him  as  a negotiable  instrument, 
and  that  it  should  be  issued  by  him  as 
such,  the  defence  is  made  out.  The 
United  Empire  Bank  in  that  case  were 
“holders  in  due  course,”  within  the 
meaning  of  sec.  56  of  the  Canada  Bills 
of  Exchange  Act.  Subject  to  what  may 
be  said  as  to  the  defendants’  right  to 
use,  under  any  circumstances,  without 
the  plaintiff’s  instructions,  his  money  on 
deposit  in  the  savings  bank  branch,  the 
defendants,  under  sec.  57,  have  the  same 
rights  as  the  United  Empire  Bank.  That 
section  is  as  follows: 

A holder,  whether  for  value  or  not,  who 
derives  his  title  to  a bill  through  a holder 
in  due  course,  and  who  is  not  himself  a 
parly  to  any  fraud  or  illegality  affecting 
it,  has  all  the  rights  of  that  holder  in  due 
course  as  regards  the  acceptor  and  all  par- 
ties to  the  bill  prior  to  that  holder. 

The  plaintiff’s  money  was  deposited 
with  the  defendants  under  special  terms, 
conditions  and  regulations,  fully  set 
out  in  the  plaintiff’s  pass  book;  the  only 
ones  having  any  special  bearing  here  as 
Nos.  6 and  7 : — 

6.  The  hank  is  authorized  to  pay  to  any 
one  presenting  a receipt  or  check  signed  by 
the  depositor  or  by  any  one  having  au- 
thority to  draw  the  depositor’s  money, 
the  amount  named  in  such  receipt  or  check 
and  to  charge  the  same  to  the  amount  of 
such  depositor. 

7.  The  bank  reserves  the  right  to  at  any 
time  demand  notices  of  withdraw.  (Then 
follows  the  length  of  notice  according  to 
amount.) 

These  do  not  in  terms  authorize  the 
payment  of  a note;  the  words  are  “pre- 
senting a receipt  or  check”;  then  the 
depositor  may  be  charged  with  “the 
amount  named  in  such  receipt  or  check.” 
The  note  paid  by  the  defendants  was 
not  either  receipt  or  check. 

In  my  opinion,  the  defendants  ought 
not,  without  special  instructions  to  pay, 
to  have  paid  this  note,  and  it  is  contrary 
to  my  notion  of  banking  that  the  de- 
fendants should  have  given  another 
banker  information,  if  they  did  give 


such  information,  that  the  plaintiff  had 
such  an  account,  or  funds  to  his  credit, 
unless  and  until  the  plaintiff’s  authority 
was  obtained.  Notice  could  be  de- 
manded by  the  defendants  before  pay- 
ment. They  could,  of  course,  waive 
such  notice,  and  would  generally  do  so 
in  favor  of  the  depositor  himself,  but  it 
is  a different  thing  when  payment  of  a 
note  or  payment  under  the  terms  of  a 
contract  between  the  depositor  and  a 
third  party  is  asked.  The  notice  could 
well  be  invoked  as  against  possible 
fraud  or  forgery,  or  lest  for  any  reason 
the  depositor  might  desire  to  contest  the 
third  party’s  claim. 

Kymer  vs.  Laurie  (1849),  18  L.  J.  Q. 
B.,  218,  is  authority  in  favor  of  the  de- 
fendants as  to  their  right  to  pay  and 
charge  up  against  a depositor’s  savings 
bank  account. 

There  remains  to  be  disposed  of  the 
right  of  the  United  Empire  Bank,  as 
holders  in  due  course,  to  recover,  upon 
the  facts  presented. 

The  paper  in  the  hands  of  Stirton 
must  be  treated  as  if  “a  simple  signa- 
ture on  a blank  piece  of  paper”  had 
been  handed  by  the  plaintiff  to  Stirton. 
Even  if  the  paper  had  upon  it  some 
writing  so  that  it  appeared,  as  I have 
before  mentioned,  it  would  be  harmless. 
No  bank  would  negotiate  such  paper, 
and  Stirton  had  no  more  right,  under 
sec.  31,  to  fill  in  the  amount  in  writing 
and  the  place  of  payment,  than  to 
wholly  fill  up  a blank  piece  of  paper 
with  only  a signature  upon  it.  It  had 
to  be  filled  up  before  it  could  be  used, 
and  it  was  filled  up  by  Stirton.  It  was 
not  delivered  to  Stirton  in  order  that  it 
might  be  converted  into  a note  or  nego- 
tiated as  a note. 

Sections  31  and  32  of  the  Canada 
Bills  of  Exchange  Act  are  practically 
the  same  as  sec.  20  of  the  English  Act: 

Sec.  31.  Where  a simple  signature  on  a 
blank  paper  is  delivered  by  the  signor  in 
order  that  it  may  be  converted  into  a bill, 
it  operates  as  a prima  facie  authority  to 
fill  up  as  a complete  bill  for  any  amount, 
using  the  signature  for  that  of  the  drawer 
or  acceptor,  or  an  indorser  and,  in  like  man- 
ner, when  a bill  is  wanting  in  any  material 
particular,  the  person  in  possession  of  it 
has  a prima  facie  authority  to  fill  up  the 
omission  in  any  way  he  thinks  fit. 


Digitized  by  t^ooQle 


322 


THE  BANKERS  MAGAZINE 


Sec.  32.  In  order  that  any  such  instrument 
when  completed  may  be  enforceable  against 
any  person  who  became  a party  thereto 
prior  to  its  completion,  it  must  be  filled 
up  within  a reasonable  time,  and  strictly 
in  accordance  with  the  authority  given; 
Provided  that  if  any  such  instrument,  after 
completion,  is  negotiated  to  a holder  in 
due  course,  it  shall  be  valid  and  effectual 
for  all  purposes  in  his*  hands,  and  he  may 
enforce  it  as  if  it  had  been  filled  up  within 
a reasonable  time  and  strictly  in  accordance 
with  the  authority  given. 

In  Smith  vs.  Prosser  (1907),  2 K.  B., 
735,  the  language  of  these  two  sections 
has  been  dealt  with  and  the  sections 
have  been  construed.  In  that  case  the 
defendant  signed  his  name  on  two  blank 
lithographed  forms  of  promissory  notes, 
and  handed  these  to  one  of  his  two 
agents,  with  instructions  that  they  were 
to  remain  in  the  custody  of  his  attorney 
until  the  defendant  should  by  telegram 
or  letter  give  instructions  for  their 
issue  as  notes,  and  as  to  the  amount  for 
which  they  should  be  filled  up.  After 
the  defendant  left,  the  person  to  whom 
the  defendant  had  handed  the  docu- 
ments, without  waiting  for  instructions 
from  the  defendant,  and  in  fraud  of 
the  defendant,  filled  in  the  blanks  and 
sold  them  to  the  plaintiff,  “who  took 
them  honestly  and  in  good  faith  and  with- 
out notice  of  the  fraud,  and  gave  full 
value  for  them.”  It  was  held,  “that,  as 
the  defendant  handed  the  notes  to  his 
agent  as  custodian  only,  and  not  with 
the  intention  that  they  should  be  issued 
as  negotiable  instruments,  he  was  not 
estopped  from  denying  the  validity  of 
the  notes  as  between  himself  and  the 
plaintiff*,  and  that  the  action  was  not 
maintainable.” 

As  stated  before,  I am  considering 
this  as  if  “a  simple  signature  on  a blank 
piece  of  paper”  handed  by  the  plaintiff 
to  Stirton.  It  was,  in  fact,  a form  of  a 
promissory  note.  The  plaintiff  had  writ- 
ten nothing  on  it,  but  his  signature  on 
the  face  and  again  on  the  back.  He 
will  not  say  that  the  figures  “$440.50” 
and  “Oct.  1st”  and  “December  1st,”  and 
the  word  “myself,”  may  not  have  been 
on  it  when  he  signed,  but  that  is  as  far 
as  he  will  go.  It  was  not  given  to  Stir- 
ton  that  it  might  “be  converted  into  a 
note”  or  that  it  might  be  used  or  nego- 


tiated as  a note.  The  plaintiff  signed 
the  paper  intending  it  not  as  a note  but 
as  a promise  to  pay  premium  for  life 
insurance  in  case  he  submitted  himself 
for,  and  passed,  the  necessary  medical 
examination.  He  did  not  pass  such  ex- 
amination ; he  did  not  even  see  the  medi- 
cal man.  Stirton,  who  held  the  plaint- 
iff's signature,  was  immediately  notified 
by  the  plaintiff,  but  he,  in  fraud  of  the 
plaintiff,  completed  the  form  as  a note, 
and  negotiated  it  with  the  United  Em- 
pire Bank.  In  my  opinion,  the  case 
cited  governs  the  present  case,  and,  up- 
setting as  that  case  may  be  of  the  opin- 
ions of  bankers  here,  as  to  the  true 
meaning  of  the  sections  of  the  Bank 
Act  referred  to,  I must  follow  the  au- 
thority. I quote  from  the  judgments  in 
that  case : 

Vaughan  Williams,  L.  J.,  at  p.  744: 

“In  my  judgment  it  is  of  the  very  es- 
sence of  the  liability  of  a person  sign- 
ing a blank  instrument  that  the  instru- 
ment should  have  been  handed  to  the 
person,  to  whom  it  was  in  fact  handed, 
as  an  agent  for  the  purpose  of  being 
used  as  a negotiable  instrument,  and 
with  the  intention  that  it  should  be  is- 
sued as  such.” 

It  seems  to  me  clear  that  what  the 
plaintiff  did  was  not  to  give  to  Stirton 
a promissory  note  or  a paper  that  could 
be  converted  into  a promissory  note,  or 
that  Stirton  would  have  any  right  or  au- 
thority to  deal  with  in  any  way  until  he 
should  get  that  authority  after  the 
plaintiff's  application  for  insurance  had 
been  accepted.  In  a sense,  Stirton  was 
the  plaintiff's  agent,  as  well  as  agent 
for  the  insurance  company.  Acting  for 
the  plaintiff,  an  application,  the  plaint- 
iff's application,  was  taken,  and  so  act- 
ing, the  plaintiff  made  him  the  custodian 
of  the  paper  with  the  plaintiff's  signa- 
ture, not  as  a note  or  to  be  negotiated  as 
a note,  but  as  evidencing  an  amount  that 
the  plaintiff  would  pay  should  an  ex- 
amination be  passed,  which,  of  course, 
was  necessary  before  his  application 
would  be  accepted. 

Further,  at  p.  745,  after  giving  the 


Digitized  by  t^ooQle 


BANKING  LAW 


323 


facts  in  Smith  vs.  Prosser  case,  Vaughan 
Williams,  L.  J.,  said:  ‘‘Under  these 

circumstances  the  authorities  seem  to 
show  that,  in  the  absence  of  a delivery 
of  notes  to  an  agent  with  the  intention 
that  they  shall  be  negotiated  or  at  any 
rate  that  the  agent  shall  have  power  to 
negotiate  them,  the  signer  is  not  respon- 
sible even  to  a ‘bona  fide'  holder  for 
value.” 

Judgment  was,  therefore,  given  for 
the  plaintiff  without  prejudice  to  the 


rights  of  the  Home  Bank,  If  any, 
against  the  United  Empire  Bank. 

From  this  judgment  an  appeal  was 
taken  to  a divisional  court  which  unani- 
mously upheld  the  judgment  of  the  trial 
judge.  A implication  was  made  for  leave 
to  appeal  to  the  Court  of  Appeal  for 
Ontario,  but  this  leave  was  refused  on 
the  ground  that  the  case  involved  merely 
a simple  proposition  of  law  and  had 
been  fully  and  fairly  dealt  with  by  the 
courts  below. 


$25,000,000  BANKS 


THERE  are  seventeen  national  banks  in 
New  York  City  that  have  deposits  of 
over  $25,000,000  which  is  over  one- 
half  of  the  national  banks  of  the  country 
reporting  deposits  exceeding  that  amount 
on  June  30.  Chicago  and  Philadelphia 
each  has  four  institutions  of  this  size  or 
over,  St.  Louis  three,  Boston  two,  while 
Pittsburgh,  Cleveland  and  Minneapolis  each 

Banks — 

Commerce,  New  York 

City,  New  York  

Park,  New  York  

First,  New  York  

First,  Chicago  

Hanover,  New  York 

Continental,  Chicago  

Chase,  New  York  

Shawmut,  Boston  

Mechanics  and  Metals,  New  York  

Commerce,  Chicago  

First,  Boston  

Com  Exchange,  Chicago 

Commerce,  St.  Louis  

American  Exchange,  New  York 

Fourth  Street,  Philadelphia  

Philadelphia,  Philadelphia  

Fourth,  New  York  

Mellon,  Pittsburgh  

Girard,  Philadelphia  

Franklin,  Philadelphia 

Chemical,  New  York  

Third,  St.  Louis  

New  York,  New  York 

Seaboard,  New  York  

Liberty,  New  York 

Citizens’  Central,  New  York 

First,  Cleveland 

Importers  and  Traders,  New  York 

Mechanics*  American,  St.  Louis  

Irving  Exchange,  New  York  

Northwestern,  Minneapolis  

Merchants,  New  York 

First,  Kansas  City  


has  one,  making  thirty-four  banks  in  all. 
Most  of  the  New  York  banks  reported  in- 
creases in  deposits  as  compared  with  March 
29,  1910,  and  decreases  as  compared  with 
June  23,  1909.  The  four  Chicago  banks 
all  decreased  their  deposits  since  March  29. 
'Phis  is  also  true  of  the  three  St.  Louis  in- 
stitutions. The  following  compares  de- 
posits on  the  dates  given: 


June  30, 1910. 

March  29, 1910. 

June  23, 1909. 

$182,614,778 

$158,946,080 

$226,415,461 

213,808,089 

229,785,449 

276398,597 

117,636,081 

106,713^61 

117,165317 

112,041,115 

112,752,142 

130,073,965 

106,979,589 

114,241,258 

112,131,577 

102,893,864 

101,249,117 

111,738384 

94,910,879 

98358,589 

76,480,076 

92,787,538 

101,751357 

102,143,607 

81,674,791 

91,433,525 

88,558,199 

74,974,098 

80,088,412 

82,408342 

71,791,607 

72,886329 

49,735393 

58,702,605 

65,773,541 

62309,113 

55,600,849 

61,714,026 

61,118,514 

55,389,154 

63,414,617 

62,478,871 

47,021,997 

36,773300 

31300,686 

46,646,720 

45,042,623 

48,187,686 

44,059,303 

43,899,455 

52317,809 

39,952,236 

28,650,373 

37,724398 

36,690397 

36361362 

35,782,145 

36,179,134 

36,767,834 

41382301 

33,123,874 

32,035,661 

31,039,956 

31,707,196 

30,999,090 

32,740,161 

31,642,302 

32,453341 

32338362 

31,382,405 

29,729,075 

33317,296 

30,037,3 52 

29,065,150 

31313,935 

28383,756 

22,531,034 

20,775,198 

27,841,025 

24,041389 

28322,615 

27,605,731 

28307309 

27,789356 

27,471363 

27371,194 

28340,154 

27,088,456 

29,438381 

29,872323 

27,056,869 

27,838,093 

24342,796 

26366,194 

28,520,541 

23,150,067 

25,110398 

24384394 

28306,675 

24,927,808 

27313,417 

27,734313 

Digitized  by  t^ooQle 


PRACTICAL  BANKING 


HOW  TO  FIND  OUTSTANDING  DRAFTS 


By  Chas.  P. 

'T'HE  coining  of  the  first  of  the  month 
brings  to  the  general  bookkeeper 
in  a bank  a great  deal  of  extra  work, 
due  to  the  fact  that  he  has  to  reconcile 
the  accounts  with  his  bank’s  correspon- 
dents, whose  statements  then  come  flock- 
ing in;  and  among  these  accounts  are 
some  of  the  big  city  banks  on  which  his 
country  bank  is  accustomed  to  draw. 

These  latter  accounts  are  the  tre-‘ 
mendous  ones,  as  the  mails  bring  in 
heaps  of  cancelled  vouchers  which  have 
to  be  arranged  and  checked  up  with  the 
register  or  stubs  before  the  correspond- 
ing accounts  can  be  reconciled.  The 
bookkeeper  hates  to  get  at  this  work, 
because  it  seems  endless  as  well  as 
monotonous. 

It  is  just  here,  however,  that  a way 
may  be  suggested  which  may  save  sev- 
eral hours’  work. 

In  demonstrating  the  short  cut,  we 
will  begin  by  arranging  a stack  of  con- 
celled  vouchers  numerically.  No  ma- 
chine will  do  that  for  us,  and  we  will 
have  to  have  them  in  that  order  for 
future  reference,  if  required,  as  well  as 
for  our  present  needs. 

Our  vouchers  are  now  so  arranged 
that  the  smallest  numbers,  or  the  drafts 
first  issued,  are  on  top.  We  see  also 
that  the  top  checks  were  issued  before 
the  first  of  last  month,  which  we  will 
suppose  was  April.  Those  top  checks 
were  outstanding  when  we  made  our  last 
reconcilement  and  were  paid  by  our  cor- 
respondent only  since  April  first.  So 
they  must  be  on  our  list  of  outstanding 
drafts  on  March  31,  which  we  have 
pinned  to  our  last  month’s  reconcile- 
ment. 

Taking  this  list,  we  w’ill  check  off 
those  drafts  that  have  straggled  in,  and 
will  suppose  that  No.  36,454  and  No. 
37,191  still  remain  out.  Taking  an- 
other slip  of  paper  we  now  begin  a new 

324 


Schumacher 

list  with  these  numbers  and  their  corre- 
sponding amounts. 

Looking  at  the  drafts,  we  see  that  at 
the  top  or  the  balance  of  the  stack  of 
cancelled  vouchers  are  those  that  were 
issued  on  April  first.  Now  we  come  to 
the  place  where  we  deviate  from  the 
common  method  of  finding  out  which 
drafts  of  April  are  not  yet  in. 

Ordinarily  the  bookkeeper  checks  up 
these  drafts  with  the  register,  and  then 
picks  out  those  that  remain  open  or  un- 
checked, as  being  the  outstanding 
drafts.  But  we  will  not  lose  time  that 
way.  For  the  present,  we  do  not  refer 
to  the  stubs  or  register  at  all.  The 
method  is  simple.  This  is  it.  The  bal- 
ance of  the  vouchers,  as  you  clearly  see, 
are  all  the  drafts  issued  during  April, 
with  only  those  missing  that  have  not 
been  paid.  Why  should  we  check  over 
those  that  are  in,  when  we  can  find  out, 
much  more  quickly,  which  drafts  are 
outstanding  by  running  over  the  stack  of 
checks,  with  our  eye  on  the  numbers 
only,  and  taking  note  of  those  that  are 
missing? 

Let  the  first  draft  issued  on  April 
first  be  No.  50,200.  Now,  running  over 
the  stack  from  there  on  we  will  suppose 
we  find  all  the  numbers  consecutive  up 
to  50,310  inclusive.  Nos.  50,311  and 
50,312  are  not  here.  Those  numbers 
then  are  outstanding;  accordingly  we 
mark  them  down  on  our  list  of  out- 
standing drafts  which  then  shows  up 
like  this: 


Numbers  Amounts 

36,45 1 $35.40 

37,191 1418.99 

50.311  ? 

50.312  ? 


Now  we  continue  our  search  for  those 
that  are  conspicuous  by  their  absence. 
Suppose  for  brevity’s  sake  that  up  to 
50,500  inclusive  (which  ends  the  pack) 


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PRACTICAL  BANKING 


325 


all  the  drafts  to  be  in.  Now  we  add 
50,501,  etc.,  to  our  number  list,  and  be- 
gin to  look  up  the  corresponding 
amounts  in  the  register  or  stub  book. 

On  coming  to  50,501  we  note  care- 
fully whether  or  not  it  was  issued  in 
April.  Supposing  it  was  issued  in  April 
but  that  it  was  not  the  last,  we  add  it, 
with  the  balance  of  the  April  numbers, 
to  our  number  list,  and  their  correspond- 
ing amounts  to  our  amount  list. 

Allowing  50,510  to  be  the  first  draft 
issued  in  May,  our  list  will  appear  as 
shown  in  the  accompanying  table. 

Thus  we  get  all  we  are  looking  for 
just  as  accurately  as  if  we  had  checked 
all  the  drafts  up.  If  an  error  was  made 


at  the  time  a draft  was  being  issued, 
such  as  getting  down  the  wrong  amount 
or  entering  a certain  amount  opposite 
the  wrong  stub,  then,  of  course,  some 
checking  will  have  to  be  done  anyhow, 
but  only  up  to  the  point  where  the  error 
occurred. 


Numbers  Amounts 

36,454 $35.40 

37,191 348.99 

50.311  75.40 

50.312  13.09 

50,501  to  50, 509 784.22 


April  31,  1910,  total.  .$1,257.10* 


* Drafts  outstanding. 


OUR  TRANSIT  DEPARTMENT* 

By  A.  C.  Tonsmeire,  Assistant  Cashier  City  Bank  & Trust  Co.,  Mobile,  Ala. 


A.  C.  TONSMEIRE 
Assistant  Cashier  City  Bank  and  Trust 
Company,  Mobile,  Ala. 


Mr.  Tonsmeire  began  his  hanking  career 
by  accepting  a position  as  messenger  with 
the  City  National  Bank  of  Mobile,  Ala.,  in 
February,  1909,  three  months  after  it 
opened  for  business.  When,  in  April,  1903, 


this  bank  was  succeeded  by  the  City  Bank 
and  Trust  Company,  he  was  retained  and 
began  his  upward  climb  through  every  posi- 
tion in  the  bank,  including  some  twenty  odd 
desks.  Prior  to  his  election  as  assistant 
cashier,  which  occurred  in  January,  1909, 
he  had  been  paying  teller  for  three  years. 

Mr.  Tonsmeire  recently  completed  anight 
course  in  commercial  and  business  law.  He 
was  one  of  the  organizers  and  first  presi- 
dent of  the  Progressive  Bankers'  Club, 
made  up  of  employees  of  the  City  Bank 
and  Trust  Co.,  and  is  at  this  time  president 
of  the  Mobile  Chapter  of  the  American  In- 
stitute of  Banking. 

TT  has  been  after  much  experimenting 
*■*  only,  that  we  have  arrived  at  our 
present  method  for  handling  this  de- 
partment of  our  institution,  and  we  be- 
lieve it  is  as  near  perfect  as  it  can  be 
made. 

This  department  of  the  bank  is  one 
of  the  most  important  on  account  of  the 
great  volume  of  business  handled 
through  it.  Consequently  the  system 
used  is  a matter  of  considerable  im- 
portance. 

We  have  devoted  much  time  to  this 
department  and  feel  that  we  could  not 

•This  article  is  reprinted,  by  permission, 
from  the  reunion  number  of  the  “Pro- 
gressive Banker,”  a magazine  published  by 
the  employees  of  the  City  Bank  and  Trust 
Co.  of  Mobile,  Ala. 


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Digitized  by  t^ooQle 


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PRACTICAL  BANKING 


827 


handle  the  volume  of  business  we  do  if 
we  did  not  have  what  we  think  is  one  of 
the  best  systems  in  use. 

We  will  illustrate  the  forms  used  in 
this  department,  which  we  trust  will  be 
of  interest  to  our  readers. 

The  items  for  our  transit  department 
are  received  from  several  different 
sources.  The  first  batch  is  received 
from  the  mailing  desk  after  the  morn- 
ing's mail  has  been  opened.  The  so- 
called  morning's  mail  is  handled  in  the 
following  manner: 

After  the  items  have  been  verified 
with  the  letters  accompanying  them, 
they  are  numbered,  each  correspondent 
being  given  a particular  number,  so 
that  in  describing  the  endorser,  or  bank 
from  whom  received,  it  is  not  necessary 
to  write  the  name,  but  simply  the  num- 
ber. The  number  appearing  on  the  face 
of  the  check,  saves  also  the  turning  over 
of  the  check  for  this  information.  These 
items  are  then  sorted  in  four  different 
departments,  clearing-house  items,  cash 
items  overdrafts  on  local  concerns, 
checks  on  ourselves  and  transit  items. 
The  clearing-house  checks  go  to  the 
clearing-house  clerks  to  be  presented  at 
the  clearing  house  that  same  morning, 
the  cash  items  go  to  our  collection  de- 
partment, the  checks  on  ourselves  to  our 
bookkeeping  department,  and  the  transit 
items  to  our  Transit  Department. 

The  second  and  third  batches  come 
from  the  different  teller's  cages.  One 
of  the  clerks  in  the  Transit  Department 
takes  charge  of  the  sorting  of  all  items 
by  distributing  them  in  the  pigeon  holes 
of  our  regular  correspondents.  Items 
to  be  sent  to  banks  for  collection  and 
remittance  are  placed  in  a miscellaneous 
pigeon-hole  with  memoranda  attached, 
given  name  of  the  banks  to  whom  they 
are  to  be  sent.  After  the  items  have 
all  been  sorted,  they  are  turned  over  to 
the  clerks  who  write  the  transit  letters. 

The  machines  employed  for  writing 
these  letters  are  combination  writing- 
adding EUiott-Fisher  machines,  which 
automatically  add  the  letters  as  written. 
These  machines  are  equipped  with  auto- 
matic accumulating  devices,  so  that  the 
total  amount  of  the  entire  day's  work  is 
obtained  automatically  when  the  last 


letter  has  been  written.  Special  carbon 
roll  attachments  enable  us  to  obtain 
carbon  copies  without  having  to  handle 
carbon  papers.  The  ease  with  which 
the  forms  can  be  inserted  and  removed 
from  the  machines  makes  it  possible  to 
write  short,  one  or  two  item,  letters  a 
great  deal  more  rapidly  than  could  be 
done  by  hand. 

Form  1 illustrates  a transit  letter  to 
be  sent  to  our  regular  correspondents  for 
credit.  It  is  a folded-over  form,  per- 
forated so  that  the  original  copy  can  be 
detached  and  sent  to  correspondent  with 
the  checks;  the  duplicate  is  retained  in 
our  files.  The  duplicate  copy  has  col- 
umns for  Endorser,  On  Whom  and 
Amount,  but  the  endorser's  column  does 
not  appear  on  the  original  copy.  Form 
2 shows  a transit  letter  for  collection 
and  remittance  sent  to  a bank  with 
whom  we  have  no  reciprocal  relation. 
That  form  provides  for  the  Last  En- 
dorser, Maker  and  On  Whom  Drawn. 

In  describing  name  of  payer  of  items 
on  such  Cities  as  New  York,  New  Or- 
leans or  other  principal  points,  we  use 
the  banks'  clearing-house  numbers  in- 
stead of  writing  out  the  names.  This 
saves  us  additional  time  and  labor,  but 
there  are  only  a comparative  number  of 
items  drawn  on  banks  located  in  cities 
having  clearing  houses. 

After  all  the  letters  for  the  day  have 
been  written  and  the  total  amount  bal- 
anced with  the  mailing  desk  and  receiv- 
ing tellers,  the  original  copies  are 
mailed  to  the  various  banks,  together 
with  the  checks.  The  duplicate  copies 
of  remittance  letters  go  to  the  general 
bookkeeper  for  posting.  The  total 
amount  of  sundry  transit  letters  is  fur- 
nished the  bookkeeper  to  be  charged  to 
transit  account  on  the  general  ledger. 
These  copies  are  later  filed,  the  re- 
mittance letters  in  folders  of  the  vari- 
ous banks,  the  sundry  transit  letters  in 
a vertical  file,  geographically  and  alpha- 
betically arranged.  When  a letter  has 
been  remitted  for  or  advised,  it  is  re- 
moved from  the  current  file  and  trans- 
ferred into  a permanent  binder.  Thus, 
we  can  always  balance  our  transit  ac- 
count by  adding  the  total  amounts  of 


Digitized  by  t^ooQle 


CITY  BANK  & TRUST  CO. 

Capital  $500,000  Surplus  Over  $450,000 


Digitized  by  Google 


FORM  NO 


TRUST  COMPANIES 


329 


sundry  transit  letters  in  the  current  file. 

Under  our  former  system,  when  we 
had  bound  transit  books,  we  never  knew 
to  a certainty  that  each  particular  item 
remitted  for  had  been  marked  off  the 
books,  and  in  order  to  balance  transit 
account,  we  had  to  prepare  a schedule 
of  outstanding  items,  an  operation 
which  was  necessarily  slow,  and  not 
wholly  free  from  mistakes.  Like  all 
bound  book  systems  it  was  practically 
impossible  to  write  the  letters  in  alpha- 
betical order,  and  when  remittances 


were  received,  the  records  might  be 
found  in  any  one  of  half  a dozen 
places. 

We  have  found  our  present  system  a 
great  labor  saver,  and  that  we  have  a 
clear  and  perfect  record  of  the  items 
sent  through  this  department,  and  are 
handling,  with  three  clerks,  a great  deal 
more  business  than  we  formerly  did  with 
four,  our  business  in  this  department 
having  increased  more  than  fifty  per 
cent,  since  installing  this  system  and  the 
Elliott-Fisher  machines. 


TRUST  COMPANIES 

Conducted  by  Clay  Herrick 


THE  SEGREGATION  OF  SAVINGS  DEPOSITS 


r¥''HE  trust  company  is  interested, 
perhaps  more  vitally  than  any 
other  financial  institution,  in  the  agita- 
tion now  being  made  for  laws  in  various 
States  requiring  the  segregation  of  sav- 
ings deposits  and  the  maintaining  of 
separate  savings  deposits  by  all  banks 
or  trust  companies  which  receive  such 
deposits.  We  have  at  various  times 
called  attention  in  these  columns  to  the 
fact  that  throughout  the  country  the 
trust  company  is  a large  holder  of  sav- 
ings deposits,  while  in  some  communi- 
ties it  is  by  far  the  most  important  sav- 
ings institution.  There  are,  indeed, 
many  trust  companies,  three-fourths  or 
more  of  whose  business  is  in  the  sav- 
ings department. 

The  essential  features  of  the  pro- 
posal for  the  segregation  of  savings  de- 
posits are  two: — First,  that  all  accounts 
and  records  relating  to  such  deposits 
shall  be  kept  separate  and  apart  from 
other  records  of  the  bank;  second,  that 
the  funds  received  on  account  of  such 
deposits  shall  be  invested  separately, 
shall  not  be  mingled  with  the  other  as- 
sets of  the  bank,  and  in  case  of  liquida- 
tion shall  be  used  for  the  payment  in 
full  of  savings  deposits  before  they  may 
be  used  for  the  benefit  of  any  other 
creditors.  With'  the  maintenance  of 


such  a separate  department  most  of  the 
trust  companies  which  do  any  consid- 
erable amount  of  trust  business  are  al- 
ready familiar,  through  experience  in 
conducting  their  trust  departments. 
Separate  departments  for  trust  busi- 
ness are  now  required  by  statute  in 
many  States. 

Movement  Not  a New  One. 

The  movement  for  the  segregation  of 
savings  deposits  has  made  considerable 
progress  within  the  last  few  years,  and 
today  nine  or  ten  States  have  more  or 
less  complete  regulations  in  the  matter. 
In  some  of  them,  as  in  several  New 
England  States,  the  separation  of  the 
savings  business  is  complete;  while  in 
others,  like  Ohio,  it  amounts  essentially 
to  the  separation  of  the  accounts  only. 
The  pioneer  in  the  movement  was  New 
Hampshire,  which  in  1891  adopted  a 
statute  providing  that  “Trust  compa- 
nies, loan  and  trust  companies,  loan  and 
banking  companies  and  other  similar 
corporations,  receiving  savings  deposits 
or  transacting  the  business  of  a savings 
bank,  shall  conduct  the  business  as  a 
separate  department,  and  that  depart- 
ment shall  be  amenable  to  the  laws 
governing  savings  banks ; and  the  treas- 
urer of  every  such  company  or  corpora- 


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330 


THE  BANKERS  MAGAZINE 


tion  shall  give  a bond  to  the  savings  de- 
partment of  said  company  or  corpora- 
tion in  like  manner  as  is  required  of 
treasurers  of  savings  banks.” 

In  Massachusetts,  chapter  520  of  the 
Acts  of  1 908  provides,  among  other 
things,  for  the  total  separation  of  the 
savings  department  from  the  other  busi- 
ness of  a trust  company.  The  sections 
relating  to  this  matter  are  as  follows: 

Section  1.  Every  trust  company  solicit- 
ing or  receiving  deposits  (a)  which  may  be 
withdrawn  only  on  presentation  of  the  pass- 
book or  other  similar  form  of  receipt  which 
permits  successive  deposits  or  withdrawals 
to  be  entered  thereon;  or  (b)  which  at  the 
option  of  the  trust  company  may  be  with- 
drawn only  at  the  expiration  of  a stated 
period  after  notice  of  intention  to  withdraw 
has  been  given  or  (c)  in  any  other  way 
which  might  lead  the  public  to  l»elieve  that 
such  deposits  are  received  or  invested  under 
the  same  conditions  or  in  the  same  manner 
as  deposits  in  savings  banks;  shall  have  a 
savings  department  in  which  all  business 
relating  to  such  deposits  shall  be  transacted. 

Sec.  2.  All  such  deposits  shall  be  special 
deposits,  and  shall  be  placed  in  said  savings 
department,  and  all  loans  or  investments 
thereof  shall  be  made  in  accordance  with 
the  statutes  governing  the  investment  of  de- 
posits in  savings  banks.  The  duties  of  the 
board  of  investment  relative  to  the  invest- 
ment of  such  deposits  shall  be  performed 
by  a board  or  committee  appointed  by  the 
board  of  directors  of  such  corporation. 

Sec.  3.  Such  deposits  and  the  invest- 
ments or  loans  thereof  shall  be  appropriated 
solely  to  the  security  and  payment  of  such 
deposits,  and  shall  not  be  mingled  with  the 
investments  of  the  capital  stock  or  other 
money  or  property  belonging  to  or  con- 
trolled by  such  corporation,  or  be  liable  for 
the  debts  or  obligations  thereof  until  after 
the  deposits  in  said  savings  department 
have  been  paid  in  full.  The  accounts  and 
transactions  of  said  savings  department 
shall  be  kept  separate  and  distinct  from  the 
general  business  of  the  corporation. 

Sec.  4.  The  capital  stock  of  such  cor- 
poration with  the  liabilities  of  the  stock- 
holders thereunder  shall  be  held  as  security 
for  the  payment  of  such  deposits,  and  the 
persons  making  such  deposits  or  entitled 
thereto  shall  have  an  equal  claim  with  other 
creditors  upon  the  capital  and  other 
property  of  the  corporation  in  addition  to 
the  security  provided  for  by  this  act. 

Sec.  o.  All  income  received  from  the 
investment  of  funds  in  said  savings  depart- 
ment, after  deducting  the  expenses  and 
losses  incurred  in  the  management  thereof 
and  such  suras  as  may  be  paid  to  depositors 
therein  as  interest  or  dividends,  shall  accrue 


as  profits  to  such  corporation,  and  may  be 
transferred  to  its  general  funds. 

Sec.  6.  All  savings  deposits  which  are 
not  now  invested  in  accordance  with  the 
provisions  of  this  act  shall  be  so  invested, 
at  least  one-fifth  part  before  the  first  day 
of  November  in  each  year  after  the  passage 
of  this  act,  beginning  with  the  year  nine- 
teen hundred  and  nine,  and  all  such  deposits 
shall  be  so  invested  before  the  first  day  of 
November  in  the  year  nineteen  hundred  and 
thirteen. 

Sec.  7.  Such  trust  company  may  at  any- 
time require  a depositor  in  said  savings  de- 
partment to  give  a notice  not  exceeding 
ninety  days  of  his  intention  to  withdraw 
the  w-hole  or  any  part  of  his  deposit. 

Just  how  much  change  in  the  manner 
of  conducting  a trust  company’s  busi- 
ness would  be  required  by  the  adoption 
of  such  a plan  as  the  above  would  of 
course  depend  upon  the  methods  at 
present  employed  by  any  particular 
company  and  upon  the  State  laws  regu- 
lating investments  or  trust  companies 
and  savings  banks.  For  most  compa- 
nies which  already  transact  a savings 
business  the  changes  in  routine  work 
would  be  slight.  For  the  individual 
records  separate  books  for  commercial 
and  savings  accounts  are  in  general  use: 
the  changes  in  records  would  be  con- 
fined to  the  general  books.  As  for  the 
receipt  and  payment  of  deposits,  the 
larger  companies  are  for  the  most  part 
already  in  the  habit  of  maintaining  sep- 
arate windows  and  separate  tellers  for 
the  care  of  the  two  classes  of  accounts. 
Except  as  a matter  of  convenience,  how- 
ever, such  separation  is  not  necessary, 
even  if  the  law  requires  a separate  sav- 
ings department.  Small  companies  em- 
ploying only  one  teller  and  one  book- 
keeper could  receive  and  pay  funds  on 
both  commercial  and  savings  accounts, — 
as  they  do  now, — through  one  teller; 
and  the  accounts  could  all  be  kept  by 
one  bookkeeper.  It  is  probable  that  the 
cases  involve  absolutely  no  changes  in 
the  routine  work  of  the  company,  ex- 
cept as  to  the  general  books.  As  to  the 
latter,  it  would  of  course  require  the 
keeping  of  separate  general  books  for 
the  savings  department. 

Investment  of  Savings  Funds. 

The  matter  of  the  most  importance, 
both  as  to  change  from  present  methods 


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and  as  to  possible  effects  upon  both  the 
company  and  the  general  public,  is  the 
separate  investment  of  the  funds  of  the 
savings  department.  In  States  where 
the  investments  prescribed  for  savings 
banks  differ  materially  from  those  per- 
mitted to  trust  companies,  very  consid- 
erable readjustments  would  be  required; 
while  in  some  states  the  shifting  of  in- 
vestments would  not  be  burdensome.  It 
is  not  improbable  that  if  the  movement 
should  spread,  it  would  be  accompanied 
in  many  States  by  a re-classification  of 
investments  permitted  to  the  various 
financial  institutions. 

The  argument  for  the  segregation 
plan  is  based  essentially  upon  the  neces- 
sity of  safe  investment  of  savings  funds. 
Hon.  Pierre  Jay,  vice-president  of  the 
Bank  of  Manhattan  Company  of  New 
York, — and  formerly  Bank  Commission- 
er of  Massachusetts, — in  a recent  ad- 
dress before  the  Maryland  Bankers’  As- 
sociation, calls  attention  to  the  fact  that 
safety  of  investment  is  a fundamental 
requirement  of  most  of  the  savings  bank 
systems  of  the  world,  and  shows  that  the 
principle  of  special  investment  of  sav- 
ings deposits  is  generally  recognized 
not  only  in  Europe,  but  also  in  this 
country. 

He  goes  on  to  show  that  although 
twenty-six  States  of  the  Union  have 
adopted  special  standards  of  investment 
for  savings  deposits,  such  legislation  is 
in  many  States  a dead  letter  because  of 
the  fact  that  most  of  the  savings  funds 
are  held  by  State  and  national  banks 
and  trust  companies,  in  which  no  special 
investment  of  savings  deposits  is  re- 
quired. Illustrating  this  point,  he 
says: — “West  Virginia  has  an  excellent 
mutual  savings  bank  law,  with  well-se- 
lected investments;  but  of  the  $12,500,- 
000  of  savings  deposits  in  the  State,  as 
reported  to  the  National  Monetary  Com- 
mission on  April  28,  1909,  only  a little 
over  a million  dollars  were  in  the  soli- 
tary mutual  savings  bank,  whereas  the 
other  eleven  millions,  or  ninety  per  cent, 
of  the  total,  were  held  by  the  260  State 
and  national  banks  and  trust  companies. 

“Therefore,  it  is  clear  that  the  sav- 
ings bank  law  of  West  Virginia  is  not 
an  effective  one.  The  West  Virginians 


evidently  do  not  care  to  organize  mutual 
savings  banks;  and  as  there  is  but  one 
in  the  State,  the  people  are  obliged  to 
put  their  savings  in  stock  banks  with 
unrestricted  investments." 

Safety  for  Savings. 

This  illustration, — to  which  others 
might  be  added, — shows  how  legislation 
designed  to  protect  savings  deposits 
must  necessarily  fail  to  give  the  in- 
tended protection  to  all  savings  deposit- 
ors, unless  the  legislation  affects  all 
banks  which  receive  such  deposits.  Of 
this  there  can  be  no  doubt.  The  ques- 
tions that  remain  are  whether  savings 
deposits  actually  need  added  protection, 
and  whether  the  separate  investment  of 
these  deposits  gives  additional  protec- 
tion. 

On  the  question  of  safety  it  is  com- 
mon to  cite  statistics  showing  how  small 
a fraction  of  one  per  cent,  of  all  de- 
posits have,  in  a series  of  years,  ac- 
tually been  lost.  The  figures  really 
show  that  the  loss  has  in  the  aggregate 
been  very  small  as  compared  with  the 
total  deposits  handled,  and  such  sta- 
tistics have  a value  in  the  discussion  of 
general  plans  for  improvement. 

But  what  some  persons  overlook  is 
that  from  the  standpoint  of  the  public 
outside  of  the  banks  the  fact  that  only 
a small  proportion  of  all  the  savings 
in  the  country  have  been  lost  does  not 
exactly  satisfy  the  individual  who  has 
a savings  account.  What  he  wants  to 
know  is  that  his  own  savings  are  in  no 
danger.  If  he  has  saved  for  a lifetime 
to  accumulate  enough  for  old  age,  and 
then  loses  it  all  through  some  bank  fail- 
ure, it  is  poor  consolation  for  him  to 
know  that  he  is  one  of  a small  minority, 
and  that  more  than  ninety-nine  per  cent, 
of  all  the  savings  deposits  in  the  country 
for  the  last  fifty  years  have  been  per- 
fectly safe. 

What  strikes  him  with  full  force  is 
the  circumstance  that  he  has  lost  his 
money,  or  most  of  it,  at  a time  of  life 
when  he  cannot  replace  it,  and  when  its 
loss  must  mean  intense  suffering.  To 
him  the  statement  that  since  the  pas- 
sage of  the  national  bank  act  the  losses 
of  deposits  of  national  banks  have 


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THE  BANKERS  MAGAZINE 


averaged  but  one-twenty-sixth  of  one 
per  cent,  a year  is  hollow  mockery. 

No  reasonable  man  with  red  blood  in 
his  veins,  who  has  seen  the  despair  of 
people  whose  entire  savings  were  tied 
up  in  some  bank  failure,  can  be  satisfied 
until  we  have  a system  under  which  an 
even  one  hundred  per  cent,  of  savings 
deposits  will  be  absolutely  safe.  The 
public  certainly  will  not  be  satisfied  un- 
til then,  and  ought  not  to  be. 

Moreover,  it  is  short-sighted  policy, 
merely  from  the  standpoint  of  business, 
for  a bank  or  banker  to  fail  in  the 
adoption  of  every  reasonable  measure 
that  will  add  to  the  security  of  deposit- 
ors. Every  bank  failure  hurts  all  the 
banks.  The  maximum  prosperity  of  the 
banks  will  never  be  reached  until  the 
banks  are,  and  are  believed  by  the  pub- 
lic to  be,  absolutely  safe.  Nor  will  the 
urging  of  measures  like  the  guarantee 
of  deposits  ever  cease  until  the  neces- 
sity of  making  our  banks  safer  ceases  to 
appeal  to  the  people.  Those  bankers 
who  justly  regard  such  proposals  with 
alarm  need  to  remember  that  they  may 
be  successfully  combated  only  by  the 
adoption  of  more  rational  measures 
which  will  accomplish  the  same  result. 
The  self-interest  of  the  bank  and  the 
rights  of  the  public  alike  demand  that 
very  reasonable  precaution  be  taken. 

But  will  the  separate  and  special  in- 
vestment of  savings  deposits  contribute 
to  the  safety  of  such  deposits?  That  it 
alone  will  not  absolutely  assure  entire 
safety  may,  of  course,  be  granted;  but 
will  it  increase  the  element  of  safety? 
To  this  question  the  answer  of  the  en- 
lightened nations  of  Europe  and  of 
more  than  half  the*  States  of  the  Union 
is,  as  Mr.  Jay  points  out,  yes.  In  sav- 
ings bank  legislation  no  principle  is 
more  thoroughly  established  than  that 
the  investment  of  savings  deposits 
should  be  carefully  safeguarded.  This 
has  been  the  judgment  of  the  past,  and 
it  is  endorsed  by  the  best  thought  of 
today.  The  investments  permitted 
should  be  those  which  afford  the  highest 
possible  degree  of  security. 


Doubtful  Results. 

To  the  writer  the  objections  offered 
to  the  segregation  plan  do  not  seem  well 
founded.  Those  objections  which  are 
based  upon  supposed  inconveniences 
to  the  bank  themselves,  and  to  the  neces- 
sity of  readjustment,  would  not  be  of 
serious  importance  even  if  their  reality 
is  conceded.  The  end  to  be  attained  is 
not  the  convenience  of  the  banks,  but 
the  best  interest  of  the  depositing  pub- 
lic. In  the  long  run  the  true  interests 
of  the  banks  and  of  the  public  are  iden- 
tical; or,  in  other  words,  what  is  best 
for  the  public  will  also  be  best  for  the 
banks.  In  the  end  that  bank  best  serves 
itself  which  best  serves  the  public. 

The  obj  ection  that  it  is  a difficult  mat- 
ter to  determine  just  what  deposits  are 
savings  deposits  may  be  dismissed  as 
trivial.  It  is  true  enough  that  the  line 
is  not  always  clearly  marked  between 
savings  and  other  deposits,  but  that  it 
can  be  marked  is  shown  by  the  daily 
practice  of  numerous  banks  which  do 
make  the  distinction.  The  Massachu- 
setts statute  above  quoted  makes  a clear 
distinction.  If  given  the  opportunity, 
the  depositor  himself  will  readily  solve 
the  problem  as  to  whether  he  wants  his 
deposit  considered  a savings  deposit  or 
not. 

To  the  objection  that  the  plan  might 
frighten  away  other  than  savings  de- 
positors, because  the  latter  are  preferred 
creditors,  it  is  easily  shown  that  ex- 
perience has  proven  that  fears  of  this 
kind  are  groundless;  for  savings  de- 
positors, as  well  as  municipal  and  other 
depositors,  have  long  been  preferred 
creditors  in  many  States  in  which  gen- 
eral deposits  have  steadily  grown. 

Sudden  Readjustment  Would  Be 
Harmful. 

Of  more  moment  are  the  objections 
that  the  plan  might  result  in  a reduc- 
tion of  funds  that  could  be  used  for 
general  business  purposes  and  for  com- 
mercial loans,  and  that  there  would  be 
a glut  of  funds  that  could  be  invested 
only  in  real  estate  mortgages  and  other 
approved  securities.  On  this  point  Mr. 
Jay  aptly  calls  attention  to  the  fact 
that  in  most  States  the  amounts  already 


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TRUST  COMPANIES 


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invested  by  the  banks  in  securities  which 
are  legal  for  savings  banks  equals  or 
exceeds  the  total  of  savings  deposits  in 
those  States.  In  such  cases  the  prob- 
lem would  be  the  comparatively  simple 
one  of  assigning  such  investments  to  the 
savings  department.  There  doubtless 
are  some  States,  however,  in  which  a re- 
adjustment  of  investments  would  be  re- 
quired, depending  upon  the  provisions 
for  investment  of  savings  funds  and 
npon  the  present  holdings  of  the  banks. 

In  a recent  address  before  the  Penn- 
sylvania State  Bankers’  Association, 
John  G.  Reading,  president  of  the  Sus- 
quehanna Trust  & Safe  Deposit  Com- 
pany of  Williamsport,  Pa.,  claims  that 
in  his  State  the  adoption  of  the  segre- 
gation plan  would  result  in  a contrac- 
tion of  $150,000,000  in  commercial 
loans,  the  bulk  of  which  he  believes 
would  under  the  present  law  have  to  be 
re-invested  in  real  estate  mortgages, 
since  investments  in  Government,  Penn- 
sylvania State  or  municipal  bonds  (the 
only  investments  other  than  real  estate 
mortgages  permitted  to  savings  banks 
in  the  State)  bring  so  low  an  interest 
return  as  to  be  out  of  the  question.  If 
his  figures  are  correct,  it  is  evident  that 
an  attempt  at  sudden  readjustment 
would  have  serious  consequences. 

However,  the  readjustment  need  not 
be,  and  under  any  carefully  considered 
plan  would  not  be,  sudden,  but  would 
be  spread  over  a number  of  years.  In 
the  case  of  Massachusetts,  five  years 
were  allowed,  and  that  time  might  be 
extended.  Another  possibility  in  Penn- 
sylvania would  be  the  amending  of  the 
savings  bank  law  to  permit  of  other 
classes  of  investments  which  in  recent 
years  have  by  many  States  been  regard- 
ed as  safe.  It  may  be  pertinent  to  re- 
mark, too,  that  if  $150,000,000  of  sav- 
ings deposits  in  Pennsylvania  banks  are 
now  invested  in  commercial  loans,  the 
fact  emphasizes  the  need  of  segregation 
of  savings  deposits  in  that  State. 

The  segregation  plan  is  now  in  opera- 
tion in  enough  States  and  under  suffi- 
ciently varying  circumstances  to  justify 
the  belief  that  experience  will  soon 
demonstrate  whether  it  is  a success.  Its 
operation  has  thus  far  proceeded  with- 


out serious  inconvenience  and  with  grati- 
fying results.  From  present  indications 
it  is  probable  that  the  movement  will 
spread  to  other  States  and  result  in 
more  satisfactory  conditions. 


JOHNSONS,  IN  NEWMAN  GROVE, 
IOWA,  NUMBERED  FOR 
IDENTIFICATION 

INSTEAD  of  it  being  used  as  a slang  ex- 
pression here  this  little  town  and  the 
community  round  about  are  afflicted 
with  “too  much  Johnson.”  Eric  Johnson, 
cashier  of  the  Newman  Grove  State  Bank, 
is  the  man  here  who  is  authority  for  de- 
claring that  there  is  “too  much  Johnson.” 
“I  believe  there  are  more  Johnsons  to 
the  square  inch  in  and  around  this  town 
than  anywhere  else  in  the  world,  figuring 
on  the  same  area.  I have  counted  them  up 
and  find  that,  taking  this  town  as  a center 
there  are  958  Johnsons  within  a radius  of 
twelve  miles  and  of  these  699  have  the 
Christian  name  John. 

“A  check  drawn  on  the  local  bank  will 
not  be  paid  if  it  is  simply  signed  'John 
Johnson,’  no  matter  what  the  standing  of 
the  Johnson  may  be.  Neither  will  the  in- 
dorsement ‘John  Johnson’  be  accepted  at 
the  bank  or  any  of  the  stores.  There  are 
so  many  of  them  that  we  have  to  adopt 
another  method.” 

Here  is  the  method  as  explained  by 
Cashier  Johnson,  though  not  one  of  the 
Johns: 

The  bank  and  the  stores  have  decided 
that  while  the  699  John  Johnsons  who  do 
business  here  are  entitled  to  credit  there  must 
be  some  way  of  identifying  them  and  not 
making  charges  against  one  particular  one 
when  the  charge  may  lack  several  hun- 
dred points  of  being  correct.  The  mer- 
chants and  banker  have  agreed  that  one 
John  Johnson  shall  be  “John  Johnson  No. 
1,”  the  next  “John  Johnson  No.  9,”  and  so 
on  until  all  of  the  699  have  been  given 
and  have  accepted  their  numbers. 

The  John  Johnsons  take  to  the  idea  kind- 
ly and  like  it  so  well  that  they  are  notify- 
ing their  friends,  requesting  that  when  they 
write  letters  to  them  they  address  them  by 
number  as  well  as  by  name.  In  this  way 
they  figure  that  if  a letter  received  at  the 
office  intended  for  John  Johnson  No.  699  is 
delivered  to  and  received  by  John  Johnson 
No.  93  it  will  be  an  easy  matter  to  find 
out  who  is  to  blame  for  the  error. — yew- 
man  Orore  Correspondent  Sioux  City  Jour- 
nal. 


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INVESTMENTS 

Conducted  by  Franklin  Etcher 


THE  BIG  R.  R.  DEAL  THAT  WENT  WRONG 

By  A.  Franklin 


A syndicate  of  high  degree 
Comes  stealthily  across  the  sea 
Bringing  a brilliant,  bold  Intent 
To  chain  with  steel  the  continent. 

And  secretly  it  sets  about. 

To  buy  the  Yankee  magnates  out. 

FYom  tropic  heat  to  Arctic  cold 
It  hath  made  millions  manifold; 

Here's  gold  and  glory  more  to  reap. 

The  while  these  purse-proud  Yankees  sleep; 
Rock  Island,  Lehigh,  Wabash,  Mop,— 

The  seas  alone  its  sway  shall  stop. 
Stenographer,  accountant,  clerk. 

It  hires  by  scores  and  puts  to  work; 

Analyses  its  experts  make 

That  praise  the  roads  it  means  to  take; 

Its  members  mum  ride  near  and  far. 
Inspecting  things  from  private  car; 

And  while  they  chuckle  as  they  choose. 

Still  all  the  Yankees  strangely  snooze. 

Their  minds  made  up,  they  buy,  buy,  buy; 
The  outlook's  fair,  though  stocks  are  high. 
Each  lot  is  based  on  well-placed  loan. 

They  mark  the  railroad  map  their  own, — 
And  almost  have  their  plans  prevailed 
Where  Goulds  and  Harrimans  had  failed. 

Ix>!  Mop’s  off  twelve.  Rock  Island  ten — 
Flies  every  stock  back  home  again. 

No  title  save  of  high-born  names 
This  peers'  son  syndicate  retains. 

In  place  of  its  pounds,  shillings,  pence. 

It  owns  this  dear  experience: 

Though  sound  the  Yankee  slumber  seems, 
’Tls  lighter  far  than  others’  dreams! 

— Boston  News  Bureau  Poet. 

* I VHE  big  mystery  with  regard  to 
A Rock  Island  is  out.  There  may 
be  others  to  come  and  with  regard  to  the 
properties  concerned,  the  situation  is 
anything  but  clear,  but  so  far  as  the 
main  facts  of  the  case  are  concerned, 
the  light  has  been  turned  on.  Who  is 
buying  Rock  Island,  Denver,  Rio 
Grande,  Wabash,  Lehigh  Valley? — 
that  was  the  question  continually  asked 
during  the  year's  early  months,  and 
which  baffled  the  most  astute  market 
observers.  It  is  answered  now.  The 
market’s  suspicions  that  underneath  it 
all  something  was  going  on,  something 
important,  have  been  fully  confirmed. 
There  was  buying  of  these  properties 
going  on,  concerted  buying  and  with  an 
object.  The  Pearson-Farquhar  syndi- 

334 


cate  was  the  buyer.  That  has  gone  to 
smash  now,  letting  a flood  of  light  in  or 
the  whole  matter. 

As  conditions  disclosed  show  it  up, 
the  whole  case  appears  to  be  one  of 
over-confidence.  As  was  fully  set  forth 
in  an  article  appearing  in  January  “In- 
vestments,* * the  Rock  Island  crowd  had 
for  some  time  past  been  fostering  the 
ambitious  project  of  an  ocean-to-occan 
line.  Came  to  them  one  Pearson  and 
one  Farquhar.  “We  have  all  kinds  of 
foreign  backing,*'  they  said;  “let  us  in 
on  this  scheme  and  we  can  be  of  great 
assistance  in  helping  you  carry  it 
through.**  The  Reid-Moore  party  were 
not  slow  to  take  up  with  this  new  ally. 
Here  was  the  very  thing  they  needed 
most — capital,  financial  strength.  Into 
their  inmost  councils  were  admitted 
these  foreign  capitalists.  There  was  set 
on  foot  what  was  perhaps  the  most  am- 
bitious project  ever  undertaken  for  con- 
solidating into  one  system  a great  num- 
ber of  powerful  railroads. 

The  Scheme. 

As  events  have  shown,  the  scheme  was 
fatuous — there  was  never  enough 
money  behind  the  syndicate  to  carry  out 
plans  of  such  magnitude,  especially  as 
these  plans  conflicted  directly  with  the 
existing  order  of  things.  With  the 
Reid-Moore  party  already  in  control  of 
the  vast  Rock  Island  system,  stretching 
westward  from  Chicago,  with  control  of 
the  Lehigh  Valley  resting  pretty  se- 
curely in  their  hands,  with  every  indica- 
tion that  they  could  get  the  Wabash  as 
a connecting  link  when  they  wanted  it, 
it  seemed  indeed  as  though  the  great 
plan  for  an  ocean-to-ocean  line  had  a 
first  rate  chance  of  success.  And  as  a 
matter  of  fact,  there  was  nothing  wrong 
the  matter  with  the  scheme  except  that 
these  interests  were  reckoning  without 
their  host — their  host  in  this  case  being 


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INVESTMENTS 


335 


the  proprietors  in  possession  of  the 
territory  into  which  the  new  combina- 
tion was  trying  to  force  its  way. 

It  was  indeed  a scheme  to  appeal  to 
the  imagination.  The  Western  Pacific 
from  San  Francisco  to  Salt  Lake,  from 
there  the  Denver  & Rio  Grande  and  the 
Rock  Island  into  Chicago,  eastward 
again  the  Wabash  and  the  Lehigh  Val- 
ley straight  into  New  York.  That  was 
to  be  the  great  transcontinental.  Small 
wonder  that  these  men  of  big  ambitions 
found  in  it  a scheme  to  fire  their  imagi- 
nation and  to  cause  them  to  associate 
with  themselves  all  the  eapital  resources 
they  possibly  could.  Had  the  scheme 
been  successful,  think  what  it  would 
have  meant  to  them ! 

The  Stock  Market  Side  of  It. 

That  was  the  condition  of  things  dur-' 
ing  the  early  months  of  the  year.  Stocks 
in  all  these  properties  were  being 
bought  as  they  were  offered  in  the  mar- 
ket. For  Denver  & Rio  Grande,  for 
Missouri  Pacific,  even  for  the  despised 
Wabash,  there  was  a continuous  de- 
mand. Sometimes  at  concessions,  but 
steadily  nevertheless,  these  stocks  were 
taken.  There  was  never  a time  when 
they  could  not  be  sold.  Who  was  buy- 
ing?— that  was  what  the  Street  kept 
wondering.  Steady  buying  in  so  many 
places  along  this  transcontinental  route 
dreamed  of  by  George  Gould  finally 
awoke  suspicion,  and  rumor  that  an- 
other attempt  to  put  through  the  Gould 
plan  was  afoot  became  rife.  Cleverly, 
however,  the  buying  was  done,  and  in 
such  a way  that  the  buyer’s  hand  was 
never  shown.  The  Street  realized  that 
it  was  going  on,  realized  the  big  plans 
were  under  way,  realized  that  interests 
of  the  first  financial  strength  must  be 
involved — suspected,  but  was  unable  to 
figure  out  quite  what  it  all  meant. 

And  so  everything  went  along  well 
until  the  financial  skies  began  to  darken 
and  clouds  of  trouble  to  gather  on  the 
horizon.  First  came  the  postponement 
by  the  Supreme  Court  of  the  trust  cases 
and  with  it  the  certainty  that  this  evil 
influence  must  overhang  the  market  for 
a year  to  come.  Then  came  the  insist- 


ence of  the  demands  of  labor,  bringing 
about  a general  increase  in  wages  and 
precipitating  the  bitter  fight  for  freight 
rates.  The  banks  about  this  time,  too, 
made  a report  showing  a vast  increase 
in  loans  and  a general  position  warrant- 
ing the  expectation  of  trouble  later  on 
in  the  year.  Under  these  influences, 
prices  began  gradually  to  recede.  Strong 
interests  felt  that  stock  liquidated  at 
prevailing  prices  could  be  bought  back 
more  cheaply  later  on. 

When  the  Storm  Broke. 

It  is  unnecessary  in  connection  with 
this  Rock  Island  matter  to  go  deeply 
into  the  details  of  the  market’s  action 
during  the  first  half  of  the  year,  but 
from  what  has  been  said,  it  can  plainly 
be  seen  that  the  crumbling  market  put  a 
severe  strain  upon  the  foreign  syndicate 
which  had  started  in  to  do  such  great 
things  with  American  railroads.  They 
were  loaded  with  stocks — stocks  of  a 
kind  on  which  they  could  readily  borrow 
when  the  financial  skies  were  smiling^ 
but  stocks  of  a class  on  which  loans 
were  quickly  enough  called  when  once 
trouble  btgan  to  brew.  All  along  the 
line  cruel  recessions  took  place  in  the 
quotations  for  these  securities.  For  a 
long  time  the  great  financial  strength 
of  the  foreign  syndicate  made  it  seem 
as  though  it  would  be  possible  to  ride 
out  the  storm.  So  probably  it  would 
have  been  had  the  other  big  market  in- 
terests been  friendly  to  the  one  which 
was  sinking  deeper  and  deeper  into 
trouble.  Exactly  opposite,  however, 
was  the  case.  The  railroad  interests  in 
control  of  existing  transcontinental 
lines  could  hardly  be  expected  to  view 
with  much  distress  the  troubles  of  this 
would-be  newcomer. 

Finally  the  water  became  too  rough 
and  lest  this  great  craft  in  foundering 
should  cause  too  great  a disturbance,  a 
strong  syndicate,  headed  by  Kuhn,  Loeb 
& Company,  stepped  in  and  at  a price — 
its  own  price — took  over  the  stock  hold- 
ings of  the  syndicate  which  had  gotten 
itself  into  trouble.  Immediately  the 
market  experienced  great  relief.  It  was 
as  though  a great  weight  which  was 


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of  Established  Gas  and  Electric  Companies 

These  bonds  are  issued  by  prosperous  Companies  of  New  England  and  the 
Middle  West;  companies  whose  business  has  been  developed 
by  years  of  constant  and  growing  service,  whose  credit  is 
firmly  established  and  whose  ability  to  carry  their  bonded 
debt  has  been  proven  through  periods  of  prosperity  and  of 
general  business  depression. 


The  control  of  these  companies  is  vested  In  the  NATIONAL  LIGHT,  HEAT  A POWER 
COMPANY,  New  York,  which,  through  its  various  sub-companies,  controls  the  lighting 
franchises  of  some  Twenty  Cities  and  Towns. 


DOUBLE  SECURITY 


Each  of  these  Bonds  bears  the  unconditional  Guarantee  of  the  National  Light,  Heat 
A Power  Company  as  to  prompt  payment  of  principal  and  Interest.  This  Guarantee 
means  protection.  Insurance  against  loss  and  the  constant,  unremitting  supervision  and  in- 
terest of  a large  and  successful  corporation  which  controls  these  valuable  properties. 

DENOMINATION  $500  AND  $1,000. 

For  offerings  and  full  Information  address  Bond  Dept. 

A.  H.  Bickmore  & Co.,  Inrntmont  Securities  30  Pino  Stmt,  Now  York 


hanging  around  its  neck  had  been  sud- 
denly taken  off. 

After  Effects. 

To  those  into  whose  territory  the 
Pearson  syndicate  was  trying  to  push 
itself  all  this  was  more  or  less  gratify- 
ing, but  looked  at  in  a larger  way,  there 
is  some  question  as  to  what  may  be  the 
after  effects  of  what  has  taken  place. 
The  Reid-Moore  group,  as  is  well 
known,  is  one  of  the  most  powerful, 
financially  speaking,  in  the  country. 
With  them,  associated  in  this  venture, 
was  this  other  powerful  foreign  syndi- 
cate, the  two  of  them  comprising  a 
financial  power  representing  untold  mil- 
lions. They  started  out  to  do  some- 
thing, accumulated  an  immense  amount 
of  stocks,  and  in  the  end,  suffered  com- 
plete defeat  and  had  these  stocks  all 
taken  away  from  them.  Marketwise, 
this  is  a consideration  far  too  important 
to  overlook.  There  has  been  a great 
shifting  about  of  securities.  Has  it 
helped  or  has  it  hurt  things?  That  is 
the  question  as  it  appeals  to  the  in- 
vestor. 

It  will  be  possible  to  give  a more 
definite  answer  when  it  is  known  what 
the  Kuhn,  Loeb  & Company  syndicate 
proposes  to  do  with  the  stocks  it  has 
acquired.  Into  its  hands  has  come  this 
great  mass  of  Denver  & Rio  Grande, 
Missouri  Pacific,  Wabash  and  possibly 
Lehigh  Valley.  What  will  he  done  with 
these  stocks?  Will  the  Kuhn,  Loeb  & 


Company  interests  carry  out  the  am- 
bitious plan  of  an  ocean-to-ocean  route, 
or  will  these  stocks  he  fed  out  on  the 
market  as  the  opportunity  offers?  The 
latter  course,  it  must  he  admitted, 
seems  the  more  probable.  In  its  rail- 
road affiliations,  the  Kuhn  Loeb  interest 
is  pretty  definitely  fixed  already.  That 
group  of  financiers  would  hardly  he 
likely  to  undertake  the  kind  of  a scheme, 
represented  by  this  plan,  of  a new  route 
from  New  York  to  San  Francisco.  Far 
more  likely,  indeed,  does  it  seem  that 
the  stocks  taken  over  from  the  Pearson 
syndicate  will  be  held  no  longer  than 
necessary  and  sold  at  the  very  first  op- 
portunity. Gifted  with  rare  stock  mar- 
ket sagacity  as  are  these  interests,  it  is 
hardly  likely  that  this  selling  will  he 
done  in  such  a way  as  to  cause  disturb- 
ance. And  yet  from  the  stock  market 
point  of  view  the  fact  that  this  selling 
will  sooner  or  later  have  to  he  done  can 
hardly  he  regarded  as  anything  hut  a 
most  unfavorable  circumstance. 


FROM  A FOREIGN  VIEWPOINT 

OECAUSE  of  the  better  perspective 
in  which  they  see  conditions  pre- 
vailing here,  foreign  bankers’  views  of 
our  market  are  often  far  clearer  than 
our  own.  Speaking  of  conditions  in  the 
United  States,  Sir  Felix  Schuster,  head 
of  the  great  Union  of  London  Sc  Smith’s 
Bank,  of  London,  said: 


330 


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Mutoti  National  Sank 

CAPITAL  $1,600,000  fflfrltflfttlfr,  SURPLUS  $900,000 


GEO.  H.  WORTHINGTON,  President 
J.  F.  HARPER*  Vice-President 
E.  R.  FANCHER,  Vice-President 
a A.  COULTON,  Cashier 
W.  E.  WARD*  Asst.  Cashier 


€|  Organized  in  1884*  Mote  than 
twenty  five  years  of  service  back 
of  us*  May  we  be  of  use  to  you? 


“The  condition  of  affairs  in  the  United 
States  has  for  some  time  past  been 
watched  with  a certain  amount  of  anx- 
iety, and  exports  of  gold  to  that  coun- 
try are  already  taking  place.  The  best 
opinions,  however,  that  I have  been  able 
to  obtain  do  not  appear  to  warrant  the 
pessimistic  views  not  infrequently  ex- 
pressed of  the  economic  condition  of  tUj 
United  States.  It  is  true  that  the  in- 
creased cost  of  living  has  brought,  as  it 
was  bound  to  do,  labor  questions  into 
the  foreground;  legislation  also  is 
feared  in  some  quarters  which,  while 
dealing  with  acknowledged  existing 
evils,  might  inflict  injury  upon  legiti- 
mate commercial  interests.  Perhaps, 
too,  the  lessons  of  the  crisis  of  1907 
were  somewhat  * too  rapidly  overlooked 
in  the  great  and  sudden  revival  of  last 
year,  and  the  banking  and  currency 
problems  disclosed  in  that  crisis  have 
not  yet  been  solved.  But  similar  doubts 


and  anxieties,  and  greater  ones,  have 
before  this  been  overcome  by  that  re- 
sourceful people,  and  there  can  be  no 
question  of  the  intrinsic  soundness  of 
their  increasing  prosperity  and  develop- 
ment, rapid,  too  rapid,  perhaps,  as  that 
development  has  been.  Our  information 
indicates  that  the  outlook  and  conditions 
are  considered  satisfactory,  that  diffi- 
culties in  the  commercial  markets  are 
not  anticipated,  that  banks  are  pursuing 
a conservative  policy,  so  as  to  keep 
their  resources  well  in  hand  to  meet  the 
autumn  demands.  Gold  exports  from 
this  country  are  not  now  expected  in 
large  volume;  they  may  possibly  occur 
later,  but,  according  to  present  esti- 
mates, not  in  excessive  amounts.  A fore- 
cast is  more  than  ever  difficult,  in  view 
of  the  contradictory  statements  as  to  the 
condition  of  crops  in  the  States,  on 
which  so  much  depends.” 


SPECULATION  IN  BANK  STOCKS 

By  Charles  W.  Stevenson 


TN  considering  an  unusual  subject  of 
this  kind  it  must  be  admitted  that 
there  is  no  law,  either  artificial  or  nat- 
ural, that  can  confine  the  dealing  in 
shares  and  commodities.  Under  our 
system  of  using  the  corporation  as  a 
frame  upon  which  to  string  a business 
we  must  admit  the  right,  and  best  re- 
sults of  transfer.  There  is  in  certain 
corporations  a restriction  on  the  right 
of  sale  imposed  by  the  issuing  power 


itself.  But  such  is  not  the  case  where 
the  corporation  is  free,  and  willing  to 
have  its  ownership  pass  where  it  may, 
being  only  concerned  in  the  conduct  of 
the  business  itself.  True,  in  the  best  of 
corporations,  and  especially  in  the  bank 
stocks  of  the  smaller  banks,  there  is  the 
security  of  a controlling  interest  de- 
sired in  the  hands  of  the  men  who  are 
the  chief  officers.  But  this  is  not  im- 
perative. And  it  is  exercised  against 

S3: 


Digitized  by 


Google 


To  Buy  or  Not  to  Buy 


But  easily  obviated  by  good  Market  Literature. 
Bead  for  dally  letter  aad  other  data. 


is  the  ? Most  Puzzling 
to  the  Average  Trader 


J.  FRANK  HOWELL 


Member  Consoli- 
dated Stock  Ex- 
change of  N.  Y. 


34  NEW  STREET  NEW  YORK  CITY 


no  law  of  transfer,  but  merely  out  of 
the  goodwill  and  benefit  to  the  parties 
concerned.  A way  to  transfer  the  value 
and  property  in  corporate  shares  must 
always  attach  to  the  individual  owner. 
And  in  this  lies  utter  freedom  from  that 
oppression  which  comes  from  the  man- 
agement of  the  institution  through  the 
domination  of  a few.  The  bank  is  no 
less  amenable  to  this  law  than  others, 
taken  in  its  fundamental  principle. 

Not  only  is  an  individual  right  in- 
volved but  the  bank  organism  itself 
must  always  have  the  benefit  among  the 
people  of  that  open  regard  which  at- 
taches to  any  stock  that  may  be  pur- 
chased by  the  people  with  all  the  at- 
tending rights  of  inspection. 

A Wide  Distribution  Desirable. 

It  will  be  unnecessary  to  go  into  the 
good  results  of  a wide  ownership  and 
distribution  of  bank  stocks  as  a matter 
of  public  investment.  Here,  again,  the 
right  of  ownership  cannot  be  gainsaid. 
But,  from  the  standpoint  of  the  bank, 
it  is  desirable  for  the  interest  of  the  in- 
stitution, as  is  apparent  to  all  thought- 
ful bankers,  that  the  stock  be  placed 
where  it  will  do  the  most  good  to  the 
, bank.  There  is  competition  in  banking 
as  in  everything  else,  And  it  is  the 
bank  that  can  maintain  its  own  right  to 
exist,  because  it  has  inherent  elements 
of  strength,  that  is  to  succeed.  This  is 
to  say  that  the  unifying  of  the  divers 
commercial  interests  of  a city  or  a com- 
munity give  to  the  bank  this  inherent 
strength.  This  is  always  best  subserved 
by  a proper  placing  of  the  stock.  But 
it  is  also  a guaranty  that  the  ownership 
of  the  stock  is  for  an  investment  which 
will  carry  with  it  such  an  interest  as 
will  assure  to  the  bank  in  question  the 
full  business  of  the  owner  as  a de- 
positor and  a borrower.  To  this  may 
be  added  perhaps  that  of  a director;  and 
338 


if  not  this  then  that  of  a friend  who 
will  bring  business  to  the  bank. 

Therefore  there  is  good  in  a wide 
distribution  of  the  stock  of  the  bank. 
In  the  matter  of  ownership  outside  of 
this  it  may  be  desirable  according  to 
the  situation  and  conditions  that  are  at 
hand.  For  instance,  in  a small  country 
bank  it  is  often  desirable  to  have  some 
one  of  the  leading  men  of  the  com- 
munity interested,  not  for  the  business 
which  he  may  bring,  but  for  the  good- 
will he  will  bring  and  the  character 
which  his  association  will  add  to  the  in- 
stitution. In  the  same  way  with  a city 
institution  there  is  need  for  the  great 
capitalist,  if  it  be  no  more  than  for  the 
implied  strength  he  gives. 

Investment  Feature  Adds  to  Sta- 
bility. 

Taking  the  city  institution  as  an  ex- 
ample, the  stock  which  is  regarded  as 
a good  investment  by  the  general  pub- 
lic because  of  the  wl^le  makeup  of  the 
bank  adds  to  the  stability  of  the  bank. 
For  confidence  is  unshaken  in  that  in- 
stitution which  has  the  general  good- 
will. And  where  the  stock  is  desired 
as  an  investment,  not  for  the  large 
profits  which  may  accrue,  but  for  the 
safety  of  the  placing  of  funds,  then  it 
will  attract  to  itself  the  best  there  is  in 
the  community. 

It  is  very  easy  to  make  a showing  in 
this  regard.  And  yet  outside  of  the 
publishing  of  the  names  of  directors 
there  is  little  done  to  show  to  the  peo- 
ple of  a city  who  are  the  owners  of  the 
stock.  One  of  the  future  changes  in 
the  great  banks  of  the  country  must 
be  regarded  as  their  popularization  at 
home.  The  stocks  of  the  national  banks 
of  the  country  are  largely  scattered. 
But  when  they  become  the  property  of 
the  men  and  women  of  moderate  means 
in  the  city  of  operation  then  the  bank 


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Investors  may  keep  in  touch  with  New  York  Stock  market  conditions 
and  receive  suggestions  for  investment  or  speculation  through  our  weekly 
**  Market  Letter  on  Stocks.** 


Swartwout  & Appenzellar,  Bankers 

Members  New  Tork  Stock  Sheehan  re 

40-42-44  PINE  STREET,  NEW  TORK  CITT 

aas tsn^  B-k BM*  vsupjt* 


will  grow  stronger  thereby.  For  when 
there  are  hundreds  of  stockholders  in 
the  city  of  operation,  among  this  class 
there  will  be  hundreds  of  special  plead- 
ers for  the  bank.  There  will  be  hun- 
dreds that  will  read  the  published  state- 
ments with  avidity  and  compare  them 
with  rival  institutions  in  the  same 
city.  It  is  this  which  will  give  to 
the  bank  an  added  strength  not  other- 
wise attainable.  But  all  this  is  on  the 
ground  purely  of  investment,  of  buy- 
ing and  owning  for  the  safety  of  the 
placement,  and  for  the  steady  and  rea- 
sonable returns  on  the  capital. 

Ownership  Without  Interest  Detri- 
mental. 

On  the  other  hand,  it  is  not  desirable 
that  aliens  shall  own  shares  unless  it 
will  bring  ties  of  financial  interest  to- 
gether that  will  be  for  the  good  of  both 
institutions.  Just  to  own  shares  in  a 
bank  half  way  across  the  country  is  of 
no  advantage  to  the  bank  otherwise. 
The  dividends  not  only  go  out  of  the 
country,  but  there  is  no  benefit  through 
the  drawing  in  of  business  which  comes 
with  a home  ownership.  And  there  are 
many  national  banks  of  the  country 
which  would  be  much  improved  by  this 
distribution  of  the  stock  near  to  the  base 
of  operation. 

A bank  lives  by  what  it  feeds  on.  Its 
food  is  deposits  and  its  growth  is  credits. 
If  it  is  to  be  of  full  benefit  to  the  com- 
munity in  which  it  exists  it  must  ren- 
der to  that  community  the  full  force  of 
its  being.  It  cannot  do  this  if  it  is  de- 
prived of  the  benefit  to  it  which  accrues 
through  home  ownership  for  investment 
and  association.  Stock  scattered  over 
the  country  which  does  not  add  business 


to  the  bank  is  just  that  much  waste 
power. 

Speculation  Dangerous  to  Stable 
Operation. 

In  the  modern  complexities  of  busi- 
ness the  custom  of  buying  and  selling 
shares  has  invaded  the  field  of  bank- 
ing. And  there  are  now  daily  and  week- 
ly quotations  of  bank  stocks  in  some  of 
the  larger  centers.  And  especially  since 
there  have  been  mergers  and  rumors  of 
mergers  there  is  a growing  tendency  to 
buy  and  sell  shares  for  the  immediate 
profit  there  is  in  the  trade;  in  a word, 
to  speculate.  It  must  be  dangerous  to 
the  management.  And  if  it  shall  con- 
tinue to  increase,  must  become  one  of 
the  items  of  banking  interest  that  will 
demand  thought  and  attention.  For 
there  is  no  good  can  come  out  of  this 
form  of  trading.  It  matters  not  that 
the  ownership  is  independent  of  this.  It 
matters  not  that  it  does  not  come  close 
to  the  management.  It  will  in  time 
come  closer  and  in  time  it  will  make 
its  influence  felt  to  the  detriment  of  the 
safe  and  sane  principles  of  banking. 

A bank  occupies  that  peculiar  posi- 
tion in  the  business  world  that  gives  it 
cognizance  of  all  the  buying  and  sell- 
ing, both  legitimate  and  speculative, 
without  any  participation  therein.  And 
it  is  this  position  that  gives  it  strength 
and  the  power  to  meet,  the  issues  of  com- 
merce as  they  come  up  through  a credit 
system  built  on  confidence.  But  sup- 
pose that  the  public  understand  that  a 
bank  is  in  the  speculative  markets,  and 
that  men  are  fighting  for  the  control 
thereof  by  the  usual  methods  used  in 
industrials  and  railroads,  what  will  be 
the  effect  on  the  deposits?  There  ought 

330 


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TELEPHONES 
67901 


6791 

6799 

6793 

6794 


BROAD 


Union  Ferry 
Stock  and  5*i 
Now  Amsterdam 
Gas  ff’s 


WILLIAMSON  A SQUIRE 

MEMBERS  N.  Y.  STOCK  EXCHANGE 

INVESTMENT  SECURITIES 

25  BROAD  IT,  BEW  TORE  BITY 

All  Local  Street  Railway,  Gas,  Electric  and  Ferry 
Companies  Bonpkt,  Sold  and  Quoted 


Economy  Light  A 
Power  5vs.  ISM 
Syracuse  Light- 
ing 6*s,  1981 
Dela.,  Lack.  A 
Western  Coal 
Pacific  Gas  and 
Electric 

Klng*s  County 
EL  Lt.  6 Power 


to  be  absolutely  no  speculation  in  bank 
stocks.  And  there  ought  to  be  some 
method  adopted  and  some  restriction 
devised  which  will  prevent  the  sale  of 
shares  of  stock  in  a speculative  way. 
But  it  should  be  done  through  the  busi- 
ness and  banking  world. 

Fluctuations  in  Price  May  Cause 
Panic. 

It  needs  but  a glance  at  the  fields  of 
investment  where  there  is  speculation 
to  discern  that  it  would  be  highly  detri- 
mental to  a bank  to  be  involved  therein. 
Even  the  matter  of  price  of  shares  with- 
out the  schemes  which  are  used  to  bear 
or  bull  the  stock  would  within  itself 
tend  to  produce  panic.  The  depositor, 
noting  some  day  a drive  in  the  stocks 
of  the  Great  National  Bank  of  Gamble- 
town,  would  immediately  begin  to  listen 
to  the  rumors  that  fill  the  air  and  the 
sensational  stories  that  are  compounded 
for  the  purpose  of  the  game.  And 
there  would  appear  in  all  probability 
some  feature  that  would  cast  a doubt 
on  the  continued  profits  or  show  some 
undue  acceleration  therein,  and  this 
would  bring  to  light  something  con- 
nected with  the  internal  management. 
Such  must  be  the  inevitable  result.  This 
depositor,  perhaps,  not  knowing  just 
how  much  weight  to  put  to  the  incident 
that  is  relied  on  for  the  speculative 
feature  might  scent  something  in  the 
wind  that  would  make  for  the  ultimate 
downfall  of  the  bank.  He  would  imme- 
diately seek  to  withdraw  his  deposit. 
Others  would  do  likewise.  And  still 
others,  seeing  and  hearing  vague  and 
shadowy  rumorp,  would  also  seek  to  get 
their  money  in  hand.  And  thus  a panic 
might  be  the  reasonable  result. 

We  have  not  reached  anything  like 
this  in  the  speculative  field  of  trading 
bank  stocks.  But  it  may  not  be  far  dis- 

340 


tant,  if  the  growing  tendency  to  specu- 
late herein  is  not  by  some  means 
frowned  upon.  The  people  own  the 
banks.  It  is  to  their  interest  that  they 
be  run  on  the  natural  principles  that 
give  them  strength  and  helpfulness. 
But  to  do  this  they  must  be  like  a city 
set  upon  a hill,  whose  light  cannot  be 
hid.  They  must  be  above  the  specula- 
tive market,  not  a part  of  it.  And,  in- 
deed, the  bank  has  a duty  to  perform 
always  in  curbing  speculation  in  the 
granting  of  its  loans. 

Creates  Opportunity  For  Injurious 
Talk. 

One  can  easily  imagine  that  there 
might  come  a time  by  the  mere  trading 
in  stocks  when  there  would  be  banks 
organized,  merged  or  manipulated  for 
the  purpose  of  depressing  the  shares  or 
unduly  raising  their  price.  That  such 
a condition  is  wholly  foreign  to  the  safe 
stable  banking  position  is  admitted. 
There  can  be  none  of  the  speculative 
features  about  a bank  stock.  And  to 
create  a condition  in  which  there  might 
be  engendered  something  of  the  kind 
would  be  to  imperil  the  institution. 

But  leaving  this  objection  aside,  the 
mere  fact  that  there  is  speculation  in  a 
certain  bank's  shares  may  give  rise  to 
talk  that  may  prove  very  injurious  to  its 
welfare  and  even  its  safe  conduct.  For 
if  there  is  one  impregnable  institution 
in  all  the  city  or  community  it  is  the 
bank.  Here  men  rest  their  full  con- 
fidence. And  as  all  roads  lead  to  the 
bank,  so  all  men  come  to  the  bank  with 
a trust  in  its  management  and  a con- 
fidence in  its  careful  conduct  and  its 
inviolable  security.  Let  some  manipu- 
lator of  the  stock  market  take  hold’ of 
a bear  campaign  or  a bull  tossing,  and 
what  becomes  of  this  dignity  that 
hedges  about  a king?  It  is  gone.  The 


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HUDSON  COMPANIES  OWNSx 

• Hodsoi  A Maahafrtaa  B.  B.  Co.  First  Htf«.  Bonds 

• Hudson  A Manhattan  B.  B.  Co.  Common  Stock 

Hudson  A Manhattan  B.  B.  Co.  Preferred  Stock  Equities  In  Beal  Estate 

OBLIGATIONS  CONSIST  OF  s 

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* I will  buy.  sell  or  quote  these  securities 
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proposed  change  in  some  part  of  the 
personnel  gives  opportunity  to  talk. 
The  fact  that  a certain  failure  may 
come  close  to  the  institution  is  enough 
to  create  antagonism  and  distrust.  And 
it  will  soon  become  the  business  of  the 
speculator  to  take  hold  of  any  item  and 
make  it  serve  his  purpose  in  affecting 
the  price  of  the  shares.  If  the  state- 
ment shall  show  that  the  bank  has  not 
the  required  amount  of  reserve  on  hand 
for  the  time  it  may  be  made  much  of  in 
the  interest  of  a clique.  You  say  this  is 
anticipating,  and  will  never  come.  It 
may  be.  But  a less  degree  is  only 
less  harmful. 

Contrary  to  the  Spirit  and  Practice 
of  Banking. 

There  is  something  about  the  make-up 
of  a bank  that  prohibits  speculation. 
These  shares  have  a value,  it  is  true. 
They  are  the  property  of  the  individual. 
As  we  have  shown,  it  is  not  to  the  best 
interests  of  the  public  and  the  de- 
positors that  there  be  restrictions  around 
their  transfer.  This  question  was  asked 
of  the  Governors  of  the  Bank  of  Eng- 
land by  the  Monetary  Commission.  The 
answer  was  that  there  was  no  attempt 
to  control  the  ownership  of  shares, 
though  in  other  large  London  banks 
there  are  restrictions  on  transfers.  But 
it  was  averred  there  could  be  but  one 
vote  to  the  owner,  and  after  the  limit 
of  that  vote  had  been  reached,  the  own- 
er of  the  shares  could  not  vote.  Be  this 
as  it  may,  when  applied  to  the  banks  of 
the  United  States  it  remains  that  the 
bank  ought  not  to  be  used  as  a vehicle 


of  speculative  ownership  for  the  rea- 
son that  the  assets  are  the  trust  funds 
of  the  depositors  and  they  must  stand 
high  above  the  turmoil  of  trade  and  be 
in  every  dollar  worth  their  face.  Not 
only  will  the  speculation  tend  to  hurt 
the  bank  in  the  public  confidence,  but 
the  fact  that  trust  funds  are  at  stake 
will  tend  to  render  them  immune  and 
sacred. 

Hurtful  to  the  Depositor's  Trust. 

No  bank  can  long  exist  without  a com- 
plete trust  on  the  part  of  the  depositors. 
If  stories  which  affect  the  bank's  stand- 
ing and  character  seem  to  be  a part  of 
the  speculative  tactics,  should  they 
grow,  which  may  cause  a panic,  then  it 
is  incumbent  that  those  in  the  manage- 
ment of  the  large  banks  see  to  it,  as  far 
as  in  their  power  to,  and  prevent  the 
dealing  of  bank  stocks  and  their  quota- 
tions on  the  stock  exchanges  of  the 
country.  This  may  at  first  seem  to  be 
in  derogation  of  the  rights  of  the  parties 
who  are  shareholders.  But  if  it  is  nec- 
essary in  the  Bank  of  England  to  con- 
trol the  number  of  votes  that  one  owner 
shall  have,  then  it  is  incumbent  on  the 
management  here  to  see  that  the  shares 
be  not  used  for  the  sole  purpose  of  get- 
ting positions  within  the  institution.  It 
would  be  much  better  if  the  shares  were 
all  owned  by  residents  of  the  city  or  dis- 
trict in  which  the  bank  does  business  for 
the  sake  of  the  business  which  such  own- 
ership brings.  This  open  conduct  of 
the  bank,  the  publication  of  the  capital 
and  the  condition  in  the  newspapers, 
must  carry  with  it  a feeling  of  eom- 

341 


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STANOMO  PAINT  00.  STOCK 

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Dealers  In 

Tel.  TS6S-6-T-S-9  Hanover 

Unlisted  and  Inactive  Securities 

43  EXCHANGE  PLACE,  N.  Y. 

plete  trust,  or  it  will  be  made  the  sub- 
ject of  attack  by  manipulators.  In- 
deed, as  matters  stand  now,  be  it  even 
a new  bank  it  is  best  that  there  be  no 
speculative  value  whatever  concerning 
the  shares. 

Nothing  should  be  done  by  the  public 
that  will  hurt  the  bank's  standing.  There 
is  a special  law  now  on  the  statute  books 


of  the  nation  that  he  who  wantonly  as- 
sails the  character  of  a bank  is  amen- 
able to  punishment  and  damages  as  in 
other  cases  of  slander.  And  this  ought 
to  be  the  unwritten  law  of  every  good 
citizen  and  community.  The  bank  is 
too  vital  an  institution  to  all  the  people 
to  admit  of  anything  like  vicious  dis- 
cussion as  to  its  assets. 


THE  PERSONAL  EQUATION  IN  THE  BOND 

BUSINESS 


By  George  £.  Gastello 


’C'XPERIENCE  in  selling  various 
^ lines,  a large  acquaintance  among 
salesmen,  and  a still  larger  acquaintance 
with  buyers  and  consumers  of  all 
classes,  convinces  me  that  in  no  line 
does  the  element  of  personality  exert 
the  influence  that  it  does  in  the  bond 
business.  It  is  the  logical  conclusion  of 
one  of  the  most  important  functions  of 
business  life. 


Three  generations  ago,  there  was  not 
time  for  specialization.  It  is  true  that 
in  a few  isolated  cases  we  had  great 
specialists,  but  the  lawyer,  physician, 
bookkeeper,  etc.,  etc.,  was  a “general 
practitioner."  There  were  too  few  men 
then.  The  individual  was  a general 
utility  man,  whose  activities  embraced, 
or  tried  to  embrace,  all  the  subjects  cov- 
ered by  his  profession  or  business.  As 
a result,  the  knowledge  that  the  ordinary 
human  being  can  acquire  had  to  be 
spread  out  pretty  thin  to  make  it  cover 
the  required  ground. 

Time  has  changed  all  this.  General 
knowledge  has  increased  at  a pace  which 
has  far  distanced  the  individual  capac- 
ity for  absorption,  retention,  and  the 


subsequent  practical  application  of  the 
principles  previously  acquired.  Knowl- 
edge, ever  impatient,  is  never  content  to 


34  2 


stand  still.  With  the  increase  of  knowl- 
edge came  the  inevitable  concomitant 
increase  of  science,  which  is  knowledge 
reduced  to  principles.  What,  then,  was 
more  natural  than  specialization  ? 

Personality  the  Keynote  of 
Achievement. 

In  this  bustling,  rushing  time,  the  op- 
portunities for  individual  development 
are  far  from  large.  On  the  other  hand, 
the  opportunities  ofFered  for  the  indi- 
vidually developed  never  were  larger. 
Personality  is  the  keynote  of  achieve- 
ment— the  slogan  of  success.  Why  have 
we  not  more  of  it  ? Primarily,  the  busi- 
ness houses  are  at  fault.  They  turn  a 
man  out  with  a list  of  bonds,  saddle  him 
with  the  duties  of  a lot  of  unnecessary, 
and  sometimes  unread,  reports,  and  say 
“Make  good."  One  sees  these  men  en- 
ter a bank  and  submit  the  list  to  the 
official  in  charge  of  the  purchasing  of 
investment  securities.  There  they  are, 
take  your  choice — for  all  the  world  like 
a peddler  opening  his  pack.  On  the  list 
may  be  half  a dozen  kinds  of  bonds,  and 
the  individual  number  of  concerns  rep- 
resented may  run  up  to  forty  or  fifty. 
The  salesman  will  submit  this  same  list 
to  all  his  customers; — tradesmen,  phy- 


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Miners  Bank,  Joplin,  Mo. 

We  cordially  invite  correspondence  relative  to  opportunities  and  investments,  the  advan- 
tages of  Joplin  as  a manufacturing  point,  etc.  Accounts  and  collections  also  invited. 

Capital,  $100,000  Surplus,  $100,000  Deposits,  $750,000 


sicians,  retired  manufacturers,  in  the 
same  “you-pays-your-money-and-you- 
takes-your  choice*'  style. 

The  point  is — how  much  do  these 
salesmen  know  about  the  bonds  they  are 
selling?  What  do  they  know  of  the 
physical  conditions  of  the  properties? 
In  most  cases,  they  know — and  that 
more  or  less  imperfectly — just  what  is 
printed  on  the  circulars  they  distribute. 
The  soliciting  of  thousands  of  dollars 
of  earnings  and  savings  is  far  too  seri- 
ous a matter  to  be  taken  lightly.  Kip- 
ling writes  of  Tomlinson's  account  of 
his  deeds — 

“This  I have  read  in  a book,"  he  said, 
“and  that  was  told  to  me. 

And  this  I have  thought  that  another 
man  thought  of  a prince  in 
Muscovy." 

How  many  bonds  are  sold  on  this 
very  plan? 

The  Training  of  a Salesman. 

If  a bond  house  will  take  the  time 
to  acquaint  its  men  personally  with  all 
the  details  of  the  securities  to  be  sold, 
assigning  the  various  grades  and  classes 
of  bonds  to  the  men  best  qualified  to 
handle  them,  then  give  these  men  the 
opportunity  to  work  up  a clientele 
among  the  classes  to  which  their  par- 
ticular assignment  would  most  appeal, 
there  would  then  be  offered  an  oppor- 
tunity for  individual  effort  and  per- 
sonal endeavor  which  would  develop, 
to  the  utmost,  the  personality  of  the 
salesman.  What  a splendid  thing  the  re- 
sult of  this  plan  would  be,  and  to  what 
an  enormous  extent  business  would  be 
facilitated  and  benefited!  If  the  bond 
be  an  industrial,  let  the  salesman  visit 
*he  plant,  see  everything  that  is  being 
done,  thoroughly  familiarize  himself 
with  all  the  details  of  the  property — its 


history,  present  condition  and  prospects 
— keep  him  on  the  grounds  until  he  is 
filled  with  a legitimate  enthusiasm  that 
will  make  his  work  a pleasure.  The  man 
thus  equipped  has  laid  the  foundation 
for  specializing.  If  he  be  the  right 
sort,  the  selling  of  the  bond  will  be  the' 
means  instead  of  the  end.  A specialist 
must  idealize,  for  what  is  Idealism  but 
Selection,  and  what  is  Selection?  Spe- 
cialization. The  property  being  bonded 
must  appeal  to  him  so  strongly  that  his 
thought  will  not  be  of  his  commissions, 
his  salary,  or  his  sales  account,  but  of 
the  welfare  of  the  concern,  of  what  ben- 
efit the  sale  of  the  bonds  will  effect. 

Women  should  make  splendid  secur- 
ity-sellers, by  virtue  of  their  highly  de- 
veloped intuition.  Nature  has  endowed 
them  with  this  wonderful  ability  to  ar- 
rive at  a logical  conclusion  without  pre- 
vious logical  process.  What  an  invalu- 
able asset  selective  intuition  would  be  to 
the  business  man ! A sixth  sense,  which 
would  enable  him  to  determine  at  once 
the  kind  of  security  which  would  appeal 
to  an  individual.  Yet  this  power  can 
be  developed,  and  some  men,  uncon- 
scious specialists,  know  at  once  to  whom 
to  go  with  a particular  bond.  This  is 
the  sort  of  salesman  referred  to  at  the 
beginning  of  this  article.  The  man  who 
knows!  What  does  he  know,  and  how 
does  he  know  it?  First,  he  knows  him- 
self, and  has  the  confidence  of  that 
knowledge.  Secondly,  he  knows  what 
his  bond  represents.  Thirdly,  he 
knows  his  customers — a knowledge 
which  cannot  be  acquired  except  by 
keen  observation,  hard  work,  and  unlim- 
ited comparison  and  thought.  Fourthly, 
he  knows  what  to  do,  how  and  when  to 
do  it,  and  has  developed  his  sense  of 
the  “eternal  fitness  of  things"  to  such 
a degree  that  he  has  reduced  to  but  a 
fraction  of  its  former  force,  the  axiom 
“Humanum  est  errare." 

343 


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Si  1 


THE  BANKERS  MAGAZINE 


A False  “Quantity”  in  tiie  Personal 
Equation. 

We  are  told  that  “a  good  salesman 
can  sell  anything,”  and  we  grant  the 
fact.  Furthermore,  we  prove  it  by 
pointing  to  the  thousands  of  buyers 
who  have  been  “sold.”  Proved  by  the 
lowest  form  of  wit,  it  is  true;  but  the 
morals  of  the  proof  are,  if  anything,  a 
shade  higher  than  the  morals  of  the 
statement. 

Not  long  ago  I talked  with  one  of 
the  best  “salesmen”  I have  ever  met. 
I had  not  seen  him  for  over  two  years, 
at  which  time  he  was  working  in  the 
Middle  Western  States. 

“Where  are  you  working  now?”  I 
asked. 

“New  England.” 

“How  do  you  find  business?” 

“Mighty  slow.  Great  place  if  the 
people  know  you,  though.” 

“What's  the  matter  with  your  old  ter- 
ritory? I thought  you  had  a splendid 
clientele  there.” 

“So  I did,  and  I made  big  money  out 
of  it.  Trained  the  customers  to  come 
right  up  and  eat  out  of  my  hand.  Then 
I took  out  a million  X Y & Z 4^,  and 
made  the  juiciest  killing  you  ever 
dreamed  of ! They  went  like  hot 
cakes!  Everyone  knew  me,  and  when 
I said  the  stuff  was  O.  K.,  I had  to  put 
up  a sign,  ‘Line  forms  on  this  side.'  Of 
course  it  was  bunk,  and  pretty  soon 
the  folks  were  looking  for  little  Willie 
with  cannon  and  things.  That's  why 
I’m  in  New  England.  But  there  was 
good  money  in  it,”  he  added,  regret- 
fully. 

Here  we  have  an  instance  of  the  ma- 
terial for  a specialist  being  wasted. 
Worse  than  wasted;  deliberately  thrown 
away — sacrificed  to  no  worthy  end.  This 
man  had  lived  among  his  customers  for 
years,  and  had  gained  their  confidence 
to  a degree  second  only  to  that  enjoyed 
by  their  physicians  and  clergy.  He 
knew  absolutely  what  sort  of  bond 
would  appeal  to  this  one  and  that  one, 
and,  taking  advantage  of  this  knowl- 
edge, deliberately  violated  his  trust. 

“Everyone  knew  me,  and  when  I said 
the  stuff  was  O.  K.,  it  went  like  hot 


cakes.”  That  is  the  whole  story.  The 
Personal  Equation  sold  the  bond,  but 
the  Equation  contained  a false  quantity 
in  this  case.  What  a ghastly  travesty 
on  the  term  “Securities” ! 

How  Methods  Have  Changed. 

The  increased  cost  of  living  makes  it 
imperative  that  the  individual  investor 
secure  higher  interest  on  his  capital,  and 
the  lowering  of  savings  banks’  rates  of- 
fers a golden  opportunity  for  the  start- 
ing of  a specializing  movement  among 
bond  men. 

Fifteen  years  is  not  a very  long  time 
in  which  to  overcome  a custom  of  sev- 
eral generations'  standing,  yet  this  is 
what  has  been  done.  Not  entirely  over- 
come, perhaps,  but  the  exceptions  are 
in  cases  where  the  new  order  of  things 
would  not  be  particularly  useful. 

Fifteen  years  ago,  not  a banking 
house  in  the  country  had  an  “outside” 
representative ! When  it  became  known 
that  a firm  had  detailed  a man  to  go  to 
various  cities,  selling  securities,  hands 
went  up  in  amazement,  heads  were 
shaken  sadly,  and  the  enterprising  bank- 
ers were  immediately  voted  “short  of 
funds,”  and  their  suspension  and  fail- 
ure momentarily  expected.  Now, — 
what  a change!  The  firms  not  having 
men  on  the  road  can  be  counted  on  the 
fingers  of  one  hand,  and  the  travelling 
force  of  a bond  department  is  a very 
potent  factor  in  a banking  house. 

Here  we  have  an  unconscious  spe- 
cialization, the  evolution  of  the  con- 
comitant development  of  a growth,  nec- 
essitated by  the  inevitable  “broadening” 
of  ambitious  and  progressive  concerns. 
Furthermore,  we  now  see  tremendous 
institutions,  which  handle  nothing  but 
bonds ! 

Are  we  not,  therefore,  justified  in 
premising  a further  specialization — a 
specialization  by,  for,  and  -of  the  in- 
dividual? This  done,  it  is  net  difficult 
to  visualize  a condition  dominated  by 
the  personality,  a knowledge  of  the  par- 
ticular financial  needs  and  preferences 


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pendently. He  would  need  to  make  such  a thorough  study  of  conditions  that  in 
securing  the  information  in  that  way  he  would  have  no  time  to  act  accordingly. 
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of  the  individuals  by  the  individual,  and  sand  fold — in  time  and  money — the 
a consequent  facilitation  of  distribution  initial  investment  for  the  development 
and  digestion  which  will  repay  a thou-  of  the  Personal  Equation. 


KNOWLEDGE  OF  INVESTMENTS— PART  I 


By  Charles  Lee  Scovi! 


TT  has  been  wisely  stated  that  the  se- 
■**  lection  of  sound  investments  is 
largely  a matter  of  education.  As  ap- 
plied to  persons  setting  aside  at  stated 
intervals  a certain  proportion  of  their 
earnings,  business  men  carrying  over  a 
surplus  from  year  to  year,  or  to  those 
dependent  upon  the  income-producing 
power  of  their  money,  the  importance  of 
this  statement  cannot  be  exaggerated. 
Further  than  this,  it  is  a subject  which 
should  be  a familiar  topic  of  discussion 
in  the  homes  of  all  prosperous  people. 

No  man  can  foretell  at  what  time,  or 
under  what  circumstances  he  may  cease 
to  be  a factor  in  the  activities  of  this 
world.  It  is  therefore  a positive  duty, 
or  at  least  a wise  precaution,  for  him 
to  familiarize  the  immediate  members 
of  his  family  with  the  subject  of  invest- 
ments. Otherwise,  as  frequently  hap- 
pens, they  may  be  persuaded,  through 
lack  of  knowledge,  to  invest  in  venture- 
some schemes  the  money  accumulated 
solely  for  their  benefit.  This  should 
make  it  perfectly  clear  to  fair-minded 
persons  that  if  the  habit  were  formed 
of  discussing  the  subject  of  investments 
in  the  home,  there  would  be  a vast  de- 
crease in  the  large  percentage  of  losses 
resulting  from  the  placing  of  money  in 
unsafe  channels. 

Entirely  aside  from  this  there  are 
men  without  number  who  are  large  earn- 
ers of  money,  and  who,  apparently  with- 
out any  uneasiness  of  mind,  absolutely 
ignore  the  necessity  of  saving,  or  invest- 
ing with  wisdom,  any  part  of  their  earn- 
ings. Not  only  is  this  true,  but  it  is 
also  frequently  the  case  that  men  believe 
themselves  to  be  saving  money,  when 
they  are  simply  turning  it  over  to  un- 
scrupulous individuals  to  do  with  sub- 
stantially as  they  may  elect.  A man  of 
moderate  means,  or  one  conducting  a 
profitable  business,  who  fails  to  adopt 


a frugal  policy  in  times  of  prosperity, 
neglecting  to  give  thought  and  study  to 
the  safe  investment  of  his  surplus  earn- 
ings, usually  lays  up  for  himself,  in 
times  of  adversity,  an  ocean  of  regrets. 

People  should  know  what  sound  in- 
vestments represent,  their  affiliations 
with  progress  and  prosperity,  and  their 
direct  bearing  upon  the  comfort  and  in- 
dependence of  wage-earners.  Our  rail- 
roads, public  utility  and  industrial  cor- 
porations— in  fact,  the  bone  and  sinew 
of  every  industry  in  the  country — are 
distinctly  related  to  sound  investments. 
The  government  itself  and  municipali- 
ties rest  largely  upon  this  solid  foun- 
dation. It  takes  money,  the  money  of 
individuals  collectively,  to  finance  and 
maintain  all  of  these  interests.  While 
it  must  always  be  true  that  some  invest- 
ments will  be  more  speculative  than 
others,  and  that  some  so-called  invest- 
ments will  ever  exist  as  subterfuges  to 
extract  money  from  the  unwary,  there 
are  practical  and  comparatively  simple 
ways  by  which  the  investor  can  learn  to 
avoid  the  danger  spots  and  become  inter- 
ested in  only  meritorious  propositions. 

Some  Basic  Principles. 

It  is  a recognized  fact  that,  in  times 
of  great  prosperity,  inexperienced  in- 
vestors usually  buy  a large  number  of 
undesirable  securities.  The  following 
are  probably  the  two  chief  reasons: 

First — During  such  periods,  the  cost 
of  living  is  so  very  high  that  investors 
are  tempted  to  give  too  much  thought  to 
the  amount  of  their  dividends  or  income, 
thus  neglecting  to  scrutinize  with  suffi- 
cient care  the  quality  of  the  security  to 
be  afforded  their  principal. 

Second — In  times  of  great  prosperity, 
the  high  prices  for  raw  materials,  man- 
ufactured products,  etc.,  lead  owners 
and  proprietors  to  believe  that  larger 


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INVESTMENTS 


347 


profits  could  be  made  if  sufficient  capital 
were  available  with  which  to  extend 
their  respective  fields  of  operation.  The 
natural  result  is  incorporation;  in  many 
instances  based  largely  upon  estimated 
earnings  and  dreams  of  the  future.  As 
time  goes  on,  and  the  inevitable  decline 
in  the  volume  of  business  takes  place, 
with  lower  range  of  prices  all  along  the 
line,  the  inexperienced  investor,  who 
may  have  placed  a part  of  his  funds  in 
such  enterprises,  finds  himself  to  be  the 
owner  of  a class  of  securities  from 
which  little  or  no  income  is  to  be  de- 
rived, and  for  which  there  is  absolutely 
no  market.  It  is  only  after  experiences 
of  this  character  that  many  investors 
learn  the  basic  principle  of  safeguard- 
ing their  surplus  funds,  i.  e.,  always  to 
make  the  question  of  security  the  pri- 
mary consideration . 

Some  Unusual  Opportunities. 

This  must  not  be  construed  as  imply- 
ing that  it  is  difficult  to  make  desirable 
investments  in  times  of  great  prosperity. 
On  the  contrary,  during  such  periods 
many  long-established  and  sound  cor- 
porations with  whose  securities  well-in- 
formed investors  are  familiar,  find  it  ex- 
pedient to  become  heavy  borrowers, 
chiefly  for  the  reason  that  enlarged  fa- 
cilities are  essential  to  meet  the  increas- 
ing demands  of  their  business.  If  the 
prevailing  rates  for  money  are  high, 
which  is  usually  the  case  at  such  times, 
the  corporations  have  no  alternative  ex- 
cept to  sell  their  securities  at  attractive 
prices.  It  is  then  that  the  well-in- 
formed investor,  being  in  a position  to 
follow  intelligently  the  suggestions  of 
the  investment  banker,  whose  client  he 
may  be,  is  afforded  unusual  investment 
opportunities. 

The  writer  has  no  intention  of  dignify- 
ing, by  comparison  with  conservative  in- 
vestments, certain  classes  of  speculative 
real  estate,  mining  stocks,  plantation 
stocks,  and  numerous  other  questionable 
propositions.  At  the  same  time,  consid- 
ering the  hundreds  of  thousands  of  dol- 
lars lost  by  misinformed  investors,  it  is 
difficult  to  conceive  how  one  writing 
upon  the  subject  of  investments  can 
pass  over  such  a deplorable  condition 


John  M^ir  & fj°* 

^ THE  SPECIALISTS  IN  ^ 

ODD  LOTS 

If  you  have  limited  capital  and 
wish  to  deal  in  stocks;  if  you  have 
ample  capital  and  wish  to  be  con- 
servative-trade in  odd  lots.  First, 
communicate  with  us. 

Send  fnr  “ Odd  Lot  Circular  L*’ 
Members  New  York  Steck  Exchange 

71  BROADWAY,  NEW  YORK 


without  some  comment.  The  writer, 
therefore,  takes  this  opportunity  of 
cautioning  his  readers  against  having 
anything  whatever  to  do  with  such  prop- 
ositions. If  the  scores  upon  scores  of 
securities  which  it  is  claimed  by  their 
exponents  will  yield  all  the  way  from 
eight  per  cent,  to  fifty  per  cent,  annual 
income,  were  sound  investments  of  per- 
manent and  progressive  value,  the  pro- 
moters would  experience  no  difficulty  in 
readily  securing  capital  from  reputable 
investment  bankers,  or  even  from  local 
institutions.  When  such  men  present 
their  propositions,  keep  this  thought  in 
mind:  the  reputable  investment  banker, 
with  his  special  knowledge  and  years  of 
training,  and  with  the  best  investigating 
experts  at  his  command,  can  not  get  for 
his  clients  sound  investments  yielding 
more  than  from  five  per  cent,  to  six  per 
cent.,  excepting  under  abnormal  condi- 
tions, when  large  and  responsible  cor- 
porations sometimes  find  it  necessary  to 
pay  high  rates  of  interest  for  short- 
time  loans. 

This  applies  also  to  the  advertise- 
ments and  literature  of  many  companies, 
stating  that  they  are  offering  securities 
directly  to  the  public,  thus  saving  buy- 
ers the  banker’s  commission.  Investors 
who  are  attracted  by  very  expensive 
advertisements  and  large  type,  should 
first  make  inquiry  as  to  whether  the 
business  had  been  submitted  to  reputa- 
ble investment  bankers,  and,  if  so,  dis- 
cover the  reasons  that  induced  bankers 
to  decline  to  purchase. 


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THE  BANKERS  MAGAZINE 


Influence  of  Bankers’  Names. 

Then  again,  investors  should  not  be 
misled  by  the  statement,  often  made, 
that  subscriptions  for  such  securities 
will  be  received  through  certain  banks 
or  trust  companies.  Such  a statement 
by  the  sellers,  while  in  some  cases  hav- 
ing the  tendency  to  inspire  the  con- 
fidence of  prospective  buyers,  has  no  di- 
rect bearing  upon  the  subject.  So  long 
as  a company  selling  its  securities  di- 
rectly to  the  public  is  without  bad  repu- 
tation, any  institution  with  which  it  may 
carry  a reasonably  large  deposit  account 
might  feel  perfectly  justified  in  extend- 
ing such  an  accommodation.  Because 
of  such  action  it  is  not  customary  in 
business  circles  to  conclude  that  the  in- 
stitutions endorse  the  propositions.  It 
is  purely  and  simply  an  accommodation; 
nothing  more,  nothing  less. 

Any  business  man  will  readily  appre- 
ciate the  very  great  difficulty  of  con- 
ducting a profitable  mercantile  business 
and  combining  with  it  the  sale  of  stocks 
or  bonds.  A company  attempting  to  do 
this  might  make  money  out  of  one  of  the 
two  propositions;  but  when  worked  in 
conjunction  one  usually  suffers  for  the 
benefit  of  the  other.  The  propositions 
are  separate  and  distinct,  largely  for 
the  reason  that,  as  related  to  the  securi- 
ties, it  is  not  merely  a question  of  sell- 
ing. On  the  contrary,  the  important 
consideration  should  be  the  permanent 
protection  afforded  the  investor . 

Practically  every  large  investment 
.banking  house  is  the  medium  through 
which  certain  corporations  sell  to  the 
public  their  security  issues.  These  se- 
curities are  commonly  known  as  the 
“specialties”  of  the  banking  house  han- 
dling them.  No  reputable  investment 
banker  will  consent  to  purchase  the 
bonds  of  an  issuing  company  until  qual- 
ified experts  have  rigidly  inspected  and 
carefully  scrutinized  every  detail  of  the 
business;  not  only  as  related  to  existing 
conditions,  but  judged  also  from  the 
viewpoint  of  future  possibilities.  The 
experts  must  be  men  of  established 
reputation  and  their  integrity  beyond 
reproach.  They  consist  of  well-known 


accountants,  eminent  engineers,  expert 
operating  officials  and  men  well  skilled 
in  getting  at  the  facts  underlying  the 
particular  business  transacted  by  the 
company,  the  purchase  of  whose  securi- 
ties may  be  under  consideration. 

If  the  examinations  result  in  a satis- 
factory report  by  the  experts,  the  firm 
of  bankers  holds  a conference,  at  which 
time  all  of  the  facts  and  details  are 
carefully  reviewed.  Assuming  that  the 
decision  be  to  accept  the  business,  a 
member  of  the  firm  usually  becomes  a 
director  of  the  company,  and  the  other 
members  of  the  board  must  not  be  ob- 
jectionable to  the  investment  house.  This 
is  deemed  essential  in  order  to  protect 
the  interests  of  such  of  the  firm’s  clients 
as  may  purchase  the  bonds. 

Mortgage  and  Deed  of  Trust. 

Further  than  this,  a “Mortgage  and 
Deed  of  Trust”  is  framed  between  the 
issuing  company  and  a trustee — the  lat- 
ter usually  a well-known  trust  company, 
having  a reasonably  large  capital  and 
surplus.  Under  the  terms  of  the  in- 
denture, which  are  reviewed  in  detail  by 
the  members  of  the  firm  of  bankers  and 
its  attorneys,  the  issuing  company  con- 
veys and  assigns  unto  the  trustee  all  of 
the  property,  rights,  franchises,  etc., 
upon  which  the  bonds  are  to  be  a mort- 
gage. There  are  also  specified,  among 
other  things,  the  amount  of  bonds,  and 
the  conditions  under  which  they  may  be 
issued,  a description  of  the  property 
mortgaged,  the  keeping  of  the  same  in- 
sured and  in  repair,  and  numerous  other 
important  stipulations  designed  abso- 
lutely to  protect  the  bondholders.  In 
addition,  it  is  usually  specified  that  if 
default  shall  be  made  in  the  perform- 
ance of  any  agreement  contained  in  the 
indenture,  or  in  the  payment  of  interest 
upon  any  of  the  outstanding  bonds,  and 
shall  so  continue  for  the  term  specified 
(usually  from  three  to  six  months),  the 
whole  amount  of  outstanding  bonds  then 
becomes  due  and  payable,  in  accordance 
with  the  terms  of  the  deed  of  trust.  In 
order  that  all  of  the  holders  of  outstand- 


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CRAM,  MULLIKEN  & CO. 

BANKERS 

We  Finance  Railroad*,  Electric  Railways,  Gas  and  Electric  Companies  of  Established  Value 

SO  Congress  Street,  Boston 


ing  bonds  may  receive  the  same  fair  and 
impartial  treatment,  united  action  upon 
their  part  is  essential.  It  is  therefore 
usually  customary  to  specify  in  the  deed 
of  trust  that  while  the  trustee  may  en- 
force the  rights  of  all  bondholders  at 
the  written  request  of  holders  of  only 
from  twenty-five  per  cent,  to  thirty  per 
cent,  of  the  outstanding  bonds;  at  the 
same  time,  it  takes  a majority  of  the 
bondholders  (from  sixty  to  ninety  per 
cent,  as  the  case  may  be)  to  direct  and 
control  the  action  of  the  trustee  in  the 
sale  of  the  property,  or  in  the  appoint- 
ment of  a receiver  to  operate  it  for  their 
benefit.  This  would  prevent  the  sale  of 
the  property  at  a price  which  might  be 
considered  a sacrifice. 

On  the  other  hand,  if  the  form  of  se- 
curity to  be  issued  were  to  comprise 
stock,  it  is  obvious  that  the  company 
would  have  to  be  controlled  by  the 
clients  and  friends  of  the  investment 
banker.  This  for  the  reason  that,  as 
related  to  its  “specialties/'  no  reputable 
investment  house  will  undertake  to 
finance  a company  unless  the  positive 
assurance  is  had  that  it  will  be  in  a posi- 
tion to  protect  the  interests  of  its  clients, 
no  matter  through  what  future  exigen- 
cies the  company  may  pass. 

These  facts,  which  are  very  briefly 
recited,  could  be  added  to  by  a multi- 
plicity of  others.  They  should  serve  to 
explain,  however,  why  the  reputable  in- 
vestment house  is  recognised  as  being 
the  only  proper  channel  through  which 
to  buy  or  sell  sound  investment  securi- 
ties. The  service  rendered,  which  is 
largely  professional  in  its  scope,  is  the 
governing  factor  with  the  reputable 
banker,  and  is  so  recognized  by  all  large 
corporations.  It  is  a service  which  is 
essential  to  the  individual  investor,  aid- 
ing him,  so  far  as  the  experienced  mind 
can  determine,  in  selecting  safe  and 
conservative  investments. 


Generally  speaking,  bonds  represent 
a mortgage  divided  into  several  parts, 
and  in  most  cases  the  interest  is  pay- 
able semi-annually.  The  denominations 
are  usually  $1,000,  although  sometimes 
they  are  issued  in  smaller  or  larger 
amounts.  There  are  three  distinct  forms 
of  bonds,  as  follows: 

Coupon  bonds. 

Coupon  bonds  registered  as  to  prin- 
cipal only. 

Bonds  registered  as  to  both  principal 
and  interest . 

It  is  very  important  for  investors  to 
know  just  what  these  different  forms 
signify,  notwithstanding  that  in  all  cases 
the  issuing  companies  are  responsible 
for  the  punctual  payment  of  the  princi- 
pal and  interest. 

Coupon  bonds  “pass  by  delivery/'  as 
is  usually  specified  in  mortgages.  In 
other  words,  the  principal  and  the  in- 
terest are  payable  to  bearer,  and  are 
readily  convertible  into  cash.  The  bond 
itself  recites  upon  its  face  the  obliga- 
tion of  the  issuing  company,  etc.,  and 
has  attached  thereto  small  interest  cer- 
tificates, commonly  known  as  “coupons." 
Assuming  that  a $1,000  coupon  bond  is 
one  of  an  issue  having  twenty  years  to 
run  before  the  principal  becomes  pay- 
able, and  that  it  bears  interest  at  the 
rate  of  five  per  cent,  per  annum,  pay- 
able semi-annually,  January  1 and  July 
1,  there  would  be  attached  to  the  bond 
forty  coupons  of  twenty-five  dollars 
each.  With  every  January  1 and  July 
1 the  owner  detaches  from  the  bond  one 
of  these  coupons,  and,  upon  presenting 
the  same  at  the  fiscal  agency  of  the  is- 
suing company,  receives  twenty-five  dol- 
lars in  cash,  representing  the  interest 
on  the  $1,000  bond  for  six  months.  If 
the  holder  of  the  coupon  preferred,  he 
could  deposit  the  same  at  his  bank  for 
collection;  or  a bank  or  trust  company, 

849 


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s;>o 


to  whom  he  were  known,  might  arrange 
to  cash  it  for  him.  It  frequently  hap- 
pens that  investors  leave  bonds  in  trust 
with  investment  bankers.  In  this  case, 
if  the  investor  so  directs,  the  banker  will 
detach  the  coupons  upon  the  interest 
dates,  collect  the  same,  send  the  client 
a check  for  the  amount,  or  place  the 
money  to  the  credit  of  the  client's  ac- 
count. When  the  final  coupon  attached 
to  a bond  becomes  due,  the  bond  itself 
should  also  be  presented  for  payment. 
Based  upon  a coupon  bond  of  $1,000 
denomination,  the  holder  would  receive 
$1,000  in  cash,  representing  his  pron- 
cipal,  in  addition  to  the  twenty-five  in 
cash  for  the  last  coupon.  Sometimes 
the  final  coupon  is  not  attached  to  the 
bond,  in  which  case,  when  the  bond  is 
presented  for  payment  at  maturity,  the 
holder  receives  also  the  interest  for  the 
last  six  months.  Usually  coupon  bonds 
may  be  registered  as  to  principal,  and, 
in  some  cases,  they  may  be  exchanged 
for  bonds  registered  as  to  both  princi- 
pal and  interest. 

Bonds  Not  Directly  Negotiable. 

Coupon  bonds  registered  as  to  prin- 
cipal only  are  a direct  obligation  of  the 
issuing  company  to  the  registered  own- 
, ers.  Such  bonds  are  not  negotiable,  ex- 
cept by  the  written  assignments  of  the 
registered  owners,  whose  names  appear 
upon  the  bonds.  The  coupons  attached 
to  such  bonds,  however,  are  payable  to 
bearer,  in  the  same  manner  as  those  at- 
tached to  coupon  bonds.  Bonds  reg- 
istered as  to  principal  only  may  be  re- 
leased to  bearer  by  the  issuing  company, 
or  its  agents,  when  accompanied  by  the 
written  assignments  of  the  registered 
owners.  When  so  released,  they  become 
coupon  bonds,  and  may  be  sold  and  de- 
livered as  such. 

Investors  should  be  very  particular 
not  to  write  their  names,  nor  make  nota- 
tions, upon  bonds.  When  this  is  done, 
it  is  necessary  to  sell  them  as  “endorsed 
bonds”  which,  of  course,  affects  their 
market  value. 

Bonds  registered  as  to  both  principal 
and  interest  are  a direct  obligation  of 
the  issuing  company  to  the  registered 
owners.  They  are  usually  issued  in  cer- 


tificate form,  assignable  in  writing,  and 
have  no  coupons  attached,  checks  for 
the  interest  being  mailed  directly  to  the 
registered  owners.  Practically  all  of 
the  modern  mortgages  provide  for  the 
conversion  of  such  bonds  into  coupon 
bonds.  When  mortgages  do  not  so  pro- 
vide, such  bonds  usually  sell  at  slightly 
lower  prices  than  coupon  bonds  of  the 
same  issuing  company,  owing  to  the 
limited  demand  and,  in  the  event  of  sale, 
it  is  necessary  to  assign  them  in  blank, 
disposing  of  them  specifically  as  reg- 
istered bonds. 

Safeguards  for  Bondholders. 

It  is  obvious  that  coupon  bonds  should 
be  placed  in  a safe-deposit  vault  or 
lodged  in  some  secure  quarter.  It  is  a 
matter  of  record  that  a stolen  coupon 
bond,  when  purchased  by  an  innocent 
third  party,  cannot  be  recovered  by  the 
original  owner.  Further  than  this,  the 
issuing  company,  or  its  fiscal  agents, 
would  have  to  pay  the  coupons  as  they 
became  due,  and  also  the  par  value  of 
the  bond  at  its  maturity.  This  will  ex- 
plain why  many  investors  prefer  to 
leave  bonds  in  trust,  with  their  invest- 
ment bankers.  It  also  explains  one  of 
the  reasons  why  experienced  and  reputa- 
ble investment  bankers  will  not  buy  or 
sell  securities  for  a stranger,  until  sat- 
isfied that  he  is  all  he  represents  him- 
self to  be.  When  a coupon  bond  is  lost, 
the  fiscal  agents  of  the  issuing  company 
should  be  notified  promptly,  and,  if  pos- 
sible, the  number  of  the  bond  furnished. 
A communication  should  also  be  ad- 
dressed to  the  investment  banker,  who 
will  render  the  client  every  possible  as- 
sistance in  the  effort  to  recover  the  bond. 
In  the  case  of  a lost  bond,  the  issuing 
company  might,  in  its  discretion,  ar- 
range to  issue  a new  bond,  but  only 
upon  the  filing  of  a satisfactory  bond 
of  indemnity. 

In  view  of  these  facts,  it  seems  to  be 
advisable  for  persons  of  moderate 
means,  buying  bonds  solely  for  invest- 
ment, to  have  the  same  registered  as  to 
principal,  notwithstanding  that  the  cou- 
pons attached  to  such  bonds  are  pay- 
able to  bearer,  the  same  as  in  the  case 
of  coupon  bonds.  The  registration  of 


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bonds  as  to  principal  is,  however,  a safe- 
guard to  the  owners,  so  far  as  the  prin- 
cipal is  concerned,  and  such  bonds  when 
released  to  bearer,  in  the  manner  as 
heretofore  stated,  become  readily  ne- 
gotiable. 

Redeemable  bonds:  In  some  mort- 

gages the  right  is  reserved  by  the  issu- 
ing company  to  buy  all  or  any  part  of 
the  outstanding  bonds  before  maturity, 
usually  upon  prior  notice  to  holders  of 
from  one  to  six  months,  by  advertise- 
ment. This  naturally  has  an  effect 
upon  the  market  for  such  bonds,  and  ex- 
plains why  they  often  sell  at  lower 
prices  than  bonds  which  are  not  redeem- 
able, although  the  redeemable  bonds 
may  bear  the  same  rate  of  interest  and 
possess  even  greater  intrinsic  value.  To 
illustrate:  If  a $1,000  bond  were  re- 

deemable at  the  option  of  the  issuing 
company  at,  say,  105  ($1,050),  it  would 
be  exceptional  for  a buyer  to  be  willing 
to  pay  in  excess  of  this  figure  for  the 
same.  When  such  bonds  are  redeemed, 
coupon  bonds  are  payable  to  the  bearer 
at  the  office  of  the  issuing  company,  or 
its  agents;  and  registered  bonds,  when 
accompanied  by  written  assignments, 
are  redeemable  in  the  same  manner.  All 
bonds  cease  to  bear  interest  after  the 
date  of  redemption,  or  maturity. 

Redemption  for  the  Sinking  Fund. 

Some  mortgages  provide  that  a cer- 
tain amount  of  cash,  or  a percentage  of 
gross  earnings,  or  so  many  cents  for 
each  ton  of  coal  mined,  etc.,  shall  be 
paid  by  the  issuing  company  to  the 
trustee  at  stated  periods,  and  applied 
as  a sinking  fund  for  the  purchase  of 
outstanding  bonds,  at  not  exceeding  a 
specified  price.  It  is  customary  to  pro- 
vide in  such  mortgages  that  the  issuing 
company  shall  advertise,  semi-annually, 
or  annually,  as  the  case  may  be,  the 
amount  of  money  in  the  hands  of  the 

3 


trustee  available  for  the  purchase  of 
bonds  for  the  sinking  fund.  The  hold- 
ers of  the  outstanding  bonds  who  may 
so  elect,  offer  them  to  the  trustee  at  a 
price  at  which  they  would  be  willing  to 
sell,  not  exceeding,  however,  the  figure 
specified  in  the  mortgage.  When  the 
bids  are  opened,  the  bonds  offered  at 
the  lowest  prices  are,  of  course,  ac- 
cepted. If  no  offerings  are  received, 
the  mortgage  usually  specifies  that  the 
trustees  may  draw  by  lot  a sufficient 
amount  of  the  outstanding  bonds  to  ab- 
sorb the  sinking-fund  money,  paying 
the  holders  the  sinking-fund  price,  no 
more  and  no  less.  The  issuing  company 
then  advertises  the  numbers  of  the 
bonds  so  drawn,  and,  as  far  as  the  hold- 
ers are  concerned,  the  principal  and  in- 
terest of  such  bonds  have  matured.  The 
holders  of  the  drawn  bonds,  upon  pre- 
senting them  at  the  offiee  of  the  trustee, 
receive  in  payment  therefor  the  price 
specified  in  the  mortgage.  In  some 
cases,  in  lieu  of  drawing  bonds  by  lot, 
the  trustee  may  invest  and  accumulate 
the  sinking-fund  money.  Bonds  pur- 
chased for  the  account  of  the  sinking 
fund  must  be  either  cancelled  and  de- 
stroyed, on  the  one  hand;  or  they  must 
be  kept  alive  and  held-  by  the  trustee. 
In  the  latter  case,  the  bonds  continue  to 
draw  interest,  the  same  as  other  out- 
standing bonds,  the  interest  being  ap- 
plied by  the  trustee  toward  the  future 
purchase  of  bonds  for  the  sinking  fund. 
Generally  speaking,  the  mortgages  of 
coal  companies,  or  companies  exhaust- 
ing a product  which  cannot  be  replaced, 
should  provide  for  a sinking  fund,  mak- 
ing it  certain  that  as  the  amount  of 
coal,  or  whatever  product  it  may  be,  is 
diminished,  the  bonded  debt  of  the  com- 
pany will  be  proportionately  decreased. 

351 


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THE  CONTEST  OVER  RAILROAD  RATE  INCREASES 

By  Kendal!  Taylor 


HPHE  question  of  railroad  rate  in- 
creases,  instead  of  being  settled 
now,  as  the  railroad  executives  hoped  it 
would  be  by  this  time,  is  still  hanging 
fire.  Through  the  “persuasion”  of  the 
Interstate  Commerce  Commission,  the 
railroad  companies  have  agreed  to  sus- 
pend all  of  the  important  increases  un- 
til the  first  of  November.  This  step  was 
taken  because  the  Commission  had  de- 
termined to  suspend  the  rates  if  the 
railroads  did  not,  and  in  that  case  the 
delay  would  have  been  greater  than  it 
now  is  expected  to  be. 

The  whole*  country  is  now  asking 
whether  or  not  the  Commission  is  going 
to  allow  the  higher  rates.  Meanwhile 
the  railroad  companies  are  losing  several 
millions  of  dollars  that  they  expected  to 
earn  as  a result  of  the  change  in  sched- 
ules. Investors  are  hesitating  between 
railroad  bonds  and  other  securities,  with 
a result  of  a big  drop  of  prices  obtain- 
able for  the  railroad  bonds.  The  stock 
exchange,  as  events  of  the  past  few 
weeks  have  shown,  is  suffering  from 
painful  uncertainty  as  to  the  future  of 
railroads,  and  the  quotations  for  high 
class  securities  have  dropped  to  the  low- 
est point  since  the  panic  of  1907. 

The  Public. 

The  attitude  of  the  public,  as  far  as 
it  can  be  gauged  from  the  newspapers, 
presents  strange  aspects.  Apparently 
the  public  is  never  tired  of  hitting  the 
railroads.  No  matter  how  many  hostile 
laws  have  been  passed  and  how  large 
the  increases  in  the  pay  of  employees 
may  be,  there  is  always  a cry  for  more 
laws  and  more  pay.  The  average  citi- 
zen, if  we  may  judge  of  him  at  all  from 
his  representatives  in  Congress  and 
from  his  defenders  in  the  ranks  of  jour- 
nalism, seems  to  have  little  conception 
of  the  fact  that  railroad  baiting  is  apt 
to  be  as  disastrous  to  the  baiter  as  it  is 
to  the  railroads.  He  keeps  at  it  with  a 
zest  which  knows  no  abatement. 

It  is  impossible  yet  to  tell  the  exact 
extent  of  the  increases  in  the  pay  of 

352 


employees  granted  by  the  railroad  com- 
panies since  the  first  of  the  year.  The 
estimates  vary  by  many  millions.  Pres- 
ident Brown  of  the  New  York  Central 
was  quoted,  a few  weeks  ago,  as  saying 
that  the  advances  to  employees  would 
amount,  before  the  year  was  done,  to 
$100,000,000. 

Wages  and  Earnings. 

Already  the  effect  of  the  wage  ad- 
vance is  beginning  to  be  seen  in  the 
monthly  reports  of  the  roads.  Though 
there  are  many  cases  of  encouraging  in- 
creases in  gross  earnings,  either  the  in- 
creases in  net  earnings  are  very  small  or 
there  are  no  increases  at  all.  The 
Southwestern  roads  are  making  the 
poorest  showing.  For  the  month  of 
May,  for  example,  according  to  reports 
to  the  Interstate  Commerce  Commission, 
the  following  roads  showed  decreases  in 
net  earnings  amounting  to  a total  of 
$8,171,853: 

Rock  Island;  Illinois  Central;  San 
Pedro,  Los  Angeles  & Salt  Lake; 
Atchison,  Topeka  & Santa  Fe;  Cleve- 
land, Cincinnati,  Chicago,  & St.  Louis; 
Lake  Shore  & Michigan  Southern;  St. 
Louis  & San  Francisco;  Chicago  & 
Alton;  Missouri,  Kansas  & Texas;  Cen- 
tral of  Georgia;  St.  Louis  Southwest- 
ern; Buffalo,  Rochester  & Pittsburgh. 

The  great  increase  in  expenses  began 
even  before  the  wage  advances  went 
into  effect.  Thus  thirty-two  companies, 
including  the  largest  and  most  important 
in  the  country,  had  a gross  income  of 
$169,575,990  in  March,  an  increase 
over  the  same  month  of  last  year  of 
$23,018,823,  or  thirteen  and  one-half 
per  cent.  The  net  earnings,  however, 
were  only  $50,985,909,  or  $3,952,919 
more  than  in  March,  1909.  The  Union 
Pacific,  with  an  increase  in  gross  of 
$958,767,  had  a decrease  of  $390,308. 
Atchison  increased  its  gross  by  $954,- 
242,  and  suffered  a shrinkage  in  its  net 
of  $474,471.  The  New  York  Central 
added  $725,667  to  its  gross,  while  its 
net  showed  a loss  of  $834,360. 


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J.  K.  Rice,  Jr.,  & Co. 

We  have  good  markets  In  unlisted  and  inactive 
securities  and  respectfully  invite  inquiries. 
Phones  7460  to  7466  Hanover.  88  Wall  street,  N.  Y. 


Bringing  the  figures  to  a later  date, 
both  the  New  York  Central  and  the 
Pennsylvania  are  shown  to  have  suf- 
fered severely  in  June  from  the  increase 
in  expenses,  and  a great  part  of  the  loss 
is  attributed  to  the  wage  advances.  In 
the  month,  the  last  of  the  fiscal  year,  the 
New  York  Central  had  gross  earnings 
of  $698,183  more  than  in  June,  1909, 
and  the  Pennsylvania  had  gross  earn- 
ings of  $1,176,400  more  than  in  June, 
1909.  Both  companies,  however,  lost 
in  net  earnings,  the  New  York  Central 
by  $505,447,  the  Pennsylvania  by  $493,- 
200.  The  New  York  Central  for  the 
last  half  of  the  fiscal  year — January  1 
to  June  30 — suffered  a decrease  in  net 
earnings  of  $842,241. 

It  has  been  known  for  two  or  three 
years  that  the  railroads  were  contem- 
plating an  increase  in  rates.  Some  com- 
panies wanted  to  put  it  into  effect  a year 
or  two  ago,  but  strong  political  inflence 
was  exerted  to  prevent  them  from  either 
reducing  wages  or  raising  rates.  It  has 
been  said  that  the  railroad  companies 
were  assured,  by  one  high  in  authority 
at  that  time,  that  if  the  rate  advance 
was  postponed  it  would  not  be  opposed 
by  the  political  powers  when  prosperity 
should  return  to  the  country.  What- 
ever may  be  the  truth  in  that,  there  has 
certainly  been  a strong  opposition  on 
the  part  of  influential  public  men. 

Nobody  disputes  that  railroad  ex- 
penses have  gone  up  immensely.  The 
opponent  of  high  rates  says:  “The  in- 
crease in  gross  earnings  will  keep  the 
railroads  prosperous.  They  will  put 
new  economies  into  effect,  just  as  they 
have  been  doing  in  the  last  ten  years. 
There  is  no  need  of  their  raising  rates/' 


Economies  Cannot  Go  On  Indefi- 
nitely. 

The  fact  is  that  the  railroads  have 
about  come  to  the  end  of  their  row  in 
the  way  of  new  economies.  By  improving 
their  roadbed,  by  building  larger  cars 
and  locomotives,  and  by  extension  of 
terminals,  the  companies  managed,  from 
1897  to  1907,  to  counterbalance  all  the 
agencies  that  were  tending  to  drive  them 
to  bankruptcy.  All  this  time  rates  were 
steadily  decreasing,  while  wages  and 
the  cost  of  materials  were  steadily  in- 
creasing. If  it  had  not  been  for  the 
vast  improvement  in  methods  of  trans- 
portation, the  carriers  would  have  been 
unable  to  keep  their  heads  above  water. 

The  increases  in  average  daily  pay  of 
employees  from  1898  to  1908  were  as 
follows: 

Locomotive  engineers  had  their  aver- 
age pay  advanced  from  $8.72  to  $4.45; 
firemen  from  $2.09  to  $2.64;  conductors 
from  $2.18  to  $8.81 ; machinists  from 
$2.28  to  $2.95 ; telegraph  operators 
from  $1.92  to  $2.80;  station  agents  from 
$1.78  to  $2.09. 

In  a recent  address  before  the  Bank- 
ers' Association,  the  president  of  one  of 
the  large  railroads  mentioned  some  of 
the  most  striking  increases  in  the  cost 
of  materials.  It  costs  $90,000  to  pay 
for  100,000  ties,  $42,000  more  than  ten 
years  ago.  The  cost  of  a locomotive 
since  1899  has  advanced  about  fifty- 
eight  per  cent.  The  cost  of  a box  car 
has  advanced  sixty-six  per  cent.  The 
company  which  had  a pay  roll  of  $100,- 
000  eleven  years  ago,  pays  $140,000  to- 
day for  exactly  the  same  labor — the 
same  number  of  men  doing  the  same 
work.  Taxes  have  gone  up  on  an  aver- 
age of  sixty-three  per  cent. 

S53 


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THE  BANKERS  MAGAZINE 


Where  is  the  difference  coming  from? 
The  railroad  bond  holders  and  stock 
holders  have  been  paying  it  so  far,  but 
they  think  that  the  time  has  come  when 
some  of  the  expense  should  be  shared  by 
the  rest  of  the  community.  That  is  why 
it  is  now'  proposed  to  raise  rates  by 
small  percentage.  The  railroad  experts 
have  spent  much  time  and  effort  in  alter- 
ing the  schedules,  and  they  say  that  the 
changes  are  such  as  to  give  themselves 
only  a moderate  increase  in  revenue  and 
to  cause  the  shippers  an  additonal  ex- 
penditure that  will  not  have  a serious 
effect  upon  their  business.  Whether  the 
Interstate  Commerce  Commission  will 
uphold  them  in  this  view  is  yet  to  be  as- 
certained. 

In  any  event,  it  cannot  be  denied  that 
the  railroads  have — to  use  a slang  term 


— “come  out  at  the  little  end  of  the 
horn.”  With  the  most  favorable  possi- 
ble outcome,  they  will  have  lost  the 
large  sums  represented  by  the  rate. in- 
crease which  might  have  gone,  but  did 
not  go,  into  effect  on  August  1.  And  if 
the  Commission  decides  against  them 
they  will  face  these  alternatives:  either 
to  continue  operation  with  the  old  rates, 
or  to  fight  the  matter  out  in  the  courts. 
The  former  would  postpone  indefinitely 
the  improvements  and  additions  which 
the  country  sorely  needs.  The  latter 
would  involve  not  only  delay  but  the 
expense  of  litigation ; railroad  stock- 
holders, seeing  the  market  value  of  their 
holdings  depreciate,  could  then  console 
themselves  with  the  thought  that  those 
unselfish  patriots,  the  lawyers,  were  ac- 
cumulating fat  bank  accounts. 


THINGS  THAT  ARE  WORTH  WHILE 

By  Courtney  Clarke 


AT  very  considerable  expense  the 
United  States  Government  main- 
tains w'eather  bureaus  in  various  cities, 
whose  duty  it  is  to  forecast  weather 
conditions.  By  no  means  infallible, 
these  w'eather  bureaus  are  able  to  tell 
pretty  well  what  sort  of  weather  may 
be  expected,  and  so  are  of  great  value. 
Not  infrequently  they  are  wrong,  not 
infrequently  the  kind  of  weather  pre- 
dicted does  not  materialize,  and  the  bu- 
reau stands  at  fault.  That,  however,  is 
the  exception.  The  rule  is  that  the 
weather  bureau  knows  pretty  well  what 
it  is  talking  about.  There  is  a reason 
for  that.  The  reason  is  that  the  bureau 
is  in  possession  of  data  concerning  the 
weather  conditions  all  over  the  country 
from  which  information  it  is  able  to 
draw’  reasonably  safe  conclusions  as  to 
what  sort  of  weather  may  be  expected. 

So  it  is  exactly  in  the  financial  world. 
To  the  intelligent  investor  the  signs 
which  presage  the  broad  movement  of 
the  markets  are  as  plain  as  are  the 
weather  signs  to  the  experienced 
weather-sharp.  Sometimes  he  is  wrong. 
Sometimes,  like  the  original  Rothschild, 
he  makes  mistakes  and  buys  too  soon, 


and  sells  before  the  top  is  reached,  but, 
on  the  whole,  provided  that  he  is  in  pos- 
session of  the  necessary  data,  he  is  able 
to  draw  reasonably  safe  conclusions  as 
to  the  drift  of  things. 

Publicity  op  Financial  Data. 

For  it  has  come  about  in  the  present 
broad  stage  of  our  financial  develop- 
ment that  the  cumulative  information 
concerning  things  which  govern  the 
markets  is  accessible  to  practically 
everybody.  There  is  no  monopoly  about 
it.  It  is  not  a case  of  bankers  getting 
these  figures  ahead  of  anybody  else. 
Figures  concerning  bank  clearings,  rail- 
road earnings  and  the  other  broad  in- 
dicia of  conditions  are  printed  in  every 
newspaper  from  one  end  of  the  coun- 
try to  the  other  and  are  just  as  avail- 
able to  the  man  whose  fortune  amounts 
to  $1,000  as  to  the  man  who  can  sign 
his  check  for  an  amount  running  into 
seven  or  eight  figures.  The  government 
reports  the  condition  of  the  banks,  the 
railroads  are  compelled  to  make  full 
statements  of  their  condition — this  in- 
formation is  compiled  and  put  into 
shape  by  experienced  editors — there  is 


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We  Recommend  for  Investment 


At  the  Present  Prices 

American  Light  & Traction  Pfd.  Otis  Elevator  Pfd. 

Babcock  & Wilcox  Com.  Phelps,  Dodge  Co. 

Borden's  Condensed  Milk  Pfd.  Royal  Baking  Powder  Pfd. 

Du  Pont  Powder  Pfd.  Underwood  Typewriter  Pfd. 

Worthington  Pump  Pfd. 

WE  BUY  AND  SELL  THE  ABOVE  STOCKS 

Quotations  of  the  above  stocks  will  be  furnished  to  interested  parties 

J.  HATHAWAY  POPE  & CO. 

67  Exchange  Place  ?hone  Rcctor  3486  New  York  City 


no  reason  in  these  days  for  misinforma- 
tion regarding  any  of  these  subjects.  It 
is  simply  a question  of  the  investor  be- 
ing able  to  pick  out  what  is  important 
and  what  counts  and  what  does  not. 

It  seems  hardly  necessary  to  say  much 
regarding  the  importance  of  these  big 
influences  on  the  markets.  By  a certain 
class  of  Wall  Street  traders  these  things 
are  more  or  less  made  light  of  and 
passed  up  with  a declaration  that  it  is  in 
day-to-day  fluctuations  that  the  money 
is  made.  That,  however,  is  just  ex- 
actly where  the  money  is  not  made — 
except  by  a limited  number  of  traders 
operating  right  on  the  floor  of  the  ex- 
change. To  the  vast  majority  of  per- 
sons interested  in  day-to-day  and  week- 
to-week  fluctuations  the  whole  business 
is  a dead  loss;  if  they  make  a little 
money  to-day  out  of  it  they  lose  it,  and 
more,  to-morrow.  Money  is  made  in 
Wall  Street.  It  is  made  by  just  these 
selfsame  investors,  who,  like  the 
weather-sharp,  look  for  the  signs  on  the 
horizon  and  know  what  signs  to  count 
in  and  what  to  leave  out,  and  so  draw 
long  range  deductions  as  to  what  the 
swings  of  the  markets  are  going  to  be. 
If  the  money  lies  anywhere  it  lies  just 
there. 

Precedent. 

It  is  easy  enough,  of  course,  to  look 
back  at  a movement  in  the  market  and 
to  say  by  what  signs  it  was  presaged, 
but  that  nevertheless  is  the  best  way  of 


showing  how  movements  can  be  fore- 
casted. Take  for  instance  “1907.”  It 
was  not  so  easy  at  that  time,  of  course, 
to  see  that  the  exhaustion  of  bank  re- 
serves by  which  the  beginning  of  the 
year  was  marked  would  be  so  disastrous 
in  its  results,  but  that  bank  reserves  had 
reached  a point  of  absolute  exhaustion 
was  a fact  which  could  have  been  seen 
by  any  observer  and  was,  indeed,  seen 
by  a good  manj.  Then,  again,  take 
1909,  with  all  the  tremendous  advance 
in  security  prices  which  took  place. 
What  went  ahead  of  1909?  Two  years 
of  cheap  money,  two  years  of  the  piling 
of  reserves  in  the  banks,  one  of  the 
surest  conditions  to  lead  up  to  a rise  in 
prices.  With  regard  to  this  1910  smash 
in  security  values — early  in  the  year, 
from  the  banking  position  as  shown  by 
the  statements  of  all  the  country's  banks 
it  could  have  been  seen  that  the  avail- 
able capital  supplied  was  again  in  bad 
shape.  Here  are  three  distinct  in- 
stances, all  of  them  within  the  range  of 
the  shortest  memory.  Do  these  things 
count  in  shaping  the  course  of  the  mar- 
kets? They  certainly  do.  They  are  ex- 
actly what  does  shape  the  course  of  the 
markets. 


Things  That  Count. 

What  are  the  more  important  of  the 
signs  by  which  the  observant  investor 
can  be  guided,  by  which  he  can  get  some 
sort  of  a line  on  what  may  be  expected 
to  happen?  In  the  first  place  the  gen- 

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eral  business  outlook  as  shown  by  rail- 
road earnings  and  bank  clearings,  iron 
production,  etc.  Secondly  by  the  pros- 
pective scarcity  or  plenty  of  capital  as 
shown  by  the  general  banking  position. 
Thirdly  by  such  special  developments 
as  government  activity  with  regard  to 
the  corporations,  the  state  of  the  crops, 
labor  agitations,  etc.  In  reply  to  the 
statement  that  it  is  not  very  easy  for  the 
average  man  to  size  up  the  business  out- 
look, it  may  be  said  that  with  the  in- 
formation which  he  has  at  his  command 
the  intelligent  business  man  is  in  just 
as  good  a position  to  forecast  the  gen- 
eral trend  of  business  affairs  as  is  any- 
one else.  Not  infrequently  indeed  the 
man  of  small  interests,  his  views  un- 
biased by  complicating  considerations, 
is  in  a better  position  to  judge  than  the 
man  whose  ramified  interests  pull  him 
one  way  and  the  other.  Are  railroad 
dividends  to  be  maintained?  Can  the  in- 
dustrial companies  maintain  their  pres- 
ent rates  ? These  are  questions  the 
answer  which  it  might  be  thought  that 
the  big  banking  interests  only  would  be 
in  a position  to  foresee,  but  such  is  far 
from  being  the  case.  Under  the  pres- 
ent system  of  government  supervision 
of  the  activity  of  our  corporations,  earn- 
ing statements  are  coming  more  and 
more  to  be  common  property.  The  rail- 
roads and  the  industrials  have  to  make 
them.  The  day  when  the  investor 
bought  in  the  dark  and  remained  in  the 
dark  are  over.  He  knows  what  he  is 
doing.  He  can  tell  a good  deal  more 
about  the  general  outlook  in  the  steel 
business,  for  instance,  than  a good 
many  of  the  officials  of  the  steel  com- 
panies themselves. 

The  same  thing  is  true  with  regard 
to  the  bank  situation.  There  is  no 
monopoly  as  to  information  concerning 
the  condition  of  the  country's  banking 
institutions.  Bankers  may  give  the  mat- 
ter more  attention,  but  experience  has 
shown  that  periods  of  stringency  and 
stress  find  them  quite  as  unprepared  as 
the  humble  investor.  Frequently  their 
viewpoint  is  too  close — they  see  the 
whole  thing  at  too  near  range.  With 
the  investor  it  is  different.  Impartially 
and  at  long  range  he  takes  the  published 


figures  of  bank  condition  and  draws  his 
own  deductions.  “If  the  banks  are  all 
loaned  up  as  they  are  now,"  he  says  at 
a time  when  a statement  like  the  last 
one  comes  along,  “What  is  going  to 
happen  later  on  in  the  year  if  business 
gets  active  and  mercantile  interests  need 
a whole  lot  of  money?"  It  is  a crude 
way  of  looking  at  it,  perhaps,  but  it  is 
commonsense,  the  kind  of  commonsense 
that  makes  money. 

Comment. 

As  has  been  remarked,  comment  on 
all  these  things  is  ample.  There  never 
has  been  a time  when  financial  informa- 
tion has  been  disseminated  to  the  same 
degree  as  at  present.  More  and  more 
space  is  being  given  to  the  markets  and 
to  finance  by  the  newspapers.  The 
weekly  magazines  practically  have  all 
established  financial  departments,  while 
the  monthly  magazines  are  rapidly  com- 
ing into  line.  These  discussions,  more- 
over, are  written  by  trained  observers, 
men  who  know  the  relative  importance 
of  things  and  put  them  together  with 
understanding.  The  information  neces- 
sary is  presented,  and  in  comprehensi- 
ble form.  It  is  not  that  absolute  pre- 
diction is  made  or  that  these  discussions 
are  valuable  because  they  tell  exactly 
what  is  going  to  happen,  but  because 
they  present  the  facts  and  the  possible 
deductions  to  be  drawn  therefrom.  Be- 
fore the  investor  lies  all  the  information 
sorted  and  sifted  out,  boiled  down.  It 
is  up  to  him  and  his  commonsense  to 
make  use  of  it 


ELECTRIFYING  THE  RAILROADS 

TTRGING  the  need  of  uniformity  in 
^ the  electrification  of  railroads, 
now  going  on  on  such  a great  scale, 
George  Westinghouse  recently  said: 
The  complete  electrification  of  rail- 
ways will  necessitate  a rearrangement 
of  ideas  and  practices  in  regard  to  op- 
erations. Coaling  and  watering  places 
will  not  be  needed ; passenger  trains  will 
be  differently  composed,  some  classes 
being  of  less  weight;  and  they  will  op- 
erate more  frequently,  thus  promoting 


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travel ; other  trains  will  be  heavier  than 
at  present,  or  will  operate  at  higher 
speeds,  and  branch  lines,  by  the  use  of 
electrically  fitted  cars,  can  be  given  a 
through  service  not  now  enjoyed.  The 
movement  of  freight  will  undergo  great 
changes,  due  to  the  fact  that  electric 
locomotives  can  be  constructed  with 
great  excess  capacity,  enabling  them  to 
move  longer  trains  at  schedule  speed  on 
rising  gradients.  The  large  percentage 
of  shunting  operations  due  entirely  to 
the  use  of  steam  locomotives  will  no 
longer  be  required.  The  railway  com- 
panies can  combine  upon  some  co-opera- 
tive plan  for  the  generation  of  electrici- 
ty, thereby  effecting  large  savings  in 
capital  expenditures,  and  can  utilize 
their  own  rights  of  way  for  the  trans- 
mission of  the  current,  not  only  for  the 
operation  of  trains,  but  for  many  other 
useful  purposes.  I foresee  from  the 
progress  made  in  the  development  of 
gas  and  oil  engine  power  a still  further 
reduction  in  cost,  which' will  accelerate 


the  work  of  electrifying  existing  rail- 
ways. One  important  aspect  of  this 
great  question  will  engage  thoughtful 
consideration  of  every  government, 
namely,  the  military  necessity  for  uni- 
form railway  equipment  in  time  of  war. 

Were  there  now  only  one  system  to 
be  considered,  there  would  be  a concen- 
tration of  the  energy  of  thousands  on 
the  perfecting  and  simplifying  of  the 
apparatus  for  that  system,  to  the  advan- 
tage of  railway  companies  and  of  manu- 
facturers. In  conclusion,  I can  only  re- 
peat, and  earnestly  recommend  to  the 
serious  consideration  of  railway  engi- 
neers and  those  in  authority,  the  press- 
ing need  of  determining  the  system 
which  admits  of  the  largest  extension  of 
railway  electrification  which  will  render 
possible  a complete  interchange  of  traf- 
fic in  order  to  save  expense  in  the  future 
and  to  avoid  difficulties  and  delays  cer- 
tain to  arise  unless  some  common  under- 
standing is  arrived  at  very  shortly. 


THE  ART  OF  SAVING  MONEY 

By  J.  E.  Bangs 


\XTHO  are  the  great  money  makers 
* * in  this  country?  Instantly  the 
names  of  Rockefeller,  Carnegie,  Mor- 
gan, Vanderbilt  and  others  flash  across 
our  vision  and  we  say  they  are  the  great 
money  makers  of  the  country.  This  is 
a common  but  mistaken  notion.  They 
have  been,  indeed,  great  accumulators 
of  wealth,  but  not  the  great  money 
makers.  In  fact,  their  wealth,  great 
as  it  is,  is  very  small  when  compared 
to  the  immense  wealth  of  our  entire 
country. 

The  great  money  makers  of  this  coun- 
try are  the  busy  workers,  who  daily  toil 
in  mine,  factory  and  shop,  on  farm, 
railroad  and  ranch,  in  store,  office,  bank 
and  profession,  where  skilled  hand  and 
trained  brain  from  inert  matter  evolve 
utility,  comfort,  convenience  and  beauty, 
and  cause  a constant  golden  stream  of 
money  to  flow  in  the  channels  of  trade. 

These  are  the  money  makers  of  our 
country,  and  they  should  enjoy  to  a 


great  extent  the  product  of  their  labor. 
They  should  be  accumulators  as  well  as 
producers. 

Accumulating  Wealth. 

Why  do  the  millions  of  money  mak- 
ers become  the  accumulators  of  wealth? 
Because  the  vast  majority  do  not  give  it 
serious  thought,  and  very  many  are  un- 
willing to  deny  themselves  anything 
which  they  may  fancy  in  order  to  start 
a nucleus  for  accumulation.  They  put 
off  saving  until  to-morrow,  being  un- 
willing to  start  to-day. 

The  history  of  our  money  kings 
proves  that  the  foundation  of  their 
wealth  was  laid  by  careful  saving.  John 
D.  Rockefeller  tells  us  that  he  made 
his  start  by  saving  his  first  earnings 
and  loaning  it  out  on  interest.  His  ex- 
perience is  but  the  experience  of  nearly 
everyone  who  has  been  successful  in  ac- 
cumulating wealth. 

Nearly  every  rich  man  was  born  poor. 


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but  many  a boy  born  rich  does  not  die  a 
rich  man.  The  reason  lies  in  the  acquir- 
ing of  the  saving  habit  in  the  first  case 
and  the  lack  of  it  in  the  other. 

It  is  much  easier  to  spend  than  to 
save.  It  is  much  easier  to  earn  money 
than  to  spend  it  wisely. 

The  Object  of  Saving. 

What  is  the  use  of  saving?  In  the 
first  place  it  is  a duty  we  owe  to  our- 
selves. We  cannot  always  be  producers; 
old  age  is  sure  to  come;  sickness,  acci- 
dent or  misfortune  may  come  at  any 
time  and  cut  off,  temporarily  or  per- 
manently, our  productive  powers,  there- 
fore we  should  provide  for  the  future 
rainy  day  or  for  old  age  by  saving  dur- 
ing the  days  of  our  greatest  productive 
power.  This  is  certainly  true  even  if 
we  have  no  one  depending  upon  us,  but 
if  we  have  loved  ones  at  home,  or  if  we 
ever  expect  to  have  a home  for  loved 
ones,  we  are  doubly  called  upon  to  pro- 
vide for  them  by  systematic  saving. 

Fathers  may  thus  provide  for  wives 
and  families,  or  for  the  future  educa- 
tion of  their  children.  Children  should 
form  the  habit  of  saving,  thus  estab- 
lishing a correct  business  habit  and  lay- 
ing a foundation  for  future  success  in 
business  or  a profession. 

The  obligation  of  saving  is  an  ever 
present  one,  which  cannot  be  disre- 
garded without  resulting  misfortune. 

How  to  Save. 

If  in  doubt  where  to  begin  in  saving, 
take  a little  memorandum  book  and 
place  in  it  every  cent  you  spend.  Class- 
ify expenditures  by  placing  them  in 
three  columns  headed,  respectively,  “Ac- 
tual Necessities/*  “Comforts”  and 
“Luxuries.”  At  the  end  of  the  month 
compare  the  footings  of  each  column 
and  one  will  be  surprised  at  the  size 
of  the  column  marked  “Luxuries.” 
You  can  then  see  where  one  can,  at 
least,  begin  to  save.  In  the  classifica- 
tion of  our  expenses  let  us  be  honest 
with  ourselves.  Don’t  imagine  every- 
thing we  wish  is  a necessity.  Too  many 
of  us  think  the  luxuries  of  our  fathers 


are  our  everyday  necessities  and  act 
accordingly.  We  often  mistake  style 
for  comfort  and  pay  an  extra  price  for 
appearance  sake,  when  less  would  give 
us  more  real  comfort  and  pleasure. 

Everyone  should  endeavor  systemati- 
cally to  save  a certain  part  or  per  cent, 
of  one’s  earning  or  income. 

How  Interest  Multiplies. 

When  Hendric  Hudson  discovered  the 
river  which  bears  his  name,  he  pur- 
chased of  the  Indians  the  whole  of 
Manhattan  Island,  now  New  York,  for 
about  the  equivalent  of  twenty-five  dol- 
lars in  our  money  to-day.  Had  this 
amount  been  placed  on  interest  and 
compounded  at  five  per  cent,  annually, 
it  would  now  amount  to  about  $25,000,- 
000,  or  an  increase  of  one  million  times 
the  original  amount  invested. 

Five  cents  a day  saved  and  deposited 
monthly  with  interest  at  three  per  cent., 
compounded  semi-annually,  in  ten  years 
amounts  to  over  $200.  Ten  dollars  a 
month  saved  and  deposited  in  the  same 
way,  in  ten  years  amounts  to  nearly 
$1,400. 

Everyone  can  save  at  least  five  cents 
a day  and  thousands  can  save  ten  dollars 
and  upwards  monthly. 


THE  INSTALMENT  PLAN 

"C'OR  the  benefit  of  our  many  readers 
A interested  in  the  new  idea  of  buy- 
ing securities  on  the  instalment  plan, 
but  not  familiar  with  the  way  it  is  done, 
we  present  herewith  a description  given 
by  the  odd-lot  specialists,  John  Muir 
& Co. : 

To  accommodate  the  investor  of  mod- 
erate means  who  does  not  wish  to  spec- 
ulate nor  to  subject  himself  to  margin 
calls,  we  have  devised  a plan.  Its  terms 
permit  the  man  with  a small  capital  to 
invest  it  at  once,  and  by  adding  a part 
of  his  outside  income  regularly,  to 
finally  become  the  actual  owner  of  bonds 
and  dividend  paying  stocks. 

Stocks  will  be  bought  in  quantities  of 
five  shares  and  upward,  and  bonds  from 
one  upward,  for  an  initial  deposit  and 


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monthly  payments  thereafter  until  the 
securities  are  paid  for  in  full. 

On  stock  selling  above  150,  the  initial 
deposit  required  is  fifty  per  cent,  of  the 
par  value  (not  the  market  value) ; on 
stock  selling  between  100  and  150, 
thirty  per  cent.;  on  stock  selling  be- 
tween fifty  and  100,  twenty  per  cent.; 
and  on  stock  selling  below  fifty,  fifteen 
per  cent.  All  bonds  require  fifteen  per 
cent.  Thus,  the  deposit  on  the  pur- 
chase of  ten  Union  Pacific  is  $500,  on 
ten  Southern  Pacific,  $300 ; on  ten  Steel, 
$200;  on  ten  Erie,  $150;  on  $1,000 
C.  & O.  conv.  four  and  one-half  per 
cent,  bonds,  $150. 

The  balance  is  to  be  paid  monthly  in 
amounts  equal  to  five  per  cent,  of  the 
par  value,  irrespective  of  market  price. 
Thus,  the  second  and  succeeding  pay- 
ments on  ten  shares  of  Union  Pacific, 
Southern  Pacific,  Steel,  Erie  or  $1,000 
C.  & O.  four  and  one-half’s  would  be 
fifty  dollars  each. 

To  take  advantage  of  a rise,  securi- 
ties inav  be  sold  at  any  time,  whereupon 
aggregate  deposits  plus  the  profit,  less 
the  charges,  will  be  returned. 

Holdings  may  be  increased  without 
an  additional  initial  deposit  whenever 
payments  on  the  first  purchase  aggre- 
gate the  stated  requirements  on  both 
purchases.  For  example,  if  you  bought 
five  shares  of  Steel,  made  an  initial  de- 
posit of  $100,  and  four  monthly  pay- 
ments of  twenty-five  dollars  each,  you 
would  have  credit  for  $200.  This 
would  allow  you  to  buy  five  shares  more, 
or  a total  of  ten  shares.  Subsequent 
monthly  payments  would  be  fifty  dollars 
each. 

Interest  is  charged  monthly  on  the 
amount  lent — the  difference  between 
cost  and  deposits.  That  is,  charge  is 
made  on  the  cost,  and  allowed  on  pay- 
ments. The  interest  rate  is  six  per  cent, 
and  does  not  change. 

Payments  other  than  those  specified 
above  will  not  be  called  for,  whatever 
the  course  of  the  market. 

In  the  event  of  failure  to  pay  any  in- 
stalment when  due,  the  security  will  not 
be  sold  peremptorily.  When  this  hap- 
pens, the  security  is  considered  as  car- 
ried on  margin,  subject  to  the  rules 


which  govern  margin  accounts.  In  a 
declining  market,  a stop  loss  order  will 
be  entered  close  to  the  point  of  exhaus- 
tion of  the  margin.  In  the  meantime, 
you  may  sell  out  and  receive  in  return 
your  deposits  plus  your  profits  or  less  A 
your  losses,  and  less  the  charges. 

If  losses  amount  to  more  than  aggre- 
gate deposits  when  default  is  made  on  a 
monthly  payment,  the  security  will  be 
sold  at  the  best  market  price,  and  the 
difference  will  become  due  immediately. 

THE  NEW  PENNSYLVANIA  TER- 
MINAL 

T\ISCUSSING  the  probable  effect  of 
the  opening  of  the  New  York 
Terminal  of  the  Pennsylvania  Railroad, 
Messrs.  E.  B.  Smith  & Co.  say:  The 

great  New  York  Terminal  system  of 
the  Pennsylvania  Railroad  Company  is 
about  to  be  put  into  operation.  This  in- 
cludes the  passenger  station  at  Thirty- 
second  street,  two  tunnels  under  the 
North  River,  connecting  New  Jersey 
with  New  York,  and  four  tunnels  under 
the  East  River,  connecting  New  York 
City  with  Long  Island;  together  with 
extensive  approaches.  The  entire  sys- 
tem will  be  operated  electrically.  The 
terminal  is  the  most  notable  and  com- 
plete in  the  world  and  stands  out  in 
conspicuous  relief  as  the  great  accom- 
plishment of  a bold  and  able  railway 
management. 

Increased  Business  in  Prospect. 

The  financial  problem,  of  course, 
hinges  upon  the  development  of  new 
business.  To  give  due  emphasis  to  the 
large  probabilities  in  this  respect,  rec- 
ognition must  be  accorded  to  the  ex- 
treme importance  of  the  territorial 
connections,  and  an  inevitable  growth  in 
traffic. 

With  the  completion  of  the  New  York 
system,  the  Pennsylvania  Railroad  will 
have  direct  entrance  into  all  of  the  first 
eleven  cities  in  the  United  States  with 
the  exception  of  Boston  and  San  Fran- 
cisco, three  of  the  cities  on  its  lines 
being  among  the  first  nine  in  point  of 
population  in  the  world.  The  popula- 


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tion  of  Greater  New  York  City  alone, 
thus  directly  connected  with  the  Penn- 
sylvania system,  is  almost  equal  to  the 
entire  population  of  New  England,  and 
about  equals  the  aggregate  population 
of  California,  Montana,  Wyoming, 
Idaho,  Washington,  Oregon,  Colorado, 
New  Mexico,  Utah,  Arizona  and 
Nevada.  The  three  States  brought  to- 
gether by  this  tie — New  York,  New 
Jersey  and  Pennsylvania — contain  about 
twenty  per  cent,  of  the  entire  popula- 
tion of  the  United  States. 

Passenger  traffic  in  and  around  New 
York  is  the  greatest  in  the  world.  More 
than  300,000,000  persons  travel  between 
Brooklyn  and  New  York  each  year,  and 
more  than  150,000,000  between  New 
York  and  New  Jersey  by  cars  and 
ferries.  There  are  also  carried  over 
the  railroads  to  Jersey  City  100,000,- 
000  tons  of  freight  per  annum.  It  has 
been  estimated  that  by  1920  there  will 
be  a population  of  between  seven  and 
eight  million  people  in  Greater  New 
York.  With  this  growth  the  increase 
in  traffic  will  be  tremendous.  The  Penn- 
sylvania Railroad  now  receives  about 
one-third  of  the  freight  traffic  that 
crosses  to  Jersey  City  and  one-sixth  of 
the  passengers  who  travel  in  that  direc- 
tion. The  completion  of  the  terminal 
and  tunnel  system  will  put  the  company 
in  a position  to  get  a much  larger  pro- 
portion of  this  traffic  and  will  enable  it 
to  command  the  greater  part  of  the 
business  out  of  New  York. 

There  can  be  no  question  as  to  the 
increase  of  the  traffic  not  only  in  and 
around  New  York,  but  in  all  west- 
bound business.  In  this  connection  it  is 
to  be  remembered  that  the  Pennsylvania 
Railroad  has  the  shortest  line  between 
New  York  and  Chicago  by  fifty-six 
miles.  The  Pennsylvania  had  the  great- 
er proportion  of  the  west-bound  busi- 
ness oiit  of  New  York  prior  to  the  time 
of  the  establishment  of  the  Grand  Cen- 
tral Station  by  the  New  York  Central. 
When  the  latter  move  was  made  the 
New  York  Central  gained  the  larger 
part  of  the  west-bound  travel,  but  it  is 
believed  by  railway  men  that  the  Penn- 
sylvania will  regain  its  dominant  posi- 
tion in  the  New  York  business  with  the 


opening  of  its  Thirty-second  street 
station. 

Ten  Years  Ahead  of  Demands. 

The  chief  effect  of  the  opening  of 
the  terminal  system  in  New  York,  so 
far  as  the  stock  of  the  Pennsylvania 
Railroad  is  concerned,  will  be  the  con- 
centration of  attention  of  investors,  not 
only  in  and  around  New  York  and 
Philadelphia,  but  in  Europe,  upon  the 
extraordinary  qualities  of  the  Pennsyl- 
vania Railroad  Company.  The  system 
has  properly  been  designated  the  great- 
est in  the  world,  but  full  recognition  is 
not  always  given  to  the  strong  points 
that  entitle  it  to  such  a place  of  distinc- 
tion. Two  facts  stand  out  clearly: 

1.  The  business  of  the  Pennsylvania 
Railroad  Company,  at  a minimum  calcu- 
lation, doubles  every  ten  years.  In  the 
decade  before  the  recent  panic  it  in- 
creased more  than  150  per  cent. 

2.  The  traditional  policy  of  the 
Pennsylvania  Railroad  Company  is  to 
keep  its  road  in  condition  to  handle 
business  for  ten  years,  or  more,  ahead 
of  the  times.  That  it  is  now  ten  years 
ahead  of  the  times  is  plain.  The  vast 
work  of  the  past  few  years  placed  it  in 
condition  to  meet  the  growth  of  busi- 
ness at  least  up  to  about  1920.  This 
work  includes  the  completion  of  what  is 
virtually  a six-track  railroad  between 
New  York  City  and  Pittsburgh;  the 
terminal  and  tunnels  in  and  around 
New  York;  building  of  cut-off  railways 
around  Pittsburgh ; gravity  classification 
yards,  elevation  and  alignment  of 
tracks;  new  terminals  in  large  cities, 
and  acquisition  of  interest  in  other 
properties. 

The  Pennsylvania  Railroad  runs 
through  the  greatest  freight-producing 
center  in  the  world.  It  embraces  in  its 
system  11,292  miles  of  railway.  It  has 
a freight  and  passenger  traffic  about 
equal  to  the  aggregate  business  of  the 
Atchison,  Topeka  & Santa  Fe,  the 
Union  Pacific,  the  Southern  Pacific,  the 
Northern  Pacific,  the  Great  Northern 
and  the  Chicago,  Milwaukee  & St.  Paul 
Railways.  Business  constantly  is  press- 
ing upon  it,  and  with  the  great  improve- 


Digitized  by  t^ooQle 


INVESTMENTS 


36 1 


ment  now  under  way  in  the  steel  and 
bituminous  coal  industries  the  traffic 
should  increase  at  a very  rapid  rate. 
The  demands  for  additional  service 
have  been  so  pronounced  that  the  com- 
pany has  built  what  is  virtually  an  en- 
tirely new  low  grade  railroad  from 
Pittsburgh  to  New  York. 


INVESTMENT  NEWS  AND  NOTES 

— The  Pacific  Gas  and  Electric  Company 
of  California,  the  stocks  and  bonds  of 
which  are  largely  held  in  New  York  and 
vicinity,  and  which  company  serves  a terri- 
tory about  four  times  the  area  of  New  Jer- 
sey, has  purchased  the  lighting  plants  and 
water  supply  stations  situated  at  Wheat- 
land,  Lincoln,  Davis,  Roseville,  Cordelia, 
Elmira,  Winlcrs,  Dixon,  Rio  Vista  and  Ber- 
nicia. 

— The  Tri-City  Railway  and  Light  Com- 
pany of  Davenport,  Rock  Island  and  Moline, 
the  five  per  cent,  bonds  of  which  were  large- 
ly marketed  in  the  East  four  years  ago  by 
N.  W.  Halsey  & Co.,  reports  substantial  in- 
creases in  gross,  net  and  surplus  earnings 
for  the  twelve  months  ending  May  31.  The 
company  earned  net  $956,465.86,  or  more 
than  double  all  interest  charges.  As  illus- 
trating the  stability  of  sound  public  utility 
properties,  this  company’s  earnings  substan- 
tially increased  during  the  period  following 
the  1907  panic,  when  railroad  earnings  in- 
variably fell  off. 

— The  Rio  Plata  mine  at  Chihauhau,  Mexi- 
co, according  to  a financial  statement  just 
issued,  produced  from  December  1,  1909,  to 
June  30,  1910,  the  first  seven  months  of  the 
current  fiscal  year,  433,980  ounces  of  silver, 
valued  at  $212,348.53. 

Receipts  from  sales  applying  to  the  pres- 
ent fiscal  year  have  amounted  to  $169,692.45, 
and  the  estimated  value  of  silver  on  hand 
July  1 was  $44,168.47,  a total  of  $213,860.92. 
After  deducting  the  operating  cost  for  the 
same  period  the  profits  for  the  seven  months 
were  $135,960.24. 

Quarterly  dividends  were  paid  in  Decem- 
ber, March  and  June  amounting  to  $102,- 
706.47.  The  dividend  rate  is  eight  per  cent, 
per  annum. 

— Speaking  of  the  mortgage  plan  recently 
adopted  by  his  company,  Clarence  H.  Kel- 
sey, president  of  the  Title  Guarantee  & 
Trust  Company,  recently  said: 

“The  advice  to  save  money  has  been  so 
often  repeated  that  it  has  come  to  have  a 
somewhat  empty  sound.  Advising  a man 
to  save  money  is  a good  deal  like  advising 
a man  to  swim  who  does  not  understand 


how’  to  take  a single  stroke.  The  habit  of 
saving  is,  in  most  cases,  not  a natural  en- 
dowment but  an  achievement.  The  culti- 
vation of  any  habit  requires  practice  and 
practice  means  the  consistent  pursuance  of 
some  method  or  system. 

“The  great  difficulty  in  this  country  has 
been  that  there  has  hardly  existed  any  ap- 
paratus by  the  use  of  which  the  would-be 
saver  could  cultivate  the  habit  of  money 
saving.  The  nearest  approach  to  it  has  been 
perhaps  in  the  yearly  premium  of  a life  in- 
surance policy.  Probably  one  of  the  chief 
benefits  of  the  life  insurance  plan  lies  in 
this  instilling  in  the  policy  holder  the  sense 
of  periodic  financial  obligation. 

“Again,  there  is  a positive  side  to  saving 
as  well  as  a negative.  We  have  all  heard  a 
good  deal  about  thrift  and  frugality  but 
after  all  there  is  nothing  particularly  at- 
tractive in  self-denial.  It  is  the  fruits  of 
self-denial  that  we  wish  for.  One  of  the 
chief  enjoyments  of  money  saving  lies  in 
the  profitable  investment  of  the  money 
saved,  and  here,  also,  the  moderate  money 
getter  in  this  country  has  never  had  much 
of  a chance. 

“It  was  with  some  such  thought  as  this 
that  the  Title  Guarantee  & Trust  Company 
inaugurated  its  system  of  guaranteed  first 
mortgage  certificates,  thus  giving  the  small 
money  saver,  for  the  first  time,  in  a real 
sense,  the  benefit  of  a first  class  investment 
security.  The  offering  of  a certificate  as 
small  as  $200  enabled  the  man  who  had 
got  together  a comparatively  small  fund  to 
invest  it  to  the  best  possible  advantage  and 
the  selling  of  these  certificates  in  monthly 
installments  of  $10  provided  the  would-be 
saver  with  the  necessary  incentive  and  ma- 
chinery for  the  acquirement  of  the  habit 
of  saving.” 

— Soon  after  the  formation  of  the  firm  of 
Thompson,  Towle  & Company  there  was 
inaugurated  a news  bulletin  service  with  a 
view  of  keeping  clients  informed  of  devel- 
opments in  the  financial  world,  particularly 
news  as  affecting  the  various  properties 
whose  shares  have  been  listed  upon  the  lead- 
ing Exchanges.  This  service  has  been  under 
the  supervision  of  W.  F.  Bartholomew,  a 
member  of  the  firm,  who  was  for  some  years 
editor  of  the  Boston  News  Bureau.  The 
extensive  demand  for  these  news  bulletins 
has  led  to  a decision  to  also  publish  them 
in  the  form  of  a weekly  “News  letter”  for 
distribution  among  clients  and  friends. 

In  the  recent  number  of  the  “News  Let- 
ter” the  bond  market  was  tersely  summed 
up  as  follows: 

In  the  bond  market  there  are  many  bar- 
gains. Bonds  of  ably  managed  and  well 
known  public  service  corporations  are  sell- 
ing on  a five  per  cent,  to  5.20  per  cent,  basis, 
while  many  high  grade  railroad  bonds,  legal 
for  savings  banks,  are  down  to  the  price 
level  of  1907.  The  course  of  industrial 


Digitized  by  t^ooQle 


362 


THE  BANKERS  MAGAZINE 


bonds  during  1910  has  been  downward,  al- 
though not  to  such  a marked  degree  as  the 
railroad  securities.  Municipal  bonds  are 
cheaper  than  they  have  been  since  1907. 
"When  public  confidence  is  restored  bond 
prices  should  quickly  go  higher  for,  un- 
questionably, idle  funds  are  awaiting  invest- 
ment. 

— The  following  is  from  one  of  a series 
of  “Concrete  Business  Talks”  issued  by  the 
Alexander  Hamilton  Institute.  New  York: 

Like  the  Southern  Classification  rates,  the 
arrangement  in  western  territory  is  an  evo- 
lution and  must  be  explained  on  historical 


rather  than  on  logical  grounds.  The  first 
railroads  in  this  territory  were  built  in 
stages,  and  work  on  them  was  stopped  for 
the  time  being  when  they  reached  certain 
termini.  The  northwestern  railroads,  for 
instance,  were  almost  all  intended  to  reach 
Minneapolis  and  St.  Paul  and  did  not  ex- 
tend their  lines  beyond.  The  central  west- 
ern railroads  had  as  their  first  goal  the 
Missouri  river  and  as  their  second  goal  the 
mining  region  around  Denver.  The  south- 
western railroads  were  extended  first  to 
northeastern  Texas,  next  to  El  Paso  and 
southern  Arizona,  and  after  that  to  the  Pa- 
cific Coast. 


INVESTMENT  AND  MISCELLANEOUS  SECURITIES 

[Corrected  to  August  18,  approximate  yield  as  figured  Sept.  1.] 


GOVERNMENT,  STATE  AND  CITY  BONDS. 
Quoted  by  J.  Hathaway  Pope  & Co.,  brokers 
In  Investment  securities  and  dealers  In  un- 
listed and  Inactive  railroad  and  industrial 
securities,  67  Exchange  pi.  New  York. 


Name  and  Maturity.  Price.  Yield. 

U.  S.  Gov.,  reg.  2s.  1930 101  -101%  1.66 

U.  S.  Gov.,  reg.  3s,  1918 101% -102%  2.60 

Panama  Canal,  reg.  2s.  1936.  ,100%-101  1.94 

Dlst.  of  Columbia  3-65s  105  -106 

Alabama  4s.  July.  1056  101  -104%  1.77 

Colorado  4s.  '22  (op.  ’12) 95  -100  4.00 

Connecticut  3%s,  Apr.,  *30 99  -102  3.37 

Georgia  4%s,  July,  1915 104  -105  3.40 

Louisiana  4s,  Jan.,  1914 96  -101  3.72 

Massachusetts  3%s,  1940 94  %-  95  3.75 

New  York  State  3s,  *59 101%-103  2.88 

North  Carolina  6s.  Apr.,  '19.  .114 %-116 % 3.80 

South  Carolina  4%s,  1933.... 103  -104  4.22 

Tenn.  New  Settlement  3s.  *13..  95  - 96  4.40 

Va.  6s,  B.  B.  & Co.  ctfs.,  1871  40  - 45 

Boston  3% s.  1929  95  - 96%  3.85 

New  York  City  4%s,  1957 106% -106%  4.10 

New  York  City  4%s.  1917 102% -103%  3.95 

New  York  City  4s,  1959 97  %-  98  4.06 

New  York  City  4s,  1955 96  %-  97%  4.05 

New  York  City  3%s,  1954  ....  86  - 87%  4.10 

New  York  City  3%s,  1930 89%-  91  4.12 

New  York  City  rev.  6s,  1910.. 101  -101%  1.80 

Philadelphia  4s,  Jan.,  1938...  100  -101%  3.95 

St  Louis  4s.  July,  1928 100  -101%  3.92 


SHORT  TERM  SECURITIES. 

Quoted  by  J.  Hathaway  Pope  A Co. 

Following  are  current  quotations  for  the 
principal  short-term  railway  and  Industrial 
securities.  Date  of  maturity  Is  given,  be- 
cause of  the  Importance  of  those  dates  In 
computing  the  value  of  securities  with  so 
near  a maturity.  All  notes  mature  on  the 
first  of  the  month  named  except  where  the 
day  Is  otherwise  specified;  Interest  Is  semi- 
annual on  all.  Accrued  interest  should  be 

added  to  price. 

Name  and  Maturity.  Price.  Yield. 

Am.  Cig.  4s.  “A"  Mar.  15,  'll  98%-  99%  4.92 

Am.  Cig.  4s.  *B”  Mar.  15.  '12  97  %-  98%  5.10 

Am.  Locomotive  5s.  Oct.,  '10..  99%-100%  4.25 

Bethlehem  Steel  6s,  Nov.,  '14..  97  - 98  6.20 

"Big  Four”  5 s,  June,  '11....  100  -100%  4.35 

B.  R.  & P.  Equip.  4%s 99  -100% 

Chic.  A Alton  5s.  Mar.  15.  '13  98%-  99%  5.25 

C.  H.  & D.  4s.  July,  '13  96  %-  97%  5.05 

Diamond  Match  5s.  July  '12  98  -100  6.00 

Hudson  Co.  6s,  Oct.,  '11 98  -100  6.00 

Interboro  6s,  May,  '11 101% -101%  3.92 

K.  C.  R.  & L.  6s,  Sept.,  '12..  98  - 99  6.60 

Maine  Central  4s,  Dec..  '14 93  -100  4.25 


Name  and  Maturity.  Price.  Yield. 

Minn.  & St.  Louis  5s.  Feb..  '11  98  %-  99%  5.58 

New  Orl.  Term.  5s,  Apr.,  '11..  99% -100  8.45 

N.Y.C.  Equip.  5s.  Nov.,  '10.. 100  -101%  4.15 

N.Y.C.  Equip.  6s,  Nsv..  '14 . .102%-108%  4.15 

N.Y.C.  Equip.  6s,  Nov.,  '16.  .103%-104%  4.15 

N.Y.C.  Equip.  6s,  Nov.,  '19 . .104% -106 % 4.15 

N.Y..N.H.&H.  6s.  Jan..  '11 100  -100%  3.70 

N.Y..N.H.&H.  6s,  Jan.,  *12 100%-101  3.93 

No.  American  5s,  May,  '12. . 99  -100  6.00 

8t«  L.  A S.  F.  4 %s,  Feb.,  '12..  95%-  96%  6.00 

St.  L.  & S.  F.  4 %s,  Feb.,  '12..  95%-  96%  6.00 

Southern  Ry.  5s,  Feb..  1913 98  - 98%  5.45 

Tidewater  6s.  June.  '13 100% -101%  6.35 

Westinghouse  6s.  Aug..  '10 99%-100%  4.25 

Wood  Worsted  4%s,  Mar.,  'll  99%-  ..  4.50 

Western  Tel.  6s.  Feb..  1912..  99  - 99%  6.20 


INACTIVE  RAILROAD  STOCKS. 

Quoted  by  J.  Hathaway  Pope  A Co. 

Bid.  Asked. 

Ann  Arbor,  pref 65  70 

Arkansas,  Oklahoma  & Western...  4 8 

Atlanta  & West  Point  140 

Atlantic  Coast  Line  of  Conn 235  242  % 

Buffalo  & Susquehanna,  pref 12  15 

Central  New  England  13  18 

Central  New  England,  pref 23  28 

Chicago,  Indianapolis  & Louisville.  50  55 

Chicago,  Ind.  & Louisville,  pref....  60  72 

Cincinnati,  Hamilton  & Dayton...  36  60 

Cincinnati,  Ham.  & Dayton,  pref...  65  70 

Oincin.,  N.  O.  & Tex.  Pac 125  137% 

Cincin.,  N.  O.  A Tex.  Pac.,  pref... 102  106 

Cincinnati  Northern  50  60 

Cleveland.  Akron  A Columbus 70  84 

Cleve.,  Cin.,  Chic.  A St.  L..  pref...  100  103 

Delaware  45  50 

Dos  Moines  A Ft.  Dodge,  pref 70 

Detroit  & Mackinac  85 

Detroit  & Mackinac,  pref 82  90 

Grand  Rapids  A Indiana 40  50 

Georgia,  South.  A Florida  30  40 

Georgia,  South.  A Florida  1st  pref.  .90 
Georfgia,  South.  A Flor.,  2d  pref..  65  75 

Huntington  & Broad  Top  8 9 

Huntington  A Broad  Top,  pref 25 

Kansas  City,  Mexico  A Orient....  18  20 

Kansas  City,  Mex.  A Orient,  pref.  24  27 

Louisville,  Henderson  & St.  Louis.  12  18 

Louisville.  Hend.  A St.  L.,  pref...  30  37 

Maine  Central  200  ... 

Maryland  & Pennsylvania  15  24 

Michigan  Central  165  175 

Mississippi  Central  35  40 

Northern  Central  124  125 

Pitts.,  Cin.,  Chic.  A St.  L.  pref 105  115 

Pittsburg  A Lake  Erie  296  ... 

Pittsburg.  Shawraut  & Northern..  1 

Pere  Marquette  20  30 

Pere  Marquette.  1st  pref 60  60 

Pere  Marquette.  2d  pref 30  40 

St.  Louis,  Rocky  Mt.  A Pac.,  pref.  . . 40 

Seaboard  1st  pref 70  76 


Digitized  by  t^ooQle 


INVESTMENTS 


363 


Bid.  Asked. 


Seaboard  I'd  pref 42  45 

Spokane  & Inland  Empire  30  50 

Spokane  & Inland  Empire,  pref...  50  70 

Virginian  17  22 

Vandalia  80  ... 

Williamsport  & North  Branch 1 4 


GUARANTEED  STOCKS. 
Quoted  by  J.  Hathaway  Pope  & Co. 


Bid.  Asked. 

North  Pennsylvania  (Phila.  & R.  )..196  ... 

North.  R.  R.  of  N.  J.  (Erie  R.  R.)..  85  95 

Northwestern  Telegraph  (W.  U.)...107  115 

Nor.  & Wor.  pfd.  (N;y.,N.H.&H.)  . . 208 
Ogden  Min.  R.R.  (Cen.R.R.  of  N.J.) . 95  105 

Old  Colony  < X.Y..N.H.&H.)  ..  192 

Oswego  & Syracuse  (D.  L.  & W.)..215  225 

Pacific  & Atlantic  Tel.  (W.  U.) 66  75 

Peoria  & Bureau  Val.  (C.R.I.&P.) . .175  185 

Philadelphia  & Trenton  (Pa.  R.  R.).248  ... 

Pitts.  B.  A L.  (P.  L.  E.  & C.  Co.)..  32  35 


(Guaranteeing  company  In  parentheses.) 

Bid.  Asked. 


Albany  & Susquehanna  (D.  & H. )..280  ... 

Allegheny  & West’n  (B.  R.  I.  & P. ).140  160 

Atlanta  & Charlotte  A.  L.  (So. R.R.)  .186  ... 

Augusta  & Savannah  A.  L.  (Cen. 

of  Ga.)  102  110 

Beech  Creek  (N.  Y.  Central) 96  102 

Boston  & Lowell  (B.  & M.)  200  215 

Bleecker  St.  & F.  Ry.  Co.  (Met. 

St.  Ry.  Co.)  17  22 

Boston  & Albany  (N.  Y.  Cen.) 215  221 

Boston  & Providence  (Old  Colony). 285  293 

Broadway  & 7th  Av.  R.  R.  Co. 

(Met.  St.  Ry.  Co.)  120  130 

Brooklyn  City  R.  R.  (Bk.  H.  R.  R. 

Co.)  150  156 

Camden  & Burlington  Co.  (Penn. 

R.  R.)  140  150 


Catawlssa  R.  R.  (Phila  & Read.)..  112  120 

Cayuga  & Susquehanna  (D.L.&W. ) . 215  ... 

Cent.  Pk.  N.&B.  R.R.  (Met.  St.  Ry.)  25  40 

Christopher  & 10th  St.  R.  R.  Co. 

(M.  S.  R.)  80  110 

Cleveland  & Pittsburg  (Pa.  R.  R. ).168  175 

Cleveland  & Pittsburg  Betterment..  95  100 

Columbus  & Xenia  (Pa.  R.  R. ) . . . . 200 
Commercial  Union  (Com’l  C.  Co.).. 100  110 

Commercial  Union  of  Me.  (Com.  C. 

Co.)  100 

Concord  & Montreal  (B.  & M. ) 155  170 

Concord  & Portsmouth  (B.  & M.)..168 
Conn.  & Passumpsic  (B.  A L.)...130  185 

Conn.  River  (B.  & M.)  260  270 

Dayton  & Mich.  pfd.  (C.  H.  & D.)..180  190 

Delaware  & Bound  B.  (Phila.  & R. ).190  200 

Detroit.  Hillsdale  & 8.  W.  (L.  S.  & 

M.  S.)  95  100 

East.  Pa.  (Phila.  & Reading)  130  138 

Eighth  Av.  St.  R.  R.  (M.  S.  R.  Co.). 250  300 

Elmira  & Williamsport  pfd.  (Nor. 

Cen.)  135  140 

Erie  & Kalamazoo  (J.  S.  & 8.).... 220  240 

Erie  & Pittsburg  (Penn.  R.  R.) 140  160 

Franklin  Tel.  Co.  (West.  Union)..  40  50 

Ft.  Wayne  & Jackson  pfd.  (L.  S.  & 

M.  S.)  130 

Forty-second  St.  & G.  St.  R.  R. 

(Met.  St.  Ry.)  200 

Georgia  R.  R.  & Bk.  Co.  (L.  & N. 

& A.  C.  L 262  262 

Gold  & Stock  Tel.  Co.  (W.  U.) 106  115 

Grand  River  Valley  (Mich.  Cent.)...  120  130 

Hereford  Railway  (Maine  Central)..  86  92 

Inter.  Ocean  Telegraph  (W.  U.)....  90  100 

Illinois  Cen.  Leased  Lines  (111.  Cen.)  95  100 

Jackson,  Lans.  & Saginaw  (M.  C.)..  84  . 90 

Joliet  A Chicago  (Chic.  & Al.) 169  180 

Kalamazoo,  Al.  A G.  Rapids  (L.  S. 

A 8. ) 140  150 

Kan.  C..  Ft.  Scott  & M.  pfd.  (St. 

L.  A S.  F.)  69  75 

K.  C.  St.  L.  A C.  pfd.  (Chic.  A Al.).125  140 

Lake  Shore  Special  (Mich.  S.  A N. 

Ind.)  830  360 

Little  Miami  (Penn.  R.  R.) 210  216 

Little  Schuylkill  Nav.  A Coal  (Phil. 

A R.)  110  120 

Louisiana  A Mo.  Rlv.  (Chic.  A Atl..).160  170 

Mine  Hill  A Schuylkill  Hav.  (F.  A 

R.)  120  126 

Mobile  A Birmingham  pfd.  4%  (So. 

Rv.)  68  76 

Mobile  A Ohio  (So.  Ry.)  75  85 

Morris  Can.  pfd.  (Lehigh  Valley)..  170 
Morris  A Essex  (Del.  Lack  A W.)..176  182 

Nashville  A Decatur  (L.  dr  N.) 186  192 

N.  H.  A Northampton  (N.  Y.,  N.  H. 

A H.)  100 

N.  J.  Transportation  Co.  (Pa.  R.R.)  .250  255 

N.  Y..  Brooklyn  & Man.  Beach  p/d. 

(I*.  I.  R.  R.)  107  118 

N,  Y.  A Harlem  (N.  Y.  Central) 305 

N.  Y.  L.  A Western  (D.  L.  A W)..120  125 

Ninth  Av.  R.  R.  Co.  (M.  St.  Ry.  Co.)  150  180 

North  Carolina  R.  R.  (So.  Ry.) 156  164 


Pitta,  Ft.  Wayne  & Chic.  (Pa.R.R.)  .166 
Pitta,  Ft.  Wayne  A Chic,  special 

(Pa.  R.  R.)  165  170 

Pitts.  A North  Adams  (B.  A A.).. 127  134 

Pitta,  McW’port  A Y.  (P.  & L.  E. 

M.  S.)  120  130 

Providence  A Worcester  (N.  Y.,  N. 

H.  & H‘.)  260  300 

Rensselaer  A Saratoga  (D.  A H.)..190  200 

Rome  & Clinton  (D.  A H.) 140  150 

Rome,  Watertown  & O.  (N.  Y.  Cen.)  118  125 

Saratoga  & Schenectady  (D.  & H.).166  175 

Second  Av.  St.  R.  R.  (M.  S.  R.  Co.).  20  50 

Southern  Atlantic  Tel.  (W.  U.)....  87  97 

Sixth  Av.  R.  R.  (Met.  S.  R.  Co.) 112  130 

Southwestern  R.  R.  (Cent,  of  Ga.)..108  115 

Troy  & Greenbush  (N.  Y.  Cent.)... 169 
Twenty-third  St.  R.  R.  (M.  S.  R.)..200  225 

Upper  Coos  (Maine  Central)  135  146 

Utica  A Black  River  (Rome,  W. 

& O.)  .166  176 

Utica.  Chen.  & Susqueh.  (D.  L. 

A W.)  144  155 

United  N.  J.  & Canal  Co.  (Pa.R.R.) . 241  248 

Valley  of  New  York  (D.,  L.  & W.)..122  130 

Ware  R.  R.  (Boston  A Albany)  ....160 
Warren  R.  R.  (D.,  L.  & W.)  168  175 

NEW  YORK  CITY  RAILWAY,  GAS  AND 
FERRY  COMPANY  BONDS  AND  STOCKS. 


Quoted  by  Williamson  A Squire,  members  New 
York  Stock  Exchange,  brokers  and  dealers  in 
investment  securities.  25  Broad  street,  New 
York  City. 

Bid.  Asked. 

Bleecker  St  A Ful  Fy 

1st  4s  1950  J&J  54  60 

Bway  Surf  Ry  lat  5a.  .1924  J&J  102  104 

Bway  & 7th  Av  stock 120  185 

Bway  & 7th  Av  Con  5a. 1948  J&J  100  102 

Bway  & 7th  Av  2d  6a.  .1914  J&N  99  100ft 

Col  & 9th  Av  lat  6s... 1993  M&S  91  100 

Christopher  & 10th  St QJ  80  95 

Dry  Dk  E B & Bat  6a. 1982  J&D  96  100 

Dry  Dock  E B & Bat 

Ctfs  5s  1914  F&A  40  49 

42d  St  M & St  N Av  6S.1910  M&  S 99  ft  100  ft 
Lex  Av  & Pav  Fy  6s..  1922  M&S  95  98 

Second  Av  Ry  stock 7 14 

Second  Av  Ry  1st  5s.. 1909  M&N  97ft  99 
Second  Av  Ry  Cons  6s. 1948  F&A  50  60 

Sixth  Av  Ry  stock 120  185 

South  Ferry  Ry  1st  5s.  1919  A&O  88  91 

Tarry  t’n  W P A M 6s. 1928  M&S  60  80 

Union  Ry  1st  5s 1942  F&A  100  102 

Westchester  El  Ry  5s.  1948  J&J  65  86 

Yonkers  Ry  1st  5s 1946  A&O  70  85 

Central  Union  Gas  5s.. 1927  J&J  99ft  101 
Equitable  Gas  Light  5s. 1932  M&S  102  105 

New  Amst  Gas  Cons  6s.  1948  J&J  97  98ft 
N Y & E R Gas  1st  6s.  1944  J&J  100  108 

N.  Y & E R GasCon  5s. 1945  J&J  95  98 

Northern  Union  Gas  6s.  1927  M&N  99  101 

Standard  Gas  Light  6S.1930  M&N  100  108 

Westchester  Light  6s. . I960  J&D  108ft  106 


Brooklyn  Ferry  Gen  Be- 1943  17  24 

Hoboken  Fy  1st  Mtg  6s. 1946  M&N  102  105 

NY  & Bkn  Fy  1st  Mt  6s. 1911  J&J  98  97 

NY  & Hobok  Fy  Gen  5s.  1946  J&D  93  96 

NY  & East  River  Fy QM  20  28 

10th  & 23d  St  Ferry...:  ..  A&O  30  40 

10th  & 23d  St  Fy  1st  5s.  1919  J&D  65  76 

Union  Ferry  QJ  27  29 

Union  Ferry  1st  5s 1920  M&N  93  97 


EQUIPMENT  BONDS. 

Quoted  by  Blake  A Reeves,  dealers  in  Invest- 
ment securities,  34  Pine  st..  New  York. 
Quotations  are  given  in  basis. 

Bid.  Asked. 

Atl.  Coast  Line  4%.  Mar.,  '17 4ft  4ft 

Buff..  Roch.  & Pitts.  4 ft  %,  Apr.,  '27  4ft  4ft 

Canadian  Northern  . ft%,  Sept.,  '19  6ft  5 

Central  of  Georgia  4ft%.  July,  '16  6 4ft 


Digitized  by  CjOOQle 


364 


THE  BANKERS  MAGAZINE 


Bid.  Asked. 

Central  of  N.  J.  4%,  Apr.,  ’13 4 44  4 44 

Ches.  A Ohio  4%,  Oct..  '16 4%  4% 

Chic.  A Alton  4%,  June.  ’16 6 ft  6 

Chic.  A Alton  4 44%.  Nov.,  ’18 6ft  6 

Chic.,  R.  I.  & Pac.  4 44%.  Feb.,  '17  6 44  4% 

Den.  A Rio  Grande  5%,  Mar.,  ’ll  6 44  4 44 

Del.  & Hud.  4 44%.  July.  ’22 4 44  4 44 

Erie  4%.  Dec.,  ’ll  6 44  6 

Erie  4%,  June,  ’ll  6 44  6 

Erie  4%.  Dec.,  ’14  6 44  4 44 

Erie  4%,  Dec.,  *16  6 44  444 

Erie  4%,  June,  ’16  6 44  4 44 

N.  T.  Cent.  6%,  Nov.,  '11 4 44  4 44 

N.  Y.  Cent.  6%,  Nov.,  '13  4 44  4 44 

No.  West  4%,  Mar.,  ’17  4 44  4 44 

Pennsylvania  4%,  Nov.,  ’14  4 44  4 44 

Seaboard  Air  Line  6%,  June.  '11..  6 4 44 

So.  Ry.  4 44%.  Series  E,  June.  '14  6 444 


ACTIVE  BONDS. 

Quoted  by  Swartwout  A Appenzellar,  bankers, 
members  New  York  Stock  Exchange,  44  Pine 
street,  New  York. 

Bid.  Asked. 


Amer.  Agrl.  Chem.  5s  101  10144 

Amer.  Steel  Foundries  4s,  1923...  63  66 

Amer.  Steel  Foundries  6s,  1935...  99  102 

Balt.  A Ohio,  Southwest.  Dlv.  3 44s.  89  44  9 0 44 

Bethlehem  Steel  5s  83  46  85 

Chi.,  Burlington  & Quincy  Gen.  4s.  98  98  44 

Chi.,  Burl.  A Quincy  111.  Div.  4s...  9 8 44  9 9 44 

Chi.,  Burl.  & Quincy  111.  Div.  344s.  87  8744 

Cin..  Hamilton  & Dayton  4s 96  97  44 

Denver  A Rio  Grande  Ref'ng  5s..  9044  9144 

Louis.  A Nashville  unified  4s 97  44  98 

Mason  City  & Ft.  Dodge  4s 80  83 

Norfolk  & West.  Divisional  4s...  91  92 

Savannah.  Florida  & Western  6s..  119  123 

Va.  Carolina  Chem.  1st  5s 9 8 44  9 9 44 

Western  Maryland  4s  83  83  44 

Wheeling  & Lake  Erie  cons.  4s....  78  7944 

Wls.  Central,  Superior  A Duluth  4s  8844  90  44 

Western  Pacific  5s  93  94 


COAL  BONDS. 

Quoted  by  Frederick  H.  Hatch  A Co.,  dealers  In 
investment  securities,  30  Broad  street.  New 
York. 

Bid.  Asked. 

Beech  Creek  C.  & Coke  1st  5s,  1944.  70  75 

Cahaba  Coal  Min.  Co.  1st  6s.  1922.105  110 

Clearfield  Bltum.  Coal  1st  4s,  1940.  80  86 

Consolidated  Indian  Coal  1st  Sink- 
ing Fund  6s,  1985  90  93  44 

Continental  Coal  1st  5s,  1962 96  100 

Falrmount  Coal  1st  5s,  1931 93  95 

Kanawha  A Hocking  Coal  A Coke 

1st  Sinking  Funds  5s,  1951  99  101 

Monongahela  River  Con.  Coal  A 

Coll.  Tr.  6a  1947  95  97 

New  Mexico  Railway  & Coal  1st  A 

Coll.  Tr.  5s.  1947 95  97 

New  Mexico  Railway  A Coal  Con. 

A coll.  Tr.  5s,  1961  94  9644 

O’Gara  Coal  Co.  1st  5s.  Sept.,  1965.  70  80 

Pittsburg  Coal  Co.  1st  A Coll.  Tr. 

Sinking  Fund  5s.  1954  106  110 

Pleasant  Val.  Coal  Co.  1st  5a  1928.  90  95 

Pocohontas  Consol.  Collieries  1st 

5s.  1957  80  85 

Somerset  Coal  Co.  1st  6s,  1932....  92  95 

Sunday  Creek  Co.  Coll.  Tr.  5s,  1944  64  67 

Vandalia  Coal  1st  6a  1930  100 

Victor  Fuel  1st  5a  1963  85  87 

Webster  Coal  A Coke  1st  6s.  1942..  80  83  44 

West  End  Coll.  1st  5s.  1913  95 

POWER  COMPANY  BONDS. 

Quoted  by  Wm.  P.  Bonbrlght  A Co.,  bankers, 
members  of  the  New  York  Stock  Exchange, 
24  Broad  street.  New  York. 

Bid.  Asked. 


Guanajuato  Power  & Electric  Co. 

Bonds,  6%.  due  1932  (Int.)  93  97 

Guanajuato  Power  & Electric  Co. 

Pref.,  6%,  cumulative  (ex  com. 

stk.  div.)  76  81 

Guanajuato  Power  & El.  Co.  Com.  32 
Arizona  Power  Co.,  bonds  6%,  due 

1933  85  93 

Arizona  Power  Co.  pref 45  60 

Arizona  Power  Co.  com 20  23 

Great  Western  Power  Co.  bonds, 

6 rr.  due  1946  86  88 

Western  Power  Co.  pref 46  49 


Bid.  Asked. 


Western  Power  Co.,  com 26  27  44 

Mobile  Elec.  Co.  bds.,  6%,  due  1946  88  99 

Mobile  Electric  Co.  pref.  6% 76 

Mobile  Electric  Co.  com 25  30 

Amer.  Power  A Lt.  Co.  pref.,  6%..  79  81 

Amer.  Power  A Lt.  Co.  com 44  48 


MISCELLANEOUS  SECURITIES. 

Quoted  by  J.  K.  Rice,  Jr.,  A Co.,  brokers  and 
dealers  in  miscellaneous  securities,  33  Wall 


street.  New  York. 

Bid.  Asked. 

American  Brake  Shoe  A F.  com. ...  85  86  44 

American  Brake  Shoe  A F.  pref. . ..122  44  UK 

American  Brass  115  125 

American  Chicle  com 216  220 

American  Chicle  pref 96  101 

American  Coal  Products  95  100 

American  Gas  A Electric  com 41  44 

American  Gas  & Electric  pref 39  42 

Adams  Express  250  270 

American  Express  240  255 

American  Light  A Traction  com. ..270  280 

American  Light  A Traction  pref. . . 99  104 

American  District  Tel.  of  N.  J 49  52 

Bordens  Condensed  Milk  pref 102  104 

Bush  Terminal  85  95 

Cripple  Creek  Central  com 15  25 

Cripple  Creek  Central  pref 35  45 

Del..  Lack.  A Western  Coal  202  44  212  44 

Du  Pont  Powder  com 164  159 

Babcock  A Wilcox 96  101 

Bordens  Condensed  Milk  com 109  44  11144 

Du  Pont  Powder  pref 84  44  8644 

E.  W.  Bliss  com.  120  125 

E.  W.  Bliss  pref 126  135 

Hudson  A Manhattan  com 15  18 

International  Nickel  com 133  138 

International  Nickel  pref 88  93 

International  Silver  com 40  80 

International  Sliver  pref 104  109 

Int.  Time  Recording  com 175  200 

Int.  Time  Recording  pref 104  112 

Kings  Co.  E.  L.  & P 118  123 

Oil  Fields  of  Mexico 60  70 

Otis  Elevator  com 45  60 

Otis  Elevator  pref 88  93 

Pacific  Gas  A Electric  com 53  66 

Pacific  Gas  A Electric  pref 82  87 

Phelps,  Dodge  & Co 180  205 

Pope  Manufacturing  com 60  65 

Pope  Manufacturing  pref.  73  78 

Producers  Oil  143  148 

Royal  Baking  Powder  com 185  195 

Royal  Baking  Powder  pref 101  105 

Safety  Car  Heating  & Lighting 12  4 44  1 26  44 

Sen  Sen  Chiclet  132  138 

Singer  Manufacturing 275  285 

Standard  Coupler  com 30  60 

Texas  (Oil)  Company  136  140 

Texas  & Pacific  Coal  98  103 

Tri-City  Railway  A Light  com 22  26 

Tri-City  Railway  & Light  prfe 86  44  9144 

U.  S.  Express  95  100 

U.  S.  Motors  com 54  67- 

U.  S.  Motors  pref 65  6S 

Union  Typewriter  com 37  42 

Underwood  Typewriter  pref 97  101 

Underwood  Typewriter  com 53  57 

Virginian  Railway  17  22 

Wells  Fargo  Express  157  165 

Western  Pacific  23  26 

Worthington  Pump  pref 103  107 


FOREIGN  AND  MUNICIPAL  BONDS. 


Reported  by  Zimmerman  A Forshay,  9-11  Wall 
street.  New  York. 

Bid.  Asked. 


German  Govt.  3 44s  92  44  9344 

do  3s  8344  8444 

Prussian  Consols  4s  101%  102% 

Bavarian  Govt.  4s  100  44  10144 

Hessian  Govt.  3 44s  91  92 

Saxony  Govt.  3s  83  84 

Hamburg  Govt.  3s  82  44  8344 

City  of  Berlin  4s  100  44  1 0 1 44 

City  of  Cologne  4s  99%  100% 

City  of  Augsburg  4s  99%  100% 

City  of  Munich  4s 100  101 

City  of  Frankfurt  3 44s 93  94 

City  of  Vienna  4s  96%  96% 

Mexican  Govt.  6s  99  44  10044 

Russian  Govt.  4s  92  93 

French  Govt.  Rente  3s 97  98 

British  Consols  244s 8044  8144 


Digitized  by  CjOOQle 


BANK  AND  TRUST  COMPANY  STOCKS 


[Corrected  to  August  20,  1910.] 


NEW  YORK  BANK  8TOCK8. 


Reported  by  Hornblower  A Weeks,  members 
New  York  and  Boston  Stock  Exchanges,  42 
Broadway.  New  York. 


Dlv 

Rate.  Bid. 

Asked. 

Aetna  National  Bank  . . . 

8 

165 

180 

Amer.  Exchange  Nat.  Bk. . 

10 

225 

235 

Audubon  Bank  

116 

126 

Bank  of  America  

26 

680 

600 

Bank  of  the  Manhattan  Co 

12 

220 

385 

Bank  of  the  Metropolis. . . 
Bank  of  N.  Y.,  N.  B.  A 

16 

280 

410 

14 

810 

325 

Bank  of  Washington  Hts. 

8 

280 

Battery  Park  Nat.  Bank. . 

116 

Bowery  Bank  

12 

380 

Bronx  Borough  Bank 

20 

300 

. . . 

Bryant  Park  Bank 

165 

166 

Butchers  A Drovers  Bank. 

6 

135 

145 

Century  Bank  

6 

160 

175 

Chase  National  Bank  

6 

426 

Chatham  National  Bank  . . 

16 

300 

325 

Chelsea  Exchange  Bank... 

8 

200 

e e * 

Chemical  National  Bank... 

15 

425 

440 

Citizens  Central  National  Bk 

6 

150 

160 

Coal  A Iron  Nat.  Bank... 

6. 

145 

165 

Colonial  Bank  

10 

390 

. . . 

Columbia  Bank  

12 

850 

Com  Exchange  Bank 

16 

800 

sis 

East  River  Nat.  Bank.... 

6 

100 

120 

Fidelity  Bank  

6 

165 

175 

Fifth  Avenue  Bank  

100 

4000 

4500 

Fifth  National  Bank  .... 

12 

800 

. . . 

First  National  Bank  

32 

860 

Fourteenth  Street  Bank... 

10 

... 

150 

Fourth  National  Bank  ... 

8 

180 

185 

Gallatin  National  Bank  . . . 

14 

325 

340 

Garfleld  National  Bank... 

12 

300 

... 

German  •American  Bank  . . 

6 

140 

150 

German  Exchange  Bank... 

20 

460 

... 

Germania  Bank  

25 

600 

Greenwich  Bank 

10 

250 

265 

Hanover  National  Bank . . . 

16 

600 

630 

Importers'  A Traders  Nat 
Bank  

24 

640 

660 

Irving  Nat.  Exchange  Bk 

8 

200 

210 

Jefferson  Bank  

10 

175 

Liberty  National  Bank  . . . 

20 

600 

Lincoln  National  Bank  . . . 

10 

400 

420 

Market  A Fulton  Nat.  Bk. 

12 

246 

255 

Mechanics  A Metals  Nat 
Bank  

12 

240 

260 

Mercantile  Nat.  Bank  .... 

6 

150 

160 

Merchants*  Ex.  Nat.  Bk. . 

6 

160 

. . . 

Merchants'  Nat.  Bank  . . . 

7 

170 

180 

Metropolitan  Bank  

8 

200 

. . . 

Mount  Morris  Bank  

10 

250 

. . . 

Mutual  Bank  

8 

275 

. . . 

Nassau  Bank  

8 

240 

260 

Nat.  Bk.  of  Commerce 

8 

190 

200 

Nat.  Butchers  & Drovers’. 

6 

185 

145 

National  City  Bank  

10 

350 

360 

National  Park  Bank  

16 

835 

850 

National  Reserve  Bank  . . . 

6 

100 

110 

New  Netherlands'  Bank... 

5 

210 

... 

N.  Y.  County  Nat.  Bank.. 

40 

950 

... 

New  York  Bkg.  Assn 

14 

310 

325 

N.  Y.  Produce  Ex.  Bank. . 

8 

160 

170 

Night  A Day  Bank  

. . . 

230 

Nineteenth  Ward  Bank  ... 

260 

Northern  Bank  

*6 

105 

Pacific  Bank  

8 

280 

240 

People’s  Bank  

10 

260 

280 

Phenix  National  Bank  .... 

8 

185 

200 

Plaza  Bank  

20 

600 

. . . 

Seaboard  National  Bank. 

12 

890 

... 

Second  National  Bank  . . . 

12 

876 

... 

Sherman  National  Bank. . 

125 

. . . 

State  Bank  

io 

. . . 

200 

Twelfth  Ward  Bank  

6 

150 

Twenty-Third  Ward  Bk... 

6 

i85 

. . . 

Union  Ex.  Nat.  Bank 

10 

160 

175 

Washington  Heights  Bank 
West  Side  Bank  

276 

. . • 

i2 

625 

... 

Yorkvllle  Bank  

20 

625 

... 

NEW  YORK  TRUST  COMPANY  STOCKS. 

Dlv.  Rate. 

Bid. 

Asked. 

A st  or  Trust  Co 

8 

340 

350 

Bankers*  Trust  Co 

16 

605 

650 

Brooklyn  Trust  Co 

20 

485 

iso 

Carnegie  Trust  Co 

8 

. . . 

Central  Trust  Co 

Dlv.  Rate. 

45 

Bid. 

Asked. 

1000 

Columbia  Trust  Co 

8 

270 

285 

Commercial  Trust  Co. 

100 

120 

Empire  Trust  Co 

10 

300 

310 

Equitable  Trust  Co.  . . . 

24 

. . . 

465 

Farmers’  Loan  8b  Trust 

(par  325)  

Co. 

50 

1660 

1690 

Fidelity  Trust  Co 

6 

200 

210 

Flatbush  Trust  Co.  . . . 

8 

210 

Franklin  Trust  Co 

8 

210 

220 

Fulton  Trust  Co 

10 

290 

Guaranty  Trust  Co 

32 

800 

825 

Guardian  Trust  Co.  . . 

. . 

176 

Hamilton  Trust  Co.  . . . 

12 

270 

- - r 

Home  Trust  Co 

i . . * 

4 

105 

Hudson  Trust  Co 

6 

160 

International  Bank’g  Corp.. 

90 

100 

Kings  Co.  Trust  Co.  . . 

t f t t 

16 

600 

. . . 

Knickerbocker  Trust  Co. . . . 

12 

290 

300 

Lawyers'  Mortgage  Co. 

12 

230 

240 

Lawyers’  Title  Insurance  8b 
Trust  Co 

12 

250 

260 

Lincoln  Trust  Co 

ISO 

150 

Long  Isl.  Loan  & Trust 

Co. 

12 

300 

• • • 

Manhattan  Trust  Co. 
630)  

(par 

12 

375 

Mercantile  Trust  Co.  . . 

80 

725 

. . . 

Metropolitan  Trust  Co. 

. . f f 

24 

... 

625 

Mutual  Aliance  Trust  Co. . 

. . 

116 

120 

Nassau  Trust  Co 

8 

175 

National  Surety  Co.  . . 

8 

245 

N.  Y.  Life  Ins.  8b  Trust 

Co. 

45 

1100 

1120 

N.  Y.  Mtg.  & Security  Co... 

12 

190 

205 

New  York  Trust  Co 

32 

. . . 

650 

People’s  Trust  Co 

12 

285 

. . • 

Queens  Co.  Trust  Co.  . . 

. . 

115 

125 

Savoy  Trust  Co 

. . 

... 

100 

Standard  Trust  Co.  . . 

16 

. . . 

400 

Title  Guar.  & Trust  Co. 

20 

480 

500 

Trust  Co.  of  America  . . 

10 

340 

350 

Union  Trust  Co 

50 

1330 

U.  S.  Mtg.  & Trust  Co. 

24 

450 

470 

United  States  Trust  Co. 

50 

1175 

1215 

Van  Norden  Trust  Co. . . 

210 

Washington  Trust  Co. . 

16 

266 

. . . 

Williamsburg  Trust  Co. 

. , 

80 

100 

Windsor  7rust  Co 

6 

125 

BOSTON  BANK  STOCKS. 

Reported  by  Hornblower  A Weeks,  members 
New  York  and  Boston  Stock  Exchanges,  <0 
Congress  St.  Boston. 


Dir. 


Name. 

Atlantic  National  Bank 
Boylston  National  Bank 


First  Ward  Bank 


National  Market  Bank,  Brighton.. 
Nat.  Rockland  Bank.  Roxbury.... 
National  Shawmut  Bank  


New  England  National  Bank  . . . . 

Old  Boston  National  Bank  

People's  National  Bank.  Roxbury.. 
Second  National  Bank  


Webster  & Atlas  National  Bank... 


• No  public  sales. 

BOSTON  TRUST  COMPANIES. 


Name. 

American  Trust  Co. 
Bay  State  Trust  Co. 
Beacon  Trust  Co.  . . . 
Boston  Safe  D.  A T. 


Last 


Co. 


Columbia  Trust  Co. 


Rate. 

Sale. 

6 

151% 

4 

102% 

6 

140 

3 

225 

12 

400 

8 

185 

7 

173% 

10 

266 

6 

122 

< 

173% 

6 

119% 

8 

167 

10 

375 

7 

200 

12 

• 

6 

152 

5 

127 

5 

122% 

10 

262% 

5 

104% 

7 

182 

7 

175 

10 

325 

HE8. 

Dlv. 

Last 

Rate. 

Sale. 

8 

325 

7 

• 

8 

185 

14 

869 

12 

453 

365 

120 

Digitized  by  ^.ooQle 


366 


THE  BANKERS  MAGAZINE 


Div.  Last 
Name.  Hate.  Sale. 

Commonwealth  Trust  Co 6 206 

Dorchester  Trust  Co 6 106 

Exchange  Trust  Co 

Federal  Trust  Co 6 138 

International  Trust  Co 16  400 

Liberty  Trust  Co 6 

Mattapan  D.  A T.  Co 6 201 

Mechanics  Trust  Co 6 110 

New  England  Trust  Co 15  300 

Old  Colony  Trust  Co 20  785 

Puritan  Trust  Co 8 219 

State  Street  Trust  Co 8 * 

United  States  Trust  Co 16  226 

* No  public  sales. 


CHICAGO  NATIONAL  BANK  STOCKS. 
Reported  by  Hornblowcr  & Weeks,  members 
New  Tork  and  Boston  Stock  Exchanges.  152 
Monroe  St.,  Chicago. 

Dir.  Rate.  Bid.Asked. 


Calumet  National  Bank  ...  6 190 

City  National.  Evanston...  12  300 

Corn  Exchange  Nat.  Bank..  16  406  416 

Drovers  Deposit  Nat.  Bank.  10  220  225 

First  National  Bank  16  410  416 

First  Nat.  Bk.  of  Englewood  10  250 

Fort  Dearborn  Nat.  Bank..  8 176  180 

Live  Stock  Exchange  Nat 

Bank  10  224  229 

Monroe  National  Bank  ....  4 130  136 

Nat.  Bank  of  the  Republic..  8 ...  198 

National  City  Bank  6 203  208 

National  Produce  Bank  ....  4 144  147 

CHICAGO  8TATE  BANKS. 

Div.  Rate.  Bid.  Asked. 
Ashland  Exchange  Bank..  ..  ...  112 

Austin  State  Bank  10  280 

Central  Trust  Co 7 160  163 

Chicago  City  Bank  10  174  180 

Chicago  Savings  Bank  ....  6 144  148 

Citizens  Trust  Co 4 125 

Colonial  Tr.  & Sav.  Bank..  10  190  195 

Drexel  State  Bank  6 ...  151 

Drovers  Tr.  & Sav.  Bank...  8 175  180 

Englewood  State  Bank....  6 114 

Farwell  Trust  Co 6 120  125 

Hibernian  Banking  Assn 8 203  210 

Illinois  Tr.  & Sav.  Bank 20  499  606 

Kaspar  State  Bank  10  250 

Kenwood  Tr.  & Sav.  Bk...  7 134  140 

• Lake  View'  Tr.  & Sav.  Bk. . . 5 138  141 

Merchants  Loan  & Tr.  Co..  12  400  408 

Metropolitan  Tr.  & Sav.  Bk . 6 119  122 

Northern  Trust  Co 8 ...  318 

North  Avenue  State  Bank..  6 145  150 

North  Side  State  Bank 6 135 

Northwest  State  Bank  ....  4 117  120 

Northwestern  Tr.  & Sav.  Bk.  6 137  142 

Oak  Park  Tr.  & Sav.  Bank  ..  308  812 

Peoples  Stock  Yards  State 

Bank  10  200 

Prairie  State  6 250 

Pullman  Loan  A Tr.  Bank.  8 160  ... 

Railway  Exchange  Bank...  4 125 

Security  Bank  6 170  175 

Sherid?n  Tr.  & Sav.  Bank..  6 144  148 

South  Side  State  Bank 135  150 

State  Bank  of  Chicago  ...  12  334  338 

State  Bank.  Evanston  ....  10  278 

Stockmen’s  Trust  Co 5 115  118 

Stock  Yards  Savings  Bank..  8 ...  215 

Union  Bank  6 134  138 

Union  Trust  Co 8 325 

Wendell  StMe  Bank 110 

West  Side  Tr.  & Sav.  Bank  ..  175 

Western  Trust  6 150  155 

Wilmet te  Fix.  State  Bank 110  115 

Woodlawn  Trust  8 135  140 


OBLIGING 

Suitor  (to  rich  banker) — I have  come  to 
ask  for  the  hand  of  one  of  your  charming 
daughters. 

R.  B. — Just  wait  a minute,  and  I’ll  see  if 
there’s  one  left. — Fliegende  Blaetter . 


MATT  C.  SMITH 

Treasurer  United  States  and  Mexican  Trust 
Company 

MATT  C.  SMITH,  recently  elected  treas- 
urer of  the  United  States  and  Mexi- 
can Trust  Company  is  an  Illinois 
man,  and  was  born  in  Marengo,  McHenry 
County. 

He  began  his  business  career  at  the  age 
of  seventeen  as  a teller  in  the  First  Na- 
tional Bank  of  Marengo.  After  five  years 
of  banking,  Mr.  Smith  entered  the  field 
of  mercantile  endeavor  as  manager  of  the 
Fort  Worth,  Texas,  branch  office  of  the  Aer- 
motor  Company  of  Chicago,  manufacturers 
of  windmills  and  farm  machinery.  Returning 
to  financial  lines  two  years  later,  he  ulti- 
mately became  associated  with  the  American 
Guaranty  Company  of  Chicago  as  manager 
of  the  bond  department  of  that  institution. 

In  1906  Mr.  Smith  opened  an  office  in 
Kansas  City,  Mo.  His  success  there  in  the 
distribution  of  securities  of  the  Kansas  City, 
Mexico  & Orient  Railway  brought  him  in 
close  touch  with  A.  E.  Stilwell,  the  builder 
and  president  of  that  railway,  forming  a 
friendship  calculated  to  last  for  life.  In 
May,  1909,  upon  the  establishment  of  the 
New  York  office  of  the  United  States 
and  Mexican  Trust  Company — a Stil- 
well enterprise — Mr.  Smith  was  called 
East  by  that  company  to  assume  the  man- 
agement of  its  bond  department.  This  con- 
nection led  to  the  recent  action  of  the 
Trust  company’s  board,  tendering  him  the 
treasure  rship. 

Mr.  Matt  C.  Smith’s  business  sense  and 
personal  magnetism  are  bringing  him  to 
the  front  in  financial  circles  in  New  York. 


CHINESE  BANK  WILL  BE  TO  CHINA 
WHAT  BANK  OF  ENGLAND  ;IS 
TO  THE  EMPIRE 

THE  Tai  Ching  Bank,  the  great  National 
Bank  of  China,  which  has  just  been 
organized  by  the  government,  is  to  be 
to  China  what  the  Bank  of  England  is  to 
England,  writes  the  Canadian  Trade  Com- 
missioner for  the  country  of  the  400,000,000* 
only  with  this  distinction  that  the  Tai  Ching 
is  to  be  entirely  a government  bank,  its  di- 
rectors and  managers  to  be  appointed  from 
Pekin,  and  its  capital  raised  by  the  govern- 
ment. It  will  have  its  headquarters  in  Pekin, 
but  will  have  branches  in  Shanghai  and  in 
ail  the  principal  provincial  cities. 

The  buildings  at  Pekin,  Shanghai,  Tient- 
sin, Hankow,  etc.,  will  be  ready  for  occupa- 
tion in  a very  short  time,  and  when  in  oper- 
ation there  will  at  least  be  one  native  bank 
which  will  not  fail  and  close  its  doors,  like 
so  many  do  at  the  present  time.  No  for- 
eigner can  deposit  or  have  a current  or  sav- 
ings bank  account  in  the  Tai  Ching,  it  is 
wholly  and  entirely  Chinese.' 


Digitized  by  ^.ooQle 


PHOTO  BV  OL.V1*  LlPPlNCOTf.  N.  V. 


MATT  C.  SMITH 

Treasurer  Kansas  City,  Mexico  & Orient  Railway 


Digitized  by  t^ooQle 


THE  BANK,  THE  EMPLOYE,  AND  THE  PENSION 
AND  PARTICIPATION  FUND 

By  James  P.  Gardner 


WITH  the  accumulation  of  large  sur- 
plus funds  and  the  growing  con- 
viction of  the  value  of  the  human 
element  in  the  administration  of  a large 
bank,  there  has  come  into  existence  in  many 
institutions,  and  organized  primarily  for  the 
joint  benefit  of  the  bank  and  the  men,  an 
organization  generally  known  as  a pension 
and  participation  fund. 

In  Great  Britain,  on  the  Continent  and 
in  Canada,  this  plan  to  unify  and  to  arouse 
a spirit  of  endeavor  among  the  men  to  pro- 
mote the  best  interests  of  the  institution 
they  serve  is  by  no  means  a new  departure. 
In  the  United  States,  while  it  is  not  so  gen- 
eral, two  of  the  largest  banks  have  adopted 
a very  practical  plan  along  these  lines,  and 
which  could  well  be  emulated,  with  adapta- 
tions to  comply  with  peculiar  conditions 
very  generally  throughout  the  country.  In 
the  National  Bank  of  Commerce,  St.  Louis, 
such  a fund  was  created  in  1900.  The  plan 
followed  in  that  bank  briefly,  is,  after  the  net 
earnings  of  the  bank  have  been  ascertained 
and  all  losses  deducted  therefrom  there  is 
set  aside  a sum  not  to  exceed  six  per  cent,  of 
the  remaining  net  profits  for  the  benefit  of 
the  employes’  pension  fund.  In  addition 
to  this  a sum  not  to  exceed  four  per  cent, 
of  the  remaining  net  profits  is  set  aside  for 
the  employes’  participation  fund.  We  have 
here  two  distinct  funds,  the  pension  fund 
and  the  participation  fund.  It  is  planned 
to  maintain  the  pension  fund  at  the  sum 
of  $100,000. 

It  is  not  necessary  to  detail  the  rules  em- 
ployed in  the  fund  under  consideration,  ex- 
cept to  say  that  officers  and  employes  who 
have  been  with  the  bank  for  a period  of 
five  years  or  over,  and  leave  because  of 
physical  disability,  receive  monthly,  during 
such  periods,  ten  per  cent,  of  their  average 
monthly  salaries.  For  each  year  of  service 
over  five  years,  two  per  cent,  is  added,  un- 
til twenty-five  years  is  reached,  the  maximum 
amount  paid  being  fifty  per  cent,  of  the 
average  monthly  salary  received  during  the 
entire  time  of  service.  Should  an  employe 
sever  his  connection  with  the  bank  before 
the  expiration  of  twenty-five  years  of  con- 
tinuous service  for  any  other  reason  than 
that  of  physical  disability,  the  right  to  par- 
ticipate in  the  fund  is  forfeited.  The  board 
of  directors  reserves  the  right  to  discontinue 
at  any  time  the  annual  appropriation,  in 
which  event  the  credit  is  held  for  the  bene- 
fit of  those  officers  and  employes  who  at 
the  time  have  been  in  the  employ  of  the 
bank  continuously  for  five  years  or  more 
and  apportioned  in  such  way  as  the  board 
may  determine. 

368 


Tiie  Participation  Fund. 

This  fund  is  distributed  at  the  close  of 
each  year  in  cash  among  the  officers  and  em- 
ployes in  proportion  to  the  salaries  paid  to 
them  during  the  year.  Of  course  as  the  ap- 
propriations to  these  funds  are  entirely 
voluntary  and  gratuitous  on  the  part  of  the 
bank,  the  title  to  them  remains  in  the  bank 
and  all  decisions  made  by  three  senior  offi- 
cers are  final. 

In  one  of  the  leading  banks  of  Chicago, 
the  pension  fund  is  based  on  slightly  dif- 
ferent methods.  Here  the  officers  and  em- 
ployes contribute  three  per  cent,  annually 
on  the  amount  of  their  salaries  payable  in 
monthly  installments  which  is  deducted 
from  the  monthly  salary.  It  is  not  cus- 
tomary to  grant  pensions  until  the  partici- 
pants have  completed  not  less  than  fifteen 
years  of  service  and  have  reached  the  age 
of  sixty.  Every  detail  and  contingency, 
such  as  resignation,  dismissal,  death,  have 
been  adequately  provided  for,  and  the  widow 
of  the  employe  and  the  children  until  the 
youngest  shall  have  reached  the  age  of 
eighteen  years  are  considered. 

Some  of  the  requirements,  which  at  first 
sight  may  appear  strict  in  their  exactions, 
are  to  be  explained  by  the  paternal  form 
of  the  management,  which  is  always  di- 
rected to  the  highest  interests  of  the  men, 
thus  every  clerk  entering  the  bank  must 
pass  a medical  examination,  and  no  clerk 
is  allowed  to  marry  on  a salary  of  less  than 
a thousand  dollars  a year  without  the  con- 
sent of  the  bank  under  penalty  of  dismissal. 

Railroad  Benefit  Funds. 

I*et  us  look  for  a minute  in  another  field 
of  activity.  The  splendid  systems  of  the 
Pennsylvania  Railroad  Company,  the  Bal- 
timore and  Ohio  Railroad  Company,  to- 
gether with  other  railroads,  have  in  careful- 
ly elaborated  plans  made  full  provision  for 
the  loan,  accident  and  savings  feature  of 
such  funds  and  a careful  study  of  their 
intricate  and  thorough  plans  to  encourage 
thrift  among  the  men  are  worthy  of  care- 
ful study.  A summary  of  the  two  rail- 
roads named  is  given  to  illustrate: 

The  relief  department  of  the  Pennsylva- 
nia Railway  Company  is  a mutual  benefit 
association  supported  by  contributions  and 
payments  made  by  both  the  employes  and 
the  railroad  company.  Its  benefits  are  ex- 
tended on  the  basis  of  a graduated  scale  of 
payments,  from  the  standpoint  of  class 
membership  in  the  department,  and  these 
benefits  are  paid  exclusively  for  sickness, 
accident,  and  death.  There  is  no  provision 
for  borrowing  money  from  the  relief  fund, 
other  than  that  incident  to  death,  when  the 


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THE  PENSION  AND  PARTICIPATION  FUND 


869 


beneficiary  of  the  deceased  member  may 
be  advanced  money  for  burial  purposes, 
the  money  so  loaned  in  advance  to  be  de- 
ducted from  the  regular  death  benefit  al- 
lowance in  final  adjustment.  Apart  from 
the  provision  for  sickness,  accident,  death, 
and  old  age,  by  its  relief  fund,  superannua- 
tion fund,  and  pension  fund,  the  railroad 
company  also  conducts  for  its  employes  a 
savings  fund,  the  money  deposited  therein 
being  subject  to  withdrawal  at  any  time 
upon  reasonable  notice  given,  a guaran- 
teed rate  of  interest  thereon  being  paid  by 
the  railroad  company,  averaging  about 
three  and  one-half  per  cent,  per  annum. 

Baltimore  & Ohio  Railroad  Plan. 

The  Baltimore  & Ohio  Railroad  Com- 
pany conducts  a loan  feature  in  connection 
with  its  “savings”  feature,  which,  in  turn, 
is  an  adjunct  of  its  relief  department. 
Everjr  borrower  must  provide  life  insur- 
ance in  the  natural  death  benefit  of  the 
relief  department,  to  an  amount  equal  at 
all  times  to  his  indebtedness  to  the  sav- 
ings feature,  in  such  manner  that  the  bene- 
fits payable  in  case  of  death  may  be  avail- 
able to  discharge  the  indebtedness.  Where 
the  borrower  cannot  meet  the  requirements 
of  the  relief  department,  then  he  is  called 
upon  to  take  insurance  in  some  regular  or 
commercial  life  insurance  company  satis- 
factory to  the  relief  department.  Sums 
not  less  than  $100  may  be  borrowed  at  the 
rate  of  six  per  centum  per  annum.  The  loans 
are  made  to  employes  for  the  purchase  of 
homes,  building  residences  or  making  im- 
provements thereon,  for  paying  off  mort- 
gages and  other  liens  on  property,  and  for 
the  settlement  of  personal  debts  that  may 
become  liens.  lA>ans  are  made  only  to  em- 
ployes of  the  railroad  company  who  are 
members  of  the  relief  department.  This 
department  is  not  in  any  manner  a chari- 
table enterprise,  since  both  the  men  and  the 
company  contribute  to  it  regularly,  stated 
sums,  for  which  certain  speciAed  benefits 
are  paid  in  the  event  of  disability  or  death. 

The  feature  of  participation  in  the  profits 
that  we  have  discussed — a dividend  to  la- 
bor, to  use  a favorite  term  of  the  political 
economist — and  the  maintenance  of  a pen- 
sion fund  will  undoubtedly  be  universally 
adopted  by  our  great  industrial  and  bank- 
ing concerns.  They  will  come  to  see  that 
some  such  action  is  essential  to  the  promo- 
tion of  that  “esprit  de  corps”  among  their 
employes  which  they  so  much  desire. 


PRIMITIVE  FINANCIAL  METHODS 

MRS.  FERGUSON— George,  what  do 
you  have  to  do  when  you  want  to 
draw  money  out  of  a bank? 

Mr.  Ferguson — You  always  have  to  put 
some  money  in  the  bank  beforehand.  That’s 
always  been  my  experience. 


BEHIND  THE  SCENES  IN  NEW 
YORK’S  GREAT  BANKS 

FOUR  big  banks  in  the  Wall  Street  dis- 
trict resemble  the  great  gold*  mines  of 
the  West  in  one  striking  feature. 
They  have  three  eight-hour  shifts  of  toilers, 
and  the  work  never  stops.  One  set  takes 
up  tlie  routine  where  the  other  leaves  off. 
All  night  long,  Sundays  and  holidays,  a 
staff  of  men  in  each  of  these  banks  is  busy 
opening  thousands  of  letters,  sorting  and 
listing  innumerable  checks  and  drafts  that 
represent  fabulous  sums  of  money  and 
getting  them  ready  for  the  day  force,  which 
is  the  only  one  the  public  comes  in  con- 
tact with  or  ever  hears  about.  If  this  work 
was  not  carried  on  incessantly  the  banks 
would  soou  be  overwhelmed  with  a moun- 
tainous accumulation  of  detail. 

Two  shifts,  the  “scouting  force,”  as  they 
call  themselves,  work  between  five  in  the 
afternoon  and  nine  the  next  morning,  says 
“Harper’s  Weekly.”  Each  bank  has  a big 
drawer  in  the  general  post  office.  Messen- 
gers clear  this  of  letters  every  hour  all 
night  long.  Three  thousand  letters  a day 
is  the  average  mail  of  one  of  these  big 
banks.  Two-thirds  of  it  comes  in  during  the 
night.  These  letters,  in  the  case  of  one 
of  the  biggest  of  these  banks,  contain  from 
to,000  to  40,000  checks  and  drafts.  At  times 
these  inclosures  represent  as  much  as  $30,- 
000,000.  Rarelv  does  the  total  fall  below 
$^0,000,000. 

The  letters  are  opened  as  fast  as  they 
are  received,  the  checks  are  counted  and 
the  totals  verified  with  the  footings  on  the 
lists.  The  letters  are  then  stamped,  which 
shows  that  they  have  been  “proven  in,”  as 
the  banks  call  it.  After  that  they  are 
turned  over  to  the  clerks,  who  send  out  the 
formal  acknowledgements  of  the  remittan- 
ces they  contain.  The  various  checks  are 
assorted  according  to  the  numbers  of  the 
books  in  which  they  are  to  be  entered 
and  otherwise,  the  sight  drafts  are  grouped 
according  to  the  routes  of  the  bank’s  mes- 
sengers and  all  is  made  ready  for  turning 
the  night’s  accumulation  over  to  the  day 
force,  so  it  may  be  handled  by  it  as  ex- 
peditiously as  possible. 

Each  of  these  shifts  of  night  workers 
at  the  banks  consists  of  from  twelve  to 
twenty  men.  Some  banks  get  along  with 
only  one  extra  set  of  clerks  at  night.  These 
come  on  duty  at  midnight  and  leave  at 
8 a.  m.  This  plan  of  working  all  night 
long  in  order  to  keep  up  with  the  tremen- 
dous amount  of  business  that  comes  in  by 
mail  was  inaugurated  about  five  year$  ago. 
The  first  bank  that  tried  it  found  that  so 
much  valuable  day  time  was  saved  that  one 
institution  after  another  took  it  up,  until 
now  tliere  are  four  that  have  these  three 
eight-hour  shifts  of  clerks  and  several  more 
who  work  only  a part  of  the  night. 


Digitized  by  t^ooQle 


PHOTO  BY  PIRIE  MACDONALO,  N.  V. 


IRVING  T.  BUSH 
President  Bush  Terminal  Company 


3T0 


Digitized  by  t^ooQle 


ECONOMICAL  AND  EFFICIENT  HANDLING  OF 
FREIGHT  AT  TERMINAL  POINTS 

WHAT  THE  BUSH  TERMINAL  COMPANY  HAS  ACCOMPLISHED 

IN  NEW  YORK 


WHILE  economy  in  the  transporting 
of  goods  between  different  points 
has  followed  as  a result  of  im- 
proved railway  facilities,  the  method  of 
effecting  a distribution  of  freight  at  termi- 


In  dealing  with  this  problem  it  has  been 
found  that  concentration  supplies  a prin- 
cipal clement  in  reducing  cost,  ensuring 
safety  and  in  making  prompt  deliveries. 
By  bringing  together,  under  a single  man- 


Executive  Offices  Bush  Terminal  Company,  100  Broad  Street,  New  York 


nal  points  has  in  many  localities  remained 
primitive  and  inefficient,  thus  entailing  a 
reduction  of  profit  to  the  seller  and  an 
unnecessary  high  cost  to  the  consumer. 

Few  traffic  problems  are  of  greater  im- 
portance to-day  than  those  relating  to  the 
handling  of  frtight  upon  arriving  at  its 
destination.  Cheap  rates  of  transportation 
between  two  points  may  be  largely  offset 
by  inefficient  and  costly  means  of  distribu- 
tion to  consignees. 


agement,  the  work  heretofore  undertaken 
by  each  merchant  or  manufacturer  for  him- 
self individually,  cheaper  handling  of 
freight  has  been  made  possible,  lower-priced 
insurance  secured,  and  numerous  other 
economies  effected  possible  only  by  doing 
business  on  a large  scale. 

The  proper  storing  of  goods  is  a matter 
of  profound  interest  to  the  banker,  while 
he,  like  the  rest  of  the  community  has  a 
vital  concern  in  whatever  makes  for  the 

ST  1 


Digitized  by  t^ooQle 


A View  of  the  Bush  Lofts 


ECONOMICAL  HANDLING  OF  FREIGHT 


37  3 


One  of  the  Bush  Piers,  showing  railroad  tracks  with  cars  waiting  to  receive  cargoes 
to  be  transported  direct  from  the  ship 


efficient  and  economical  distribution  of  the 
products  of  the  farm  and  the  factory. 

It  might  be  thought  that  with  its  vast 
domestic  and  foreign  commerce,  New  York 
would  be  able  to  show  the  best  general 
system  of  distributing  goods,  but  this  is 
hardly  the  case,  though  the  example  given 
below  of  what  has  been  done  by  a single 
organisation  in  New  York  may  be  found 
instructive  to  other  parts  of  the  country'. 

While  innumerable  civic  organizations 
have  been  urging  reforms,  improvements, 
and  innovations  in  New  York  City’s  pas- 
senger transit  system,  less  energy  has  been 
expended  on  behalf  of  commerce  by  a bet- 
terment in  the  methods  of  moving  freight. 
Many  people  seem  perfectly  satisfied  to  let 
the  suburbanite  clamor  for  more  subways, 
but  they  do  not  so  readily  realize  that  the 
traffic  they  are  most  interested  in  is  being 
neglected. 

Though  the  railroads  and  express  com- 
panies are  doing  their  best,  certain  condi- 
tions in  the  city  are  such  that  improvements 
within  the  lines  now  established  are  bound 
to  be  of  a very  limited  scope,  and  in  fact 
all  efforts  not  calculated  to  bring  about 
a complete  reorganization  of  the  city’s  ship- 
ping manipulations  will  be  practically  fu- 
tile. 

Mr.  Irving  T.  Bush,  president  of  the  Bush 
Terminal  Company,  which  has  established 
a model  shipping  plant  covering  an  area  of 
more  than  twenty  blocks,  along  the  Gov- 
ernment channel  in  South  Brooklyn,  recent- 
ly made  a tour  of  inspection  in  the  West. 
On  his  return,  he  did  not  hesitate  to  say 
that,  with  all  due  resj>ect  to  the  commercial 
greatness  of  New  York,  the  average  man  in 


that  city  is  somewhat  behind  his  western 
brother  in  the  matter  of  appreciating  what 
the  commerce  of  New  York  and  its  needs 
mean  to  the  general  welfare. 

“A  strange  contrast,”  said  Mr.  Bush,  “is 
presented  by  the  concentrated  public  efforts 
looking  to  the  abatement  of  ‘rush  hour’  evils 
in  passenger  transit  and  the  comparative 
indifference  regarding  analogous  conditions 
in  mercantile  transportation  matters.  A 
stalled  subway  train  or  a fifteen-minute  trol- 
ley blockade  on  the  bridge  agitates  thousands, 
causes  no  end  of  discussion  about  the  loss 
of  time  sustained  by  the  passengers,  and 
very  often  springs  into  general  public  no- 
tice in  the'  shape  of  big  headlines  in  the 
newspapers.  On  the  other  hand,  long  cara- 
vans of  trucks  loaded  with  goods  worth 
thousands  of  dollars,  and  in  the  care  of 
drivers  and  handlers  whose  time  to  their 
employers  is  at  least  as  valuable  as  that 
of  the  clerks  delayed  on  their  way  to  work 
in  the  inornng,  is  held  up  day  after  day  for 
hours,  at  the  ferry  entrances,  and  the  streets 
from  Broadway  to  the  river  front  become 
clogged  and  hardly  a complaint  is  heard. 

“I  do  not  intend  to  find  fault  with  pas- 
senger transit  agitation,  nor  wth  the  officials 
who  lend  a ready  ear  to  the  com  plants  of 
suburban  Boards  of  Trade,”  said  Mr.  Bush, 
“nor  is  it  necessary'  to  point  out  that  out 
West,  for  instance,  the  grave  importance 
of  the  freight  congestion  problems  and 
their  solution  is  apparent  to  the  majority 
of  citizens,  while  in  New  York  only  a com- 
paratively small  number  seem  to  realize  that 
the  driving  away  of  a single  industry  to 
another  city  or  State  is  a positive  loss  to 
every  taxpayer.” 


Digitized  by  t^ooQle 


THE  BANKERS  MAGAZINE 


Peculiarities  of  tiie  Problem  ix  New  meant  for  such  traffic  and  through  streets 

York.  where  pedestrians,  small  vehicles,  and  elec- 

tric cars  naturally  have  the  precedence. 

In  a way,  despite  all  its  advantages  which  Now,  an  hour’s  loss  in  the  cost  of  the 
have  helped  to  make  it  commercially  great,  day’s  work  of  each  driver  represents  an  item 

New  York  is  peculiarly  located,  and  its  of  only  about  twenty-five  cents,  but  this  may 

facilities  for  distributing  freight  have  been  represent  a total  loss  to  the  merchants  of 

developed  without  much  forethought.  The  New  York  City  of  a sum  equal  to  the  in- 


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It  '* 

71  1 

L » • 

struct  between  two  of  the  Model  Loft  Buildings  of  the  Bush  Terminal  Co.,  in  South 
Brooklyn,  showing  the  railroad  tracks  at  the  door  of  the  building 


shipping  sections  lie  between  two  and  six 
miles  distant  from  the  shipping  termini,  that 
is,  the  piers  and  the  freight  depots,  and 
there  are  congested  stretches  of  many 
miles  between  the  various  shipping  termini 
themselves.  The  merchant,  sending  one 
truckload  of  goods  over  more  than  one 
line,  is  compelled  to  use  either  as  many 
trucks  as  the  number  of  lines  he  intends  to 
use  or  else  he  must  send  one  truck  from 
terminus  to  terminus  till  all  the  goods  are 
under  way.  Worse  than  that,  the  trucks 
cannot  proceed  with  ordinary  speed,  but 
have  to  wind  their  tortuous  way  through 
congested  thoroughfares,  through  lanes  never 


l crest  on  $5,000,0D0.  There  is,  of  course, 
no  way  of  figuring  out  exactly  how  many 
trucks  are  sent  to  the  shipping  termini  every 
day,  but  it  is  safe  to  say  that  their  number 
is  at  least  5,500.  If  even’  driver  loses  an  hour, 
this  loss  of  5,500  hours  a day  will  amount 
to  a total  cost  of  $187,500,  and  to  say  tliat 
the  average  driver  loses  only  one  hour  a 
day  through  the  congestion  evil  is  placing 
the  estimate  on  a very  moderate  basis. 
Merchants  figure  that  the  cost  of  a horse 
is  about  seven  cents  an  hour.  On  an  equal 
division  between  one  and  two-horse  trucks, 
the  total  figures  into  $78,000,  altogether 
putting  $505,500  a year  on  the  wrong  side 


Digitized  by  t^ooQte 


ECONOMICAL  HANDLING  OF  FREIGHT 


375 


A Portion  of  the  Union  Freight  Depot  on  the  Bosh  Plant 


of  the  mercantile  ledger.  One  large  shipper 
to  whom  these  figures  were  submitted,  re- 
marked that  double  the  amount  would  be 
nearer  the  truth — or  a loss  of  the  interest 
on  $10,000,000  a year. 

At  certain  hours  of  the  day,  the  streets 
of  Manhattan  which  are  the  most  import- 
ant from  the  commercial  point  of  view  pre- 
sent conditions  which  must  seem  outrageous 
and  intolerable  to  the  stranger  who  views 
them  for  the  first  time.  Yet  New  Yorkers 


normal.  The  man  in  the  street  insists  on 
subway  extensions,  on  side-doors,  and  on 
polite  guards,  and  almost  unlimited  capital 
tolerate  them  and  consider  them  almost 
is  being  invested  in  order  to  comply  with 
his  wishes.  He  deserves  no  blame.  While 
his  own  motive  may  be  a selfish  one,  he  acts 
in  concert  with  the  spirit  of  the  community, 
and  thus  discharges  his  civic  duty.  But 
this  same  man  in  the  street,  in  the  ultimate 
analysis  of  his  livelihood,  is  dependent  upon 


Private  Office  of  a Tenant  in  one  of  the  Bush  Loft  Buildings 


Digitized  by  t^ooQle 


376 


THE  BANKERS  MAGAZINE 


A Typical  Street  Scene  in  New  York  City’s  Congested  Wholesale  District.  The  entire 
principle  of  the  Bush  Terminal  Company’s  System  is  based  upon 
the  idea  of  making  such  conditions  impossible 


some  mercantile  enterprise  which  in  turn 
rests  upon  a banking  basis,  and  both,  with 
the  exception  of  a very  few  isolated  cases, 
draw  their  life-blood  from  the  shipping  busi- 
ness. What  then  of  the  firm,  often  im- 
personal in  its  name,  and  a thing  intangible 
to  the  general  public,  which  is  delayed  in 
its  operations,  mulcted  and  annoyed  in  a 
hundred  ways  by  being  unable  to  send  on  and 
receive  its  shipments  through  and  in  the 
city  without  undue  hindrances?  No  elab- 
orate proof  is  needed  for  the  statement  that 
a carload  of  goods  can  be  sent  as  quickly 
from  the  waterfront  to  Jersey  as  from  New 
York's  congested  wholesale  district  to  the 
waterfront.  In  an  age  like  ours,  it  should 
not  take  longer  to  send  a packing  case 
a given  distance  than  it  takes  a messenger 
to  carry  a letter  over  the  same  route.  Even 
the  automobile  trucks  which,  for  very  nat- 
ural reasons,  are  securing  the  right  of  way 
where  horse  vehicles  are  held  up,  have 
worked  less  improvement  than  they  should 
have  done.  As  soon  as  they  enter  one  of 
the  narrow  streets  of  the  wholesale  section 
or  join  the  waiting  lines  at  the  ferries,  they 
become  as  helpless  as  the  horse-drawn 
trucks. 

The  Remedy  for  Congested  Streets. 

There  is  hardly  a large  business  house  in 
New  York  City  which  could  not  reduce  its 
operating  expenses  by  large  amounts  if  the 
commercial  traffic  congestion  were  not  a 


fact.  There  is,  of  course,  a remedy.  The 
fact  of  the  matter  is  that  a good  deal  of  the 
traffic  iti  the  streets  of  New  York  does  not 
belong  there.  If  every  truck  moving  over 
the  circuitous  route  of  the  streets  of  Man- 
hattan to  a railroad  or  steamship  terminal 
were  removed,  the  remaining  traffic  could  be 
so  easily  handled  . that  a good  many  of  the 
passenger  troubles  which  are  now  bothering 
the  Public  Sendee  Commisson  and  other 
authorities  would  adjust  themselves.  The 
trouble  is  that  the  geographical  conditions 
of  the  city  are  such  that  the  railroads  do 
not  connect  with  the  waterfront  and  the 
warelmuses,  as  they  ought  to  do,  and  as 
they  do  in  many  other  cities.  As  matters 
stand  to-day,  the  transfer  of  freight  by 
trucks  to  factories  and  between  the  various 
transportation  corporations  is  a necessity! 

There  is  no  reason  why  freight  in  transit 
should  not  be  properly  diverted  to  outlying 
points  about  New  York,  direct  from  car 
to  car,  or  from  boat  to  car.  The  realisation 
of  the  truth  of  this  view  of  the  problem 
was  partly  responsible  for  the  investment  of 
about  $^0,000,000  along  the  South  Brooklyn 
waterfront,  and  the  creation  of  the  Bush 
plant  in  that  section.  Wholesalers  and  man- 
ufacturers located  there  can  receive  at  and 
ship  directly  from  their  doors  without  in- 
termediary cartage,  no  matter  what  part  of 
the  country  or  world  their  goods  come  from 
or  are  consigned  to,  and  irrespective  of 
whether  their  transit  is  by  land  or  water. 


Digitized  by  t^ooQle 


ECONOMICAL  HANDLING  OF  FREIGHT 


377 


In  order  to  carry  out  this  factory-door  de- 
livery, the  company  has  made  a long  chain 
of  six  and  eight-story  loft  buildings,  of  con- 
crete and  steel,  the  centre  of  its  establish- 
ment. Naturally,  the  insurance  rate  in  such 
a location  and  in  such  structures,  is  ex- 
ceptionally low.  The  United  Cigar  Stores 
Company,  a recent  lessee,  to  cite  only  one 
instance,  pays  fifty  cents  per  $100  in  its 
present  building,  in  Eighteenth  street,  Man- 
hattan. As  soon  as  its  removal  to  South 
Brooklyn  will  have  been  accomplished,  the 
rate  will  drop  to  twenty-two  and  one-half 
cents  per  $100  which,  in  the  case  of  a con- 
cern carrying  an  average  of  $900,000  worth 
of  stock,  is  a saving  worth  underscoring  in 
the  annual  balance  sheet.  In  the  case  of 
clothing  manufacturers,  classed  as  hazard- 
ous risks  by  the  underwriters,  a corres- 
ponding decrease  in  the  insurance  rates  must 
of  necessity  go  a long  way  towards  steady- 
ing their  credit  and  facilitating  their  general 
banking  operations.  It  goes  without  saying 
that  the  loft  buildings  are  equipped  with 
an  automatic  sprinkler  system. 

These  structures  are  backed  by  groups  of 
model  tenement  houses  into  which  are  fil- 
tered, from  the  great  South  Brooklyn  labor 
markets,  the  thousands  of  operatives  em- 
ployed by  the  tenants  of  the  lofts,  some  of 
whom  have  nearly  a thousand  hands  on  their 
pay  rolls.  From  the  doors  of  the  buildings 
lead  the  tracks  of  the  Bush  Terminal  Rail- 
road into  the  nearby  Union  depot,  where 
ever}'  one  of  the  "freight-carrying  roads 
reaching  New  York  City  has  a terminal. 
Shipments  of  carloads  or  less  are  therefore 
made  by  the  simple  method  of  sending  a car 
of  any  road  desired  at  the  time  over  the 
Bush  tracks  from  the  Union  Depot  to  the 
elevator  doors  of  the  lofts. 

The  water  front  is  lined  with  a series  of 
enormous  piers,  where  twenty-seven  steam- 
ship lines,  connecting  with  all  parts  of  the 
world,  liave  their  wharves.  Between  the 
piers,  and  the  loft  buildings  are  158  fire- 
proof warehouses,  and  at  the  pier  heads  are 
now  being  reared  several  structures  of  an 
entirely  model  design.  They  are  combination 
warehouses  and  loft  buildings,  and  are  of 
particular  advantage  to  shippers  who  send 
their  goods  by  water.  In  addition  to  these 
facilities,  there  is  now  being  installed  a 
city  transfer  system  by  means  of  motor 
trucks  which,  starting  from  South  Brooklyn, 
will  conduct  the  deliveries  into  Manhattan 
borough. 

In  discussing  the  situation  in  South 
Brooklyn  and  elsewhere.  President  Bush 
expressed  the  opinion  that  whenever  future 
water  front  developments  are  undertaken, 
it  would  be  best  to  follow  the  South  Brook- 
lyn example  of  utilizing  the  land  back  of 
the  piers. 

“One  of  the  principal  causes  for  New 
York’s  present  freight  troubles,”  he  said,  “is 
to  be  found  in  the  fact  that  the  land  about 
the  piers  is  not  being  properly  utilized. 


The  mistake  was  made  in  the  past.  The  cut- 
ting off  of  the  water  front  from  the  uplands 
by  a broad  public  thoroughfare  has  made 
it  impossible  on  the  one  hand  to  establish 
along  the  Manhattan  shore  suitable  facili- 
ties for  ocean-borne  freight  commerce,  and 
on  the  other,  to  reach  it  without  interfering 
with  the  traffic  that  properly  belongs  on 
the  streets.  It  seems  to  me  that  the  proper 
way  to  eliminate  many  of  these  evils  lies 
in  the  utilization  of  the  land  behind  the 
piers.  Railroad  yards,  warehouses,  fac- 
tor}' and  loft  structures,  should  be  located 
close  together.  It  is  impossible,  of  course, 
to  place  these  various  shipping  and  com- 
mercial agencies  at  the  head  of  the  piers  in 
Manhattan,  because  the  land  is  otherwise 
employed.  But  there  is  no  reason  why 
newer  locations  should  not  be  developed 
along  these  lines.  In  creating  the  Bush 
Terminal  plant,  I have  had  the  present 
troubles  of  Manhattan  in  mind,  and  have 
endeavored  to  organize  a system  which  will 
eliminate  all  waste  effort  in  shipping. 

“It  must  be  borne  in  mind  that  every 
time  a Manhattan  merchant  finds  that  his 
goods  are  being  unduly  delayed  in  transfer 
through  the  city,  he  must  involuntarily  wish 
that  his  plant  was  located  in  a more  fa- 
vored spot.  If  things  get  so  bad  that  he 
finally  decides  upon  moving,  the  financial 
basis  of  the  city  stands  in  danger  of  losing 
one  of  its  props.  If  he  moves  to  the  new 
section  in  South  Brooklyn,  New  York  has 
not  only  suffered  no  loss,  but  has  become 
a gainer  by  virtue  of  the  taking  awa^  from 
the  streets  of  Manhattan  of  an  obstruction. 
If,  on  the  other  hand,  he  moves  to  Jersey, 
the  city  has  lost  in  taxes,  in  bank  deposits, 
in  credit,  and  in  reputation.  There  is  no 
need  of  pointing  out  that  Philadelphia,  Bal- 
timore. and  Boston,  not  to  speak  of  Jersey, 
are  ready  to  take  advantage  of  every  slip 
New  York  City  makes  in  the  treatment  it 
accords  to  its  merchants.  In  Chicago,  for 
instance,  conditions,  similar  to  ours,  led  to 
the  construction  of  the  freight  subway. 
This  system  is  quite  a valuable  adjunct  to 
that  city’s  shipping  facilities,  but  in  prac- 
tice it  has  developed  so  many  shortcomings 
that  it  would  be  inadvisable  to  introduce 
a similar  method  in  New'  York  City.  St. 
Ix>uis,  which  boasts  of  its  Cupples  Station, 
is  in  a slightly  better  position.  However, 
this  line  is  devoted  to  limited  purposes 
and  a duplication  of  it  here  would  not 
suffice  our  needs.  In  other  words,  we  must 
create  a system  of  our  own  and  the  one 
referred  to  above,  which  would  take  the 
trucking  traffic  off  our  streets,  and  result  in 
direct  shipments  from  factory  or  wholesale 
lofts,  by  means  of  railroad  termini  and 
steamship  piers  located  at  the  doors  of  the 
factories,  appears  to  me  as  the  only  logical 
one.” 


Digitized  by  t^ooQle 


EXPORT  COTTON  BILLS  OF  LADING  TO  BE 
SAFEGUARDED— THE  PLAN 


REPORT  of  a committee  of  railroad  of- 
ficials and  bankers  regarding  the  vali- 
dation of  through  order  notify  bills 
of  lading  for  export  cotton,  adopted  at  a 
meeting  of  lines  east  of  the  Mississippi 
river,  held  at  White  Sulphur  Springs,  W. 
Va.,  Tuesday,  July  19,  1910,  and  tentative- 
ly accepted  by  all  lines  west  of  the  Mis- 
sissippi river  represented  at  the  above  meet- 
ing. It  being  understood  that  the  agree- 
ment will  be  adopted  by  all  Western  lines 
at  a meeting  to  be  held  within  one  week. 

Your  committee  appointed  to  consider 
the  form  of  certificate  to  be  attached  to 
order  notify  bills  of  lading  for  export  cot- 
ton and  the  method  of  their  use  recom- 
mends the  adoption  of  the  certificate  in 
the  following  form  and  the  following 
uniform  regulations  in  respect  to  the  is- 
suance of  such  bills  of  lading: 

(To  be  attached  to  order  notify  bills  of  lad- 
ing for  export  cotton  issued  by  agents  of 
this  company.) 

Bill  of  lading  signature  certificate  No 

The  Railroad  Company 

hereby  certifies: 

That  Is  its  regularly  ap- 
pointed   agent  at  

and  as  such  is  authorized  to  sign  bills  of 
lading  in  accordance  with  the  regulations 
of  this  company,  and  that  the  signature  on 
the  attached  order  notify  bill  of  lading 

No , dated  (place  of  issue)  

(date)  covering  bales 

of  cotton  marked  is  his  signa- 

ture. 

(Date)  

We  recommend  that  certificates  be  handled 
in  the  following  manner,  to  wit: 

That  they  be  issued  in  book  form,  with 
original,  duplicate  and  stub,  and  numbered 
consecutively,  and  that  they  be  prepared  by 
each  company  on  paper  bearing  Its  own 
water  marks  or  color  tint  protective  de- 
vices. It  is  suggested  that  a uniform  size 
of  four  (4)  inches  in  width  and  six  (6) 
Inches  In  length  be  used.  The  certifying 
representative  will  attach  the  certificate 
to  the  bill  of  lading  with  mucilage  or  paste 
or  an  irremovable  metal  fastenerT 
The  certificates  will  be  issued  to  the 
agents  in  the  same  manner  as  passage  tick- 
ets, and  the  same  check  shall  be  undo  of 
these  documents  in  agents’  hands  as  of 
passage  tickets. 

On  the  date  of  issue  the  agent  will  for- 
ward to  the  accounting  department  the  du- 

378 


plicate  certificate,  with  a non -negotiable 
copy  of  the  bill  of  lading.  The  bill  of  lading 
in  addition  to  its  own  number,  shall  bear 
the  number  of  the  bill  of  lading  signature 
certificate  which  is  Issued  in  connection  with 
it. 

The  agent  affixing  the  signature  certificate 
to  the  bill  of  lading  shall,  in  addition  to 
signing  and  dating  the  same  and  keeping  a 
record  of  the  number,  the  date  and  the  quan- 
tity of  cotton  called  for  by  said  bill  of  lading 
and  certificate,  stamp  the  same  partly  on 
the  bill  of  lading  and  partly  on  the  cer- 
tificate in  such  manner  that  tampering  or 
irregularity  would  be  apparent. 

Spoiled  certificates  shall  be  immedately 
canceled  and  returned  to  the  auditor,  with 
report. 

It  Is  further  recommended  that  through 
export  bills  of  lading  be  issued  upon  the 
following  conditions: 

Agents  are  to  be  instructed  not  to  sign 
bills  of  lading  until  the  cotton  Is  In  posses- 
sion of  the  railway  company. 

It  being  understood  that  cotton  bills  of 
lading  may  be  Issued  on  loading  certificates 
certifying  that  cotton  is  loaded  In  cars 
designated  by  initials  and  numbers;  issued 
by  duly  authorized  agents  of  compress  or 
warehouse  companies  that  have  executed 
the  usual  contract  and  bonds  with1  the  rail- 
way company,  but  not  otherwise. 

Bills  of  lading  will  be  issued  only  by 
agents  or  other  representatives  of  the  com- 
pany who  are  duly  authorized  to  do  so. 

Only  one  original  bill  of  lading  shall  be 
issued  for  each  shipment.  The  practice  of 
issuing  duplicate  and  triplicate  bills  of  lad- 
ing will  be  discontinued,  but  as  many  copies 
as  are  reasonably  required  may  be  issued, 
provided  they  aTe  endorsed  “Copy,  not  ne- 
gotiable." 

The  number  of  bales  of  cotton  and  the 
marks  shall  be  written  in  pen  and  Ink  In 
the  original  bill  of  lading  and  not  inserted 
with  typewriter  or  any  other  manner. 

There  shall  be  no  additions,  erasures  or 
changes  in  bills  of  lading. 

Bills  of  lading  will  be  Issued  in  serial 
numbers,  beginning  with  No.  1 at  each  Is- 
suing station  on  September  1 of  each  year. 
All  copies  of  bills  of  lading  shall  bear  the 
same  number  as  the  original. 

A copy  of  each  bill  of  lading  will  be  for- 
warded on  the  date  Issued  to  the  agent 
of  the  water  carrier  at  the  port  of  export 
in  the  case  of  indirect  shipments. 

The  shipper  is  required  to  accept  the  con- 
ditions of  the  bill  of  lading  by  attaching 
his  signature  or  the  signature  of  his  author- 
ized representative  to  the  original  and 
agent’s  copy. 


Digitized  by  t^OOQle 


LATIN  AMERICA 


PERU’S  RESOURCES 


By  Otto  Sperber 


PERU  is  tlie  most  extended,  as  well  as 
the  most  richly-endowed  country  on  the 
Pacific  Coast  of  South  America,  and 
in  the  interest  of  all  those  who  could  even- 
tually try  this  country  as  a field  for  their 
activity,  I propose  briefly  to  describe  the 
sources  of  her  national  wealth  as  well  as 
the  possibilities  she  offers  to  investors  of 
large  and  small  capital.  To  discuss  these 
resources  in  detail  would  necessitate  the 
mention  of  every  mineral  that  exists  and  of 
every  agricultural  product  that  is  grown, 
for,  owing  to  the  diversity  of  climate,  almost 
every  fruit  or  grain  that  can  be  grown  will 
thrive  somewhere  in  Peru,  on  a soil  of  al- 
most unexampled  fertility,  and  nearly  every 
mineral  can  be  mined  somewhere  in  her 
mountains,  where  lands  splendidly  adapted 
to  the  raising  of  all  kinds  of  cattle  are 
found. 

Peru’s  Great  Mineral  Wealth. 

The  country’s  mineral  wealth  is  a subject 
that  has  been  discussed  for  centuries,  and  is 
still  much  talked  of  by  th^se  interested  in 
the  mining  industry.  Centuries  ago  Peru 


was  famous  for  gold  ajid  silver.  The  greed 
of  the  conquerors  and  the  many  local  dis- 
turbances have  probably  been  responsible 
for  the  neglect  of  production  in  the  past; 
but  things  have  changed,  and  in  the  last  few 
years  foreign  capital,  and  particularly 
American  capital,  has  been  attracted  by  the 
opportunities  Offered. 

A short  survey  of  the  mines  owned  by 
Americans  will  tend  to  impart  a clear  idea 
of  what  the  mines  of  Peru  are  in  reality. 
The  largest  mine  in  Peru  today  is  the  Cerro 
de  Pasco  copper  mine,  situated  14,000  feet 
above  sea  level,  owned  by  the  Cerro  de  Pasco 
Mining  Company  of  New  York.  Among  the 
prominent  Americans  interested  in  this  com- 
pany are  A.  Vanderbilt,  J.  B.  Haggin,  H. 
C.  Frick  and  J.  P.  Morgan.  Their  invest- 
ment represents  a cash  outlay  of  no  less 
than  $20, 000,000,  while  the  stock  capital 
amounts  to  $60,000,000.  This  mine  was 
originally  worked  by  the  Indians  as  a silver 
and  gold  mine,  and  as  the  ores  were  of  a 
very  rich  quality  it  produced  large  sums. 
Later  on,  when  silver  fell  in  prjee,  the  mine 
was  partly  shut  down  and  abandoned,  until 


Main  Street  of  Arequipa.  Peru,  from  hotel  balcony.  This  is  the  second  largest  city  of 
Peru  in  population  and  commercial  importance 


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THE  BANKERS  MAGAZINE 


Sty?  mpxtran 
3ff  manner 

Only  Weekly  Financial  Journal 
Published  in  Mexico 

COMPLETE  QUOTATIONS  OF  ALL 
BANK.  INDUSTRIAL  AND  MINING 
STOCKS 

READING  MATTER  OF  VITAL  INTEREST 
TO  ALL  INVESTORS  IN  MEXICO 

$5.00  U . S.  Currency  per  annum,  post- 
age paid 

JOHN  R.  SOUTHWORTH.  F.R.G.S. 

Managing  Director 

CALLE  DEL  EUSEO  . MEXICO.  D.  F. 
Cable  Addras.  Cel-South.  P.  O.  Boa  1 172. 
Mexico  City 


copper  became  a valuable  metal,  and  it  was 
discovered  that  this  mine  contained  quanti- 
ties of  copper  of  very  high  quality.  The 
ore  there  is  the  richest  in  the  world.  Some 
of  it  averages  about  twenty  per  cent.,  al- 
though a fair  average  is  about  twelve  per 
cent.  The  company  is  now  shipping  about 
2,000  tons  of  copper  a month,  and  is  not  run- 
ning its  present  plant  at  its  fullest  capacity. 
The  pound  of  copper  costs  the  company 
seven  cents,  including  freight  to  New  York, 
and  is  sold  here  at  the  regular  market  prices. 

In  the  olden  days,  when  the  mine  was 
worked  in  a primitive  way  for  silver,  the 
miners  used  to  complain  of  the  large  banks 
of  copper  they  encountered  and  which  in- 
curred heavy  expenses  to  remove,  and  which 
they  threw  aside  as  worthless.  Later  on, 
copper  was  worked  in  a primitive  way,  too, 
but  the  natives  only  worked  the  ore  that 
assayed  from  twenty -five  to  forty  per  cent. 

There  is  also  a large  mining  and  smelter 
plant  at  Casapalca.  There  are  also  a great 
many  smaller  silver  and  copper  mines  along 
the  line  of  the  Central  Railway. 

The  Inca  Mining  Company,  composed 
largely  of  Pennsylvania  people,  owns  the 
Santo  Domingo  gold  mine,  in  Southern  Peru. 
Twenty-five  years  ago  this  mint  was  offered 
for  sale  for  $50,000,  but  the  Inca  Mining 
Company  paid  $300,000  for  it,  and  after  a 
while  they  took  out  of  it  in  the  neighborhood 
of  $100,000  per  month.  Up  to  the  present 
time  an  ounce  of  gold  is  as  low  as  they  have 
ever  worked,  their  average  being  three  ounces 
to  the  ton,  or  about  $00  per  ton,  while  the 
average  in  the  celebrated  Rand  mines  in 
South  Africa  is  about  $7  per  ton.  The 
whole  district  seems  to  be  very  rich  in  gold 


mines.  Traces  of  gold,  indicating  that  this 
metal  must  abound  there  have  also  been 
found  in  almost  all  the  riVers  on  the  eastern 
slope  of  the  Andes,  as  well  as  in  other  parts 
of  the  mountain  region,  such  as  the  Poto 
mines  of  Sandia,  in  the  Department  of  Puno. 

Not  so  very  long  ago  Peru  was  still  cele- 
brated for  her  silver  mines,  but  owing  to  the 
high  cost  of  production  and  difficult  trans- 
portation, the  actual  total  output  does  not 
now  exceed  $2,000,000  per  annum. 

The  exploitation  of  vanadium  in  Peru  is  of 
recent  date.  Until  a short  time  ago  this 
metal  was  found  only  in  combination  w'ith 
coal  and  in  small  quantities,  averaging  about 
$50  per  ton.  It  is  now  found  in  other  forms 
and  runs  as  high  as  $3,000  per  ton.  Peru  to- 
day supplies  the  greater  part  of  the  world’s 
consumption  of  this  metal,  the  balance  com- 
ing from  Spain,  Portugal  and  Mexico.  It  is 
used  in  making  steel  and  armor  plate.  Most 
of  the  venadium  mines  in  Peru  are  now  con- 
trolled by  an  American  syndicate,  headed  by 
the  Flannery  Brothers  of  Pittsburg,  under 
the  name  of  the  American  Vanadium  Com- 
pany. 

When  new  mines  are  being  opened  roads 
must  be  constructed  for  the  transportation 
of  the  metals,  but  most  of  the  mines  are  so 
valuable  that  the  owners  can  easily  afford  to 
build  their  own  railroad  lines,  the  fuel  neces- 
sary for  the  running  of  these  being  found  in 
the  vicinity  of  the  mines,  as  is  the  case  with 
the  Cerro  de  Pasco  Copper  Company,  the 
Inca  Mining  Company,  etc.,  which  through 
owning  coal  mines  are  able  to  make  their 
own  coke.  The  unlimited  supply  of  lime  and 
clay  permits  them  to  make  their  own  bricks 
for  their  buildings,  ovens,  and  other  pur- 
poses. 

Rich  Deposits  op  Coal. 

The  coal  deposits  in  Peru  have  recently 
begun  to  be  developed.  The  product  is  of 
good  quality,  containing  over  sixty  per  cent, 
of  free  carbon.  With  the  completion  of  the 
railroad  now  in  construction,  leading  from 
the  richest  coal  regions  to  the  port  of  Chim- 
bote,  the  English  syndicate  working  the  ex- 
tended carboniferous  areas  of  the  Depart- 
ment of  Ancash,  will  be  able  to  deliver  coal 
of  the  best  quality  at  not  much  over  $2.50 
per  ton.  When  it  is  considered  that  at  least 
one  million  tons  of  coal  are  consumed  on 
this  coast,  it  can  easily  be  seen  that  there  is 
a big  market  for  the  Peruvian  product  It 


Vera  Cruz  Banking  Company,  Ltd. 

(Cla.  Banquera  Veracruzana,  8.  A.) 
VERA  CRUZ,  MEXICO 

Capital  and  Surplus  - - $550,00040 

A General  Banking  Business  Transacted 
Collections  Promptly  Handled 


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381 


must  also  be  borne  in  mind  that  coal  from 
Australia  and  the  United  States  sells  at  Cal- 
lao for  $13  per  ton,  and  sometimes  as  high 
as  $30  per  ton. 

The  discovery  of  coal  deposits  has  made 
Peru  the  most  important  country  on  the 
Pacific  Coast  of  South  America.  There  are 
at  present  no  available  statistics  respecting 
the  output  of  coal,  but  there  is  every  proba- 
bility that  before  long  the  coal  fields  of  Peru 


Indians  are  about  the  only  ones  to  occupy 
themselves  with  the  raising  of  the  vicufia  and 
the  alpaca.  Goats  and  sheep  thrive  splen- 
didly, but  at  a lower  altitude,  and  their  wool 
adds  $3,500,000  to  the  general  revenues  of 
the  country. 

The  Peruvian  Oil  Fields. 

Another  industrial  development  in  Peru, 
likely  to  exercise  a most  beneficial  influence 


Trojfllo,  the  third  city  of  Peru,  Was  built  by  Pizarro  and  named  after  his  birthplace  in 
Spain.  American  Consulate  in  the  foreground 


will  lie  one  of  her  most  important  sources  of 
revenues. 

Agriculture  and  Cattle  Raising. 

The  valleys  of  the  mountain  region  are 
very  productive.  The  climate  there  is  much 
the  same  as  in  our  Southern  States,  while 
higher  up  lands  for  cattle  raising  are  to  be 
found.  The  agricultural  products  of  this 
zone  yielding  good  crops  are:  Wheat,  rye, 
com,  potatoes,  and  all  kinds  of  vegetables. 

The  highest  plateaus  offer  good  opportuni- 
ties to  those  interested  in  the  production  of 
the  finest  wool,  since  it  is  only  in  these  re- 
gions that  the  animals  producing  it,  the 
vicufia  and  alpaca,  can  thrive.  The  wool  of 
these  animals,  which  are  found  only  in  the 
Andes  of  Peru,  Bolivia  and  Ecuador,  always 
commands  high  prices  on  the  foreign  mar- 
kets, owing  to  the  scarcity  of  the  article,  the 
number  of  the  animals  being  rather  limited. 
This  industry’  could  certainly  be  greatly  in- 
creased and  improved,  since  until  now  the 


on  the  immediate  future  of  the  country’,  is 
the  opening  up  ail  important  petroleum  de- 
posits in  the  northern  part  of  its  territory. 
The  Peruvian  oil  fields,  though  comparatively 
in  their  infancy,  are  already  of  great 
importance,  tlie  export  of  petroleum  at 
the  present  time  amounting  to  300,000 
tons  annually.  Until  now  the  most  im- 
portant oil  fields  have  been  found  in  the  dis- 
tricts of  Zorritoros;  Talara  and  Lobitos,  in 
the  northern  region  of  the  country,  but  the 
formation  of  the  soil  indicates  that  unsur- 
veyed fields  must  extend  far  into  the  interior 
of  the  territory’. 

Some  years  ago,  before  oil  was  found  in 
California,  this  article  was  sent  from  Peru 
to  that  State.  The  local  consumption  has 
materially’  increased,  and  to-day’  Peru  cannot 
supply’  the  demand  of  the  coast,  so  that  a 
large  business  is  done  in  shipping  California 
oil  to  the  west  coast  of  South  America.  Oil 
is  also  found  near  Arequipa  and  Puno,  where 
California  people  are  trying  to  develop  the 
oil  fields  close  to  Lake  Titicaca.  Coal  in  this 


Digitized  by  t^ooQle 


Banco  de  Nuevo  Leon 

MONTEREY,  IS.  L.,  MEXICO 

ESTABLISHED  OCT.  1.  18tfJ 

Capital  paid  op,  $2,000,000  Reserves,  $747,031.00  Deposits,  $2,030,000.03 

GENERAL.  BANKING  BUSINE88  TRANSACTED 

Principal  CorreBpondeoti: — NEW  YOBK,  National  Park  Bank,  National 
Copper  Bank;  LONDON,  Dresdner  Bank,  Credit  Lyonnais;  BEBL1X. 

Deutsche  Bank.  Berliner  Handels  Oesellschaft:  PARI 8,  Credit  Lyon- 
nais. Comptoir  National  d’Escompte;  HAMBURG,  Deutsche  Bank  Fili- 
ate Hamburg,  Commerz  und  Dl  scon  to  Bank:  MADRID,  Banco  His- 

pano  Americano,  Banco  de  Castilla;  11ABANA,  Banco  de  la  Habana. 

RODOLFO  J.  GARCIA,  Manager 

ARTURO  MANR1QUE,  Accountant  AMADOR  PAZ,  Cashier 


last  region  costs  $50  per  ton,  consequently 
if  the  oil  turns  out  well  it  will  find  a good 
market. 

Sulphur  is  found  in  rather  large  quantities 
in  the  Sechura  district,  as  well  as  in  the 
southern  part  of  the  country. 

The  Production  of  Cotton. 

The  entire  cotton  output  of  Peru  amounts 
to  18,000  tons,  with  a total  value  of  about 
$5,000,1)00.  While  not  competing  with  us  as 
to  quantity,  Peruvian  cotton  is  of  high  quali- 
ty. the  “rough  cotton”  being  celebrated  the 
world  over,  as  is  also  the  grade  known  as 
“moderate  rough.”  The  peculiarity  of  these 
two  grades  is  that  they  grow  only  in  certain 
sections  of  the  country.  Peruvian  cotton  is 
used  extensively  in  England  and  Germany 
by  manufacturers  of  hosiery  and  underwear 
and  even  of  woolen  goods,  and  when  used  in 
conjunction  with  wool,  it  improves  the  quali- 
ty of  the  cloth.  It  is  frequently  called 
“vegetable  wool.” 

The  “rough  cotton”  sells  in  the  United 
States  from  four  cents  to  six  cents  a pound 
above  our  own,  while  the  “moderate”  sells 
from  two  cents  to  four  cents  a pound  more. 

Peru  also  produces  smooth  cotton  in  the 
territory  around  lama,  of  which  she  is  be- 
ginning to  export  large  quantities,  as  well 
as  red  cotton  of  very  good  quality. 

The  coast  region  of  Peru  is  well  adapted 
to  the  cotton  industry.  One  of  the  greatest 
drawbacks  in  other  cotton-growing  countries 
is  the  damage  done  by  excessive  rains,  par- 
ticularly in  Mexico.  This  danger  does  not 
exist  in  Peru,  where  rain  is  unknown  in  the 
cotton  belt,  with  the  exception  of  the  Depart- 
ment of  Piura,  where  it  rains  every  seventh 
year.  The  greater  part  of  this  section  is 
still  a desert,  but  wherever  water  has  been 
brought  in  contact  with  the  soil  through  irri- 
gation, splendid  plantations  are  found.  Up 
to  the  present  only  a small  portion  of  the 
cotton  district  is  under  cultivation,  owing  to 
the  lack  of  proper  irrigation  and  capital. 
What  the  future  of  the  cotton  industry 
would  be  in  Peru  with  plenty  of  available 
capital,  is  not  difficult  to  calculate,  since  the 
labor  question  does  not  exist  there,  the  In- 

382 


dinns  and  half-breeds  being  obedient  and 
useful  laborers. 

In  Egypt  good  cotton  lands  cost  'from 
$200  to  $300  an  acre,  while  in  Peru  they 
would  cost  about  $25  an  acre,  producing 
from  500  to  600  pounds  of  clean  cotton,  and 
as  the  cost  of  production  is  not  more  than 
$30  per  acre,  or  about  six  cents  per  pound, 
it  will  easily  be  seen  that  an  intelligent  and 
industrious  man  can  get  good  returns  for 
his  labor  and  capital.  Peruvian  “rough  cot- 
ton” now  sells  at  twenty  cents  per  pound, 
moderate  at  nineteen  cents  and  American  at 
fourteen  cents  per  pound. 

Other  Important  Products. 

Peruvian  rice  is  of  very  fine  quality  and  a 
large  portion  of  the  production  is  consumed 
at  home,  although  quite  large  quantities  are 
exported,  it  being  made  up  for  the  shortness 
by  importing  rice  from  Asia  for  the  poorer 
trade.  The  cost  for  the  establishment  of  a 
rice  plantation  seems  to  be  a trivial  one 
when  compared  with  the  returns. 

A large  portion  of  the  hats  known  as 
Panamas  are  manufactured  in  the  district 
around  Catacaos,  in  the  Department  of 
Piura.  This  hat  is  made  from  the  fibre  of  a 
kind  of  small  palm,  resembling  the  palmetto 
palni.  The  manufacture  of  the  Panama  hat 
is  merely  a home  industry. 

Off  the  coast  of  Peru  there  are  several 
small  islands  known  as  the  I^obos  and  Chin- 
cha  Islands,  where  great  deposits  of  guano 
are  found,  wdiich  helped  to  make  Peru 
famous.  Peruvian  guano  is  one  of  the  best 
fertilizers  known.  It  contains  all  the  prop- 
erties necessary  for  a plant  food.  It  is  rich 
in  ammonia  or  nitrogen  and  phosphoric  acid. 
To  give  a fair  idea  of  the  production  of 
guano  it  is  not  exaggerating  to  say  that  these 
islands  are  completely  covered  by  the  birds 
producing  the  guano.  It  is  estimated  that 
from  15,000  to  20,000  birds  occupy  an  acre, 
and  as  the  various  islands  cover  considerable 
territory,  the  birds  must  be  counted  by  the 
million.  Now,  when  it  is  considered  that 
these  birds  do  nothing  else  but  catch  fish  and 
gorge  themselves  all  day,  and  when  it  is 
borne  in  mind  that  these  natural  factories 


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LATIN  AMERICA 


383 


A Street  Scene  in  Troyillo,  Peru,  showing  American  Tourists  and  American  Advertising 

of  Singer  Sewing  Machines 


have  been  working  for  probably  hundreds  of 
years,  storing  up  their  product,  it  is  possi- 
ble to  conceive  some  idea  of  the  deposits 
which  exist  there. 

The  Chincha  Islands  alone  have  produced 
eight  millions  of  tons,  and  guano  is  sold, 
even  recently  in  some  countries,  as  high  as 
$70  per  ton.  In  the  United  States  it  sells, 
according  to  analysis,  at  from  $30  per  ton 
upwards. 

Peru  exports  annually  about  100,000  tons 
of  guano,  and  it  is  estimated  that  the  birds 
deposit  about  20,000  to  30,000  tons  of  fresh 
guano  each  year,  but  about  this  amount  is 
reserved  by  the  government  for  home  needs. 

The  cultivation  of  coca  leaves  is  quite  an 


important  industry  in  Peru.  Formerly 
these  leaves  were  very  little  known,  and 
were  all  consumed  by  the  Indians,  but  the 
industry  has  grown  and  the  export  amounts 
now  to  4,000,000  pounds.  From  the  ex- 
tract of  these  leaves  cocaine  is  prepared, 
which  sells  for  $3.25  an  ounce.  Coca  leaves 
sell  in  the  United  States  for  twenty  to  forty 
cents  per  pound. 

The  country’s  exports  of  sugar  have  in- 
creased by  fifty  per  cent,  in  five  years  and 
are  still  moving  progressively.  The  Peru- 
vian growers  are  making  good  profits  from 
sugar,  notwithstanding  the  low  prices. 

The  sugar  of  Peru  has  the  reputation  of 
being  of  the  highest  quality.  The  export 


BANCO  MERCANTIL  DE  MONTEREY 

MONTEREY,  N.  L„  MEXICO  A Corporation 

OFFICIAL*  DEPOSITORY  FOR  THE  GOVERNMENT  OF  THE  STATE  OF 

NUEVO  LEON 

Capital  Besources,  $2,500,000.00  Deserves,  $232369.49 

Manager,  HR.  J08E  L.  GARZA  Cashier,  MR.  ENRIQUE  MIGUEL 

Accountant,  MR  EMETERIO  VELARDE 

Buys  and  seUs  domestic  and  foreign  drafts.  Issues  letters  of  credit.  Takes  charge  ef  any  coHoe- 
Mena  entrusted  te  It  en  a moderate  rate  fer  commission  and  remittance.  Bays  and 
sails  for  account  of  others,  government,  municipal,  hanking,  and  mining  stocks  and  bonds. 

Principal  Correspondents- National  Park  Bank,  Nam  York  City;  Borneo  Hispmmo  Amorim as, 
Madrid,  8 pain;  Credit  Lyonnalsa,  Paris,  Promos ; Crsdit  Lyonnaise,  London,  England / Hamburger 
Fttimts  dor  Doutsehan  Bank , Hamburg,  Germany. 


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384 


THE  BANKERS  MAGAZINE 


Kuei  Miiera 


CHIHUAHUA,  MEXICO 


Capital  - - - - $5,000,000.00 
Surplus  Fund  - - 1,475,067.12 


Transacts  a General  Line 
of  Banking  Business. 

Drafts  and  Letters  of  Credit  on 
Europe,  United  States  and 
Mexico. 

Collections  on  any  part  of 
Mexico  Given  Prompt  and 
Careful  Attention. 

CORRESPONDENCE  INVITED 

New  York  Correspondent,  NATIONAL  PARK  BANK 


JUAN  A*  CREEL  E.  C.  CUILTY 

G— ml  Manager  GaafUer 


of  this  article  amounts  to  $8,000,000  at  the 
present  time.  About  half  of  the  Peruvian 
sugar  goes  to  Chili,  to  be  refined,  and  the 
highest  prices  for  it  are  obtained  by  selling 
there.  The  balance  is  sold  to  Europe  or  the 
United  States.  Very  little  of  it  goes  for- 
ward unsold.  The  agent  for  the  sugar 
plantation  generally  gets  cable  offers  from 
every  market  and  the  highest  bidder  gets 
the  product.  The  same  occurs  with  Peru- 
vian cotton. 

An  important  by-product  of  the  Peruvian 
sugar  is  alcohol. 

Besides  coffee,  cocoa,  tobacco  and  other 
products  of  the  tropical  zone,  Peru  is  ex- 
ceedingly rich  in  rubber  lands,  with  a splen- 
did network  of  rivers  furnishing  cheap 
water  transportation.  The  present  high 
prices  for  this  important  article  must  in- 
evitably stimulate  the  opening  up  of  these 
forest  areas,  which  will  afford  a substantial 
source  of  wealth.  The  native  Indian  can 
gather  and  cure  five  pounds  of  rubber  per 
day,  and  consequently  if  one  can  get  enough 
labor,  this  would  mean  an  assured  fortune 
in  a short  time,  with  the  present  high  price 
of  rubber.  Successful  attempts  have  also 
been  made  to  use  Japanese  labor.  An 
American  syndicate  owns  almost  two  mil- 
lion acres  of  rubber  lands  near  the  Neath 
River. 

General  Conditions  in  Peru. 

Peru  has  successfully  reestablished  her 
credit.  The  acute  financial  crisis  which  fol- 
lowed the  war  with  Chili  for  years  deeply 
overshadowed  the  Peruvian  people,  at  the 
same  time  imposing  a most  onerous  task 
upon  the  government.  Much  praise  is  due 
to  statesmen,  who  have  consistently  pursued 
a policy  of  economy  which  has  rescued  the 
country  from  a condition  of  national  de- 
spondency. In  addition  to  rehabilitating  its 
credit,  the  currency  of  the  republic  has  been 
changed  from  a silver  to  a gold  basis,  and  a 
policy  of  conciliation  has,  by  means  of  arbi- 
tration or  pacific,  negotiations,  brought 
about  an  amicable  settlement  of  nearly  all 
outstanding  differences  as  to  boundary  con- 
troversies with  the  neighboring  republics. 
An  equitable  system  of  taxation  has  been 
devised  and  is  now  in  operation. 

It  will  be  seen  that  the  outlook  in  Peru 
is  decidedly  brighter.  The  future  is  open- 
ing to  her  with  increasing  promise  of  better 
things,  subject  always  to  the  continuance  of 
a pacific  and  sensible  administration. 

It  is  a notable  fact  that  in  the  last  of  the 
five  years  ended  1908,  without  special  finan- 
cial legislation,  the  budget  revenue  is  near- 
ly three  times  greater  than  it  was  at  the 
commencement  of  that  period.  This  growth 
of  revenue  has  taken  place  in  spite  of  the 
depressing  influence  caused  by  the  recent 
financial  crisis  in  the  United  States,  which 
brought  about  a diminution  of  nearly 
$1,000,000  in  the  revenue  from  the  rubber 
tax. 


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7BHIRB3  ABE  THBBE  T>J3TE>JLTl'T'M‘TnN1?&  OB’  THE 


Ca.  Bancaria  de  Fownto  y Bines  Rains,  da  Mexico,  $.  k. 


RI1L  ESTATE 

This  department  buys  and 
sells  all  kinds  of  land  in  every 
part  of  the  Republic— City  or 
Country.  H<>ueesbou8ht,FO)d 
and  constructed.  Ran  cues 
subdivided  into  smaller  ones. 
V.  M.  Chureea,  Manmgw. 


PUBLIC  WORKS 

This  department  does  paving 
work,  makes  surveys,  con- 
structs sewerage  systems,  etc. 
It  has  Improved  the  Cities  of 
Mexico.  Puebla,  Guadalajara, 
Durango  and  others. 

MumI  Blgiero,  J itmmgw. 


BANKING 

This  department  finances  the 
other  two  departments  and 
does  all  kinds  of  business  in 
relation  to  banking. 


Xavier  lean  y Lauda,  Jf#r. 


CORRESPONDENCE  IS  INVITED 


Compania  Bancaria  de  Fomento  y Biencs  Unices,  de  Mexico,  S.  A. 

MEXICO.  D.  r. 

President— F.  PIMENTEL  Y FAGOAGA 

1st  Vlce.Prea.-P.  MACEDO  tted  Yice-Pres.-LUIS  BARROSO  ARIAS 


MEXICO'S  CENTENNIAL  CELEBRATION 

OFFICIAL  PROGRAM 


FROM  September  1 to  September  30,  in- 
clusive, the  Republic  of  Mexico  will 
fittingly  celebrate  the  one  hundredth 
anniversary  of  its  independence. 

The  following  is  a complete  programme, 
as  prepared  by  the  National  Centennial 
Commission : 

September  1:  Dedication  of  the  new  gen- 
eral asylum  in  Mixcoac,  at  10  a.  m.,  by 
President  Diaz. 

September  2:  Opening  at  8 a.  m.  of  the 
hygiene  exposition  of  the  superior  board  of 
health,  showing  the  progress  of  Mexico  in 
hygiene  and  sanitation  from  1810  to  1910. 
The  exposition  will  be  open  during  the  en- 
tire month. 

September  3:  Laying  of  the  corner  stone 
of  the  new  city  prison  on  the  Calzada  de  la 
Coyuya,  at  10  a.  m.,  by  Vice-President 
Corral. 

September  5:  Dedication  of  the  new  seis- 
mo logical  station,  at  10  a.  m.,  by  the  minis- 
ter of  fomento;  dedication  of  the  amphi- 
theater of  the  National  Preparatory  School 
by  President  Diaz  and  Minister  of  Educa- 
tion Justo  Sierra. 

September  6:  Flag  parade  by  school  chil- 
dren. 

September  7:  Dedication  of  two  new  high 
schools  in  the  Plaza  de  Villamil,  4 p.  in., 
by  Minister  of  Education  Sierra. 

September  8:  Opening  of  the  Congress  of 
Americanists  by  Minister  Sierra;  dedication 
at  8 p.  m.  of  the  new  building  of  the  for- 
eign relations  department  on  Avenida  Juarez 
by  the  Minister  of  Foreign  Relations,  and 
reception  to  the  diplomatic  corps. 

September  9:  Dedication  at  10  a.  m.  of 
the  new  normal  school  for  women;  4 p.  m., 
placing  of  commemorative  tablets  in  the 
houses  formerly  occupied  by  Andres  Quin- 
tana Roo  and  the  heroine,  I^eona  Vicario, 
under  the  auspices  of  the  govemoi  of  the 
Federal  District. 


September  10:  Excursion  of  delegates  to 
the  Congress  of  Americanists  to  San  Juan 
Teotihuacan;  visit  to  the  Pyramid  of  the 
Sun  and  the  Sacred  Road,  under  the  aus- 
pices of  the  department  of  public  instruc- 
tion. 

September  11:  Dedication  at  10  a.  m.  of 
new  building  of  war  by  Minister  Gonzales 
Cosio;  opening  of  the  Fourth  National  Med- 
ical Congress  at  4 p.  m.,  by  Minister  Sierra. 

September  12:  Dedication  at  10  a.  m.  of 
new’  normal  school  for  men  by  President 
Diaz;  4 p.  m.,  placing  of  commemorative 
tablet  in  Mineria  Palace  in  honor  of  stu- 
dents who  participated  in  the  war  for  inde- 
pendence, by  governor  of  Federal  District 
and  city  council. 

September  13:  Inauguration  of  city  water 
works  by  Vice-President  Corral  and  the 
Junta  de  Provision  de  Aguas;  inaugural 
session  of  Pedagogical  Congress  of  Primary 
Instruction,  by  Minister  Sierra. 

September  14:  Grand  civic  parade  at  9:30 
a.  m.,  participated  in  by  all  classes  of  socie- 
ty; procession  will  march  from  the  Iron 
Horse,  through  Avenida  Juarez  and  San 
Francisco,  passing  in  front  of  National 
Palace  for  review  by  the  president  and 
cabinet.  Committees  will  place  floral 
wreaths  over  urns  of  heroes  of  independence 
in  the  cathedral,  9 a.  m.;  dedication  of  re- 
constructed municipal  palace,  reception  and 
concert  by  the  superior  council  of  the  Fed- 
eral District. 

September  15:  At  9:30  a.  m.,  great  his- 
torical parade,  organized  by  the  National 
Commission ; procession  will  form  in  the 
Paseo  de  la  Reforma  and  march  through 
Avenidas  Juarez  and  San  Francisco  to  stage 
in  front  of  National  Palace,  w'here  various 
historical  scenes  will  be  re-enacted. 

At  4 p.  m.,  celebration  and  entertain- 
ments in  the  various  buildings  of  the  Bene- 
fiencia  Publica. 


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At  4 p.  in.,  free  functions  in  the  theatres, 
bull  fights  and  other  spectacles. 

At  9 p.  m.,  fireworks  on  the  Zocalo  and  in 
other  parts  of  the  city;  concert  in  front  of 
the  National  Palace;  singing  of  the  cen- 
tennial hymn  by  chorus  of  several  hundred 
voices. 

At  11  p.  m.,  ringing  of  the  independence 
bell  by  President  Diaz;  display  of  fireworks 
all  over  the  Federal  District. 

September  16:  At  9 a.  m.,  reading  of  the 
proclamation  of  independence  and  dedica- 
tion of  the  monument  to  independence  on 
the  Paseo  de  la  Reforma,  by  President  Diaz. 

At  10  a,  m.,  great  military  parade  of 
10,000  troops  through  principal  streets  of 
city  to  palace  for  review  by  President  Diaz. 

At  8:30  p.  m.,  free  functions  in  theatres, 
concerts  in  parks  and  gardens,  under  the 
auspices  of  Governor  Lauda  v Escandon  of 
the  Federal  District. 

September  17:  Dedication  of  Balbuena 
Park;  grand  serenade. 

September  18:  Dedication  at  10  a.  m.  of 
monument  to  Benito  Juarez  on  the  Alame- 
da by  Vice-President  Corral. 

September  19:  Dedication  at  10  a.  in.  of 
the  Department  of  Weights  and  Measures 
in  the  Department  of  Fomento. 

Grand  ball  tendered  by  President  Diaz  in 
the  National  Palace. 

September  20:  Velada  in  Arbeu  Theatre 
dedicated  to  the  scientific  and  literary  so- 
cieties of  the  republic,  under  the  auspices  of 
the  National  Commission. 

September  21 : At  9 a.  m.,  placing  of  com- 
memorative tablet  at  the  Ciudadela,  where 
Morelos  was  detained  before  his  execution, 
under  the  auspices  of  the  National  Com- 
mission. 

At  7 p.  m.,  grand  torchlight  parade,  or- 
ganized by  the  commission,  marching 
through  principal  streets  to  place  for  re- 
view by  President  and  the  cabinet. 

September  22:  Dedication  of  the  National 
University,  literary  and  scientific  fiesta. 


President  Diaz  and  Minister  Sierra  partici- 
pating. 

September  23:  laying  of  the  corner  stone 
of  the  new  legislative  palace  at  4 p.  m.  by 
President  Diaz  and  Minister  of  Public 
Work?,  invitation  balls  in  various  theatres 
and  popular  balls  in  the  market  buildings 
under  auspices  of  the  commission. 

September  24:  Banquet  at  8:30  p.  m.  by 
the  Minister  of  Foreign  Affairs  to  diplo- 
matic corps. 

September  25:  Sham  battle  by  the  army 
under  direction  of  Secretary  of  War. 

September  26:  Dedication  of  the  recon- 
structed tunnel  of  Tequisquiac  and  of  new 
works  in  connection  with  the  drainage  sys- 
tem of  the  Valley  of  Mexico,  under  the 
auspices  of  the  Minister  of  Public  Works. 

September  27:  Apotheosis  of  the  chiefs 
and  soldiers  of  the  war  of  independence; 
great  patriotic  fiesta  organized  by  the  com- 
mission. 

September  28:  Dedication  of  the  new 

works  in  Chapultepec  Park;  concerts,  fire- 
works and  illuminations  under  auspices  of 
the  Junta  of  Improvements  of  Chapultepec. 

September  29:  Dedication  at  10  a.  m.  of 
the  new'  addition  to  the  penitentiary  by  the 
vice-president  and  governor  of  the  Federal 
District. 

September  30:  Grand  velada  in  the  Arbeu 
Theatre  for  the  distribution  of  premiums 
to  the  winners  in  the  historic,  literary  and 
musical  contests  conducted  by  the  depart- 
ment of  public  instruction,  and  distribution 
of  prizes  of  winners  in  the  contests  con- 
ducted by  the  National  Centennial  Com- 
mission, under  the  auspices  of  the  Minister 
of  Public  Instruction. 

To  assist  in  her  centennial  celebration, 
Mexico  will  invite  all  of  the  nations  of  the 
world  with  whom  diplomatic  relations  are 
maintained. 

France,  Germany  and  China  have  signified 
their  intention  of  presenting  a lasting  me- 
morial to  Mexico  on  the  occasion  of  the 


MERCANTILE  BANKING  COMPANY,  Ltd. 

Avenlda  San  Franolaoo  No.  12 

CITY  OF  MEXICO  

Capital,  $500,000.00  Surplus,  $100,000.00 

Members  of  the  American  Bankers’  Association 
GEO.  J.  McCARTY,  President  K.  M.  VAN  ZANDT,  Jr.,  Vlce-Pres.  & Mgr. 

H.  C.  HEAD,  Cashier  SHUR  WELCH,  Assistant  Cashier. 

A General  Banking  Business  Transacted  Foreign  Etohnnte  Bought  and  Sold 
Telegraphic  Transfers  Letters  of  Credit 

Unsurpassed  collection  facilities.  Correspondence  solicited.  Accounts  of  Banks,  Bank- 
ers, Merchants  and  Individuals  solicited. 


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LATIN  AMERICA 


387 


centennial.  The  first  will  return  the  silver 
keys  to  Mexico  City  given  to  the  French  on 
their  entry  into  the  capital,  Germany  will 
erect  a monument  to  Humboldt,  while  China 
has  not  yet  announced  the  nature  of  her 
gift.  Other  nations  are  now  preparing  to 
follow  the  example  of  these  and  contribute 
in  a substantial  way  toward  commemorating 
the  period. 

Special  low  rates  for  the  Mexican  centen- 
nial will  go  into  effect  about  the  first  of 
August,  good  for  return  to  about  the  mid- 
dle or  last  of  October.  In  addition  there 
may  be  lower  rates  from  most  points  in  the 
United  States  from  Texas,  Louisiana,  New 
Mexico,  Arizona  and  California  for  the  main 
attractions  about  the  middle  of  September. 
Rates  will  be  adopted  by  the  Southwestern 
Passenger  Association  from  all  points  in 
the  United  States  to  all  points  of  Mexico 
for  the  centennial,  the  rates  being  one  fare, 
plus  $2  gold  for  the  round  trip.  The  cen- 
tennial rate  will  be  about  the  lowest  ever 
offered  by  the  Southwestern  Association  to 
points  in  Mexico,  and  will  be  put  on  this 
year  with  the  anticipation  of  a large  move- 
ment of  Americans  in  the  months  of  August 
and  September.  Local  passenger  men  look 
for  the  biggest  passenger  movement  in  the 
history  of  Mexico.  All  roads  in  the  United 
States  are  preparing  literature  on  Mexico, 
which  will  be  scattered  through  the  Ameri- 
can Union.  There  is  no  doubt  that  Mexico 
will  be  the  main  point  of  interest  for  Ameri- 
can tourists  this  summer.  Doubtless  there 
will  be  thousands  who  usually  go  to  Europe 
who  will  come  to  Mexico  for  the  first  time. 
So  far  no  arrangements  have  been  made  for 
special  trains.  The  National  Railways  will 
be  ready  to  put  on  special  trains  in  case  the 
passenger  traffic  is  heavy  enough. — Bulletin 
of  the  International  Bureau  of  the  American 
Republics. 


LATIN  AMERICAN  TRADE  GROWS 

WHILE  the  trade  of  the  Latin-Ameri- 
can  republics  has  grown  to  $2,000,- 
000,000  a year  since  1906,  the  Inter- 
national Bureau  of  American  Republics  can 
justly  claim  the  credit  of  $52,000,000  of  the 
gain,  according  to  the  special  report  made 
by  John  Barrett,  director  of  the  bureau,  to 
the  fourth  Pan-American  Conference  now  in 
session  at  Buenos  Ayres. 

Some  of  the  facts  about  Latin-American 
commerce,  which  Mr.  Barrett  gives  in  his 
report,  show  a marvelous  growth.  In  1909 
the  twenty  republics  south  of  the  United 
States  bought  from  and  sold  to  the  rest  of 
the  world  more  than  $2,000,000,000  worth  of 
goods.  That  was  more  than  twice  the  for- 
eign commerce  of  Japan  and  China  com- 
bined for  the  same  period.  The  increase  of 
Latin-American  trade  in  the  last  decade  was 
about  125  per  cent. 

The  exports  in  the  last  ten  years  show  an 


increase  of  140  per  cent.,  and  the  imports  in 
the  same  time  have  made  a gain  of  115  per 
cent.  The  United  States  did  $600,000,000 
worth  of  business  with  Latin-America  in 
1909,  the  trade  having  doubled  itself  in  the 
last  ten  years. 

Mr.  Barrett’s  report  shows  a correspond- 
ing increase  in  the  work  of  the  bureau. 
Since  the  last  Pan-American  Conference  in 
1906  its  work  has  increased  1000  per  cent. 
It  has  distributed  500,000  pieces  of  litera- 
ture on  Pan-American  relations  this  year, 
as  against  50,000  a year  ago. 


AMERICAN  ELECTED  PRESIDENT 
SPANISH-FILIP1NO  BANK  OF 
MANILA 

JOHN  S.  HORD  was  born  in  Texas  in 
1862.  He  became  successively  the  editor 
of  a local  paper,  school  teacher,  county 
surveyor  for  eight  years,  and  subsequently 
engaged  in  manufacturing  and  agricultural 
enterprises  in  different  parts  of  Mexico.  In 
1899  he  went  to  Cuba  and  from  there  he 
journeyed  to  Porto  Rieo  and  was  Collector 
of  Internal  Revenue  of  that  island  for  four 
years.  From  1904  to  1910  he  was  Collector 
of  Internal  Revenue  for  the  Philippine 
Islands.  When  Congress  was  considering 


JOHN  S.  HORD 


President  of  the  Banco  Espanol-Filipino  of 
Manila 


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that  portion  of  the  Payne-Aldrich  tariff  bill 
which  particularly  concerned  the  Philippines, 
in  1908  and  1909,  Mr.  Hord  was  called  to 
Washington  to  furnish  all  the  statistical  in- 
formation he  could  give. 

In  January  of  this  year,  Mr.  Hord  re- 


Banco  Espanol-Filipino  in  Manila 


signed  from  the  Internal  Revenue  service  to 
engage  in  the  import  and  export  business  in 
Manila.  On  the  eighth  day  of  February, 
1910,  he  was  elected  president  of  the  Banco 
Espanol-Filipino. 


GUATEMALA,  THE  GREATEST 
REPUBLIC  IN  CENTRAL 
AMERICA 

( Pan-American  Magazine.) 

THK  wealth  of  Guatemala  consists  ill 
its  rich  soil,  which,  according  to  the 
altitude,  yields  the  products  of  every 
zone.  The  shores  are  lined  with  mangroves, 
the  rivers  with  bamboos,  beyond  which  rise 
the  forests,  where  the  mahogany,  the  cocoa- 
nut,  cohune,  and  other  palms  tower  above 
the  wild  bananas,  ferns  and  gingers  that 
scantily  cover  the  bare  soil  below,  whilst  the 
exuberance  of  orchids  and  trailing  parasites 
confuses  the  identity  of  the  trees.  In  the 


uplands  are  forests  of  huge  pines  and 
spruces  and  oaks,  agaves,  and  cherimoyas 
appear  on  the  hillside,  and  thick  grass 
clothes  the  ground;  even  in  the  dry  lava 
plains  a coarse  grass  springs  up  between  the 
lava  blocks,  and  acacias  and  calabash  trees 
are  met  with.  The  forests  contain  over  a 
hundred  kinds  of  timber  trees,  including 
many  of  the  most  valuable. 

Maize  and  haricot  beans  (frijoles)  grow 
freely  everywhere,  peas  and  potatoes  in  suf- 
ficient quantity  for  consumption,  wheat  in 
the  uplands  and  rice  in  the  bottomlands. 
Other  products  are  coffee  (the  chief  ex- 
port), sugar,  cacao,  india-rubber,  tobacco, 
cotton,  pita  and  sisal  hemp,  sarsaparilla  and 
many  medicinal  plants,  bananas  and  a num- 
ber of  other  fruits,  mostly  of  the  finest 
quality.  The  export  of  cochineal,  formerly 
of  chief  importance,  has  almost  ceased. 
Cattle  are  raised  sufficiently  for  the  needs 
of  the  country,  though  not,  as  in  Honduras, 
for  exportation. 

The  fauna  of  Guatemala  includes  the 
jaguar,  puma,  ocelot,  coyote  and  red-deer, 
tapir,  peccary,  armadilla  and  several  mon- 
keys; iguanas  and  turtles  are  numerous, 
whereas  the  alligators  are  small  and  not  fre- 
quent, and  boas  and  venomous  snakes, 
though  the  number  of  species  is  consider- 
able, are  seldom  met  with.  The  birds  are 
of  great  variety  and  beauty,  comprising  sev- 
eral hundred  species.  Insects  abound,  the 
most  notable  being  the  brilliant  butterflies, 
immense  beetles,  locusts,  many  kinds  of  ants, 
scorpions,  tarantulas,  grass-hoppers,  mos- 
quitoes, flies  and  jiggers. 

The  industries  of  Guatemala  arc  chiefly 
confined  to  the  manufacture  of  woven  fab- 
rics, pottery  and  saddlery:  there  are  several 
chocolate  factories  and  flour  and  sawmills  In 
the  country,  and  numerous  distilleries  of  the 
fiery  aguardiente. 


GENERAL  NOTES 

— Directors  of  the  Banco  Mercantil  del 
Paraguay  of  Buenos  Ayres  have  declared  a 
dividend  of  twelve  per  cent.,  as  a result  of 
the  past  year’s  working.  In  their  report 
they  state  that,  although  the  market  has 
not  yet  resumed  its  normal  condition,  yet  it 
has  improved,  and  during  the  last  month  of 
the  year  there  had  been  more  movement. 
Business  is  surer  and  more  solid,  free  from 
speculations  of  negative  and  disastrous  re- 
sults. Foreign  capital  is  again  taking  an 
interest  in  the  country.  The  good  tobacco 
crop,  its  better  prices,  increases  in  the  value 
of  lumber  and  hides,  anu  reduction  in  im- 
ports have  been  the  principal  factors  in  the 
all-round  improvement.  The  movement  of 
the  bank  has  been  as  follows:  Current  ac- 
counts, $628,133,461.86;  cash,  $917,083,612.- 
36;  discounts,  $49,690,576.39;  deposits,  fixed, 
$31, 938.609 .87;  other  accounts,  $417,132,800.- 


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92.  Total,  $2,043,9 ? 9,06 1 .40.  The  year's 
working  gave  a profit  of  $4,660,807.47.  The 
reserve  funds  now  stand  at  $6,000,000,  being 
thirty  per  cent,  of  the  capital. 

—The  government  of  Brazil,  like  that  of 
the  United  States,  has  just  provided  for  the 
creation  of  a postal  savings  bank  system. 

Loans  are  to  be  made  by  the  postal  banks 
as  by  other  savings  banks,  and  the  earnings 
are  to  go  into  the  treasury.  Ail  deposits 
and  transactions  are  based  upon  the  guaran- 
ty of  the  Brazilian  Government.  Deposits 
from  three  cents  to  $300  may  be  made,  and 
interest  is  allowed  at  four  per  cent,  annual- 
ly on  sums  ranging  from  thirty  cents  to 
$300.  This  is  one  per  cent,  less  than  the 
current  rate  allowed  for  time  deposits  by 
Rio  de  Janeiro  banks.  Deposits  may  be 
withdrawn  upon  funds  ten  to  thirty  days’ 
notice.  In  addition  to  allowing  funds  from 
deposits  to  be  handled  on  the  basis  of  other 
savings  bank  funds,  the  Brazilian  system 
provides  that  the  deposits  may  be  loaned  to 
popular  bafiks  or  rural  loan  associations.  If 
the  depositor  wishes,  his  funds  may  be  in- 
vested in  national  bonds  at  his  own  expense. 

— Consul  Albert  W.  Brickwood,  Jr.,  of 
Tapachula,  Mexico,  furnishes  the  following 
information  relative  to  the  fusion  of  rail- 
ways in  Guatamala: 

Additional  interest  in  the  Pan-American 
railway  system  arises  from  a proposed  fu- 
sion, which  it  is  reported  will  take  place 
within  a brief  time,  of  the  railways  of 
Guatemala  into  a merger  controlled  by  the 
Guatemala  Central  Railway.  In  this  fu- 
sion commercial  supremacy  is  expected  to 
shift  to  American  control,  the  Occidental 
Railway  of  Guatemala,  a most  important 
factor  in  the  coffee  movement  of  Guatemala, 
having  passed  into  the  ownership  of  the 
Guatemala  Central  Railway,  an  American 
corporation,  through  purchase  of  the  stock 
of  the  former  company.  The  Guatemala 
Central  Railway  runs  from  San  Felipe  to  the 
port  of  Champerico;  the  Ocos  Railway  from 
the  port  of  Ocos  to  Vado  Ancho,  in  the  cof- 
fee district  of  Guatemala.  The  Guatemala 
Central  Railway  likewise  owns  sixty-five  per 
cent,  of  stock  of  the  Guatemala  Northern 
Uailwav,  from  Puerto  Barrios  to  Guatemala 
City. 

The  Pan-Americanization  of  the  Guate- 
malan railway  lines  also  aims  at  the  Pan- 


Americanization  of  the  railways  in  Salva- 
dor, it  being  the  intention  of  the  Guatemala 
Central  Railway  to  merge  the  Salvador  Rail- 
way and  to  build  a railroad  from  Santa 
Maria  across  the  Salvador  border  to  the  city 
of  San  Salvador  to  connect  with  the  Salva- 
dor Railway.  The  coffee  moved  from  Sal- 
vador each  year  amounts  to  about  400,000 
bags,  or  60,000,000  pounds,  a quantity  readi- 
ly seen  to  be  of  consummate  importance  in 
ftgurgs  of  freight. 


FATE  CANNOT  CONQUER  MEN 
LIKE  THIS 

SELDOM  has  there  been  seen  a more  in- 
spiring example  of  indomitable  energy 
triumphing  over  fate  than  that  which 
the  engraver  Florian  is  now  giving  to  the 
world. 

Six  years  ago,  while  at  work  upon  the  de- 
signs for  the  new  French  bank-note,  he  was 
suddenly  stricken  by  paralysis.  His  right 
side  became  as  if  dead;  he  was  bereft  of 
speech;  the  hand  whose  skill  had  made  him 
famous  was  useless  forever.  Did  he  com- 
plain? Did  he  resign  himself  to  the  inevi- 
table? Did  he  sit  down  in  despair  and  al- 
low his  young  wife  and  daughters  to  sup- 
port him?  Not  for  a moment.  He  let  the 
women  work,  it  is  true,  but  only  while  he 
learned  to  engrave  with  his  left  hand. 

Hour  after  hour,  day  after  day,  month 
after  month,  he  passed,  struggling  with  that 
awkward,  untrained  left  hand,  drawing  at 
first  crudely  like  a little  child,  then  with 
ever-increasing  precision.  Gradually  he  edu- 
cated the  refractory  member  to  obey  his 
will.  Drawing,  water-color  painting,  design- 
ing for  typographers,  succeeded  one  another, 
until  today  he  has  again  attained  absolute 
mastery  over  the  graver’s  tools.  Arsene 
Alexandre,  the  famous  art  critic,  saw  him  at 
work  a few  weeks  ago.  his  wooden  block 
screwed  to  a table,  his  left  hand  plying  the 
tools  with  all  the  deftness  his  now  dead  right 
hand  formerly  possessed,  his  speechless  lips 
smiling  and  his  face  radiant  with  happiness. 

To  a man  like  Florian  fate  has  no 
terrors.  Such  men  cannot  be  conquered. 
And  if  ever  Labor  should  erect  its  Pantheon, 
Florian  is  worthy  of  a high  niche  among  the 
heroes  of  work. — New  York  World. 


Mexico  City  Banking  Company,  S.  A. 


AVENIDA  SAN  FRANCISCO  No.  14 

Capital  and  8urp1us  91*000,000 

IILLEITIIIS  MD  ILL  DUKIRI  HITTERS  SITE!  PROMPT  IRD  CAREFUL  ATTERTIIR 


Digitized  by  t^ooQle 


WHY  NOT  AN  AMERICAN  SYSTEM  OF  BANKING? 

By  George  L.  Kreeck,  Cashier  First  National  Bank,  Bonner  Springs,  Kansas 


NO  question  so  vitally  concerns  the  in- 
terests of  this  country  as  our  system 
of  banking,  yet  I believe  it  is  not  so 
much  a question  of  the  flexibility  of  our  cur- 
rency as  of  the  elasticity  and  flexibility  of 
our  banking  assets.  What  is  wanted  are  as- 
sets easily  and  readily  convertible  so  that 
customers  of  the  banks  may  receive  at  all 
times  their  full  credit-accounts  or  deposits, 
without  causing  the  banks  to  “call  in”  or 
restrict  their  loans. 

The  central  bank  plan  seems  to  receive 
the  most  attention.  From  all  that  I have 
read,  and  heard  on  this  subject,  I have  to 
find  the  plan  that  is  not  practically  new  to 
our  financial  system. 

It  is  not  a revolution  of  our  banking 
system  that  is  needed,  but  an  evolution. 

Because  our  Monetary  Commission  has 
made  a tour  of  “foreign  parts”  and  dis- 
covered that  nearly  all  of  the  countries 
of  the  Old  World  have  central  or  govern- 
ment banks,  is  no  reason  why  this  country 
of  the  New  World  should  have  them. 

If  the  bank-note  circulation  of  England, 
Scotland,  Germany,  and  the  rest  of  them, 
adjusts  itself  to  the  business  demands,  it  is 
not  necessarily  a foregone  conclusion  that 
the  same  system  would  produce  good  re- 
sults if  adopted  here.  I do  not  believe  that 
it  would,  for  our  system  has  grown  out  of 
American  conditions,  and  is  wholly  Ameri- 
can, suited  to  our  financial  and  industrial 
and  commercial  interests.  The  foreign  plan 
may  work  admirably  with  their  centralized 
banking  arrangement,  but  to  adopt  such  a 
system  to  independent,  individual,  decen- 
tralized banks  would  be  a difficult  under- 
taking. 

Who  would  change  the  American  spirit 
and  individualism  for  the  English,  Scottish, 
French  or  German  spirit?  Can  any  country 
show  the  progress  of  this  country?  Could 
we  have  attained  this  position  except  by 

Banking  house,  furniture  and  fixtures 

Real  estate  

Amounts  deposited  with  the  Government: 

U.  S.  bonds  for  circulation  

U.  S.  bonds  for  deposits  

Other  bonds  for  deposits  

Premium  on  bonds  

Five  per  cent,  redemption  fund 


our  present  method  of  independent  bank- 
ing? It  is  practically  conceded  that  we 
could  not.  Then  why  change  it,  if  by  a 
few  modifications  or  amendments  we  can 
still  have  an  American  system,  the  peer  of 
them  all. 

Capital  Equipment  of  the  Banks. 

An  examination  of  the  report  of  the 
Comptroller  of  the  Currency  for  the  year 
1909  shows  some  of  the  difficulties  which 
stand  in  the  way  of  making  our  banking 
system  adequate  to  the  demands  made 
upon  it.  On  page  seven  of  the  report  we 
find  the  table  of  “Ratio  of  Capital”  to  de- 
posits, loans,  etc.  It  shows  that  in  1897  the 
ratio  of  capital  to  credit  accounts  or  depos- 
its was  as  $1  to  $2.93,  while  in  1909  it  was  as 
$1  to  $5.30.  In  the  matter  of  capital  to 
loans  we  find  in  1897  the  ratio  was  $1  to 
$3.25,  but  in  1909  $1  to  $5.43. 

Taking  the  following  table  of  reports 
from  all  banks,  in  periods  of  ten  years  from 
1880  to  1909  we  find: 

Capital  Deposits  Loans 

1880. .  . $565,200,000  $1,961,600,000  $1,662,100,000 

1890.. .  968,700,000  4,062,500,000  3,842,000,000 

1900.. .  1,024,700,000  7,238,900,000  5,657,600,000 

1909.. .  1,855,987,000  14,425,223,00011,373,200,000 

This  shows  the  increase  of  credit-accounts 
or  deposits  and  that  of  loans  to  the  amount 
of  capital,  with  a disproportionate  ratio  of 
increase  in  the  deposits  and  loans  compared 
to  the  increase  in  capital. 

In  this  table  capital  is  spoken  of  as  the 
sum  authorized  under  the  right  of  capitali- 
zation, not  the  available  capital  ready  for 
the  current  demands  of  business. 

In  the  abstract  of  the  reports  made  to 
the  Comptroller  of  the  Currency  for  Sep- 
tember 1,  1909,  we  have  total  unavail- 
able capital  assets  of  nearly  $302,000,000. 
This  result  is  shown  thus: 

$200,076,548 

21.205.6S1 


$668,660,1 70 
39.222,300 
17,991.758 
14,721.196 
32.488.612 


$773,0S4,036 


Now  deduct: 

Circulation  received  $658,040,356 

V.  S.  deposits  35,226,912 

$693,267, 26S 

79.S16.76S 

Total  national  banking  capital  unavailable...: $301,098,997 

390 


Digitized  by  t^ooole 


WHY  NOT  AN  AMERICAN  SYSTEM  OF  BANKING? 


391 


The  table  represents  only  the  amount  of 
capital  charge  against  that  of  the  national 
banks,  showing  the  amount  of  their  capital 
unavailable  for  current  credit  redemptions. 

More  than  double  this  amount  is  unavail- 
able when  the  entire  banking  interests  of  the 
country  are  taken  into  consideration.  (For 
this  calculation  use  the  special  report  from 
the  banks  of  the  United  States  issued  by 
the  National  Monetary  Commission  for 
April  28,  1909.) 

The  last  ten  years  show  a greater  increase 
in  the  amount  of  unavailable  capital  (for 
current  redemptions)  than  any  previous  ten 
years,  and  the  ratio  of  increase  of  each  year 
greater  than  that  of  the  year  previous. 

It  has  been  estimated  that  the  greatest 
money  demands  made  on  the  entire  country 
have  never  exceded  $300,000,000.  The  total 
unavailable  capital  (for  current  redemp- 
tion) of  all  banks  is  nearly  $700,000,000. 
With  the  total  money  demands  not  exceed- 
ing $300,000,000,  and  with  nearly  $700,- 
000,000  unavailable  current  capital  assets, 
it  would  seem,  with  proper  capitalization 
and  an  increase  in  capital-assets,  that  the 
present  American  banking  could  be  retained. 

The  amount  of  capital  necessary  for  a 
bank  is  the  amount  that  will  provide  ample 
protection  for  its  credits,  meet  the  de- 
mands of  its  customers,  and  provide  for  the 
efficient  equipment  of  its  offices,  without  the 
bank  being  forced  to  call  in  loans  or  re- 
strict commercial  accommodations. 

The  national  banks  of  this  country  have 
made  a direct  capital  investment  of  over 
$G()0,000,000.  Capital  is  invested  in  the 
business  of  banking  not  for  permanent, 
long-time  or  direct  investment,  but  for  the 
purpose  of  supporting  credit  obligations 
received  in  the  course  of  business. 

With  the  sum  of  $600,000,000  or  even 
$300,000,000  added  to  the  available  capital 
assets  of  our  banking  institutions,  would  it 
not  add  stability  to  the  business  interests, 
and  give  elasticity  to  credit  accommoda- 
tions? 

Strong  Reserves  and  Ample  Available 
Assets. 

Deposits  are  demand  obligations  of  a 
bank,  and  should  be  supported  by  strong 
reserves  and  ample  available  assets.  They 
must  be  met  on  demand,  and  if  safety  is 
to  be  taken  into  consideration,  should  be 
supported  by  proper  capitalization.  The 
Comptroller’s  report  shows  a number  of 
banks  having  individual  deposits  amounting 
to  from  twelve  to  twenty  times  their  capi- 
talization. In  several  of  these  instances 
the  redemption  equipment  consists  of  only 
one-third  or  one-fourth  capitalization  and 
the  balance  is  provided  by  loans.  Such  a 
method  of  doing  business  would  be  looked 
upon  with  discredit  in  any  other  line,  yet 
the  bankers  carry  on  their  business  by  this 
method.  They  are  not  to  blame,  but  tlie 


practice  or  law  that  will  permit  inadequate 
bank  capitalization  in  relation  to  the  bank- 
credit  extended  is  responsible. 

Another  weakness  aside  from  that  of  in- 
adequate capitalization  is  the  reserve  equip- 
ment. 

The  item  “deposits”  will  show  to  a great 
extent  a considerable  amount  of  manufac- 
tured bank  credit.  This  credit  is  not  sup- 
ported by  ample  reserves  of  gold,  but  is 
largely  based  upon  securities,  bank  notes 
and  redeposited  reserves  of  other  banks. 

Of  the  $1,532,000,000  of  invested  reserves 
of  the  national  banks  on  September  1,  1910, 
no  small  amount  of  this  was  being  used 
for  the  support  of  a much  larger  volume  of 
credit  on  the  “market”  in  that  of  “call- 
loans,”  underwritings,  and  other  speculative 
assets. 

Reserves  invested  in  this  manner  are  not 
reserves  at  all.  Call  loans  are  usually  se- 
cured for  the  purpose  of  carrying  on  margin 
speculation.  Underwriting  and  the  buying 
of  large  issues  of  bonds  on  margins  or 
credit  is  highly  speculative  and  should  not 
be  permitted  in  the  business  of  banking. 

With  the  greater  percentage  of  the  re- 
serves of  the  banks  of  the  country  cen- 
tered in  the  central  reserve  cities,  used  again 
to  create  additional  bank  credits  without 
ample  gold  reserves  or  proper  capital  sup- 
port, invested  in  more  or  less  speculative 
assets,  it  is  no  wonder  that  banks  find  them- 
selves in  tight  straits  when  an  emergency 
falls  upon  them. 

Call  loans  may  be  “gilt-edge”  in  ordinary 
times,  but  the  oncoming  of  unfavorable  con- 
ditions proves  them  to  be  most  dangerous. 
Under  strain  or  panic  the  banker  finds  that 
he  must  protect  these  “securities”  in  order 
to  preserve  his  institution,  and  as  a result 
there  is  a shock  to  all  interests  which  reacts 
more  or  less  disastrously  on  all  enterprises. 
Invested  reserves  of  this  class  are  not  re- 
serves at  all,  but  are  speculative  loans. 

Burton  says  in  his  “Crises  and  Depres- 
sions” that  the  banks  are  looked  to  as  the 
“barometer  of  the  stability  and  tendencies 
of  the  times.  Accommodations  to  enter- 
prises must  be  restricted  when  near  the 
danger  point,  not  only  for  the  bank’s  pre- 
servation, but  for  the  business  community 
as  well.  This  is  done  to  protect  the  reserves 
and  is  necessary,  yet  there  are  times  when 
loans  have  been  refused  upon  the  best  of 
banking  securities.  The  object  of  this  is 
to  provide  against  the  strain  of  the  panic. 
Every  accommodation  refused  upon  good 
securities  is  but  a step  further  in  hastening 
the  oncoming  panic  to  its  zenith.”  Walter 
Bagehot  in  his  “Lombard  Street”  says  that 
what  is  necessary  to  stem  or  stop  a panic, 
is  not  to  refuse  accommodations  upon  good 
securities,  that  though  the  money  may  be 
dear,  still  there  is  money  to  be  had. 

The  report  of  the  Comptroller  shows  the 
cash  and  reserve  equipment  of  the  national 
banks  on  September  1,  1909,  to  be: 


Digitized  by  t^ooQle 


392 


THE  BANKERS  MAGAZINE 


In  cash  reserve  $942,652,509  made  as  follows: 


Cash  items  $38,287,273 

National  bank  notes 40,204,902 

Specie  666,399,897 

Fractional  currency 2,756,883 

Legal  tenders 187,093,900 

Due 'from  U.  S.  Treasurer  * 7,311,594 


$942,052,509 

$23,146,040 

719,351,249 

893,388,642 


$1,040,886,431 

$32,825,193 

30,228,978 

1,638,120 

36,638,067 

109,330,964 


Amount  of  Invested  reserve  $1,531,534,407 


From  this  deduct  the  amount  of  the  liabilities: 

Bills  payable  

Bonds  borrowed  

Other  liabilities  

Due  to  reserve  agents  


Amount  of  reserves  Invested: 

U.  S.  bonds  on  hand 

Due  from  approved  reserve  agents 
Stocks,  securities,  etc 


In  the  “cash  reserve”  we  have  “cash 
items”  $38,287,973.  This  is  of  more  or  less 
doubtful  nature.  Many  banks  carry  ex- 
pense vouchers,  etc.,  under  this  heading  for 
numerous  reasons. 

The  item  of  nearly  $720,000,000  invested 
“with  reserve  agents”  is  worthy  of  attention. 
With  a change  in  this  one  item  (granting 
ample  balances  for  exchange  purposes)  so 
that  it  should  be  invested  in  first-class, 
gilt-edge  securities,  would  add  a larger 
amount  of  available  current  assets  for  the 
money-demands  that  may  be  made;  either 
by  the  sale  of  the  securities  or  their  hypo- 
thecation. And  such  could  be  done  with- 
out disturbing  commercial  accommodations, 
or  the  relations  of  one  institution  to  the 
other. 

The  bank  reserves  are  watched  by  the 
business  interests,  and  they  are  regarded  as 
the  indicator  of  the  soundness  of  the  busi- 
ness and  credit  conditions.  But  with  these 
reserves  not  of  the  proper  character,  in- 
vested in  more  or  less  speculative  assets, 
and  with  the  reserve  banks  not  properly 
equipped,  a misconception  of  the  actual 
state  of  our  banking  equipment  results. 

There  should  be  a distinction  in  the  “re- 
serves,” showing  what  portion  of  them  are 
cash  and  exchange  accounts,  and  what  por- 
tion are  investments  and  the  kind  of  in- 
vestments. 

Money  reserves  should  be  provided  out  of 
the  capital  and  for  this  purpose  the  banks 
should  have  ample  capitalization,  especially 
those  in  the  reserve  centres.  This  reserve, 
retained  in  gold,  would  remedy  one  of  the 
fundamental  defects  of  our  banking  and 
currency  system. 

It  is  claimed  that  the  establishment  of 
a central  bank  would  be  for  this  purpose, 
and  also  of  regulating  the  rate  of  discount 
and  note  issues. 


If  this  can  be  done  without  the  introduc- 
tion of  new  machinery,  such  as  the  central 
bank  would  be,  why  not  do  it? 

Our  present  system  of  clearing-house  as- 
sociations are  better  equipped  and  in  direct 
touch  with  the  varied  business  interests  of 
the  country,  and  appreciate  the  demands 
made  by  them  better  than  any  Government 
department  can  possibly  do.  Some  pro- 
vision could  be  made,  under  rigid  regula- 
tions, placing  this  function  with  these  asso- 
ciations, or  with  an  association  of  these  as- 
sociations to  be  used  in  times  of  demand 
or  emergency. 

With  such  modifications  of  the  Bank  Act 
as  would  require  the  banks  to  possess  suffi- 
cient capitalization,  that  such  capital  be  not 
encumbered  with  unavailable  assets;  requir- 
ing the  proper  amount  and  character  of  re- 
serves, with  these  changes  it  would  not  be 
necessary  to  introduce  a new  and  untried 
system  of  banking. 


A REMARKABLE  RECORD 

HA.  DUNCAN,  president  of  the  Ma- 
• rine  National  Bank  of  Bath,  Maine* 
has  signed  every  bill  issued  by  that 
bank  either  as  cashier  or  president.  As  the 
time  extends  about  forty-four  years,  his  rec- 
ord is  probably  unequaled  In  New  England. 
To  make  the  record  unbroken,  the  officials 
of  the  bank  have  on  several  occasions  dur- 
ing the  illness  or  absence  of  Mr.  Duncan, 
held  the  bills  until  he  was  able  to  sign  them. 
The  best  time  made  by  him  in  attaching  his 
signature  to  bills  was  400  signatures  in 
forty-five  minutes. 


Digitized  by  t^ooQle 


SAFE  DEPOSIT 


THAT  BOOKLET  YOU’RE  PLANNING 


DO  you  Intend  to  bolster  up  your  safe 
deposit  department  with  a bit  of  ef- 
fective publicity?  Then  you  will  do 
well  to  consider  the  merits  of  an  attrac- 
tive booklet. 

Of  course  there  are  a great  many  differ- 
ent kinds  of  booklets,  ranging  from  the 
very  expensive  down  to  the  modest  folder, 
and  yet  the  selection  of  one  suitable 
to  your  individual  needs  should  not  prove 
a difficult  undertaking. 

Just  by  way  of  offering  some  help  along 
this  line,  we  reproduce  herewith  the  con- 
tents of  a most  artistic  and  effective  booklet 
distributed  by  the  Long  Island  Safe  Deposit 
Company  of  198  Montague  street,  Brooklyn, 
N.  Y.  It  bears  on  the  cover,  printed  in 
gold,  the  phrase — WHY  WORRY?  The 
first  page  starts  off  like  this: 

Why  Worry? 

Do  you  think  it  is  worth  while  to  worry 
about  the  safety  of  your  valuable  papers 
when  they  can  be  safeguarded  absolutely 
for  a trifle  over  a cent  a day? 

Renting  a box  in  the  great  vault  of  the 
Long  Island  Safe  Deposit  Company  Is  really 
Insurance  against  worry. 

For  the  small  sum  of  five  dollars  a year 
you  can  have  better  protection  here  than 
you  would  have  with  a thousand -dollar  safe 
in  your  own  office  or  residence. 

It  is  Impossible  for  the  average  private 
Individual  to  have  a safe  of  his  own  as  se- 
cure and  convenient  as  our  vault,  for  the 
simple  reason  that  this  vault  cost  more 
than  the  average  individual  could  afford. 

The  safe  deposit  vault  has  been  called 
the  community  strong  box.  The  cooperation 
of  a large  number  of  Individuals  makes  pos- 


sible this  plan  of  perfect  security  and  ren- 
ders personal  care  and  anxiety  in  watching 
and  guarding  valuables,  unnecessary. 

There  is  safety,  convenience  and  economy 
in  using  a private  safe  in  our  massive 
new  safe  deposit  vault. 

The  vault  work,  consisting  of  safe  deposit 
vault  and  silver  vaults,  is  built  entirely  in- 
dependent of  the  building  construction,  and 
upon  its  own  foundation.  It  is  one  of  the 
strongest  in  New  York  City.  In  its  con- 
struction are  employed  the  most  approved 
methods  and  materials,  so  that  the  vault 
is  absolutely  Impregnable. 

In  addition  to  these  vaults,  there  Is  ample 
space  for  the  storage  of  trunks,  the  month- 
ly rental  charge  being  nominal— according 
to  the  valuation  of  the  articles.  Our  own 
wagon  and  uniformed  attendant  calls  for 
and  delivers  trunks  and  packages. 

This  is  of  particular  Interest  to  house- 
holders who  expect  to  be  away  from  home 
for  a longer  or  shorter  period,  as,  for  in- 
stance, on  a summer  vacation.  If  you  ex- 
pect to  close  up  your  house  and  go  away, 
and  want  to  rest  assured  that  your  silver- 
ware, cut  glass  and  otner  valuables  of  that 
nature  are  perfectly  secure  in  your  absence, 
telephone  us,  600(1  Main,  or  drop  into  our 
office  at  No.  196  Montague  street,  and  ar- 
range for  the  storage  of  your  valuables  in 
our  great  vault.  Remember  that  our  own 
wagon  and  uniformed  attendant  will  call 
for  your  trunk,  case  or  parcel,  and  thus 
you  will  be  relieved  of  all  responsibility. 

In  the  transaction  of  business  with  this 
company  and  in  using  a safe  deposit  box 
here,  you  can  be  assured  of  perfect  privacy. 
There  are  private  rooms  and  tables  for  the 
use  of  customers  in  examining  the  contents 
of  their  safe  deposit  boxes,  putting  new 
papers  in  and  so  forth. 


Interior  View  of  Vault,  Long  Island  Safe,  Deposit  Company 


303 


Digitized  by 


Google 


THE  BANKERS  MAGAZINE 


39 1 


Office  and  Private  Booths 


Among  the  valuable  papers  and  articles 
that  we  can  store  away  safely  for  you 
are: 

Leases,  deeds,  abstracts,  mortgages,  con- 
tracts, partnership  agreements,  pension  pa- 
pers, naturalization  papers,  bonds,  stock 
certificates,  bank  books,  insurance  policies, 
receipts,  blue  pilnts,  rare  books,  plate,  and 
many  other  such  things. 

Have  you  anything  of  this  kind  that 
is  exposed  to  loss  or  destruction?  If  so, 
you  ought  to  store  them  in  our  vault  and 
insure  yourself  against  worry  as  to  their 
safety. 

You  do  not  need  to  be  a person  of  great 
wealth  to  use  a safe  deposit  vault  to  great 
advantage.  Persons  who  do  not  possess 
a great  many  valuable  papers  may  never- 
theless appreciate  the  •/isdom  of  protecting 
those  they  have  w’hen  they  can  do  so  ab- 
solutely for  as  small  an  outlay  as  five 
dollars  a year. 

It  may  be  that  a flve-dollar-a-year  box 
would  not  be  large  enough  for  your  require- 
ments. We  have  larger  ones— the  largest 
renting  for  $150. 

There  are  a great  many  things  that  could 
happen  to  your  valuables  left  at  home  or 


Manager’s  Office 


in  your  office  that  could  not  possibly  hap- 
pen to  them  when  stored  away  in  our 
Impregnable,  Gibraltar-like  safe  deposit 
vault. 

Why  take  chances?  Why  not  eliminate 
even  the  possibility  of  loss  by  renting  a 
box  in  our  fire  and  burglar-proof  vault? 

Every  year  fire,  burglary,  theft,  careless- 
ness, cause  the  loss  of  many  thousands  of 
dollars  in  actual  cash  kept  at  home  or  on 
the  person. 

Besides  the  sense  of  security  which  Is 
yours  when  your  valuables  are  safely  locked 
up  In  one  of  our  safe  deposit  boxes,  you 
will  find  it  a great  convenience  to  have 
your  securities,  bank  books,  papers,  etc., 
light  here  in  the  business  section  of  Brook- 
lyn, and  only  a few  minutes  from  the  heart 
of  Manhattan. 

In  this  way  you  avoid  the  necessity  of 
carrying  valuable  papers  to  and  from  your 
lesidence,  and  thus  do  away  with  the  possi- 
bility of  loss  by  carelessness  or  theft. 


Showing  the  Massive  Doors 


Whether  or  not  you  are  at  the  present 
moment  prepared  to  rent  a safe  deposit  box, 
we  wl.di  you  would  feel  at  liberty  to  come 
into  our  offices  in  the  basement  of  the  Title 
Guarantee  and  Trust  Company’s  new  build- 
ing, No.  196  Montague  street,  Brooklyn,  at 
any  time.  We  will  be  pleased  to  show  you 
all  the  details  of  the  security  and  con- 
venience of  our  vault  and  storage  rooms. 


YEGGMEN  BUSY  AGAIN 

AFTER  several  months  of  cessation  of 
k.  operations  in  Minnesota  the  bank 
cracksmen  got  busy  on  August  1 at 
Onamia,  Minn.,  blew*  the  safe  of  the  State 
Bank  of  Onamia,  secured  between  $3,500 
and  $3,000  and  escaped  in  a stolen  rig  to- 
ward Mille  Lacs.  Five  men  formed  the 
party.  A feature  of  the  event  was  the 
holding  up  of  J.  H.  McKenzie,  editor  of  the 
village  newspaper,  by  the  yeggs  on  Mr. 


Digitized  by  t^ooQle 


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SAFE  DEPOSIT 


395 


McKenzie’s  return  from  a night's  fishing 
trip.  He  was  forced  to  stand  by  with  arms 
in  the  air  while  the  bank  door  was  forced 
and  the  safe  blown.  Posses  formed  soon  af- 
terward scoured  the  country  around,  but 
without  success.  The  detectives  of  the  In- 
terstate Protective  Association  are  on  the 
case.  Onamia  is  situated  near  an  Indian 
reservation,  and  at  the  time  of  the  bank 
robbery  the  village  marshal  was  engaged  in 
quelling  an  incipient  Indian  outbreak  at  the 
edge  of  the  town.  The  Indians  were  in- 
toxicated and  fighting.  It  is  believed  the 
crafty  veggmen  supplied  the  liquor  to  get 
the  marshal  out  of  the  way. 


THEIR  OWN  BANKERS 

Trousers  and  Skirt  Prove  Poor  Safe  Depositor^  9 

GEORGE  HARVEY,  a farmer  living 
near  Duquoin,  111.,  will  recover  $2,250 
out  of  $3,250  which  be  brought  to  St. 
Louis  wrapped  in  a salt  sack  and  pinned  to 
a trousers  leg.  He  lost  it  in  walking  along 
the  streets,  and  his  unique  “safe  depository'* 
indirectly  leaves  him  short  exactly  $1,000. 

The  report  of  Mrs.  Mattie  Rich  of  503 
South  Broadw’av,  St.  Louis,  that  daylight 
robbers  with  revolvers  had  taken  $2,400 
from  her  room  led  to  the  recovery  of  Har- 
vey’s money.  After  she  had  told  the  story 
" detectives  found  the  money  in  a drawer  of 
her  dresser.  She  was  arrested  and  at  po- 
lice headquarters  confessed  that  she  had 
found  the  money  near  where  Haney  had 
lost  it.  She  admitted  she  gave  part  of  it 
to  friends. 

Mr.  and  Mrs.  T.  C.  Bennett  of  Bristol, 
Tenn.,  lost  heavily  in  a bank  failure  years 
ago  and  vowed  never  again  to  put  their 
trust  in  banks.  They  are  now  in  Hutchin- 
son j>enniless,  their  children  hungry.  They 
came  from  Bristol  with  their  entire  fortune 
of  $3,000  sewed  in  the  lining  of  Mrs.  Ben- 
nett’s skirt.  On  the  train  the  money  dis- 
appeared. 


A SAFE  DEPOSIT  COMPANY  IS 
LIABLE  ONLY  FOR  NEGLIGENCE 

THE  following  is  taken  from  the  Xew 
York  Journal  of  Commerce  and  Com- 
mercial Bulletin  and  should  be  of  in- 
terest to  the  readers  of  this  department: 

NEW  YORK,  Aug.  1,  1910.— 1.  Employees 
of  safe  deposit  companies  have  a key  which, 
with  the  customer’s  key,  is  used  to  open 
outer  boxes.  If  an  employee  should  rob 
a customer’s  box.  getting  at  it  by  some 
manipulation  of  keys,  would  the  company 
be  liable  for  the  loss? 

*2.  If  a safe  deposit  company’s  vault  be 
dynamited  and  a customer’s  box  Is  robbed, 
would  the  company  be  responsible  for  the 


loss?  What  is  the  liability  of  a safe  de- 
posit company  to  its  renters  of  boxes? 

C.  D. 

Reply. — 1.  A safe  deposit  company  is 
bound  to  employ  great  care  in  selecting 
employees,  it  must  not  accept  one  about 
whose  honesty  there  is  any  doubt,  and  it 
must  not  continue  a person  in  its  employ 
after  it  has  any  reasonable  ground  upon 
which  to  suspect  him.  That  is  the  full  ex- 
tent of  the  company’s  duty.  It  is  not  liable 
for  the  criminal  acts  of  its  employees.  If 
one  of  the  latter  should  steal  a customer’s 
property  the  company  could  be  held  only 
for  loss  by  negligence.  And  its  negligence, 
if  there  were  any,  would  lie  in  the  fact  that 
it  had  accepted  the  employee  without  suffi- 
cient inquiry,  in  the  first  place,  or  that  facts 
had  since  come  to  light  sufficient  to  raise  a 
doubt  of  the  employee’s  integrity,  and  that 
these  facts  were  known  to  the  company  or 
would  have  been  known  to  it  if  it  had  used 
a reasonable  degree  of  care  in  looking  after 
the  interests  of  its  customers.  If  negligence 
cannot  be  established  in  one  of  these  two 
wavs  the  company  cannot  be  held. 

2.  A safe  deposit  company  is  not  an  in- 
surer of  the  property  in  its  vaults.  If  a 
vault  is  blown  to  pieces  and  the  property 
taken,  the  company  is  not  liable  unless  neg- 
ligence on  its  part  can  be  shown,  it  may 
have  been  negligent  in  having  flimsy  doors 
that  could  easily  be  blown  to  pieces,  or  in 
failing  to  keep  a sufficiently  sharp  lookout 
for  safe-blowers.  Negligence  must  be  al- 
leged and  proved  or  the  company  cannot 
be  held. 


FIRST  POSTAL  SAVINGS  DEPOSI- 
TORY IN  WASHINGTON 

THE  first  postal  savings  depository  will 
probably  be  established  in  Washing- 
ton, where  it  will  have  the  close  su- 
pervision of  the  Board  of  Trustees  of  the 
Postal  Savings  Banks  System,  composed  of 
the  Postmaster-General,  Attorney-General 
and  Secretary  of  the  Treasury. 

Whether  the  branch  post  offices  in  East 
Washington  and  Georgetown  will  have  sav- 
ings banks  at  first  is  as  yet  undetermined.  It 
is  believed,  however,  that  soon  after  the  trus- 
tees have  satisfied  themselves  with  the  work- 
ings of  the  bank  at  the  main  office  banks  will 
be  incorporated  in  the  branches,  at  which 
perhaps  a better  test  of  this  system  could  be 
made.  It  is  quite  probable,  foo,  that  the 
first  extension  of  the  system  will  be  made 
to  Baltimore,  as  that  city  is  in  easy  reach 
of  the  officials  at  Washington. 

The  committee  working  on  plans  for  the 
system  is  said  to  have  adopted  pass  books 
instead  of  coupons  in  the  deposit  methods 
and  to  have  recommended  the  use  of  $10  and 
$100  bonds. 


Digitized  by  t^ooQle 


BANKING  PUBLICITY 

Conducted  by  T.  D.  MacGregor 


THAT  BANK  ACROSS  THE  WAY 

AN  OLD  CUSTOM  IN  VOGUE  FOR  YEARS  IN  A FINANCIAL  INSTI- 
TUTION THAT  WOULD  HAVE  BROUGHT  ABOUT  DISTRESSING 
CIRCUMSTANCES  HAD  NOT  AN  ENERGETIC  CASHIER 
CAPPED  THE  CLIMAX  AT  THE  PROPER  MOMENT 

By  Arthur  A.  Ekirch 
I 


44rT^HE  man  that  introduced  the  old  say- 
JL  ing,  ‘Competition  is  the  life  of 
trade,*  should  have  died  before  the 
thought  entered  his  brain,”  muttered  the 
president  of  the  Old  Town  Bank. 

“I  disagree  with  you  there,”  spoke  up 
Carson  the  cashier. 

‘‘We’ve  been  in  the  banking  business  thirty 
odd  years,  Mr.  Foster,  the  only  bank  in 
Wells  County.  Our  stability  and  conserva- 
tive methods  are  known  and  appreciated 
by  every  person  in  this  prosperous  com- 
munity. Some  of  our  depositors  have  been 
with  us  from  the  first  day  we  opened  for 
business  and  I venture  to  say,  if  competition 
does  enter  the  field,  we  will  prosper,  not 
perish.” 

“That’s  all  very  well,”  replied  the  presi- 
dent, “but  remember,  Carson,  if  the  Wells 
County  Bank  opens  across  the  way,  it  surely 
will  not  help  us  or  bring  us  any  new  busi- 
ness; rather  on  the  other  hand  I feel  they 
will  take  it  away  from  us.  Am  I not  right?” 

“I  think  not,  Mr.  Foster,”  the  cashier  re- 
plied with  emphasis.  “I  still  believe  as  I 
always  have  that  competition  is  the  life 
of—” 

“Hang  the  old  saying!”  interrupted  the 
president  angrily,  “there  never  was  any  truth 
in  it  and  there  never  will  be. 

“William  Hunter,  I understand,”  he  con- 
tinued in  harsh  tones,  ‘is  slated  for  presi- 
dent and  you  know  as  well  as  I,  that  any- 
thing Hunter  takes  hold  of  usually  turns 
out  successful.” 

Carson  nodded  his  head,  but  made  no  re- 
ply. 

The  Old  Town  Bank,  being  the  only  finan- 
cial institution  in  Wells  County  had  natural- 
ly been  a success  from  the  day  it  opened 
for  business,  back  in  the  seventies. 

They  never  advertised — why  should  they? 
Everybody  knew  the  bank  and  its  organizer 
and  Commander-in-chief,  Mr.  Foster. 

And  now  the  sad  awakening. 

Rumors  were  afloat  that  William  Hunter 
intended  if  possible  to  drive  the  Old  Town 
Bank  to  the  wall. 

II. 

Carpenters  and  painters  were  busily  en- 
gaged finishing  the  two-story  structure  which 

396 


had  been  erected  to  house  the  new  institu- 
tion. 

The  following  week  the  Wells  County 
Bank  opened  for  business.  The  new  gilt 
sign  on  the  roof  glittered  in  the  morning 
sunlight  and  cast  it  golden  reflection  across 
the  street,  where  the  Old  Town  Bank  stood, 
as  it  had  for  the  past  thirty  years,  with  its 
dismal  front  and  old  style  appearance. 

Carson  was  in  an  unusually  happy  mood 
as  he  entered  the  bank  on  this  particular 
morning.  President  Foster,  who  had  arrived 
at  an  early  hour,  sat  at  his  desk  gazing 
across  the  street.  The  Wells  County  Bank 
building  seemed  to  have  a mocking  fascina- 
tion about  its  construction  that  drew  his 
attention. 

“Here  Carson !”  he  called,  noting  the 
cashier’s  arrival.  “Read  that  sign  the  Wells 
people  have  just  tacked  up  in  their  window.” 
Carson  entered  the  president’s  office  and 
stepping  over  to  the  window,  read  aloud: 
“Three  per  cent,  paid  on  deposits,  sub- 
ject to  check.” 

“Three  per  cent. — subject  to  check!”  re- 
peated the  president  in  tones  of  rage.  “The 
pirates;  there  should  be  a law  prohibiting 
the  rascals  from  paying  exorbitant  interest 
rates  and  by-jingo  I’ll  see  that  there  is 
before  many  moons.  I’ll — ” 

“Mr.  Foster !”  interrupted  the  cashier,  “it 
is  as  I expected.  The  battle  is  on  and 
we  must  fight.  It  is  useless  to  grasp  the 
bull  by  the  horns,  it  will  be  far  more  busi- 
nesslike to  wave  the  red  flag  and  tantalize 
the  beast.  In  other  words,  Mr.  Foster,  the 
time  has  arrived  when  we  must  advertise.” 
“ADVERTISE!”  burst  forth  the  presi- 
dent in  tones  of  rage;  “who  ever  heard  of  a 
well-managed,  conservative  institution  like 
the  Old  Town  Bank  advertising? 

“We’ve  been  in  the  banking  business  a 
long  time,”  he  continued,  “and  never  have 
we  spent  one  penny  for  publicity.” 

“I  understand,”  retorted  the  cashier,  “but 
conditions  at  the  present  time  are  radically 
different  from  those  of  the  past  We  now 
have  the  bank  across  the  way  to  contend 
with  and  I can  assure  you,  Mr.  Foster, 
that  unless  we  do  spend  a few  pennies  for 


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BANKING  PUBLICITY 


397 


publicity  our  future  growth  can  be  counted 
on  your  finger  tips.” 

The  president  made  no  reply,  so  Carson 
withdrew  from  the  office  and  returned  to 
his  desk. 

As  the  cashier  was  leaving  for  home  this 
particular  evening,  the  paying  teller  called 
to  him  and  stated  that  Judge  Long  (one 
of  their  best  depositors)  had  withdrawn 
fifteen  thousand  dollars. 

“Did  he  say  what  he  intended  to  do  with 
the  money?”  queried  the  cashier. 

“Yes,  it  is  his  intention  to  deposit  it 
with  the  Wells  County  Bank  where  it  will 
earn  three  per  cent,  interest.” 

The  cashier  made  no  reply,  aside  from 
a sharp  “good-night”  and  started  on  his 
journey  homeward. 

Across  the  street,  an  electric  sign  blazed 
forth  in  bold  letters  the  name  “WELLS 
COUNTY  BANK.”  Carson  gritted  his 
teeth  and  passed  on. 

After  dinner  he  called  upon  Mr.  Thorn, 
one  of  the  directors  of  the  new  institution 
whom  he  knew  quite  intimately  and  learned 
from  him  that  an  appropriation  of  one 
thousand  dollars  had  been  voted  by  the 
members  of  his  board  to  carry  on  an  ad- 
vertising campaign. 

“You  need  not  worry,”  said  Mr.  Thom, 
offering  Carson  a chair,  “or  feel  that  our 
intention  in  organizing  the  Wells  County 
Bank  was  to  compete  with  your  good  insti- 
tution. I have  learned  from  good  authori- 
ty that  something  like  one  million  dollars 
has  been  deposited  by  the  mill-hands  and 
farmers  of  Dunham  and  the  surrounding 
suburbs  in  ‘banking  by  mail’  institutions 
throughout  the  country.” 

“How  do  you  account  for  this?”  asked 
Carson  eagerly. 

“The  progressive  banks  of  the  country,” 
replied  Mr.  Thom,  “advertise  for  mail  ac- 
counts and  offer  four  per  cent,  interest  as 
a special  inducement  to  deposit  with  them. 
They  are  unquestionably  'safe  and  you 
know  as  well  as  I that  everybody  is  as  anx- 
ious to  get  as  much  return  on  their  money 
as  possible.” 

Carson  nodded  in  the  affirmative. 

“Mr.  Hunter  and  myself  feel  that  this  • 
money  rightly  belongs  in  Wells  County  and 
it  is  our  intention  to  carry  on  an  advertis- 
ing campaign,  in  the  hope  of  winning  the 
good  will  and  business  of  the  mill-hands 
and  farmers  of  the  various  suburbs  and  at 
the  same  time  increase  business  in  general.” 

“Glad  you  dropped  in,”  said  Mr.  Thom, 
as  Carson  was  leaving,  “and,  by  the  way,  al- 
wavs  remember  that  ‘He  who  is  biz  and 
wants  to  rise,  must  either  bust  or  advertise.” 

III. 

As  days  wore  on,  the  Old  Town  Bank’s 
deposits  grew  less.  The  bank  across  the 
way,  however,  from  all  accounts,  seemed  to 
be  enjoying  the  fruits  of  success. 

Mr.  Foster  grew  restless,  and  Carson, 


who  usually  bore  a cheery  expression,  took 
oh  a haggard  look. 

The  cashier  realized  that  competition  was 
in  no  way  bettering  the  condition  of  the 
Old  Town  Bank — it  was  in  reality  driving 
it  slowly,  but  surely,  to  eternity. 

Conditions  continued  to  grow  worse.  The 
cash  reserve  was  running  low  and  unless 
something  was  done  and  done  mighty  quick, 
loans  would  have  to  be  called. 

“If  the  president  would  only  brush  the 
cobwebs  from  before  his  eyes,”  murmured 
Carson,  “and  acquiesce  to  an  advertising 
campaign,  it  would  not  be  long  before  we 
would  gain  all  we  have  lost” 

He  arrived  at  the  bank  a little  later  than 
usual  one  morning  and  failing  to  find  the 
president  on  hand,  set  to  work  opening  the 
vault 

The  clock  in  a far  comer  of  the  bank 
struck  ten.  Carson  grew  uneasy. 

“Note,  sir!”  exclaimed  Jones,  the  porter, 
handing  the  cashier  a small  envelope  ad- 
dressed in  feminine  handwriting. 

Carson  recognized  the  writing  as  that  of 
the  president’s  daughter  and  tearing  it  open 
in  haste,  read: 

Winfried  Carson,  Esq.,  Cashier  Old  Town 
Bank,  Wells  County. 

Dear  Mr.  Carson:  Father  died  suddenly 
this  a.  m.  Jaote  Foma. 

The  cashier  gasped  and  turned  pale. 

“Mr.  Foster  dead  I”  he  stammered.  “It 
can’t  be  true. 

IV. 

A meeting  of  the  board  of  directors  was 
called  and  Vice-President  Brown  imparted 
the  sad  news. 

Carson  took  this  opportunity  for  enlight- 
ening the  members  of  the  board  of  the  true 
condition  of  the  bank.  He  also  emphasized 
the  fact  that  the  old  methods  employed  by 
the  bank  would  no  longer  hold  good  and 
closed  by  asking  that  an  advertising  appro- 
priation'be  voted  upon. 

The  minutes  of  the  meeting  showed  that 
an  appropriation  of  one  thousand  dollars 
had  been  made,  to  be  used  as  Mr.  Foster’s 
successor  saw  fit;  his  successor  being  Win- 
fried  Carson. 

Mr.  Carson’s  election  to  the  presidency  of 
the  Old  Town  Bank  was  received  by  the 
townspeople  with  much  enthusiasm  and  all 
hands  felt  certain  that  it  was  a step  in  the 
right  direction. 

V. 

About  a year  ago  I had  occasion  to  visit 
Wells  County,  ana  while  in  that  vicinity  I 
thought  it  advisable  to  call  upon  my  old 
friend,  Carson,  slap  him  on  the  back,  hand 
him  a perfecto  and  ask  for  one  of  the 
bank’s  last  statements. 

The  train  drew  into  the  station  at  2 p.  m. 
Alighting,  I made  my  way  up  Main  street, 
turned  the  corner  of  Yonge  avenue,  and  was 


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39  8 


THE  BANKERS  MAGAZINE 


astonished  to  find  the  “Old  Town  Bank*' 
housed  in  a new  building. 

“Times  must  be  prosperous  in  this  vicini- 
ty,” I exclaimed,  as  Carson  arose  from  his 
desk  to  greet  me. 

“Sort  of,  Ned,”  he  replied  in  a jovial 
manner.  “We  put  them  out  of  business  a 
short  time  ago;  purchased  every  share  of 
their  stock;  moved  into  their  quarters  and 
increased  our  deposits  over  a half  a million 
dollars.” 

“Consolidated  with  that  bank  across  the 
way?”  I queried  anxiously. 

“Not  exactly,  Ned;  we  beat  them  at  their 
own  game.  You  will  remember  my  prede- 
cessor had  little,  if  any,  faith  in  publicity. 
He  fought  shy  of  all  attempts  toward  ad- 
vertising and  thus  decreased  the  bank’s 
business.  Upon  his  death  I took  the  helm, 
and  after  a strenuous  tug-of-war,  lasting 
a little  over  a year,  I succeeded  in  proving 
to  the  population  of  Wells  County  that  the 
one  and  only  bank  in  the  county  was  the 
Old  Town. 

“I  planned  the  advertising  campaign  my- 
self, Ned,  and  the  entire  cost  amounted  to 
only  seven  hundred  dollars,  three  hundred 
less  than  my  board  appropriated. 

“The  local  papers  were  brought  into  play 
and  an  educational  ‘ad’  was  inserted  weekly. 
The  text  matter  was  straight  from  the 


shoulder  talk;  not  the  usual  boiler  plate  copy 
peddled  by  various  concerns  and  sold  at  so 
much  per  week. 

“The  newsaper  ‘ads’  were  keyed  and  all 
inquiries  were  at  once  referred  to  our  cash- 
ier, who  followed  them  up  either  by  letter 
or  in  person.  Facsimile  letters  were  next 
brought  into  use  and  mailed  to  a list  of 
ten  thousand  farmers,  mill  hands  and  towns- 
people in  the  county. 

“The  letters  were  followed  up  with  a neat 
booklet,  explaining  the  bank’s  mission,  the 
excellent  facilities  for  handling  accounts, 
the  liberal  loan  accommodations,  and  last, 
but  far  from  least,  a special  note  was  made 
as  to  the  bank’s  long,  prosperous  and  con- 
servative career. 

“Advertising  has  made  the  Old  Town 
Bank  what  it  is  today,  Ned,”  Carson  con- 
tinued. “Without  it  we  would  have  per- 
ished; with  it  we  have  succeeded.” 

Glancing  at  my  timepiece  I found  I had 
exactly  seven  minutes  to  catch  the  express 
for  Wayne  Junction,  where  a business  ap- 
pointment awaited  me. 

“I’m  off,  Carson,”  I exclaimed,  arising, 
and  reaching  for  my  hat. 

“By  the  way,  Ned,  what  line  of  business 
are  you  in?”  he  called  after  me. 

“Selling  boiler  plate  copy!”  I shouted  in 
reply,  and  was  off. 


ADVERTISING  CRITICISM 

Comment  on  Advertising  Matter  Submitted  for  Criticism 


WE  are  in  receipt  of  the  following  let- 
ter from  R.  W.  Peery,  cashier  of 
the  Buchanan  National  Bank  of 
Buchanan,  Va. 

The  publicity  department  of  your  maga- 
zine, in  which  you  present  “ads.”  as  used  by 
different  banks  throughout  the  country,  to- 
gether with  your  criticisms  on  same,  have 
proven  very'  interesting,  as  well  as  bene- 
ficial, to  me. 

Ours  is  strictly  a country  bank,  being  lo- 
cated in  a town  of  about  1,200  people,  sur- 
rounded by  substantial,  though  not  wealthy, 
farmers.  We  do  not  have  to  preach  saving 
to  our  customers,  but  must  show  to  the 
people  that  we  offer  a safe  place  for  their 
money,  and  for  this  reason  we  bring  out  in 
our  folders  and  newspaper  talk  the  idea 
of  Government  supervision,  etc. 

For  y'our  consideration  we  are  enclosing 
newspaper  clipping  gotten  up  in  form  of 
contributed  article,  which  touches  on  pos- 
tal banks  as  well  as  Government  super- 
vision. I also  am  enclosing  copy  of  cer- 
cular  letter,  together  with  statement,  we 
have  been  mailing  out.  We  believe  this 
direct  plan  of  advertising  very  effective,  and 
do  most  of  our  advertising  in  this  w’ay. 

Any  word  of  criticism  you  may  make  will 
be  highly  appreciated,  as  we  are  open  for 
criticism,  realizing  our  efforts  are  far  from 


perfect  and  that  to  perfect  our  defects  we 
should  be  open  to  an  unbiased  report  on 
what  w’e  may  attempt  In  any  line. 

The  advertisement  referred  to  was  in  the 
form  of  a reading  notice,  as  follows: 

U.  S.  GOVERNMENT  SUPERVISION  OF 
BANKS. 

It  is  said  that  a great  many  of  the  for- 
eign laborers  who  come  to  our  country,  not 
being  familiar  with  our  banking  system, 
put  their  savings  in  the  form  of  postal 
money  orders,  knowing  the  post  office  de- 
partment is  a branch  of  the  Government. 
This  kind  of  banking,  however,  does  not 
prove  attractive  to  our  people,  as  there  is 
no  return  on  the  deposit,  and  the  strong 
banks  operating  offer  not  only  safety'  for 
money  left  with  them,  but  a return  of 
from  three  per  cent,  to  four  per  cent,  on 
deposits  in  the  form  of  certificates  and  sav- 
ings accounts. 

No  doubt  postal  savings  banks  will  at- 
tract deposits,  but  the  return  will  be  so 
small  the  establishment  of  postal  banks  will 
not  disturb  the  funds  now  with  the  com- 
mercial and  savings  banks,  but  will,  on  the 
other  hand,  tend  to  increase  the  actual 
money  in  circulation  by'  bringing  out  money 
that  has  never  been  in  bank,  the  money 
placed  with  the  postal  banks  going  Into  the 


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BANKING  PUBLICITY 


399 


channels  of  trade  through  the  national  banks 
designated  as  government  depositories  of 
such  funds. 

National  banks  offer  a high  degree  of 
safety  to  depositors,  owing  to  the  fact 
of  direct  government  supervision  of  their 
business,  double  stockholders’  liability,  na- 
tional. bank  examiners,  etc. 

In  the  establishment  of  the  national 
banking  system,  the  Government  has  made 
laws  looking  particularly  to  the  interest 
of  the  depositor,  and  the  tendency  with  the 
present  comptroller,  who  has  charge  of  this 
branch  of  the  Government,  is  to  make  even 
more  stringent  regulation  of  these  banks. 

The  Buchanan  National  Bank,  while  one 
of  the  country’s  newest  financial  institu- 
tions, has  resources  of  over  $130,000.  The 
capital  and  surplus  of  the  bank  is  $27,000, 
which,  together  with  stockholders’  liability, 
make  total  security  to  depositors  $52,000. 
New  accounts  are  cordially  Invited,  both 
checking  and  certificates  of  deposit.  In 
placing  yoiir  banking  business  with  the 
Buchanan  National  you  have  advantage  of 
Government  supervision  of  your  money,  as 
well  as  a safe  and  conservative  manage- 
ment of  the  bank’s  affairs. 

BUCHANAN  NATIONAL#  BANK. 


A recent  form  letter  which  this  bank  sent 
out  with  its  statement  reads  as  follows: 

To  Our  Friends  and  Customers: 

We  are  enclosing  herein  financial  state- 
ment of  condition  of  this  bank  as  rendered 
to  the  Comptroller  of  the  Currency  on  June 
30,  from  which  you  will  see  something  of 
the  growth  of  our  institution. 

It  is  exceedingly  gratifying  to  stockholder* 
and  mangement  of  the  Buchanan  National 
that  such  a healthy  growth  can  be  shown, 
and  wre  desire  to  express  our  appreciation 
for  the  support  given  us  by  the  business 
public. 

If  we  have  been  of  service  to  you  in  the 
handling  of  your  banking  business,  we 
would  highly  appreciate  a good  word  spoken 
in  our  behalf  to  your  friends,  with  a view 
of  securing  them  as  depositors. 

With  best  wishes,  we  are, 

In  regard  to  this  advertising,  we  can  only 
say  that  the  Buchanan  National  Bank  is  on 
the  right  track,  and  the  matter  submitted 
is  very  good  inded.  There  are  some  things 
a new  bank  can't  shout  about  very  much 
so  that  it  behooves  it  to  make  the  most  of 
the  talking  points  it  does  have.  For  a new 
national  bank  government  supervision  is 
certainly  a strong  point  to  be  emphasized 
in  advertising. 


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400 


TUB  BANKERS  MAGAZINE 


The  bank  of  Baton  Rouge,  La.,  writes: 
Gentlemen: 

Some  time  ago  you  kindly  passed  on  some 
advertising  matter  we  sent  you.  Since 
then  we  have  tried  to  improve,  and  so 
would  like  an  opinion  from  you  now. 

We  therefore  enclose  some  of  our  recent 
advs. 

Would  you  take  your  hammer  to  these 
and  knock  the  weak  spots  out,  so  that  we 
may  see  how  we  can  do  better. 

Modern  advertising  is  an  entirely  new 
field  to  us. 

Thanking  you  for  your  attention,  we  are. 

We  reproduce  a group  of  this  bank’s  news- 
paper advertisements.  They  speak  for  them- 
selves. We  notice  a decided  improvement  in 
this  institution’s  advertising.  This  is  bound 
to  be  the  case  where  the  man  in  charge 
makes  a careful  study  of  publicity  work. 
The  simple  but  strong  typographical  dis- 
play— not  too  many  different  styles  of  type 
and  the  judicious  use  of  white  space — is  a 
good  point  about  these  advertisements. 

J.  N.  Edlefsen,  assistant  cashier  of  the 
Pennsylvania  Bank,  St.  John’s,  Oregon, 
writes: 

In  April  I sent  you  one  of  our  folders 
that  we  put  out  at  that  time,  and  you  were 
kind  enough  to  pass  your  opinion  on  same 
by  letter  as  well  as  an  article  in  the  June 
number  of  the  Bankers  Magazine. 

The  greatest  defect  of  those  folders  was 
undoubtedly  primitive  print  and  paper.  We 
have  endeavored  to  remedy  such  defects  in 
the  folder  put  out  a week  ago,  of  which 
we  are  enclosing  a sample. 

If  I am  not  imposing  on  your  valuable 
time,  I should  be  very  glad  to  have  your 
criticism  on  same. 

The  new  folder  is  much  better  than  the 
former  one.  It  is  printed  on  white  pebbled 
stock  in  brown  ink  and  is  legible  and  at- 
tractive. The  subject  matter  is  good,  most 
of  the  space  being  taken  up  with  a de- 
tailed explanation  of  the  bank’s  statement, 
clear  enough  so  that  “he  who  runs  may 
read.” 

A GOOD  BOOKLET 

44TTTHY  a State  Bank”  is  the  title  of 
VV  an  excellent  booklet  issued  by  the 
Deposit  Bank  of  Winona,  Minn., 
a copy  of  which  is  furnished  us  by  Assistant 
Cashier  E.  E.  Shepard.  It  is  a particularly 
well  printed  job  and  the  arguments  con- 
tained therein  are  right  to  the  point. 

The  booklet  has  this  to  say  about  the 
Minnesota  Banking  Laws: 

The  present  Minnesota  State  Banking  Law 
was  passed  as  recently  as  two  years  ago. 
The  lighter  machinery  of  the  State  Legisla- 
ture responds  more  quickly  to  the  demands 
of  the  people  than  the  more  ponderous  ma- 
chinery of  our  National  Congress.  Our 


State  laws  are  intended  to  cover  our  own 
peculiar  local  needs  and  can  be  adapted 
more  perfectly  to  the  conditions  of  a par- 
ticular section.  On  the  other  hand,  it  is  ex- 
ceedingly difficult  to  make  one  law  for  the 
whole  United  States  that  will  fit  the  widely 
differing  needs  of  widely  separated  sections. 
In  respect  to  banking  laws,  what  might  be 
well  enough  for  New  York  City,  a commer- 
cial centre,  might  not  do  at  all  for  Winona, 
a farming  and  manufacturing  centre. 

Our  recent  Minnesota  State  Banking  Law 
is  as  perfectly  adapted  to  conditions  in  Min- 
nesota as  banking  experts  could  make  it. 
The  best  features  of  the  National  Banking 
Law  and  of  other  State  laws  were  used  in 
drafting  it,  and  improvements  were  made 
where  experience  had  shown  weak  points  in 
other  laws. 

Wh> 


SOUND  ADVERTISING  TALKS 

EST.  ELMO  LEWIS,  advertising  man- 
• ager  of  the  Burroughs  Adding  Ma- 
chine Company,  has  been  doing  con- 
siderable talking  before  gatherings  of 
bankers  and  business  men  recently  on  the 
subject  of  advertising. 

Following  are  extracts  from  two  of  his 
recent  addressses: 

At  every  stage  of  business  development 
education  Is  required  on  both  the  seller’s  and 
the  buyer’s  side  of  the  case.  Only  within 
the  past  five  years  have  bankers  seemed  to 
realize  that  the  education  of  the  public 
was  required  in  order  to  bring  into  circula- 
tion the  dead,  inactive  money  hidden  and 
hoarded  in  the  parlor  stove,  the  old  stock- 
ing and  in  the  tea  caddy  in  the  cupboard.  It 
has  been  said  that  one-fifth  of  our  total  cir- 
culation was  “dead”  because  of  lack  of  con- 
fidence In  our  monetary  institutions.  Somo 
banker  with  a vision  saw  this  condition  and 
evolved  a theory  that  he  could  educate  the 
people  into  a greater  confidence  in  banks, 
by  letting  them  know  more  about  banks  and 
bankers.  He  had  confidence  in  the  people, 
and  he  let  them  see  it.  He  advertised  that 
confidence  and  created  a new  business. 

The  advertising  man  caters  to  no  class, 
except  his  possible  customers.  He  has  no 
end  save  results.  He  has  no  ethics  save 
service.  He  has  no  Ideals  save  making  good. 
He  has  no  rigid  theories  bound  up  in  the 
winding-sheet  of  sacred  economies.  His 
work  is  to  know  each  day  what  the  Great 
American  Public’s  heart  is  turned  to,  and 
what  its  head  is  thinking. 

This  is  a vital  thing— this  human  con- 
fidence we  are  dealing  in.  It  is  a part  of  the 
web  and  woof  of  our  American  business  life 
— don’t  fight  It — don’t  try  to  ignore  it.  You 
can’t  win  the  fight— and  you  can’t  get  along 
without  the  public’s  confidence  and  sym- 
pathy. You  can  lead  this  public — for  there 
is  nothing  so  childlike  and  faithful  as  this 
public  of  ours— with  its  friends  whom  It 
knows.  It  will  folow  even  unworthy  lead- 
ers whom  it  believes  in  and  admires.  It  will 


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BANKING  PUBLICITY 


401 


A Pittsburgh  Bank  Ad.  in  the  Serb  National  Paper 


go  to  war  for  the  men  who  have  proven 
worthy  of  its  confidence. 

I plead  today  with  you  for  a larger  pub- 
lic sympathy  with  your  people  and  mine. 
You  need  it  most  of  all— you  men  of  money, 
you  who  must  enter  through  the  needle's  eye, 
and  how  like  a needle's  eye  is  the  entrance 
for  the  rich  man,  to  the  heart  of  a people. 

You  need  this  publicity  most,  you  men  of 
wealth,  because  it  is  your  privilege  to  de- 
vote yourselves  to  the  public  weal.  We  give 


you  a privilege,  yes,  we  exact  the  price — 
fealty  and  single-hearted  devotion  to  duty. 

I have  tried  to-day  to  show  you,  at  the 
risk  of  being  prosy  and  trite,  one  or  two 
fundamentally  wrong  things  that  are  the  ex- 
cuse for  present  day  public  suspicion. 

This  is  the  day  for  fair  men,  unselfish  men, 
courageous  men. 

They  are  not  found  in  the  star  chambers 
or  in  the  secret  conferences. 


HOW  BANKS  ARE  ADVERTISING 

Note  and  Comment  on  Current  Financial  Publicity 


THE  Merchants-Laclede  National  Bank 
of  St.  Louis  issued  an  attractive 
brochure  giving  historical  matter  re- 
garding early  St.  Louis.  The  booklet,  enti- 
tled “Laclede,  the  Founder  of  St.  Louis,” 
was  written  by  Walter  B.  Stevens.  The  spe- 
cial occasion  for  the  memorial  is  explained 
thus: 

In  memory  of  the  founder  of  St.  Louis, 
landmarks — a street  and  a park — have  been 
named,  corporations  have  been  titled,  and 
celebrations  have  been  held.  But  during  the 
1+6  years  of  the  existence  of  this  commu- 
nity no  monument  has  been  reared  to  the 
merchant — Laclede. 

When  the  banking  room  of  the  Merchants- 
Laclede  National  Bank  of  St.  Louis  was  re- 
modeled, a place  of  honor  was  made  above 
the  entrance.  By  the  unanimous  vote  of  the 
directors,  it  was  decided  to  put  there  the 
bust  (in  bronze)  of  Laclede,  whose  name 
has  been  borne  by  the  institution  nearly  half 
a century.  The  commission  has  been  exe- 
cuted by  George  Julian  Zolnay.  The  time 
is  deemed  fitting  to  recall  the  founder’s  per- 
sonality and  to  present  a concise  narrative 
of  the  founding,  with  the  reasons  why  St. 
Louis  may  feel  pride  therein. 

The  Mkrchaxts-Laclede  National  Bank 
or  St.  Lons. 


Another  historical  bank  publication  is  a 
cloth-bound  book  entitled,  “A  Century  of 


the  National  Bank  of  the  Northern  Liber- 
ties of  Philadelphia.”  This  splendid  work 
was  prepared  by  Lemuel  C.  Simon,  cashier 
emeritus  of  the  institution.  The  book  con- 
sists of  over  fifty  pages  and  is  thoroughly 
illustrated  by  half-tones.  Altogether  it  is 
a model  for  a commemorative  work  of  that 
kind. 


The  Old  National  Bank  of  Spokane  makes 
good  use  of  space  on  a postcard  by  the  map 
and  copy  reproduced  herewith. 


The  Mercantile  National  Bank  of  St. 
Louis  took  advantage  of  the  fact  that  Henry 
Aehle  of  its  Transit  Department  was  a 
delegate  to  the  recent  A.  I.  B.  convention  at 
Chattanooga  by  sending  out  a postcard  with 


Good  Postcard  Ad. 


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402 


THE  BANKERS  MAGAZINE 


a picture  of  the  bank  building.  Mr.  Aehle 
was  represented  as  saying:  ‘‘Where  I work. 
I will  meet  you  at  the  convention/’ 


The  Eighth  National  Bati«c  of  Philadel- 
phia sent  out  to  its  customers  a neat  book 
containing  “things  every  depositor  should 
know.”  It  is  written  in  a plain  and  concise 
way,  avoiding  as  much  as  possible  the  use 
of  technical  terms. 


The  Salem  (Mass.)  Five  Cents  Savings 
Bank  some  time  ago  published  an  eight- 


page  advertisement  in  the  Salem  Evening 
A ewe,  giving  a complete  list  of  depositors' 
accounts  by  number  and  also  a statement  of 
the  bank’s  own  investments.  The  number  of 
accounts  was  24,751  and  the  total  deposits, 
$8,202,167.94.  There  is  a vast  amount  of 
work  connected  with  such  an  advertisement, 
but  it  makes  a correspondingly  strong  piece 
of  publicity. 

The  First  National  Bank  of  Norfolk,  W. 
Va.,  is  an  aggressive  advertiser.  It  recently 
printed  an  interesting  booklet  in  the  Italian 
language  for  the  benefit  of  the  large  popu- 
lation of  that  nationality  in  its  vicinity. 


THE  AMERICAN  EXCHANGE  NATIONAL  BANK 

OF  NEW  YORK 

A MORE  MODERN  POLICY  ADOPTED  BY  THIS  OLD  AND  SUCCESSFUL 

INSTITUTION 


WHEN  Lewis  L.  Clarke  was  elected 
by  the  board  of  directors  of  The 
American  Exchange  National  Bank 
of  New  York  as  president  of  the  bank,  to 
fill  the  office  so  long  and  ably  occupied  by 
his  distinguished  father,  the  late  Dumont 
Clarke,  the  bank  found  itself  facing  a 
unique  situation. 

From  1857  The  American  Exchange  Na- 
tional Bank  had  adhered  with  unfaltering 
tenacity  to  the  principle  that  the  payment 
of  interest  on  deposits  was  opposed  to  the 
best  interests  of  the  banking  and  commer- 
cial world,  and  during  that  time  the  bank 
had  to  face  the  vigorous  and  pecuniarily 
attractive  competition  of  its  neighbors,  who 
offered  interest  on  current  balances.  As  a 
consequence,  though  the  bank  prospered  it 
did  not  grow  in  proportion  to  the  wonder- 
ful business  development  of  the  country. 

The  new  administration,  while  recogniz- 
ing the  merit  of  the  principle  of  the  non- 
payment of  interest  on  deposits  as  an 
abstract  proposition,  discerned  with  good 
judgment  the  utter  lack  of  any  benefit  to 
the  community  by  the  adhesion  to  this  prin- 
ciple by  one  or  two  banks  in  the  face  of 
an  almost  universal  practice  of  the  payment 
of  interest  on  bank  balances  by  the  fore- 
most banks  of  the  country  in  every  large 
financial  centre.  The  enormous  growth  of 
the  trust  companies  had  compelled  banks 
to  meet  their  competition.  The  payment  of 
interest  on  balances,  while  open  to  grave 
objection,  had  become  a fixed  banking  cus- 
tom. 

With  due  respect  to  his  father's  ideas  of 
banking,  Lewis  L.  Clarke,  with  the  consent 
and  help  of  his  board  of  directors,  has  suc- 
cessfully inaugurated  the  interest-paying 
plan  as  one  of  the  first  acts  of  his  admin- 
istration. 


As  evidence  that  the  change  of  policy  has 
been  a successful  one,  by  a comparison  of 
the  Comptroller’s  calls  of  June,  1909,  and 
June,  1910,  the  bank’s  net  deposits  have  in- 
creased about  $7,000,000.  This  is  hardly  a 
fair  comparison,  since  the  new  plan  only 
became  effective  about  thirty  days  before 
the  last  official  report  of  condition.  But 
it  shows  that  The  American  Exchange  Na- 
tional Bank  is  coming  into  its  own  and 
that,  too,  quite  rapidly. 

Away  back  in  the  year  1888,  on  the  14th 
day  of  September,  The  American  Exchange 
Bank  was  organized,  with  a capital  of  $5.- 
000,000.  it  was  then  the  largest,  and  for 
many  years,  the  second  largest,  capitaliza- 
tion of  any  hank  in  this  country.  On  June 
30,  1865,  it  was  nationalized  as  The  Amer- 
ican Exchange  National  Bank. 

Lewis  L.  Clarke,  president  of  The  Amer- 
ican Exchange  National  Bank,  is  in  the  prime 
of  life,  being  in  his  fortieth  year.  He  en- 
tered the  service  of  the  bank  March  17, 1889, 
serving  his  apprenticeship  in  its  various  de- 
partments, in  time  becoming  secretary  to  the 
president.  This  position  he  held  for  about 
five  years,  during  which  time  he  was  adding 
to  his  store  of  banking  knowledge  and  ex- 
perience. Three  years  ago,  w'hile  acting  as 
assistant  cashier,  the  call  came  to  go  up 
still  higher.  He  was  made  vice-president, 
the  position  he  held  until  this  spring,  when 
he  was  unanimously  chosen  to  the  presi- 
dency. 

Following  Mr.  Clarke’s  death  and  the  elec- 
tion of  I^ewis  L.  Clarke,  Edward  Burns 
was  elected  vice-president  of  the  bank ; Wal- 
ter II.  Bennett  was  appointed  cashier  and 
A.  K.  de  Guiscard,  assistant  cashier. 

Mr.  Burns  has  been  connected  with  the 
bank  for  forty-five  years,  entering  it  in 
1865  at  the  bottom  of  the  ladder.  He  was 


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BY-LAWS  OF  NATIONAL  CURRENCY  ASSO, 


403 


made  assistant  cashier  in  1881,  and  cashier 
in  1887,  in  which  office  he  served  until  his 
election  as  vice-president. 

Mr.  Bennett  started  his  business  career 
in  the  dry  goods  district  and  was  for  a 
time  with  R.  G.  Dun  & Co.,  and  entered 
the  bank  in  1886  as  a clerk,  worked  through 
the  various  departments,  and  was  appointed 
assistant  cashier  in  1893,  and  vice-president 
and  cashier  in  1910.  At  the  recent  annual 
convention  of  the  New  York  State  Bankers’ 
Association,  Mr.  Bennett  was  honored  with 
the  vice-presidency  of  the  association. 

A.  K.  de  Guiscard  entered  the  bank  in 
1804  as  a clerk,  and  worked  through  the 
various  departments,  and  at  the  time  of 
his  appointment  as  assistant'  cashier  was 
general  bookkeeper. 

In  July  of  this  year,  Arthur  P.  I^e, 
FJbert  A.  Bennett  and  George  C.  Haigh 
were  appointed  assistant  cashiers.  The  ex- 
perience of  the  new  assistant  cashiers  in 
The  American  Exchange  National  Bank 


have  been  similar  to  those  of  Mr.  Burns 
and  Mr.  Bennett.  Each  came  to  the  bank 
in  boyhood  and  have,  by  their  individual 
merit,  worked  their  way  up  to  official  posi- 
tions. 

Mr.  Lee  is  but  thirty-nine  years  of  age, 
yet  has  been  with  the  bank  since  1885,  a 
period  of  twenty-five  years.  He  was  the 
demand  loan  clerk.  Elbert  A.  Bennett,  who 
by  the  way,  is  not  related  to  Vice-President 
Bennett,  came  to  the  bank  in  1889  and  is 
now  but  thirty-seven  years  of  age.  He  has 
spent  twenty-one  years  in  the  service  of  the 
institution.  George  C.  Haigh  is  the  young- 
est of  the  officers,  being  but  thirty-three 
years  of  age.  He  has  been  employed  in 
the  bank  since  1893  and  was  of  late  years 
the  manager  of  the  credit  department. 

The  principle  of  rewarding  ability,  ef- 
ficiency and  fidelity  has  evidently  been  fully 
carried  out  by  The  American  Exchange  Na- 
tional Bank. 


BY-LAWS  OF  THE  NATIONAL  CURRENCY  ASSOCI- 
ATION OF  THE  CITY  OF  NEW  YORK 


IN  our  August  issue  reference  was  made 
to  the  organization  of  a national  cur- 
rency association  by  the  banks  of  New 
York  City,  and  the  full  details  were  given 
as  to  the  method  of  operation,  etc.  Believ- 
ing that  our  readers  will  want  a copy  of  the 
by-laws  for  reference  purposes,  we  print 
them  here  in  full,  with  explanatory  sub- 
heads : 

ARTICLE  I. 

Membership. 

Sec.  1.  Membership  In  this  association 
shall  consist  of  national  banks  doing  a busi- 
ness within  the  Boroughs  of  Manhattan,  the 
Bronx.  Queens,  Brooklyn  and  Richmond,  of 
the  City  of  New  York,  and  Long  Island. 

Sec.  2.  All  applications  for  membership 
shall  be  in  the  form  of  a certified  copy  of 
a resolution  of  tht*  directors  of  the  appli- 
cant, filed  with  the  secretary  of  the  asso- 
ciation. Such  applications  shall  by  him  be 
referred  at  once  to  the  committee  on  mem- 
bership. The  report  of  the  committee  on 
membership  shall  be  presented  to  the  board 
and  shall  be  submitted  to  the  secretary  of 
the  treasury  of  the  United  States  with  the 
recommendation  of  the  board,  and  if  ap- 
proved by  him  the  applicant  shall  thereupon 
become  a member  of  the  association. 

Sec.  3.  Any  member  of  this  association 
may  withdraw  therefrom,  with  the  approval 
of  the  Secretary  of  the  Treasury  of  the 
United  States  and  the  consent  of  the  execu- 
tive committee  of  the  board  of  managers 
of  the  association,  providing  at  the  time  of 
such  withdrawal  there  shall  be  no  unre- 
deemed additional  circulating  notes  issued 
to  this  association. 


ARTICLE  II. 

Board  of  Managers. 

Sec.  1.  Each  member  of  this  association 
shall  file  with  the  Secretary  of  the  associa- 
tion and  with  the  Secretary  of  the  Treasury, 
a certified  copy  of  a resolution  of  its  board 
of  directors,  authorizing  its  president  or  any 
Vice-President  to  act  on  the  board  as  its 
representative,  but  no  bank  shall  have  more 
than  one  representative  upon  such  board  at 
any  one  time. 

Bills  of  lading  will  be  issued  in  serial 
numbers,  beginning  with  No.  1 at  each  issu- 
ing station  on  Sept.  1 of  each  year.  All 
copies  of  bills  of  lading  shall  bear  the  same 
number  as  the  original. 

A copy  of  each  bill  of  lading  will  be  for- 
warded on  the  date  Issued  to  the  agent  of 
the  water  carrier  at  the  port  of  export  in 
the  case  of  direct  shipments,  or  at  the  port 
of  trans-shipment  in  the  case  of  indirect 
shipments. 

The  shipper  Is  required  to  accept  the  con- 
ditions of  the  bill  of  lading  by  attaching  his 
signature  or  the  signature  of  his  authorized 
representative  to  the  original  and  agent’s 
copy. 

The  special  committee  on  bills  of  lading 
of  the  New  York  Chamber  of  Commerce  on 
Thursday  adopted  resolutions  expressing 
gratification  over  the  outcome  and  urging 
that  the  same  arrangements  be  made  with 
respect  to  domestic  bills  of  lading.  Here 
are  the  resolutions: 

Whereas.  The  result  of  the  various  con- 
ferences of  a committee  of  bankers  and 
railroad  officials  was  the  adoption  on  July 
19,  at  White  Sulphur  Springs.  W.  Va„  of  a 
form  of  certificate  to  be  attached  to  through 


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404 


THE  BANKERS  MAGAZINE 


order  notify  bills  of  lading  for  export  cotton 
and  certain  uniform  regulations  in  respect 
to  the  issuance  of  such  bills  of  lading,  there- 
fore be  it 

Resolved.  That  this  committee  congratu- 
late the  railroad  officials  and  the  others  en- 
gaged in  these  negotiations  on  the  happy 
result  of  their  work,  and  we  desire  to  record 
our  approval  of  the  important  move  made 
to  restore  the  credit  of  the  bill  of  lading, 
and  our  belief  that  validation  certificates 
issued  under  the  conditions  agreed  upon 
will  prevent  forgeries  and  place  around  the 
issuance  of  this  class  of  bill  of  lading  all  the 
safeguards  that  can  reasonably  be  expected, 
and  be  it  further 

Resolved,  That  it  is  the  sense  of  this  com- 
mittee that  the  same  arrangements  should 
be  made  in  respect  of  domestic  bills  of 
lading. 

Sec.  2.  (a)  The  annual  meeting  of  the 
board  shall  be  held  at  the  office  of  the  asso- 
ciation on  the  second  Tuesday  of  June  in 
each  year,  for  the  purpose  of  receiving  re- 
ports of  officers  and  committees  for  the  pre- 
ceding year  and  for  the  election  of  officers 
and  the  appointment  of  committees  for  the 
ensuing  year. 

(b)  Special  meetings  of  the  board  may  be 
called  at  any  time  by  the  executive  com- 
mittee or  the  President,  or  Vice-President, 
and  shall  be  called  by  the  President,  Vice- 
President  or  Secretary  upon  the  request  of 
five  members  of  the  Association. 

(c)  Notice  of  each  special  meeting,  stating 
the  time  and  place,  shall  be  given  by  the 
Secretary  to  each  member  of  the  association. 

Sec.  3.  A majority  of  the  members  of  the 
board  shall  be  necessary  to  constitute  a 
quorum,  but  a less  number  may  adjourn 
from  time  to  time. 

ARTICLE  III. 

Expenses  of  the  Association. 

Sec.  1.  The  expenses  of  the  association 
shall  be  defrayed  out  of  a fund  to  be  raised 
by  the  board  or  executive  committee  from 
time  to  time  by  assessments  upon  the  mem- 
bers in  the  proportion  which  their  capital 
and  surplus  respectively  bears  to  the  aggre- 
gate capital  and  surplus  of  all  the  mem- 
bers of  the  association. 

Sec.  2.  The  assessment  and  collection  of 
such  fund  and  its  disbursement  shall  be 
regulated  and  controlled  by  the  board  or  the 
executive  committee. 

ARTICLE  IV. 

Committees. 

Sec.  1.  There  shall  be  an  executive  com- 
mittee, consisting  of  seven  members  of  the 
board,  of  which  the  President  and  Vice- 
President  of  the  association  shall  be  two 
members  ex  officio.  The  executive  com- 
mittee shall  be  appointed  by  the  board  at 
its  annual  meeting,  and,  except  in  the  mat- 
ter of  the  election  of  officers  and  the  making 
of  by-laws,  may  exercise  all  the  powers  of 
the  board  when  the  latter  Is  not  in  session, 
and  shall,  among  other  duties,  pass  upon 
all  securities,  including  commercial  paper, 
offered  as  a basis  for  additional  circulation. 
Vacancies  In  the  executive  committee  may 
be  filled  by  the  board  from  time  to  time. 

Sec.  2.  There  shall  be  a committee  on 
membership  consisting  of  five  members  of 


the  board,  of  which  the  Secretary  shall  be  a 
member  ex  officio,  appointed  by  the  board 
at  its  regular  annual  meeting.  Vacancies 
in  this  committee  shall  be  filled  by  the  board. 
The  powers  and  duties  of  the  committee  on 
membership  shall  be  such  as  are  in  these 
by-laws  defined,  wih  such  additional  powers 
and  duties  as  may  be  conferred  from  time 
to  time  by  the  board  or  the  executive  com- 
mittee. 

Sec.  3.  There  shall  be  a committee  on 
nominations,  consisting  of  five  members  of 
the  board,  to  be  appointed  by  the  board  or 
executive  committee  in  advance  of  each  an- 
nual meeting.  It  shall  be  the  duty  of  the 
committee  on  nominations  to  present  to  the 
annual  meeting  of  the  board  names  for 
President,  Vice-President.  Secretary  and 
Treasurer,  and  members  of  the  executive  and 
membership  committees.  Vacancies  in  such 
committee  shall  be  filled  by  the  board  or  by 
the  executive  committee. 

ARTICLE  V. 

Officers. 

Sec.  1.  The  officers  of  the  association  shall 
be  a President,  Vice-President,  Secretary 
and  Treasurer,  each  of  whom  shall  be  elected 
by  the  board  at  its  annual  meetings  and 
each  of  whom  shall  be  a member  of  the 
board  and  hold  office  for  one  year,  until  his 
successor  is  appointed. 

Sec.  2.  The  officers  shall  perform  the 
duties  usually  pertaining  to  their  respective 
offices,  subject  to  the  supervision  and  direc- 
tion of  the  board  and  executive  committee. 

ARTICLE  VI. 

Seal. 

Sec.  1.  The  seal  of  the  association  snail 
be  circular  In  form,  with  the  name  of  the 
association  around  the  circumference  thereof, 
and  the  word  “Seal”  and  the  figures  ”1910’* 
in  the  centre  thereof. 

ARTICLE  VII. 

Amendments. 

Sec.  1.  These  by-laws  may  be  amended  by 
the  board  at  any  regular  or  special  meeting, 
provided  written  notice  of  the  proposed 
amendment  has  been  given  to  each  member 
of  the  association  at  least  one  week  in  ad- 
vance of  such  meeting,  subject  to  the  ap- 
proval of  the  Secretary  of  the  Treasury  of 
the  United  States. 


MOST  APPROPRIATE 
U JOHN  D.  ROCKEFELLER,  Jr.,”  said 

J a New  York  banker,”  asked  me  one 
Saturday  afternoon  a good  Biblical 
text  to  base  an  address  on. 

“ ‘I  am  thinking,’  he  said,  ‘about  that 
beautiful  verse  from  the  Twenty-third 
Psalm — The  Lord  is  my  Shepherd,  I shall 
not  want.’ 

‘“Beautiful  and  appropriate,’  I agreed. 
‘But,  Rockefeller,  there  is  even  a better 
verse  in  the  same  Psalm — Thou  anointest 
my  head  with  oil;  my  cup  runneth  over.’” — 
Washington  Star, 


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Old  Colony  Trust  Co. 

BOSTON,  MASS. 


Capital  and  Surplus  - - $12,500,000 
Deposits  - - - - 65,000,000 


OFFICERS 

T.  JEFFERSON  COOLIDGE,  JR.,  Chairman  Executive  Committee 
GORDON  ABBOTT,  Chairman  Board  of  Directors 

FRANCIS  R.  HART,  Vice-Chairman  Board  of  Directors 
PHILIP  STOCKTON,  President 

WALLACE  B.  DONHAM,  Vice-President 
J.  R.  WAKEFIELD,  Vice-President 

FREDERIC  G.  POUSI.AND,  Treasurer 

E.  ELMER  FOYE,  Manager  Credit  Dept. 
GEORGE  W.  GRANT,  Cashier 

CHESTER  B.  HUMPHREY,  Secretary 


Charles  F.  Adams.  2d 
Oliver  Ames 
F.  I.othrop  Ames 
C.  W.  Amory 
William  Amory 
Charles  F.  Ayer 
John  S.  Bartlett 
Samuel  Carr 
B.  P.  Cheney 
T.  Jefferson  CoolldRe 
Charles  E.  Cotllnff 
Alvah  Crocker 
Philip  Y.  DcNormandlc 
Philip  Dexter 
George  A.  Draper 
Frederic  C.  Dumaine 
William  Endleott.  Jr. 


DIRECTORS 

Wllmot  R.  Evans 
Frederiek  P.  Fish 
Reginald  Foster 
George  P.  Gardner 
Edwin  Farnham  Greene 
Robert  F.  Herrick 
Henry  S.  Howe 
Walter  Hunnewell 
Henry  C.  Jackson 
George  E.  Keith 
Gardiner  M.  T.ane 
Thomas  L.  I.lvermore 
Arthur  Lyman 
Charles  S.  Mellen 
Lawn.-nop  Minot 
Maxwell  Norman 
Richard  Olnev 


Robert  T.  Paine.  2d 
Henry  Parkman 
Andrew  W.  Preston 
Richard  S.  Russell 
Philip  I..  Saltonstall 
Herbert  M.  Sears 
Quincy  A.  Shaw 
Howard  Stockton 
Charles  A.  Stone 
Galen  L.  Stone 
Nathaniel  Thayer 
I.uelus  Tuttle 
H.  O.  I’nderwood 
Eliot  Wadsworth 
Stephen  M.  Weld 
Sidney  W.  Winslow 
Chnrl*  s W Whittier 


The  OLD  COLONY  TRUST  COMPANY  is  in  every  sense 
of  the  word  an  independent  trust  company,  interested  only  in 
the  welfare  of  its  depositors  and  its  stockholders,  and  the 
development  of  New  England’s  business  interests. 

Resources  in  excess  of  $75,000,000  make  this  Company 
one  of  the  largest  and  strongest  financial  institutions  in  the 
country,  and  insure  to  every  depositor,  large  or  small,  absolute 
security  combined  with  the  highest  type  of  banking  service. 


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Ibanki 


lAICHlTtCTUKl-^ 
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THIS  book  shows  130  detailed 
views  of  a large  number  of 
model  banks  built  by  us. 

It  deals  with  bank  architecture, 
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also  bank  remodeling. 

It  explains  the  model  method  of 
bank  building — how  we  handle  the 
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pletion under  one  contract  guaran- 
teeing the  limit  of  cost.  To  bankers 
who  are  interested  we  will  forward 
this  book  on  request. 


HOGGSON  BROTHERS 

7 East  44th  St.  : : : New  York 
We  Build  from  First  National  Bank  Bldg.,  Chicago,  Ills. 

Coast  to  Coast  New  Haven,  Conn.  Springfield,  Mass.  Norfolk,  Va. 


THE  HALL  MONTHLY  DIARIES 


A PAGE  FOR  EACH  DAY  A BOOK  FOR  EACH  MONTH 

A High  Grade  Advertising  Sh(p*velty  used  by  many  Banks  and  Trust  Com- 
panies and  greatly  appreciated  by  business  and  professional  men.  Size  of  each  book 
by  4%  inches.  12  Books  to  set,  neatly  bound  in  leatherette  and  packed  in  box. 
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BANK  STATIONERS  PROVIDENCE,  R.  I. 

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MODERN  FINANCIAL  INSTITUTIONS 

AND  THEIR  EQUIPMENT 


MODERNLY  EQUIPPED  HOME  OF  THE  FIRST 
NATIONAL  BANK  OF  FORT  WAYNE,  INDIANA 


Shoaff  Building— Home  of  the  First  National  Bank  of  Fort  Wayne,  Ind. 


THREE  months  ago  the  First  National 
Bank  of  Fort  Wayne,  Ind.,  the  sixth 
largest  bank  in  the  Hoosier  State, 
Jield  a housewarming  in  its  new  fireproof 
quarters  in  the  Shoaff  building.  For  eight 
months  past  the  rooms  now  occupied  by 
the  bank  were  in  the  hands  of  the  Library 
Bureau  of  Chicago  and  the  Moslcr  Safe 
Company  of  Hamilton,  Ohio.  What  these 
firms  were  able  to  accomplish  in  the  way  of 
equipping  and  furnishing  the  First  Na- 
tional's home  may  be  seen  in  the  accom- 
panying illustrations. 


The  bank  has  a frontage  of  eighty-five 
feet  on  Berry  street,  facing  Fort  Wayne's 
million-dollar  court  house,  and  extends  down 
Calhoun  street  for  twenty  feet;  where  the 
tellers’  cages  face  the  lobby,  the  room  widens 
to  forty  feet.  A one-story  extension,  twen- 
ty by  ninety  feet,  adjoins  the  main  building 
at  the  rear..  This  well-lighted  space  is 
given  over  to  the  clerical  force  and  is 
equipped  with  lockers,  bicycle  rooms,  a 
shower  bath  and  toilet. 

The  main  banking  room  is  finished  in- 
Sienna  Italian  marble,  the  side  walls  wains- 

405 


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Main  Banking  Room 


Officers’  Quarters 

THE  FIRST  NATIONAL  BANK  OF  FORT  WAYNE,  INDIANA 


A Portion  of  the  Ladies*  Department 
THE  FIRST  NATIONAL  BANK  OF  FORT  WAYNE,  INDIANA 


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Public  Room  adjoining:  the  Lobby 


408 


THE  BANKERS  MAGAZINE 


coted  and  paneled  in  Bassville  marble  taken 
from  French  quarries.  Ceiling  decorations 
maintain  an  ivory  tone  throughout,  and  are 
paneled,  each  panel  containing  a cluster  of 
six  electric  lights,  while  on  the  sides  are 
brackets  with  three-light  arms,  each  carry- 
ing an  eight-inch  globe. 

Fixtures  are  mainly  of  solid  bronze.  The 
cage  fronts  are  of  steel,  with  bronze  plat- 
ing, while  the  grille  work,  the  heavy  doors. 


handsome  rail  of  Sienna  marble.  Some 
distance  away,  in  a compartment  adjoining 
the  tellers’  cages,  the  cashier  has  his  desk. 
This  arrangement  of  the  officers  has  proved 
to  be  most  satisfactory. 

Down  at  the  other  end  of  the  lobby  a 
commodious  room,  supplied  with  table,  sta- 
tionery, telephone  and  comfortable  chairs, 
is  at  the  disposal  of  those  who  have  business 
to  transact. 


J.  H.  BASS 

President  First  National  Bank,  Fort  Wayne,  Ind 


etc.,  are  of  steel  with  a triple  plating  of 
bronze.  The  vestibule  and  other  doors  are 
of  solid  bronze,  with  heavy  plate  glass. 
Above  the  lobby  entrance  from  the  main 
building  is  a Western  Union  clock  with 
white  marble  dial  and  bronze  numerals. 

All  the  furniture  in  the  working  depart- 
ments of  the  bank  is  of  steel  fireproof  con- 
struction, with  mahogany  tops.  Check  desks 
of  marble  with  glass  tops  are  provided  for 
the  use  of  the  bank's  patrons.  Customers  who 
enter  the  bank,  whether  through  the  Calhoun 
street  entrance  or  the  Berry  street  doors, 
must  pass  the  space  reserved  for  the  of- 
ficers’ desks.  They  are  placed  at  the  west 
end  of  the  lobby  and  are  enclosed  with  a 


On  the  eastern  side  of  the  room  is  the 
ladies’  department.  It  consists  of  a waiting 
room,  furnished  with  restful  chairs,  desk 
and  stationer\r,  telephone  connection  and 
lavatory. 

The  bank  has  provided  a woman’s  teller 
for  this  department,  so  that  lady  patrons 
may  transact  their  business  in  private  and 
in  comfort. 

The  Basement. 

At  the  foot  of  the  main  stairway  leading 
to  the  basement,  is  the  directors’  meeting 
room.  This  room,  eighteen  by  twenty  feet, 
is  finished  in  brown  oak,  has  paneled  walls 
and  beamed  ceiling,  is  wainscoted  and  fur- 


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C.  H.  WORDEN 

First  Vice-President  and  Executive  Officer 


H.  A.  KEPLINGER 
Second  Vice-President 


H.  R.  FREEMAN  j.  H.  ORR 

Cashier  Assistant  Cashier 

THE  FIRST  NATIONAL  BANK  OF  FORT  WAYNE.  IND. 

409 


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Custodian's  Room  with  Coupon  Booths 
THE  FIRST  NATIONAL  BANK  OF  FORT  WAYNE,  INDIANA 


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MODERN  FINANCIAL  INSTITUTIONS 


41! 


Interior  of  the  Safe  Deposit  Vault  showing: 
various  sized  boxes 


nished  with  brown  oak  furniture,  and  up- 
holstered in  Spanish  leather.  The  base- 
ment and  halls  therein  have  the  white  cera- 
mic tile  floors,  white  marble  trimmings,  pris- 
matic ceiling  lights,  and  great  chandeliers 
of  electric  lights. 

The  great  vaults  are  the  newest  and 
largest  in  Fort  Wayne. 

In  addition  to  the  big  safety  deposit  vault 
there  are  three  others— one  for  surplus 
books,  one  for  stationer}'  and  a third  for 


storage  of  large  valuable  packages,  such  as 
silverware,  furs,  etc. 

Eight  tellers’  chests,  four  silver  chests, 
two  chests  for  collateral  securities  and  val- 
uable records,  and  two  reserve  chests  with 
inside  burglar  compartments,  provide  the 
protection  in  the  small  vault  for  the  bank’s 
large  cash  assets. 

The  stationery  vault,  nine  by  eleven  feet, 
and  book  vault,  twelve  by  eighteen  fteet, 
both  finished  with  tile  floors  laid  over  con- 
crete and  steel  shelving,  care  for  the  books 
and  supplies.  A storage  vault  of  concrete 
and  steel,  lined  with  white  enamel  brick 
for  the  storage  of  trunks,  furs,  silverware, 
etc.,  and  equipped  with  steel  shelving  and 
steel  chests  with  combination  locks  for 


A Corner  of  the  Storagre  Vault 


Door  and  Entrance  to  the  Trunk  Storage 
Vault 


smaller  packages  of  silverware,  etc.,  com- 
pletes the  equipment  of  this  vault. 

The  immense  safety  deposit  vault  is  fitted 
with  a round  door  six  and  one-half  feet  in 
diameter  that  weighs  nineteen  tons.  It  is 
finished  in  brushed  bronze  and  is  operated 
by  quadruple  timers  and  a double  combina- 
tion. It  closes  into  a steel  vestibule,  em- 
bedded in  concrete.  The  vault  walls  are  con- 
structed of  reinforced  concrete  and  are  lined 
with  three-inch  chrome  steel  plates. 

An  emergency  door  two  feet  in  diameter, 
weighing  three  tons,  is  fitted  into  the  rear 
end  of  the  vault.  This  door  has  the  same 
locking  mechanism  as  the  big  door  and  is 
there  for  the  purpose  of  providing  against 
a lockout  should  the  large  door  faff  to  open 
on  time.  In  this  vault  of  steel  and  con- 


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THE  BANKERS  MAGAZINE 


crete  there  are  1,500  safe  deposit  boxes  of 
various  sizes,  finished  in  gun  metal  with 
bronze  locks  and  numbers.  Fourteen  electric 
bulbs  set  in  the  polished  steel  ceiling  of  the 
vault  furnish  the  light  required — the  floor 
covering  of  vitrified  cork  completes  the 
equipment. 

The  customers’  room  is  finished  in  green 
with  mahogany  furniture.  Here  are  eight 
coupon  booths,  finished  in  mahogany  and 
equipped  with  Corbin  type  locks.  When  a 
customer  leaves  the  booth  it  locks  auto- 
matically, and  cannot  be  opened  until  the 
custodian  makes  an  examination  to  ascertain 
that  the  preceding  customer  has  not  left 
valuable  papers  or  other  property  there  by 
mistake. 

But  the  feature  of  all  this  equipment  for 
public  use,  is  a large  committee  room,  with 
table  and  chairs  of  English  oak,  to  be  used 
by  corporations,  business  men,  or  other  or- 
ganizations as  a convenient  place  for  the 
transaction  of  business.  It  can  be  reached 
by  elevator  without  entering  the  banking 
rooms  on  the  main  floor  and  is  a convenience 
that  is  sure  to  be  appreciated. 

Historical. 

The  First  National  Bank  was  organized 
in  1863,  obtaining  charter  number  eleven, 
which  number  has  just  been  reassigned  to 
it  by  the  Comptroller  of  the  Currency, 
and  is  now  the  largest  bank  in  Fort  Wayne, 
the  sixth  in  size  in  the  State  of  In- 
diana. The  favorable  comments  received 
by  the  bank  from  visitors  have  already  con- 
vinced its  management  that  the  public  ap- 


preciates the  beauty  and  artistic  equipment 
of  the  bank's  new  home. 

The  First  National  Bank  of  Fort  Wayne, 
Ind.,  has  a capital  and  surplus  of  $700,000, 
deposits  of  $3,650,000,  and  assets  that  ap- 
proximate $5,000,000. 

Those  who  constitute  the  present  official 
staff  are:  J.  H.  Bass,  president;  C.  H.  Wor- 
den, first  vice-president;  H.  A.  Keplinger, 
second  vice-president;  H.  R.  Freeman,  cash- 
ier; J.  H.  Orr,  assistant  cashier.  The  di- 
rectorate is  exceptionally  strong  and  is 
made  up  as  follows: 

J.  H.  Bass  president  Bass  Foundry  and 
Machine  Company;  M.  B.  Fisher,  wholesale 
paper;  S.  S.  Fisher,  wholesale  paper;  W.  A. 
Fleming,  treasurer  Berghoff  Brewing  Com- 
pany; Herman  Frr iburger,  wholesale  leath- 
er; Wm.  Geake,  contractor;  F.  S.  Hunting, 
treasurer  Fort  Wayne  Electric  Works;  F. 
K.  Hoffman,  vice-president  and  treasurer 
the  Hoffman  Bros.  Co.,  hardwood  lumber; 
J.  H.  Jacobs,  retired;  J.  B.  McKitn,  super- 
intendent Pennsylvania  Company;  H.  J. 
Miller,  secretary  Hartford  City  Paper 
Mills;  W.  I,.  Moellering,  secretary  and  man- 
ager of  the  Home  Telephone  and  Telegraph 
Company  of  Fort  Wayne;  B.  P.  Mossman, 
wholesale  iron,  steel  and  heavy  hardware; 
R.  L.  Romy,  real  estate;  A.  B.  Trentman, 
manager  Wayne  Paper  Mills;  Judge  W.  J. 
Vesey,  Yesey  & Vesey,  lawyers;  E.  F.  Ynr- 
nelie.  wholesale  iron,  steel  and  heavy  hard- 
ware; J.  W.  White,  manufacturer;  Ed- 
ward White,  president  White  Fruit  House; 
C.  A.  Wilding,  president  Tri-State  Loan 
and  Trust  Company;  C.  H.  Worden,  vice- 
president  and  executive  officer. 


Emergency  Door  fitted  into  Rear  of  the  Safe 
Deposit  Vault 


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THE  IRONBOUND  TRUST  COMPANY  OF  NEWARK, 

NEW  JERSEY 


PHOTO  Bf  H.  F.  HAMHtS,  NEWANK  SUNDAY  CALL 


New  Home  of  the  Ironbound  Trust  Company  of  Newark,  N.  J. 


A LITTLE  over  three  years  ago  a num- 
ber of  Newark,  New  Jersey’s,  promi- 
nent citizens  got  together  and  organ- 
ized the  Ironbound  Trust  Company.  True 
to  its  name,  supported  and  strengthened 
by  a staff  of  experienced  officers,  the  com- 
pany has  prospered  and  grown  to  its 
present  satisfying  proportions. 

Last  September  the  first  steps  w’ere  taken 
towards  the  erection  of  the  new,  modernly 
appointed  building  which  stands  at  the  cor- 
ner of  Market  and  Ferry  streets. 

At  the  outset  the  architects,  Messrs. 
John  H.  and  W.  C.  Ely,  were  confronted 
with  this  difficulty:  The  intersection 

of  Market  and  Ferry  streets  forms  an 
acute  angle,  thereby  narrowing  the  front 
of  the  corner  lot  to  about  sixteen  feet, 
while  the  greatest  width  is  sixty-two  feet. 
By  designing  a single-story  building  of 
the  flat-iron  type,  after  the  Renaissance 
style,  they  have  secured  splendid  results. 

Flanking  the  main  entrance  there  are 
two  graceful  columns  of  white  marble  and 
the  wall  lines  on  Market  and  Ferry'  streets 
are  diversified  and  strengthened  by  pilas- 
ters treated  in  the  same  style.  Great  tall 
windows  break  the  whiteness  of  these  same 
walls. 


Interior  Arrangements. 

A large  skylight  illuminates  the  whole 
interior  of  the  banking  room,  which  with 
its  lofty  ceiling,  its  trimmings  of  green 
marble,  bronze  and  mahogany,  makes  a 
pleasing  impression  on  all  beholders. 

To  the  left  of  the  entrance  the  officers* 
quarters  will  be  found,  accessible  to  the 
public  and  to  the  working  force  of  the  bank. 
To  the  right  there  is  an  alcove  set  apart 
for  the  lady  patrons,  of  which  there  are' 
quite  a few. 

At  the  rear  end  of  the  building,  on  the 
Market  street  side,  is  the  directors’  room. 
It  is  richly  furnished  in  mahogany  and 
has  the  customary  table  and  chairs.  Ap- 
proximately $50,000  has  been  expended  on 
the  new  building  of  the  Ironbound  Trust 
Company  of  Newark. 


Safe  Deposit  Vaults. 

A staircase  leads  to  the  safe  deposit 
vaults  and  other  rooms  in  the  basement. 
The  central  feature  is  the  large  safe  and 
safe  deposit  vault.  Its  front  wall  of  solid 
steel  is  ten  inches  thick.  The  great  door, 
circular  in  shape,  seven  and  a half  feet 
in  diameter  and  seventeen  inches  thick 

413 


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THE  BANKERS  MAGAZINE 


•m 

weighs  fourteen  tons;  but  so  cleverly  is  it 
hung  that  it  can  be  moved  by  the  pressure 
of  the  finger.  It  is  an  interesting  piece  of 
mechanism,  with  a three-movement  time  lock 
of  delicate  construction  and  its  twenty-four 
bolts — each  three  inches  in  diameter — 
around  the  door’s  circumference  and  with 
the  cogs  and  gearing  to  operate  these 


ables.  It  measures  twelve  by  seventeen 
feet.  To  the  south  of  the  safe  is  the  book 
or  record  vault,  which  measures  eight  by 
twelve  feet.  At  the  southwest  corner  the 
elevator  for  transmission  of  money  and 
records  is  located.  In  the  basement  also 
are  the  coupon  booths,  toilets  and  a shower 
bath  for  the  clerks  of  the  institution. 


J.  H.  BACHELLER 

President  Ironbound  Trust  Company  of  Newark,  N.  J. 


devices.  The  cost  of  the  safe  deposit  vaults 
is  in  the  neighborhood  of  $15,000. 

The  vault  was  built  by  the  Mosler  Safe 
Company  of  New  York,  after  designs  by 
the  Hollar  Company  of  Philadelphia.  It 
runs  back  sixteen  feet.  The  flooring  has  a 
base  of  one  and  one-half  feet  of  concrete 
over  which  in  turn  are  laid  steel  rails  and 
more  concrete  and  steel  flooring.  The  vault 
is  lined  with  safe  deposit  boxes  of  various 
sizes,  there  being  capacity  for  a thousand  of 
these.  Besides  this  provision  for  the  needs 
of  the  public  the  interior  portion  of  the 
vault  contains  the  large  compartment  safes 
of  the  bank,  there  being  capacity  for  twelve 
of  these. 

On  the  north  side  of  the  vault  is  the 
storage  vault  for  silverware  and  other  valu- 


Growth  and  Organization. 

As  evidence  of  the  prosperity  that  has 
been  one  of  the  chief  assets  of  this  company 
from  its  organization  up  to  the  present  time, 
the  following  statement  as  of  June  30,  is 
appended:  Resources — bonds,  $386,496.85; 

demand  loans  upon  collaterals,  $391,566.67; 
time  loans  upon  collaterals,  $14,000;  bonds 
and  mortgages,  $217,167.60;  loans  to  cities 
and  towns,  $555,000;  notes  and  bills  pur- 
chased, $427,429.75;  cash  reserve  in  banks, 
$257,651.85;  cash  on  hand,  $49,411.23;  real 
estate,  $106,860.82;  other  assets,  $9,871.34; 
total  assets,  $2,415,456.11.  Liabilities — capi- 
tal stock,  $200,000;  surplus  fund,  $100,000; 
undivided  profits,  $72,206.74;  deposits,  $2,- 
039,749.69;  treasurer’s  checks,  $1,028.19; 


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RUFUS  KEISLfR.  JR.  F.  D.  MacFADDEN 

Secretary  and  Treasurer  Assistant  Secretary  and  Assistant  Treasurer 

6 415 


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• 1 

y 

| 4-iiM 

ly 

f id 

— 

Main  Banking  Room  showing  Stairway  leading  to  Vaults  in  Basement 


Directors’  Meeting  Room 


PHOTOS  BV  OLIVER  LIPPINCOTT.  N.  V. 


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MODERN  FINANCIAL  INSTITUTIONS 


417 


other  liabilities,  $£,171.49;  total  liabilities, 
$£,415,456.11. 

Personnel. 

J.  H.  Bacheller,  the  president,  was  born 
in  Newark,  N.  J.,  in  1869.  He  left  the 
high  school  of  that  city  in  1885  to  accept 
a position  with  the  New  York  Life  Insur- 
ance Company.  Since  1890  Mr.  Bacheller 
has  been  connected  with  the  estate  of  A.  L. 
Dennis  and  has  charge  of  its  real  estate. 
He  has  been  prominent  in  politics  in  New 
Jersey  and  has  served  as  alderman,  assem- 
blyman, and  state  senator  from  Essex  Coun- 


dent of  the  Hamburg  Button  Company. 
He  is  an  active  member  of  the  Newark 
Board  of  Trade,  has  held  the  chairmanship 
of  the  committee  on  Trade  and  Commerce 
and  is  at  present  one  of  the  directors. 

Theodore  S.  Miller,  vice-president  and  one 
of  the  organizers  of  the  company  was 
born  in  1863,  and  received  his  education  in 
the  public  schools  and  St.  Benedict’s  Col- 
lege. His  first  position  was  with  Miller  & 
Ober,  shoe  manufacturers,  where  he  learned 
the  business  thoroughly.  Associating  him- 
self with  John  Reilly,  manufacturer  of 


PHOTO  av  R.  r.  HARRIS.  NEWARK  8 UN  DA V CALL 

Front  of  Massive  Armor- Plate  Vault 


ty.  At  the  present  time  he  holds  the 
responsible  position  of  comptroller  of  New- 
ark, an  office  he  has  filled  since  January, 
1905.  When  the  Ironbound  Trust  Company 
was  organized,  Mr.  Bacheller  was  made 
vice-president;  he  has  been  president  since 
January,  1908. 

Augustus  V.  Hamburg,  vice-president  and 
one  of  the  organizers  of  the  Ironbound 
Trust  Company,  was  born  in  St.  Louis,  July 
4,  1858,  but  has  resided  in  Newark  the 
greater  part  of  his  life.  He  began  his 
business  career  as  a clerk  with  a dry  goods 
Arm  located  at  23  Ferry  street,  two  hun- 
dred feet  from  where  the  Ironbound  Trust 
Company  now  stands.  He  later  accepted 
a position  with  a wholesale  notion  house, 
remained  some  time,  and  then  filled  an  im- 
portant position  with  a New  York  importing 
house.  Five  years  later  he  resigned  to  go 
into  business  for  himself.  For  the  past 
fifteen  years  Mr.  Hamburg  has  been  presi- 


patent  and  enameled  leathers,  he  advanced 
rapidly  from  the  position  of  salesman  to 
office  manager,  secretary,  treasurer  and  sec- 
retary, and  finally  to  president  his  present 
connection.  Mr.  Miller  is  a member  of  the 
Board  of  Trade  in  Newark  and  claims  a 
large  acquaintance  among  the  city’s  business 
men. 

Rufus  Keisler,  Jr.,  the  secretary  and 
treasurer,  has  been  with  the  company  since 
1907,  coming  from  the  Fidelity  Trust  Com- 
pany of  Newark,  N.  J.,  to  accept  the  posi- 
tion which  he  now  holds. 

F.  D.  MacFadden,  assistant  secretary  and 
assistant  treasurer,  came  to  the  Ironbound 
Trust  Company  in  1907  from  the  Panama 
Banking  Company,  to  hccept  the  position 
of  paying  teller.  At  a recent  meeting  of 
the  board  of  directors  of  the  company,  he 
was  appointed  assistant  secretary  and  as- 
sistant treasurer. 


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HANDSOME  HOME  OF  THE  AMERICAN  TRUST 
COMPANY  OF  CHARLOTTE,  N.  C. 

DESIGNED  AND  EXECUTED  BY  HOGGSON  BROS.,  BANK  SPECIALISTS 

OF  NEW  YORK 


American  Trust  Company  Building,  Charlotte,  N,  C. 


THE  new  banking  home  recently  com- 
pleted for  the  American  Trust  Com- 
pany, of  Charlotte,  N.  C.,  picture  of 
which  appears  above,  in  arrangement  of 
space,  convenience  for  the  handling  of  the 
bank’s  business,  for  provision  for  customers, 
and  in  general  attractiveness,  presents  what 
is  undoubtedly  one  of  the  most  complete 
and  effective  bank  buildings  in  the  country. 

The  front,  built  in  classic  style  is  of  terra 
<*otta,  in  imitation  of  granite,  and  the  effect 
is  so  close  that  few  can  realize  that  it  is 
not  the  original  stone. 

The  rooms  above  the  bank  being  devoted 
to  offices,  the  problem  was  to  make  the 
effect  of  a bank  predominant,  and  the  ar- 
chitect has  well  succeeded  in  this,  placing 
the  entrance  to  the  offices  on  the  left,  and 
giving  to  the  bank’s  customers  the  large 
-central  entrance  to  its  public  foyer. 

418 


The  interior  arrangement  of  the  bank  is  in 
the  shape  of  a hollow  square,  the  working 
force  being  placed  around  the  public  space 
and  the  officers  behind  low  rails  in  front, 
convenient  to  approach,  and  each  furnished 
with  spacious,  well  lighted  and  attractive 
individual  offices. 

The  counter  is  of  marble  and  bronze,  the 
marble  being  carried  up  on  the  columns 
to  the  height  of  the  screen — seven  feet  six 
inches. 

In  addition  to  its  banking  business  proper, 
the  trust  company  carries  on  a trust  de- 
partment, insurance  department  and  a real 
estate  department,  the  managers  and  assis- 
tants of  which  find  ample  room  and  con- 
venient working  space  in  the  main  room  of 
this  institution.  In  the  rear  a safe  deposit 
department  is  provided  for  the  use  of  cus- 
tomers, with  large  vaults  on  the  first  floor. 


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Officers  Quarters 


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420 


THE  BANKERS  MAGAZINE 


and  vaults  in  the  basement  for  storage  of 
trunks,  silver  and  packages  of  less  value. 

Rooms  are  provided  for  large  committee 
meetings,  as  well  as  coupon  rooms  for  in- 
dividuals, and  the  large  directors'  room  is 


GEO.  STEPHENS 
President  American  Trust  Company 
Charlotte.  N.  C. 


furnished  attractively  and  comfortably,  for 
use  of  directors’  and  large  corporation 
meetings. 

Supply  rooms  and  rooms  for  checking  up, 
where  the  clerks  will  not  be  disturbed,  are 
also  provided,  and  every  facility  for  an  up- 
to-date  bank  has  been  furnished. 

The  second  and  third  floors  are  utilized 
for  offices,  accessible  by  elevator  in  front 
hall  entrance.  These  offices  are  well  lighted 
and  ventilated,  and  are  among  the  most 
attractive  in  town. 

The  decorations  throughout  the  building 
are  in  keeping  with  its  quiet,  businesslike 
dignity,  and  the  whole  building  comports 
favorably  with  the  institution  that  it  houses. 

The  entire  work  was  executed  by  Hoggson, 
bank  specialists  of  New  York,  under  one 
contract  and  upon  its  completion  they 
turned  over  to  the  bank  not  only  the  com- 
pleted building,  equipped  ready  for  business, 
but  also  a refund  of  over  four  per  cent, 
upon  the  amount  of  the  contract. 

The  Hoggson  building  method  under 
which  this  bank  was  built  guarantees  that 
the  ultimate  cost  to  the  bank  shall  come 
within  its  appropriation,  it  also  guarantees 
the  limit  of  profit  to  Hoggson  Brothers 


and  under  this  contract  the  American  Trust 
Company  received  its  completed  work  for 
over  four  per  cent,  less  than  it  had  agreed 
to  pay. 

The  American  Trust  Company  of  Char- 
lotte, N.  C.,  began  business  July  15,  1901, 
with  a paid-in  capital  of  $50,000.  Although 
the  second  youngest  banking  institution  in 
Charlotte,  its  growth  has  been  very  gratify- 
ing, all  due  to  the  efforts  of  a splendidly 
equipped  executive  staff  backed  by  a strong 
directorate,  representing  diversified  business 
interests  of  the  city  and  state. 

Six  months  after  the  opening  the  direc- 
tors voted  an  additional  $50,000  of  capital 
stock;  this  sufficed  for  one  year  when  it 


W.  H.  WOOD 

Secretary  and  Treasurer  American  Trust 
Company,  Charlotte,  N.  C. 


was  increased  to  $200,000.  Again,  after  the 
lapse  of  three  years,  the  amount  of  capital- 
ization was  brought  up  to  $350,000,  where 
it  stands  to-day. 

When  the  bank  reports  were  published 
after  the  official  call  of  June  30,  1910,  it 
was  found  that  the  American  Trust,  with 
its  $1,079,943.35  of  deposits,  led  all  the  otljer 
Charlotte  banks.  The  company  carries 
loans  of  $1,448,781.80,  has  undivided  promts 
of  $151,612.39,  and  total  resources  of  $1,746,- 
555.74.  Those  who  constitute  the  official 
staff  are:  George  Stephens,  president;  T.  S. 
Franklin  and  W.  S.  Lee,  vice-presidents; 
W.  H.  Wood,  secretary  and  treasurer;  J. 
E.  Davis,  assistant  secretary  and  treasurer. 


Digitized  by  t^ooQle 


Digitized  by  t^ooQle 


TWENTY-ONE  YEARS  OF  BANKING  SUCCESS 


IN  October  next,  the  Kings  County  Trust 
Company  of*  Brooklyn  will  have  com- 
pleted the  twenty-first  year  of  its  corporate 
existence. 

Organized  at  a time  when  there  was  a 
genuine  need  of  such  an  institution,  it  has 
prospered  accordingly  and  to-day  owns  and 


He  was  succeeded  by  Julian  D.  Fairchild, 
w’ho  has  officiated  during  the  last  seventeen 
years. 

Mr.  Fairchild  is  one  of  the  advocates  of 
a central  bank  and  his  speeches  and  papers 
on  that  question  have  been  widely  quoted. 

He  was  educated  in  the  public  schools 


JULIAN  D.  FAIRCHILD 

President  Kings  County  Trust  Company  of  Brooklyn 


occupies  a well  appointed  home  in  Court 
square  and  Fulton  street,  Brooklyn. 

The  company  was  first  located  in  the  Ar- 
buckle  building,  371  Fulton  street.  Here 
it  remained  until  1893,  when  the  increased 
volume  of  business  handled  made  the  ac- 
quisition of  larger  quarters  a necessity. 
Extensive  alterations  were  made  in  the  bank- 
ing rooms  in  1899,  changing  the  character 
of  the  interior  entirely.  All  the  depart- 
ments, including  a massive  fire  and  burglar 
proof  vault;  are  now  thoroughly  up-to-date. 

But  two  presidents  have  held  office  since 
the  organization  of  this  progressive  company. 
Joseph  C.  Hendrix,  the  first  executive,  re- 
signed in  May,  1893,  to  become  president 
of  the  National  Union  Bank  of  New  York. 

422 


of  Connecticut,  and  has  been  honored  with 
election  to  the  directorate  of  many  promi- 
nent corporations.  He  is  president  of  the 
Union  Ferry  Company,  vice-president  and 
director  of  the  Mortgage  Bond  Company, 
and  a director  of  the  Lawyers*  Title  Insur- 
ance & Trust  Company,  the  Metropolitan 
Casualty  Company,  the  Nassau  Fire  In- 
surance Company,  Pacific  Fire  Insurance 
Company,  the  New  York  & Queens  Elec- 
tric Light  & Power  Company,  the  East 
River  Savings  Bank  and  the  Eagle  Ware- 
house & Storage  Company.  Mr.  Fairchild 
is  also  president  of  the  Brooklyn  Central 
Dispensary,  a regent  of  the  Long  Island 
College  Hospital  and  a trustee  of  the 
Brooklyn  Institute  of  Arts  & Sciences. 


Digitized  by 


Google 


Interior  of  Bank  ins  Room 


PHOTOS  SV  OUVCR  uppincott.  n V. 


President  and  Directors’  Meetins  Room 
KINGS  COUNTY  TRUST  COMPANY  OF  BROOKLYN 


Digitized  by  t^ooQle 


424 


THE  BANKERS  MAGAZINE 


In  1894  he  was  offered,  but  did  not  accept, 
the  Democratic  nomination  for  mayor  of 
Brooklyn,  and  in  1896  declined  the  Demo- 
cratic nomination  for  comptroller  of  Greater 
New  York.  The  mayor  of  New  York  ap- 
pointed him  as  one  of  the  commissioners 
from  Brooklyn  for  the  erection  of  the  new 
East  River  bridge,  and  he  was  made  treas- 
urer of  the  commission.  He  is  a member  of 
the  Chamber  of  Commerce  and  is  also  great- 
ly interested  in  philanthropic  work. 

William  Harkness,  vice-president,  is  pres- 


Joseph  Huber,  H.  K.  Knapp,  Whitman  W. 
Kenyon’  Joseph  Liebmann,  D.  W.  McWil- 
liams, John  McNamee,  Cord  Meyer,  Henry 
A.  Meyer,  Charles  A.  O' Donohue,  Chas.  E. 
Perkins,  Dick  S.  Ramsay,  H.  B.  Schar- 
mann,  W.  M.  Van  Anden,  John  J.  Williams. 

One  year  after  the  commencement  of 
business  the  company  declared  its  first  divi- 
dend of  three  per  cent.;  up  to  the  present 
time  the  stockholders  have  received  in  divi- 
dends $977,500. 

As  an  evidence  of  the  steady,  uninter- 


Entrance  to  the  Safe  Deposit  Vault 


ident  of  the  Nassau  Fire  Insurance  Com- 
pany. 

D.  W.  McWilliams,  vice-president,  is  a 
former  treasurer  of  the  Interborough  Rapid 
Transit  Company. 

Julian  P.  Fairchild,  vice-president,  is  a 
son  of  the  president.  He  is  a director  of 
the  Security  Safe  Deposit  Company  of 
Brooklyn. 

The  remaining  officers  are:  Thomas  Blake, 
secretary;  William  J.  Wason,  Jr.,  assistant 
secretary;  J.  Norman  Carpenter,  trust  of- 
ficer; George  V.  Brower,  counsel. 

The  trustees  are:  John  Arbuckle,  A. 
Abraham,  Walter  E.  Bedell,  George  V. 
Brower,  Robert  A.  Drysdale,  Rosw’ell  Eld- 
ridge,  Julian  D.  Fairchild,  Julian  P.  Fair- 
child,  Joseph  P.  Grace,  William  Harkness, 


rupted  growth  which  the  company  has  ex- 
perienced during  the  twenty-one  years  it 
has  operated,  the  following  table  of  de- 
posits, as  reported  on  successive  dates,  is 
appended : 

Dec.  31,  1892 $3,602,415 

Jan.  1,  1900 6,832,065 

July  2,  1900 8,011,721 

Jan.  1,  1901 8,619,924 

July  1,  1902 8,772,341 

July  1,  1903 9,366,663 

July  1,  1904 10,213,639 

July  1,  1903 10,433,272 

July  2,  1916 12,084,832 

Jan.  1,  1907 12,702,269 

Jan.  1,  1909 13,865,297 

July  1,  1910 16,185,010 

On  June  30,  1910,  the  company  reported 
a surplus  of  $1,500,000,  a capital  of  $500,- 


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BOOK  REVIEWS 


425 


000,  undivided  profits  of  $552,147  and  de- 
posits of  $16,185,010. 

The  history  of  the  Kings  County  Trust 
Company  for  the  last  twenty  years  would 
be  incomplete  without  some  reference  to 
the  financial  disturbances  during  that 
period. 

In  the  panic  of  1893  a number  of  banks 
and  stock  exchange  houses  failed,  and  be- 
sides these,  there  were  about  fifteen  thou- 
sand commercial  failures.  The  situation 
was  one  of  general  depression  and  disaster. 
The  year  1896  was  a period  of  uncertainty 
and  anxiety. 

The  savings  banks  were  drawn  upon  very 
heavily  for  a time,  but  notwithstanding  this, 


no  savings  bank  or  trust  company  in  New’ 
York  suffered  from  any  cause  a loss  suffix 
cient  to  require  it  to  be  closed. 

During  the  year  1893,  the  Kings  County 
Trust  Company  paid  out  $30,000  in  divi- 
dends, besides  adding  $82,450  to  surplus  and 
undivided  profits.  In  1896,  $40,000  was  paid 
out  in  dividends  and  $72,568  added  to  sur- 
plus and  undivided  profits. 

The  panic  of  1907  is  fresh  in  the  memory 
of  all.  It  will  not  easily  be  forgotten. 
Enough  to  say  that  the  Kings  County  Trust 
Company  came  out  of  the  financial  storm 
stronger  than  ever.  In  that  year  it  paid 
out  $60,000  in  dividends  and  added  $90,390 
to  undivided  profits. 


BOOK  REVIEWS 


How  to  Read  Character  in  Handwriting. 
By  Mary  H.  Booth.  Price  in  boards,  35 
cents  postpaid;  author’s  autograph  edi- 
tion, in  limp  leather  binding,  $1.00,  post- 
paid. The  Philadelphia  Reference  Library, 
3730  North  Svdenham  street,  Philadelphia, 
Pa. 

One  does  not  need  to  be  a devotee  of  the 
autograph  fad  to  appreciate  and  enjoy  this 
clever  little  book  prepared  by  Miss  Mary  H. 
Booth.  Since  the  earliest  days  science  has 
recognised  the  fact  that  handwriting  is  an 
index  of  character  and  placed  reliance  on 
deductions  from  it.  Criminals  have  been 
punished  and  men  set  free  on  the  strength 
of  a scrap  of  handwriting.  Scattered 
throughout  its  sixty  odd  pages  are  the  fac- 
simile autographs  of  famous  men  and  women, 
living  and  dead,  with  an  illuminating  analy- 
sis of  their  several  peculiarities  of  tempera- 
ment and  character.  The  book  is  described 
as  4<a  guide  for  the  beginner  and  student  in 
graphology,”  hut  it  is  more  than  that,  for  it 
contains  a message  for  the  business  man,  the 
lawyer,  the  student,  the  banker  and  the  col- 
lector of  autographs. 


Who’s  Who  in  A3ierica— 1910-1911.  A.  N. 
Marquis  & Co.,  Chicago.  (Price,  $5.00, 
net.) 

This  biographical  dictionary  of  notable 
living  men  and  women  of  the  United  States 
makes  the  sixth  edition  of  this  pretentious 
work.  It  contains  2,468  pages  and  17,546 
names  and  sketches,  2,831  of  which  appeared 
in  no  previous  edition.  The  geographical  in- 
dex is  a feature  which  adds  greatly  to  the 
usefulness  of  the  volume.  It  groups  by 
states,  cities  and  post-office  address  all 
names,  making  it  easy  to  find  quickly  the 
names  for  any  particular  place  or  locality. 


American  Street  Railway  Investments. 

McGraw  Publishing  Company,  New  York. 

Price,  $5.  . 

The  1910  edition  of  American  Street  Rail- 
way Investments,  contains  more  statistics 
and  information  concerning  the  financial  and 
traffic  results  of  operation  of  electric  rail- 
ways than  any  previous  issue. 

An  editorial  introduction  to  the  new  edi- 
tion discusses  the  importance,  both  to  the 
companies  and  the  public,  of  publicity  of 
financial  operations.  A compilation  of  the 
gross  revenues  of  ten  large  companies  and 
of  twenty  smaller  properties,  made  in  order 
to  indicate  how  w^ell  urban  railways  sus- 
tained their  gross  earning  power  after  the 
panic  of  October,  1907,  reveals  interesting 
results.  Gross  earnings  of  the  ten  large 
companies  in  1909  showed  a gain  of  27.9  per 
cent,  over  1905.  The  companies  wrhose  to- 
tals are  included  in  this  compilation  are 
located  in  Boston,  Brooklyn,  Chicago,  De- 
troit, New  York,  Philadelphia,  Pittsburgh, 
Minneapolis,  St.  Louis  and  Baltimore. 

The  twenty  smaller  properties  gained  in 
gross  revenue  in  1909,  as  compared  with 
1905,  30.8  per  cent.  These  companies  are 
located  in  Birmingham,  Ala,;  Washington, 
D.  C.;  Cincinnati,  O.;  Columbus,  O.;  Den- 
ver, Colo.;  Atlanta,  Ga.;  Grand  Rapids, 
Mich.;  Houston,  Tex.;  Indianapolis,  Ind.; 
Knoxville,  Tenn.;  Louisville,  Ky.;  Malwau- 
kee,  Wis.;  Mobile,  Ala.;  New  Orleans,  La.; 
Schenectady,  N.  Y.;  Scranton,  Pa.;  Toledo, 
O.;  Albany,  N.  Y.;  Reading,  Pa.,  and 
Worcester,  Mass. 

Supplementing  the  information  in  previous 
issues,  the  1910  edition  furnishes  financial 
statements  in  greater  detail,  giving  statis- 
tics that  permit  additional  analysis  of  the  ac- 
tual results  obtained. 


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BANKING  AND  FINANCIAL  NOTES 


NEW  YORK  CITY 

— Directors  of  the  Fourth  National  Bank 
of  New  York  have  promoted  James  G. 
Cannon  to  the  presidency  as  the  successor 
to  J.  Edward  Simmons,  who  died  early  in 
August.  No  one  was  elected  to  fill  the  place 
of  Mr.  Simmons  on  the  directorate  or  to 
succeed  Mr.  Cannon  as  vice-president. 

It  was  generally  understood  that  Mr. 
Simmons  was  to  have  retired  from  the 
presidency  next  January  and  become  chair- 
man of  the  board,  and  the  common  report 
was  that  Mr.  Cannon  was  to  take  his  place. 

The  new  president  was  educated  in  the 
New’  York  schools  and  went  into  the  bank- 
ing business  in  1876  ns  a messenger  with 
the  Fifth  Avenue  Bank.  A few  years  later 
he  w’as  made  paying  teller,  then  assistant 
cashier  and  later  cashier  of  this  institution. 
In  1890  he  was  elected  a vice-president  of 
the  Fourth  National. 

Mr.  Cannon  is  best  known  among  bank- 
ers for  his  work  in  making  systematic  the 
credit  department  of  banks.  He  is  consid- 
ered a high  authority  on  clearing  houses  in 
this  country  and  his  book  on  “Clearing 
Houses’’  has  an  established  reputation.  He 
was  one  of  the  organizers  and  a president 
of  the  National  Association  of  Credit  Men, 
and  it  w’as  he  w'ho  introduced  the  system 
of  requiring  merchants  to  supply  statements 
of  their  financial  condition  when  they 


Bronze  and  Iron  Work  for  Banks 


Cast  Bronze  Signs  and  Tablets 
BRONZE  COUNTER  SCREENS 
Wire  Mesh  Enclosures 

To  Special  Design 

JNO.  WILLIAMS  INC-.  Bronze  Foundry. 

256  Weit  27th  Street.  New  York , publlAhes  the 
Magazine  “ American  Art  in  Bronze  and  Jron .”  il- 
lustrating Bank  Counter  Screens,  Tablets,  Signs, 
etc.  Copies  free  to  Bankers. 

*'  Your  Architect  k«oi«  J no.  Williams  Inc 


426 


Merchants  National  Bank 


RICHMOND,  VA. 

Capital  8200.000 

Surplus  and  Profits,  928,000 

This  bank  is  the  largest  depository  for 
banks  between  Baltimore  and  New  Orl- 
eans. It  is  Virginia’s  most  successful 
National  Bank.  It  has  the  best  f&cliitles 
for  handling  items  on  the  Virginias  and 
Carollnas.  Collections  carefully  routed. 

Correspondence  Solicited 


wanted  to  negotiate  loans.  As  chairman 
of  the  committee  on  finance  and  currency 
of  the  chamber  of  commerce  he  has  pre- 
sented a number  of  reports  that  have  at- 
tracted attention.  Mr.  Cannon  is  a direc- 
tor of  the  Fifth  Avenue  Bank,  the  Trow 
Directory  Company,  the  Bankers  Trust 
Company,  the  Franklin  Savings  Bank,  the 
United  States  Mortgage  & Trust  Company, 
the  United  States  Guarantee  Company  and 
is  president  and  trustee  of  the  Hahnemann 
Hospital.  He  was  born  in  1858. 

— At  a meeting  of  the  directors  of  the 
Chatham  National,  held  August  12,  Presi- 
dent George  M.  Hard  resigned  and  was 
elected  chairman  of  the  board,  the  office 
which  w’as  created  for  him.  Louis  G.  Kauf- 
man, president  of  the  First  National  of 
Marquette,  Mich.,  was  chosen  to  take  Mr. 
Hard’s  place.  The  new’  head  of  the  bank 
has  been  in  the  banking  business  for  eigh- 
teen years  and  has  been  president  of  the 
Michigan  Bankers'  Association.  He  is  now* 
a member  of  the  executive  council  of  the 
American  Bankers'  Association,  and  is  well 
and  favorably  knowm  to  bankers  all  over  the 
country. 

Mr.  * Hard  has  been  associated  with  the 
Chatham  bank  for  fifty  years  and  it  has 
been  understood  for  some  time  that  he 
wished  to  have  his  duties  lightened.  The  other 
officers  remain  the  same.  Mr.  Hard  is  also 


Digitized  by  t^ooQle 


BINDERS 

AND 

BLANKS 


OF  UNIFORM  EXCELLENCE 

FOR  ALL  DEPARTMENTS  OF  BANK  ACCOUNTING 


BAKER -VAWTER  COMPANY 


CHICAGO 


HOLYOKE,  MASS. 


a director  of  the  North  River  Steamboat 
Company,  the  Anglo-American  Savings  and 
Loan  Association,  the  New  York  Theatre 
Company,  the  Union  Dime  Savings  Insti- 
tution and  is  treasuer  of  the  General  Elec- 
tric Inspection  Company.  Mr.  Hard  sent 
a circular  letter  to  the  stockholders  saying 
he  wished  to  be  relieved  of  his  burden  and 
speaking  cordially  of  Mr.  Kaufman. 

— Losses  incurred  through  improvident 
loans  that  proved  uncollectible,  caused  the 
closing  of  the  European-Ainerican  Bank  at 
Greenwich  and  Dey  streets.  It  was  organ- 
ized in  1907  and  had  a capital  of  $100,000, 
and  a book  surplus  June  30,  1910,  of  only 
$20,800.  The  deposits  amounted  to  $201,000. 
Liquidation  will  be  prompt. 

— For  June  30  the  Fidelity  & Casualty 
Company  of  New  York  reports  total  re- 
sources of  $9,607,864.46,  a reserve  for  un- 
earned premiums  of  $3,014,292.44  and  a 
surplus  to  policyholers  of  $3,378,053.64. 
This  last  item  is  made  up  of  the  $1,000,000 
capital  and  net  surplus  of  $2,378,053.64. 
The  last  issue  of  the  monthly  bulletin  pub- 
lished by  the  Fidelity  & Casualty  Co.,  main- 
tains the  high  standard  it  has  always  kept. 
'There  are  bright,  newsy  paragraphs  on 
every  page  and  a cut  of  Governor  Hughes 
adorns  the  cover  page. 

— Still  another  branch  bank  is  to  be  es- 
tablished by  the  Corn  Exchange  Bank — 
this  one,  the  ninth,  to  be  known  as  the 
Plaza  branch,  and  will  be  situated  on  the 
plaza  of  the  Queensboro  Bridge,  in  Long 
Island  City.  The  contract  for  construction 
of  the  building,  which  has  been  let,  calls  for 
the  expenditure  of  $38,000.  The  Greenpoint 
branch  of  the  bank  is  now  installed  in  the 
old  Seventeenth  Ward  branch  of  the  Union 
Bank. 

--Clyde  H.  Folsom  and  Samuel  G.  Adams, 
who  were  formerly  connected  with  Fisk 
and  Robinson,  and  Robert  C.  Rathbone  as 
a special  partner  have  formed  a co-part- 


nership under  the  firm  name  of  Folsom  & 
Adams  for  the  transaction  of  a general 
banking  and  investment  business  with  offices 
at  45  Wall  Street.  The  new  firm  will  make 
a specialty  of  government  bonds. 

Clyde  H.  Folsom  is  a native  of  Oak- 
land, Maine.  He  attended  school  in  Port- 
land and  embarked  in  business  with  his 


Clyde  H.  Folsom 


father.  Finding  his  father’s  business  un- 
congenial he  secured  a position  in  a minor 
capacity  with  the  Lancaster  National  Bank 
of  Lancaster,  N.  H.  He  remained  with 
this  institution  for  three  years,  at  the  end 
of  which  time  he  accepted  a position  in 
Boston.  After  a brief  association  with  the 
Provident  Institution  for  Savings  on  Tem- 
ple place,  Boston,  Mr.  Folsom  came  to 
New  York  to  travel  for  the  firm  of  Fisk 
and  Robinson,  very  shortly  after  the  or- 

427 


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MARWICK  MITCHELL  & CO. 

CHARTERED  ACCOUNTANTS 

79  WALL  STREET,  NEW  YORK 


NEW  YORK 
PHILADELPHIA 
WASHINGTON 
NEW  ORLEANS 


PITTSBURG 
CHICAGO 
MILWAUKEE 
KANSAS  CITY 


ST.  JOSEPH 
ST.  PAUL 
MINNEAPOLIS 
SPOKANE 


MONTREAL  GLASGOW 

WINNIPEG  LONDON 


ganization  of  that  house.  From  July  1, 
1902,  to  February  1 of  this  year  he  had 
charge  of  their  government  bond  depart- 
ment, and  therefore  his  knowledge  of  that 
market  is  based  on  good,  ripe  experience. 

Samuel  G.  Adams  is  a New  Yorker  by 


Samuel  G.  Adams 


birth.  He  began  his  business  career  with 
the  Fifth  Avenue  Bank  of  New  York  in 
1895  and  during  the  period  of  his  associa- 
tion with  this  institution  filled  positions  of 
trust  and  responsbility  in  every  depart- 
ment. In  April,  1901,  he  became  connected 
with  Messrs.  Fisk  & Robinson  and  shortly 
thereafter  was  placed  in  charge  of  the 
clerical  force  in  their  bond  department. 
This  position  ho  held  until  August,  1907, 
at  which  time  he  was  appointed  manager 
of  the  office. 

Robert  C.  Rathbone,  2nd,  comes  from  an 
old  New  York  family.  His  great  grand- 

428 


father,  James  \\\  Bleeker,  was  presi- 
dent of  the  New  York  Stock  Exchange  from 
1827  to  1829  and  his  grandfather,  Robert 
C.  Rathbone,  founded  the  insurance  house 
of  R.  C.  Rathbone  & Son,  of  which  Mr. 
Rathbone  is  now  a partner.  He  is  a gradu- 
ate of  the  law  school  of  Harvard  LTniversity 
and  a member  of  the  New  York  Bar.  For 
several  years  he  was  associated  with  the 
law  firm  of  Philbin,  Beekman  & Menken,  in 
New  York  City,  and  since  1904  has  largely 
devoted  his  time  to  his  insurance  interests, 
making  a specialty  of  that  branch  of  the 
law.  Mr.  Rathbone  is  a director  and  one 
of  the  managers  of  the  Assurance  Company 
of  America  and  a director  of  several  other 
corporations;  he  is  also  a member  of  the 
Down  Town  Association  and  the  Harvard 
Club  of  New  York. 

— The  National  Negro  Bankers’  Asso- 
ciation held  a meeting  August  16,  at  Metro- 
politan Hall. 

Rev.  Dr.  \V.  R.  Pettiford,  president  of 
the  Alabama  Penny  Savings  Bank  of  Bir- 
mingham, who  presided,  said  that  the  great 
fight  of  negro  banks  throughout  the  coun- 
try was  to  teach  the  negroes  to  aggregate 
capital,  so  that  property  purchases  could 
be  secured. 

Dr.  Pettiford  said  that  at  the  present 
time  there  were  about  fifty-seven  negro 
banks  throughout  the  country,  of  which 
forty  were  members  of  the  association. 

— Ralph  Jonas  has  been  elected  to  the 
directorate  of  the  Citizens  Trust  Company 
of  Brooklyn,  to  succeed  H.  B.  Rosenson. 


DANK.  PICTURES 

Large  portraits  of  past  officers,  etc., 
made  from  any  good  photograph.  Splen- 
did for  directors’  room  or  bank  offices. 
Write  fr  particulars. 

Oliver  Lippincott,  Photographer  of  Men 

Singer  Bldg.,  149  B’way,  New  York 
Reference*— The  Banker * Magazine 


Digitized  by  t^ooole 


General  (M>7  Electric 


Google 


and  the  electricity  cost  to  the  consumer  was  2%  times  as  much 
per  kilowatt. 

Much  of  the  improvement  is  due  to  the  invention  and  market- 
ing of  more  efficient  lamps  by  the  General  Electric  Company. 

The  MAZDA  Lamp  marks  the  greatest  single  advance  in  the 
history  of  incandescent  electric  lighting.  Because  it  is  nearly  three 
times  as  efficient  as  the  bulb  commonly  in  use,  its  use  in  banks  cuts 
in  two  the  former  oost  of  electric  lighting. 

The  “Dawn  of  a New  Era  in  Lighting,”  a 22-page  booklet, 
illustrated  by  three  dozen  halftones  and  drawings,  and  containing 
information  of  decided  interest  to  all  bank  presidents  and  executives, 
will  be  forwarded  upon  request. 

Address  Department  133 

General  Electric  Company 


Schenectady,  ct{.  Y. 


Sales  Offices  in 
all  Large  Cities 


Lighting 


- / In  these  days  of  high  prices — 

j'  / when  everything  seems  to  cost 

f *7  fe  . - a little  more  today  than  it  did 

/ yesterday — it  is  a relief  to  note 

/ ^ that  the  cost  of  electric  lighting 

/ ^ is  steadily  decreasing. 

/ ^ It  is  a remarkable  fact  that 

I every  improvement  in  incandes- 

^ cent  electric  lighting  since  Edi- 

■ son’s  invention  has  decreased 

its  cost.  Twenty  five  years  ago  elec- 
tric lighting  cost  from  eight  to  nine 
times  as  much  as  it  does  now.  At  that 
time  a 20  candle-power  bulb  required 
from  to  four  times  as  much  current  per  hour  as  the 
modern 


Mazda  Lamp 


HE  one  “Necessity” 
Rapidly  Decreasing 
in  Cost  is  Electric 


Capital  - $6,000,000 
Surplus  - $6,000,000 


Depository  of  the 
United  States,  State 
and  City  of  New  York 


The  Mechanics  and  Metals  National  Bank 


OF  THE  CITY  OF  NEW  YORK 


OATES  W.  McGARRAH,  President. 
ALEXANDER  E.  ORR,  Vice-President 
NICHOLAS  F.  PALMER,  Vice-President. 
ANDREW  A.  KNOWLES,  Vice-President. 
FRANK  O.  ROE,  Vice-President. 


WALTER  F.  ALBERTSEN,  Vice-Pres. 
JOSEPH  S.  HOUSE,  Cashier. 

ROBERT  TT.  GRAFF,  Asst.  Cashier. 
JOHN  ROBINSON,  Asst.  Cashier. 
CHARLES  E.  MILLER,  Asst.  Cashier. 


Mr.  Jonas  is  a brother  of  Nathan  S.  Jonas, 
president  of  the  company. 

— William  E.  Wheelock,  president  of  the 
Weber  Piano  Company,  treasurer  of  the 
Aeolian  Company  and  affiliated  with  other 
like  interests,  has  been  elected  a trustee  of 
the  Nassau  Trust  Company  of  Brooklyn 
Borough.  Mr.  Wheelock’s  father,  A.  D. 
Wheelock,  was  the  first  president  of  the 
trust  company. 

. NEW  ENGLAND  STATES 

— After  an  existence  of  fifty  years,  the 
Richmond  National  of  Richmond,  Me.,  one 
of  the  oldest  banks  in  the  state,  has  decided 
to  close  its  doors  owing  to  a falling  off  in 
business.  The  institution  will  go  into  liqui- 
dation and  the  capital  and  surplus,  the  lat- 
ter item  amounting  to  $22,000,  will  be  di- 
vided among  the  holders  of  906  shares. 

— C.  B.  Wiggin  has  been  elected  vice- 
president  of  the  Brookline  National  Bank  of 
Brookline,  Mass.  Mr.  Wiggin  was  formerly 
assistant  auditor  of  the  Old  Colony  Trust 
Co.  of  Boston. 


©if*  Albany 
©mat  (Knmpany 

ALBANY,  N.  Y. 

J^CTrVE  end  Reserve  c4ocotmts 
Are  solicited  And  interest  psid 
on  deity  helences.  cDesiqnAted 
depository  for  reserve  of  Nev) 
York  Stete  <&Ahks  end  Trust 
Compenies  : : t : : t t 

Capital  and  Surplus,  $725,000 


430 


— The  Boulevard  Trust  Company  of 
Brookline,  Mass.,  has  just  been  organized 
and  will  open  banking  quarters  near  Cool- 
idge  Corner  in  the  near  future.  Frank  A. 
Russell  of  Brookline  was  elected  president; 
William  A.  McKenney,  also  of  Brookline, 
vice-president.  The  following  named  direc- 
tors were  chosen:  Everett  C.  Benton,  James 
M.  Codman,  Jr.,  William  Craig,  Jonathan 
L.  Dexter,  Guy  A.  Ham,  James  D.  Hender- 
son, William  A.  McKenney,  Albert  L.  Lin- 
coln, Justin  L.  Morse,  Jacob  W.  Pierce, 
Frank  A.  Russell,  Charles  H.  Stearns,  James 
P.  Stearns,  A.  W.  Chesterton  and  C.  L. 
Ayling. 

— A splendidly  balanced  report,  express- 
ing strength  in  every  figure,  comes  to  us 
from  the  Connecticut  Savings  Bank  of  New 
Haven.  This  old  New  England  institution 
carries  $4,874,350  of  loans  and  discounts, 
has  surplus  and  undivided  profits  of  $862,1 75* 
and  deposits  of  $12,011,858.  It  reports  total 
resources  of  $12,874,033. 

EASTERN  STATES 

— For  the  purpose  of  increasing  its  capi- 
tal stock  from  $750,000  to  $1,000,000,  the 
Central  National  Bank  of  Philadelphia  has 
called  a stockholders’  meeting  for  Sept  14. 
It  is  proposed  to  issue  2,500  new  shares 
(par  value  $100),  of  which  present  share- 
holders may  take  one  for  every  three  of  old 
now  held,  payments  to  be  made  on  or  be- 
fore Oct.  4.  In  its  statement  of  June  30, 
the  institution  reported  surplus  and  profits 
of  $3,172,039  and  deposits  of  $19,555,703. 
Its  officers  are:  Wm.  T.  Elliott,  president; 
Wm.  Post,  cashier,  and  Wm.  Y.  Conrad  and 
A.  H.  Jones,  assistant  cashiers. 

—Stockholders  of  the  West  End  Savings 
Bank  and  Trust  Company  of  Pittsburgh 
have  re-elected  the  retiring  directors,  as  fol- 
lows: Robert  S.  Hemiup,  Henry  Tranter, 
Albert  Graham,  Harry  S.  Hershberger, 
Frank  B.  Nimick,  Michael  Diebold,  William 
Kossler  and  Alexander  Williamson.  The 


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BANKING  AND  FINANCIAL  NOTES 


431 


board  will  reorganize  shortly  and  will  prob- 
ably re-elect  the  former  officers,  as  follows: 
Robert  S.  Hemiup,  president;  Harry  S. 
Hershberger,  vice-president  and  treasurer, 
and  George  T.  Osborn,  secretary. 

— W.  M.  Donaldson  has  become  president 
of  the  Merchants*  National  Bank  of  Harris- 
burg, Pa.,  succeeding  H.  D.  Hemler,  and  J. 
F.  Dapp  takes  the  place  of  Mr.  Donaldson 
as  vice-president. 

— Frank  Hastings  has  been  elected  presi- 
dent of  the  Second  National  Bank  of  Al- 
toona, Pa.,  to  replace  the  late  John  P.  Le- 
van. Mr.  Hastings  had  been  cashier  of 
the  bonk  for  a number  of  years.  William 
H.  Allen  has  become  assistant  cashier. 

— Jacob  S.  Hackman  has  been  made  vice- 
president  of  the  Manheim  National  Bank 
of  Manheim,  Pa.,  vice  S.  S.  Brecht. 

— G.  M.  Scott  has  been  elected  president 
of  the  Peoples*  National  Bank  of  Waynes- 
burg,  Pa.,  to  succeed  E.  L.  Denney,  de- 
ceased. Mr.  Scott  is  succeeded  as  vice- 
president  by  S.  B.  Kent;  B.  N.  Freeland 
succeeds  J.  A.  Dunn  as  cashier,  and  S.  C. 
Brock  become  assistant  cashier. 

— The  American  National  Bank  of  Wash- 
ington, D.  C.,  at  a stockholders’  meeting 
on  July  27,  increased  its  capital  stock  from 
$500,000  to  $000,000.  The  enlarged  capital 
will  become  effective  Oct.  1 and  will  be 
brought  about  through  the  issuance  of  1,000 
new  shares  of  stock  (par  value  $100),  to  be 
sold  to  present  shareholders  at  $150  per 
share  and  to  outsiders  at  $160  per  share. 
The  institution  expects  to  add  $55,000  to 
its  surplus  in  this  way.  W.  T.  Galliher  is 
president  of  the  bank,  Colin  H.  Livingstone 
and  H.  R.  Warfield,  vice-presidents;  Wil- 
liam Selbv,  cashier,  and  A.  C.  West,  J.  W. 
Williams  and  Edmund  S.  Wolfe,  assistant 
cashiers.  The  institution,  in  its  statement 
for  June  30,  reported  surplus  and  profits 
of  $197,333  and  deposits  of  $2,449,884. 


SAVOY  TRUST 
COMPANY 

(Formerly  the  Italian-American  Tru*t  Co.) 

520  BROADWAY  - NEW  YORK 


Capital  - $500,000.00 


This  company  has  a thoroughly  equipped 
Foreign  Department,  under  the  personal 
supervision  of  an  officer  of  the  bank.  We 
transact  a general  banking  business,  and 
have  the  best  facilities  for  collecting 
checks — domestic  or  foreign. 


ACCOUNTS  OF  BANKS  SOLICITED. 


BMAN  UJCL  GEBU,  — - President 

C.  PTVA,  - Vice-President 

T.  K.  SANDS,  - - Vice-President 

ARTHUR  DAY,  — — Vice-President 

ARTHUR  BAUR,  Secretary  and  Treasurer 


institution’s  stock  at  $120  a share.  The 
capital  stock,  which  was  $500,000,  was  re- 
duced to  $350,000  by  voluntary  surrender 
of  thirty  per  cent,  of  stock  pro  rata.  Then 
the  capital  was  increased  again  to  $500,000 
by  the  sale  to  Middendorf-Williams  & Co. 
of  1,500  shares  of  stock,  par  value  $100  a 
share,  at  $120  a share.  The  bank  now 
has  $500,000  capital,  $100,000  surplus  and 
$1,306,000  deposits,  or  total  resources  of 
$1^)06,000. 

— The  First  National  of  Hoboken,  N.  J., 
makes  the  following  statement  as  of  June 
30:  Loans  and  discounts,  $1,700,455.90;  U. 
S.  and  other  bonds  and  securities,  $1,31 6,- 
590.34;  cash  and  due  from  banks,  $660,384.- 
10;  total  resources,  $3,890,690.21.  The  capi- 
tal is  $220,000,  surplus  and  profits  $620,- 
460.03,  and  deposits  $2,785,530.18. 


— The  final  step  in  the  reorganization  of 
the  Commercial  & Farmers  National  of  Bal- 
timore was  taken  when  Middendorf-Wil- 
liams & Co.  sent  to  the  bank  a check  for 
$180,000  in  payment  of  1,500  shares  of  the 


— The  National  Newark  Banking  Com- 
pany of  Newark,  N.  J.,  the  oldest  bank  in  the 
state,  has  issued  a report  showing  its  con- 
dition at  the  close  of  business  July  SO,  which 
bears  evidence  of  the  continued  growth  and 
prosperity  of  the  institution.  The  items 
shown  are  as  follows:  Loans  and  discounts, 
$8,655,149.72;  U.  S.  bonds  and  other  se- 
curities, $1,164,000;  cash  and  due  from 
banks,  $2,088,402.67;  total  resources,  $11,- 
932,552.39.  The  capital  is  $1,000,000,  sur- 
plus and  profits,  $1,868,690.01,  and  deposits 
$8,571,091.95. 

— Frank  S.  Thomas,  for  fifteen  years  an 
employee  of  the  Alliance  Bank,  of  Roches- 
ter, N.  Y.,  was  recently  elected  assistant 


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432 


THE  BANKERS  MAGAZINE 


ASK  YOUR 

STATIONER 

FOR 

BANKERS 

LINEN 

AND  BANKERS  UNEM 
BOND 

Made  la  flat  papers.  Typewriter 
papers  and  envelopes 

They  are  fully  appreciated  by 
the  discriminating  banker  de- 
siring high  grade,  serviceable 
paper  for  correspondence  and 
typewriter  purposes.  . . . 


soui  aouts 

F.  W.  ANDERSON  & CO, 

34  BEEKMAN  STREET.  NEW  YORK 


cashier  of  that  institution,  to  fill  the  va- 
cancy caused  by  the  death  of  Charles  R. 
Barton. 


MIDDLE  STATES 

— George  E.  Roberts,  formerly  president 
of  the  Commercial  National  Bank  of  Chi- 
cago, has  resigned  as  president  of  the  Chi- 
cago Clearing  House,  following  his  retire- 
ment from  the  banking  business.  He  was 
elected  to  the  place  on  the  resignation  of 
J.  T.  Talbert,  nearly  a year  ago.  His  suc- 
cessor will  undoubtedly  be  L.  A.  Goddard, 
president  of  the  State  Bank  of  Chicago, 
and  now  vice-president  of  the  clearing 
house.  Mr.  Goddard  succeeded  the  late  H. 
A.  Haugan  in  the  vice-presidency. 

— In  two  weeks’  time,  following  the  mer- 
ger of  the  Continental  National  and  Com- 
mercial National  banks  of  Chicago,  the  de- 
posits of  the  combined  institutions  had  in- 
creased $4,000,000. 

— The  National  City  Bank  of  Chicago 
will  move  to  the  Commercial  National’s  old 
building  at  Dearborn  and  Monroe  streets, 
September  1,  where  it  will  have  twice  the 


amount  of  space  it  now  has  in  the  Temple 
building  on  La  Salle  street. 

— T.  A.  Fitzsimmons,  who  was  assistant 
cashier  of  the  Colonial  Trust  and  Savings 
Bank,  of  Chicago,  is  the  cashier  of  the  new 
Michigan  Avenue  Trust  Company,  which 
will  be  opened  about  September  15.  The 
capital  will  be  $200,000;  surplus,  $50,000.  A 
new  bank  building  for  the  exclusive  use  of 
the  company  will  be  erected  at  2218  Michi- 
gan avenue. 

— Directors  of  the  Western  Trust  and 
Savings  Bank  of  Chicago,  have  approved  a 
contract  by  which  that  institution  will  take 
over  the  business  of  the  Prairie  National. 
The  Western  Trust  is  to  increase  its  capital 
$250,000  to  a total  of  $1,250,000,  the  new 
stock  to  be  exchanged  share  for  share  for 
the  $250,000  capital  of  the  Prairie  National. 
A meeting  of  stockholders  of  the  Western 
Trust  has  been  called  for  Sept.  8 to  au- 
thorize the  capital  increase  and  as  soon  as 
possible  thereafter  the  exchange  of  stock 
will  be  made.  The  Prairie  National  will 
be  liquidated. 

The  purchase  of  the  Prairie  National  will 
give  the  Western  Trust  deposits  of  about 
$10,650,000.  On  the  date  of  its  last  report 
it  had  $8,745,000  deposits  and  the  Prairie 
had  $1,905,000. 

George  Woodland,  president  of  the  Prai- 
rie National,  and  H.  J.  Evans,  one  of  the 
directors,  will  go  on  the  Western  Trust 
board.  Harry  R.  Moore,  vice-president  of 
the  Prairie,  will  be  cashier  of  the  Western 
Trust  and  William  C.  Cook,  who  now  holds 
the  position,  will  be  made  a vice-president. 
Other  officers  and  employees  of  the  Prairie 
National  will  be  taken  care  of  in  the  West- 
ern Trust  or  in  the  Prairie  State  Bank  on 
the  West  Side. 

The  Prairie  National  was  organized  in 
1904  by  interests  in  the  Prairie  State,  part 
of  the  capital  being  supplied  through  the 
payment  of  an  extra  dividend  on  Prairie 
State  stock.  A considerable  amount  of  the 
stock  of  both  these  institutions  has  been 
purchased  by  the  Illinois  Life  Insurance 
Company,  which  also  has  an  important 
holding  in  the  Western  Trust. 

Joseph  E.  Otis,  president  of  the  Western 
Trust,  has  made  excellent  progress  with 
that  institution  since  he  assumed  the  man- 
agement. The  bank  has  a strong  and  active 


SITUATION  WANTED 

SITUATION  wanted  by  man  having  bad  18  years 
experience  in  the  banking  business;  knows  the 
inside  workings  of  a bank,  having  been  auditor  for 
large  banking  institution  in  Chicago,  which  has 
now  gone  out  of  busiueas.  Capable  of  taking  the 
position  of  Cashier,  Assistant  (Cashier  or  Auditor. 
Can  give  good  references  and  have  some  capital  to 
invest.  Address  X,  care  BANKERS  MAGAZINE, 
253  Broadway,  New  York  City. 


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Bergers  Steel  Filing  Equipment 

Cannot  come  apart  like  wood . 


Made  in  every  knowu  style. 

Write  for  Catalogue 


Berber  Co.,  Canton,  Ohio 

BRANCHES 

New  York,  N.  Y.  Atlanta,  Ga.  Chicago,  III. 
Boaton,  Mans.  Minneapolis,  Minn. 
lMiikulcIphin.  Pa  Kansas  cit  \ . Mo. 
St.  Louis.  Mo.  San  Francisco,  Cal. 


board.  It  was  admitted  to  membership  in 
the  clearing-house  quite  recently. 

— The  National  Stock  Yards  (111.)  Na- 
tional recently  secured  a valuable  addition 
to  its  executive  force  by  the  election  as 
vice-president  of  Harr}’  L.  Jarboe,  Jr.,  presi- 
dent of  the  Oklahoma  State  Bank  of  Chick- 
asa,  Okla.  During  the  first  six  months  of 
the  present  year  the  Stock  Yards  Bank 
showed  a gain  of  over  $300,000  in  deposits. 

T.  P.  Martin,  Jr.,  will  leave  the  National 
Stock  Yards  Bank  about  September  1 to 
assume  the  presidency  of  a bank  which  he 
is  organizing  at  the  Oklahoma  Cit}’  Stock 
Yards.  The  bank  will  have  a capital  of 
$250,000,  all  of  which  has  been  subscribed. 
A handsome  bank  building,  fully  equipped 
with  safety  deposit  vaults,  has  already  been 
completed,  and  the  bank  has  only  been  wait- 
ing for  the  further  development  of  the  stock 
yards,  which  now  seems  assured.  Morris  & 
Co.  and  other  large  packers  are  now  con- 
structing extensive  plants  at  that  point. 

— J.  Z.  Miller,  Jr.,  of  Pelton,  Tex.,  who 
owns  stock  in  101  banks  of  the  Southwest, 
has  been  named  as  vice-president  of  the 
Commerce  Trust  Company  of  Kansas  City. 
He  succeeds  to  the  position  made  vacant  by 
the  promotion  of  W.  T.  Kemper,  who  is  now 
president  of  the  institution.  The  vice-presi- 
dency has  been  vacant  for  the  past  six 
months.  Mr.  Miller,  who  has  large  landed 
interests  and  owns  the  electric  light  and 
power  plant  at  Temple,  Tex.,  together  with 
other  commercial  enterprises  selected  Kan- 
sas City  after  looking  over  all  other  financial 
centres  of  the  Southwest. 

— T.  C.  Tupper  has  been  elected  assistant 
cashier  of  the  Central  National  Bank  of  St. 
Louis,  the  growth  of  that  institution  re- 
quiring an  additional  official.  Mr.  Tupper 
was  formerly  w’ith  the  Mechanics-American 
National  Bank  and  previous  to  his  connec- 
tion with  that  bank,  which  was  for  three 
years,  he  was  with  the  National  Bank  of 
Texarkana,  Texas,  assistant  cashier  for 


six  years.  He  enjoys  a large  acquaintance 
among  the  bankers  of  the  Middle  West,  hav- 
ing attended  numerous  State  conventions 
during  his  connection  with  the  Mechanics- 
American  Bank.  The  other  assistant  cash- 
iers of  the  Central  National  Bank  are  J.  N. 
Kingsbury  and  Ferdinand  Diehn.  A.  C. 
Berninghaus  is  the  cashier. 

— J.  C.  Dodd  has  been  added  to  the  direc- 
torate of  the  National  Bank  of  Commerce, 
Louisville,  Ky.,  of  which  Samuel  Casseday 
is  the  president.  Mr.  Dodd  continues  the 
representation  of  his  family  in  the  bank, 
which  began  thirty-three  years  ago,  when  W. 
O.  Dodd  became  a director  of  the  institu- 
tion. He  died  in  1886  and  was  succeeded 
by  his  brother,  J.  L.  Dodd,  who  served  until 
his  death  a few  weeks  ago.  A third  brother 
has  now  been  elected,  making  a unique  series 
of  successions. 

— The  Fletcher  National  Bank  and  the 
American  National  Bank  of  Indianapolis 
will  not  consolidate,  as  was  reported  recent- 
ly. They  will  both  go  out  of  existence  and 
a new  bank  will  be  organized,  to  be  called 
the  Fletcher-American  National  Bank.  It 
will  begin  business  under  its  own  charter. 
This  action  was  made  necessary  to  circum- 
vent a national  law  prohibiting  the  direct 
consolidation  of  national  banks. 

On  the  same  day  the  two  banks  will  go 


RUDOLPH  GUENTHER 

Financial  Advertising 

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Efficient  Publicity  Service  for  finan- 
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THE  BANKERS  MAGAZINE 


THE 

GARFIELD 
NATIONAL  BANK 

Fifth  Avenue  Building 

Corner  Fifth  Ave.  and  Twenty-Third  Street 

NEW  YORK 

CAPITAL  SURPLUS 

$1,000,000  $1,000,000 

OFFICER8 
RUEL  W.  POOR,  President 

JAMES  McCUTCHEON,  Vice-Pres. 
WILLIAM  L.  DOUGLASS.  Cashier 
ARTHUR  W.  SNOW.  Asst.  Cash. 

DIRECTORS 

James  McCutcheon  Samuel  Adams 
Charles  T.  Wills  William  H.  Gelshenen 
Ruel  W.  Poor  Morgan  J.  O'Brien 

Thomas  D.  Adams 


into  voluntary  liquidation  and  the  re- 
sources and  capital  of  the  two  combined 
will  be  used  for  the  formation  of  the  new 
bank.  The  voluntary  liquidation  of  the  two 
banks  can  only  be  accomplished  by  the  per- 
mission of  two-thirds  of  the  stockholders. 

The  stockholders  of  the  two  banks  will 
be  minus  of  every  vestage  of  bank  owner- 
ship until  the  charter  for  the  new  bank 
arrives,  when  they  wfill  be  given  the  same 
amount  of  stock  in  the  new  company  as 
they  had  in  the  two  old  banks.  The  new 
bank  will  take  over  the  assets  and  liabilities 
of  the  other  two  banks. 

The  present  building  of  the  American 
National  Bank  will  be  purchased  by  the 
new  bank  and  business  will  be  begun  in  the 
new  building  as  soon  as  the  deed  is  trans- 
ferred. 

According  to  the  plans,  Stoughton  A. 
Fletcher,  president  of  the  Fletcher  National, 
will  be  president  of  the  new  bank,  and  John 
Perrin,  president  of  the  American  National, 
will  be  chairman  of  the  board  of  directors. 
They  will  be  equally  active  in  the  direction 
of  the  bank’s  business.  The  board  of  direc- 
tors of  the  merged  institution  wall  be 
eighteen  in  number,  the  nine  present  direc- 
tors of  the  American  Bank  and  nine  to  be 
selected  from  the  other  bank.  The  organi- 
zation of  the  board  of  directors  will  likely 
be  changed  after  January  1,  1911. 

The  combined  deposits  of  the  two  banks 
will  be  about  $15,000,000.  The  last  state- 
ments to  the  Comptroller  of  the  Currency 
show  that  on  June  30  the  Fletcher  National 
Bank  had  total  resources  amounting  to 
$11,479,630,  and  the  American  National 


Bank  had  total  resources  amounting  to 
$12,789,033. 

The  Fletcher  Bank  is  one  of  the  oldest 
financial  institutions  in  Indianapolis.  The 
American  National  Bank  was  organized 
August  15,  1900,  and  began  business  Feb- 
ruary 4,  1901. 

— The  proposed  Ohio  Valley  Bank  and 
Trust  Company  of  Cincinnati  will  sink  its 
identity  in  the  Metropolitan  Bank  and  Trust 
Company  of  that  city.  The  Ohio  Valley  Bank 
and  Trust  Company  was  to  have  opened  for 
business  in  the  fall;  it  was  incorporated  in 
the  spring  and  was  to  have  been  established 
with  a capital  of  $250,000;  its  stock  was  of- 
fered at  $120  per  share.  The  subscribed 
capital  is  reported  as  $100,000,  and  the 
Metropolitan  will  issue  that  amount  of  new 
stock  to  the  stockholders  of  the  proposed 
institution.  Cashier  R.  E.  Morrison,  of  the 
Metropolitan,  is  quoted  in  the  Cincinnati 
Times-Star  as  stating  that  the  arrangement 
“simply  means  that  we  take  over  the  stock 
already  subscribed  to  the  Ohio  Valley  and 
the  business  promised  to  the  bank,  and*  issue 
$100,000  stock  of  our  bank  in  payment” 
The  organization  committee  of  the  Ohio 
Valley  ratified  the  proceedings  August  4, 
and  the  details  are  expected  to  be  completed 
by  September  1.  George  W.  Platt,  the  or- 
ganizer of  the  projected  bank,  is  a director 
of  the  Metropolitan,  and  it  is  stated  that 
several  of  the  other  interests  in  the  Ohio 
Valley  will  be  given  a place  on  the  Metro- 
politan’s board.  With  its  new*  issue  of  stock, 
the  latter’s  paid-in  capital  will  be  increased 
from  $100,000  to  $200,000. 

• — Simon  Kuhn,  a brother  of  the  late  Louis 
Kuhn,  who  was  vice-president  of  the  Fifth- 
Third  National  Bank  of  Cincinnati,  has  been 
elected  a director  of  the  institution  and  a 
member  of  its  executive  committee.  Louis 
Kuhn  had  been  a partner  in  the  banking 
house  of  S.  Kuhn  & Sons,  which  w’as  taken 
over  by  the  Fifth-Third  National  early  the 
present  year,  and  he  was  made  a vice-presi- 
dent of  the  latter  at  the  time  of  the  absorp- 
tion. His  death  occurred  last  month. 

— The  Security  Savings  Bank  of  Colum- 
bus, O.,  has  elected  J.  A.  Metcalf  and  Beman 
Thomas  respectively  president  and  cashier 
of  the  institution,  succeeding  E.  J.  Smith 
and  F.  T.  Jones.  The  institution  has  an  au- 


A No.  1 Adding  Machine  Rolls 

LlntleiB  Full  Yardage  Quality  Guaranteed! 

2 5-16”  Rolls  per  100 $5.50 

3 15-32”  Bolls  per  100 8.00 

Plain  or  Ruled. 

Ask  for  samples  and  prices  on  other  widths 
Lansing  Paper  Co.,  Box  155,  Laming,  Mich. 


Digitized  by  t^ooQle 


Capital,  $1,000,000.00  Earned  Surplus,  $1,000,000.00 


JOHN  B.  PURCELL 
President 


JOHN  M.  MILLER,  JR. 
Vice-Pres.  and  Cashier 


FREDERICK  E.  NOLTING,  2nd  Vice-President 

CHAS.  R.  BURNETT •» 

J.  C.  JOPLIN  I Assistant 

W.  P.  SHELTON  f Cashiers^^^fm) 

ALEX.  F.  RYLAND  J m m M 


BILL  OF 
LAOING  DRAFTS 
ON  RICHMONO  A SPECIALTY 


Strong  in  resources,  conservative 
tt0**^*^  in  management,  progressive  in  policy 

OF  RICHMOND,  VIRGINIA 


Assistant 


B.  Mistrot,  S.  H.  Clinton,  A.  J.  Holloway, 
thorixed  capital  of  $50,000,  of  which  about 
$41,000  had  been  paid  in  at  the  last  state- 
ment. It  is  reported  that  the  new  interests 
in  the  bank  have  purchased  the  remaining 
unpaid  capital  and  that  the  latter  will  soon 
be  increased  to  $100,000.  The  institution 
lias  deposits  of  about  $200,000. 

— Lewis  H.  Cooke,  assistant  treasurer  of 
the  Garfield  Savings  Bank,  Cleveland,  O., 
resigned  his  place  last  week  to  become  treas- 
urer of  the  American  Trust  and  Savings 
Company  of  Springfield,  O. 

— In  order  that  he  might  devote  all  his  at- 
tention to  his  Cleveland,  O.,  institutions, 
Colonel  J.  J.  Sullivan  has  resigned  as  presi- 
dent of  the  First  National  Bank  of  Canton, 
O.  Louis  A.  Loichet,  who  was  vice-presi- 
dent of  the  latter,  has  succeeded  to  the 
presidency.  Colonel  Sullivan  is  president 
of  the  Central  National  Bank  and  the  Su- 
perior Savings  and  Trust  Company  of  Cleve- 
land. 

SOUTHERN  STATES 

— At  a meeting  of  the  board  of  directors 
of  the  National  Bank  of  Virginia,  of  Rich- 
mond, John  Skelton  Williams,  of  John  L. 
Williams  & Sons,  and  William  T.  Reed, 
president  of  Icarus  & Brother  Company, 
were  elected  vice-presidents  of  that  institu- 
tion. H.  A.  Williams,  John  Tyler,  W.  H. 
Slaughter  and  James  M.  Ball,  Jr.,  were 
elected  assistant  cashiers.  W.  M.  Habliston 
continues  as  president  and  W.  M.  Addison 
as  cashier.  O.  S.  Morton  also  continues  as 
assistant  cashier. 

— The  Capitol  Savings  Bank  of  Richmond, 
Vit.,  and  the  Bank  of  Commerce  and  Trusts, 
of  the  same  city,  have  agreed  to  consolidate. 
The  officers  of  the  enlarged  institution  will 
be:  Oliver  J.  Sands,  president;  A.  R.  Holla- 
day,  vice-president,  and  It.  M.  Kent,  cashier. 
No  date  has  been  set  for  the  actual  consoli- 
dation, but  it  is  expected  to  take  place  with- 
in two  months.  The  Capitol  Savings  Bank 
has  a capital  of  $50,000.  The  Bank  of  Com- 
merce and  Trusts  recently  took  steps  to  in- 
crease its  capital  from  $200,000  to  $300,000. 


— Up  to  August  6,  the  clearing-house 
banks  of  Atlanta,  Ga.,  had  reported  capital, 
surplus  and  undivided  profits  of  $8,736,092.- 
06  and  deposits  of  $21,897,263.06.  If  the 
banks  of  Atlanta  can  continue  to  report 
such  splendid  figures,  they  will  easily  wrest 
the  record  from  some  of  the  northern  cities. 

— At  a meeting  of  the  directors  of  the 
First  National  of  Birmingham,  Ala.,  on  July 
20,  a proposition  to  increase  the  capital 
stock  of  the  bank  to  $1,500,000  was  consid- 
ered and  a circular  letter  has  been  mailed 
to  all  of  the  stockholders  setting  forth  the 
plan  of  the  directors.  The  proposition  will 
be  submitted  to  the  stockholders  at  a meet- 
ing on  October  11.  If  the  stockholders  con- 
cur with  the  idea  of  the  directors,  $500,000 
worth  of  capital  stock  will  be  sold  to  pres- 
ent stockholders  at  $200  per  share.  The 
surplus  will  therefore  be  raised  to  $1,500,000 
and  the  capital  will  be  increased  to  the  same 
amount. 

— The  German-American  National  of  New 
Orleans  makes  the  following  report  at  the 
close  of  business,  June  30:  Loans  and  dis- 
counts, $5,205,950.92;  V.  S.  and  other  bonds, 
$1,189,120;  cash  and  due  from  banks,  $2,- 
006,461.61.  The  capital  is  $1,000,000;  sur- 
plus and  profits,  $646,378.32,  and  deposits, 
$5,900,192.66. 

— The  City  Bank  and  Trust  Company  of 
New  Orleans  has  taken  possession  of  its 
new  home  on  Carondelet  street,  near  Canal. 
The  architecture  of  the  new  building  is  along 
classic  lines,  while  in  finish  and  equipment 
the  banking  room  ranks  with  the  best  in  the 
city. 

— Charles  E.  Novel  has  been  chosen  cash- 
ier of  the  People’s  Savings  Trust  and  Bank- 
ing Company  of  New  Orleans,  to  succeed 
L.  O.  Landry,  retired.  Mr.  Novel  has  been 
assistant  cashier  of  the  Inter-State  Bank 
and  Trust  Company  of  New  Orleans. 

— The  Central  Texas  National  Bank  has 
opened  for  business  in  Waco.  The  directors 
arc:  Gip  Smith,  W.  H.  McCullough.  R.  B. 
Spencer,  W.  T.  Herrick,  C.  L.  Johnson,  H. 

435 


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THE  BANKERS  MAGAZINE 


I ESTABLISHED  1865  | 

National  Bank 
of  Virginia 

RICHMOND,  VA. 

Capital  ....  $1,200,000.00 

Surplus  ....  600,000.00 

Deposits  OVER  EIGHT  [MILUON  DOLLARS 

WM.  M*.  HABLISTON,  President 
JOHN  SKELTON  WILLIAMS,  Vicc-Pres. 
WILLIAM  T.  REED,  Vice-Pres. 

W.  MEADE  ADDISON,  Cashier 
O.  S.  MORTON,  Asst.  Cashier 
H.  A.  WILLIAMS,  Asst.  Cashier 
JOHN  TYLER.  Asst.  Cashier 
W.  H.  SLAUGHTER,  AbsL  Cashier 
JAMES  M.  BALL,  Asst.  Cashier 

Accounts  of  Banks.  Bankers.  Corporations. 
Firms  and  Individuals  solicited  on  favorable 
terms.  Correspondence  invited. 

LARGEST  CAPITAL 
of  Any  Bank  in  Virginia 


Cal  Shelton,  j.  J.  Durham,  C.  L.  Sanger,  J. 
P.  Anderson,  J.  G.  Whitworth,  R.  L.  Cart- 
wright, Sep  Smith  and  F.  E.  McLarty.  W. 
H.  McCullough  is  president;  R.  B.  Spencer, 
first  vice-president;  Gip  Smith,  second  vice- 
president;  C.  L.  Johnson,  third  vice-presi- 
dent; F.  E.  McLarty,  cashier;  L.  A.  Brooks, 
first  assistant  cashier,  and  M.  L.  Hirsch- 
felder,  second  assistant  cashier.  The  new 
bank  is  incorporated  for  $300,000. 

— General  satisfaction  has  been  expressed 
at  the  selection  of  officers  for  the  National 
State  and  City  Bank  of  Richmond,  Va., 
which  is  the  institution  newly  formed  by  a 
consolidation  of  the  National  State  Bank  of 
Richmond  and  the  City  Bank  of  Richmond. 

Col.  William  H.  Palmer,  president  of  the 
consolidated  banks,  was  formerly  the  presi- 
dent of  the  City  Bank  and  is  well  known  for 
his  sterling  qualities  and  his  capabilities  as 
a banker. 

John  S.  Ellet,  selected  for  vice-president, 
was  formerly  president  of  the  National  State 
Bank.  Under  his  eye  the  National  State 
Bank  came  to  be  one  of  the  most  successful 
banks  of  the  South. 

William  M.  Hill,  the  second  vice-president, 
was  formerly  cashier  of  the  National  State 
Bank.  J.  W.  Sinton,  formerly  cashier  of 
the  City  Bank,  was  the  third  vice-president 
chosen,  and  Julien  II.  Hill  was  the  choice  of 
those  concerned  for  the  cashiership. 

In  addition  to  the  directorate  of  the  Na- 


tional State  Bank,  the  following  were  chosen 
from  the  City  Bank:  Col.  W.  H.  Palmer, 
Stewart  M.  Woodward,  James  H.  Anderson, 
E.  A.  Palmer,  E.  B.  Addison,  S.  H.  Hawes. 

Deposits  of  the  National  State,  according 
to  a statement  rendered  shortly  before  the 
consolidation,  were  $3,181,530.35;  those  of 


COL.  WM.  H.  PALMER 
President  National  State  and  City  Bank'of 
Richmond,  Va. 


the  City  Bank  were  $1,371,423.90.  The  new 
institution  has  a capital  of  $1,000,000,  a sur- 
plus of  $600,000  and  deposits  of  $4,083^24. 
On  Julv  1,  1910,  it  reported  total  resources 
of  $6,115,249. 

— On  July  16  the  First  National  Bank 
and  the  National  Bank  of  Commerce  of  El 
Paso,  Texas,  were  consolidated  under  the 
name  of  the  former.  Deposits  now  aggre- 
gate $4,000,000;  the  capital  is  $600,000,  with 
$200,000  surplus  and  $25,000  undivided  prof- 
its. Joshua  S.  Raynolds  is  president;  James 
G.  McNarv,  vice-president;  W.  L.  Tooley, 
viee-p resident;  Edward  W\  Kayser,  cashier; 
W.  M.  Butler,  Francis  B.  Gallagher,  T.  M. 
Quebcdeaux,  assistant  cashiers.  All  the  di- 
rectors of  the  National  Bank  of  Commerce 
were  added  to  the  directory  of  the  First 
National.  This  bank  is  now  the  leading  in- 
stitution of  the  Southwest. 


Digitized  by  t^ooQle 


JOHN  S.  ELLET 


WM.  M.  HILL 


Second  Vice-President  National  State  and  City 
Bank  of  Richmond,  Va. 


Vice-President  National  State  and  City  Bank 
of  Richmond,  Va. 


JAMES  W.  SINTON  JULIEN  H.  HILL 

Third  Vice-President  National  State  and  City  Cashier  NationallState  and  City  Bank  of 

Bank  of  Richmond,  Va.  Richmond.  Va. 

437 


Digitized  by  t^ooQle 


43  8 


THE  BANKERS  MAGAZINE 


AMERICAN 

NATIONAL  BANK 

RICHMOND,  VIRGINIA 


(Organized  Nov.  1,  1899) 

Capital,  • • - $500,000.00 
Surplus  and  Profits,  300,000.00 

Located  In  the  capital  and  metrop- 
olis of  the  state  and  fully  equipped 
In  every  respect  for  prompt  and 
efficient  service,  this  bank  seeks  the 
Richmond  and  Virginia  business  of 
Banks,  Firms,  Corporations  and  In- 
dividuals everywhere. 

The  large  number  of  this  Institu- 
tion’s present  correspondents  and  de- 
positors Is  ample  proof  of  the  satis- 
factory service  rendered. 


UNITED  STATES  AND  STATE  DEPOSITORY 


— The  New  Orleans  National  Bank  has 
had  its  charter  extended  for  another  period 
of  twenty  years.  This  institution  is  one  of 
the  most  profitable  and  successful  banks  in 
the  South.  Since  beginning  business  in  1871, 
out  of  its  earnings  the  capital  stock  has 
been  increased  from  $200,000  to  $1,000,000, 
a surplus  and  profit  account  of  $571,820  has 
been  accumulated  and  $2,410,000  has  been 
paid  to  stockholders.  The  New  Orleans  Na- 
tional has  the  distinction  of  being  the  only 
national  bank  in  New  Orleans  having  been 
in  business  forty  years. 


WESTERN  STATES 

— The  Farmers  and  Merchants  Bank  of 
Fairvicw,  Okla.,  has  decided  to.  take  out  a 
national  charter,  at  the  same  time  increasing 
its  capital  from  $15,000  to  $25,000. 

— The  National  City  Bank  of  Denver, 
which  was  recently  organized  by  T.  A.  and 
J.  B.  Cosgriff,  owners  of  a string  of  thirty 
banks  in  Montana,  Wyoming,  Utah,  Ne- 
braska and  Colorado,  will  occupy  the  pres- 
ent offices  of  the  Santa  Fe  Railroad,  in  the 
Railway  Exchange  Building,  Seventeenth 
and  Champa  streets,  when  the  railroad  com- 
pany moves  to  its  new  quarters,  Seventeenth 
and  California  streets. 

T.  A.  Cosgriff  will  be  the  president  of  the 
new  bank.  He  is  also  head  of  the  First  Na- 
tional of  Cheyenne,  and  it  is  said  that  a 
large  part  of  the  Wyoming  business  will  be 
transacted  through  the  National  City  Bank. 
J.  E.  Cosgriff  is  president  of  the  Continen- 
tal National  of  Salt  Lake  City,  and  both 


brothers  are  prominent  in  the  cattle  and 
wool  business.  The  new  bank  will  probably 
begin  business  in  the  fall.  Its  capitalization 
is  $250,000. 

— H.  M.  Raborg  of  New  York  has  as- 
sumed the  presidency  of  the  State  Savings 
Bank  of  Butte,  Mont.,  succeeding  M.  S. 
Largev,  who  becomes  vice-president.  Vice- 
President  A.  T.  Morgan  has  resigned  and 
will  retire  from  the  banking  business  on 
account  of  ill  health. 

— A few  months  ago  the  National  Bank 
of  Arizona,  located  in  Phoenix,  increased  its 
paid-in  capital  from  $100,000  to  $200,000. 
The  Phoenix  National  Bank  and  the  Valley 
Bank  have  just  completed  arrangements,  re- 
spectively, to  increase  their  paid-in  capital 
to  $150,000  from  $100,000  each.  The  Union 
Bank  and  Trust  Company  of  Phoenix,  which 
a few  months  ago  increased  its  paid-in  capi- 
tal to  $50,000,  will  very  shortly  make  an- 
other increase — this  time  'to  $100,000. 

The  action  taken  by  these  four  flourishing 
banks  denotes  their  recognition  of  the  fact 
that  Phoenix  has  become  the  commercial 
centre  of  the  territory,  and  that  they  are 
prepared  to  take  care  of  their  fast  increas- 
ing business. 


— Prescott  National  Bank,  Prescott,  Ariz., 
at  the  close  of  business,  June  30,  makes  the 
following  statement:  Loans  and  discounts, 
$079,432;  bonds,  seecurities,  etc.,  $160,543; 
cash  and  due  from  banks,  $498,334;  capital 
stock,  $100,000;  surplus  and  undivided  prof- 
its, $195,165.  The  officers  are:  R.  N.  Fred- 


The 


Berlitz  School 

of 

Languages 

MADISON  SQ,,  1122  BROADWAY 

Harlem  Branch,  843  Lenox  Arc., 
above  127th  3*. 

Brooklyn  Branch.  218  Livingston  St, 
Branches  In  over  250  leading  oltiee 
Summer  School  Asbury  Park,  N.  J. 

Hotel  Touralnc  Annex 
Fifth  At.  near  Grand 

Teachers  sent  all  points  within  50  miles 
Day  and  Kvenlng  Lessons,  in  Classes  or 
Privately,  at  School  or  at  Besldenoe. 


AWARDS 


PABIB  EXPOSITION. 

1900, 

Lilli  " 

1902, 

ZURICH 

1902, 

8t.  Louis  “ 

1904, 

LINOS  “ 

1905, 

LONDON  “ 

1908, 

2 GOLD  MSDALB 
Gold  Mbdal 

GOLD  MBDAL 
GRAND  PBIZS 
GBAND  PBIZS 
GRAND  PBJZB 


Digitized  by  t^ooQle 


American  Securities 

• • • and  • • • 

Foreign  Investors 

Our  continued  prosperity  depends  upon  access 
to  die  world’s  supply  of  capital. 

This  we  cannot  have  unless  the  foreign  investor 
has  confidence  in  our  business  methods  and  die  fair* 
ness  of  our  laws  relating  to  railroads  and  industrial 
corporations. 

How  we  may  counteract  the  influences  to  un- 
dermine this  confidence  is  described  in  the  new 
book — 

Confidence,  or  National  Suicide? 

By.  Arthur  E.  Stilwell 

(President  Kansas  City,  Mexico  a Orient  Railway) 


Othor  Foaturom  of  Intoroot  arm 

1.  Are  You  a Lion  or  a Zebra? 

2.  The  Great  Northern  and  Jas.  J.  Hill 

3.  The  Remedy  for  Bad  Times 

4.  The  Apaches  of  Finance 

5.  “Grabitis”  or  the  National  Disease? 

6.  The  American  Legion  of  Honor 


Cloth  Bound,  $1.00 

BANKERS  PUBLISHING  COMPANY 

253  Broadway,  New  York 


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Capital,  - • $2,500,000.00 
Surplus  $ Profits,  1,250,000.00 
Deposits,  - - 27,000,000.00 


FIRST 

K*  r,ON.\L 

BANK 


Cleveland,  Ohio 


ACCOUNTS  SOLICITED. 
C0DRESP0NDENCE  INVITED. 
COLLECTIONS  A SPECIALTY. 


cricks,  president;  Morris  Goldwater,  vice- 
president;  F.  G.  Brecht,  vice-president;  H. 
A.  Cheverton,  cashier,  and  G.  E.  Meany,  as- 
sistant cashier, 

PACIFIC  STATES 

— Since  the  official  statement  of  the  Seattle 
National  Bank,  issued  on  March  29  of  the 
present  year,  it  has  consolidated  with  the 
Puget  Sound  National  Bank,  thereby  doub- 
ling its  capital,  which  is  now  $1,000,000.  Its 
deposits  since  the  consolidation  show  an 
increase  of  $6,563,591.77,  being  now  $15,847,- 
736.96.  It  has  surplus  and  undivided  prof- 
its of  $977,119.34,  loans  of  $9,649,351.37, 
cash  and  exchange  of  $4,921,905.78,  and 
totals  of  $17,624,848.60. 

— The  American  National  Bank  of  San 
Francisco  has  a capital  of  $1,000,000.  Its 
last  statement,  issued  pursuant  to  call  of 
June  30,  shows  cash  and  exchange  of  $2,- 
557,533.07  and  deposits  of  $5,531,855.02,  and 
it  centres  its  energies  on  commercial  banking, 
and  is  a popular  and  efficient  reserve  agent. 
It  has  surplus  and  undivided  profits  of 
$502,320.56,  loans  of  $3,624,080.76,  and  totals 
of  $8,283,943.65.  The  officers  are:  P.  E. 
Bowles,  president;  Francis  Cutting,  vice- 
president,  and  that  most  popular  banker  in 
the  Northwest,  George  N.  O’Brien,  is  cash- 
ier; E.  J.  Broberg,  Russell  Lowry,  D.  B. 
Fuller  are  assistant  cashiers,  and  H.  de  Saint 
Seine,  manager  foreign  exchange  depart- 
ment. 

— To  the  old  National  Bank  of  Spokane, 
Wash.,  belongs  the  distinction  of  circulat- 
ing the  first  antiseptic,  germ-proof  national 
banknotes.  The  United  States  Treasury 
is  still  experimenting  with  devices  intended 
to  launder  dirty  banknotes  into  bright,  crisp 
ones,  but  the  Spokane  bank  has  the  first 
sanitary  money  on  record.  Fifty  thousand 
dollars  in  bills  just  put  out  by  the  bank 
were  signed  with  an  ink  which  consisted 
largely  of  carbolic  acid.  The  result  is  the 
bills  are  saturated  with  an  agency  which 
means  death  to  the  most  vigorous  germ. 

— Established  in  1882,  just  28  years  ago, 
the  First  National  Bank  of  Seattle  lays 
claim  to  being  one  of  the  pioneer  institu- 
tions of  the  Queen  City.  Its  capital  stock 
is  $300,000;  its  surplus,  $60,000;  its  undi- 
vided profits,  $17,319.26;  loans,  $2,549,653.84; 

440 


cash  and  exchange,  $1,145,513.20;  deposits, 
$3,730,690.58  and  its  totals  are  $4,907,409.84. 
Ihe  officers  are:  M.  A.  Arnold,  president; 
M.  McMicken,  D.  H.  Moss,  vice-presidents; 
J.  A.  Hall,  vice-president  and  cashier;  C.  A. 
Philbrick,  assistant  cashier. 

— With  both  capital  and  surplus  doubled, 
the  Union  Savings  and  Trust  Company  of 
Seattle  has  entered  upon  another  epoch  in 
its  career  of  prosperity.  The  capital  is  now 
$600,000,  and  surplus,  $140,000,  and  with  this 
working  capital  the  officers  expect  to  make  a 
still  better  showing  than  that  reported  to 
the  State  examiner  at  the  close  of  business, 
June  30.  On  that  date,  with  its  lower  capi- 
talization of  $300,000,  the  bank’s  total  re- 
sources were  $3,298,041.63,  and  deposits  of 
$2,939,691.74.  Loans  and  discounts  were 
$2,156,809.24;  cash  and  due  from  banks, 
$702,412.02. 

James  D.  Hoge  is  president  of  the  com- 
pany. The  other  officers  are:  J.  D.  Lowanan 
and  A.  B.  Stewart,  vice-presidents;  N.  B. 
Solner,  cashier,  and  Rollin  Sanford  and 
Charles  B.  Brown,  assistant  cashiers. 

— P.  C.  Kauffman,  secretary  of  the  Wash- 
ington Bankers’  Association,  is  the  author 
of  the  following  resolutions,  which  were 
unanimously  adopted  by  his  association  at 
its  recent  convention: 

Resolved,  That  the  executive  officers  of 
this  association  be  hereby  authorized  to  set 
apart  annually  out  of  the  funds  of  this  asso- 
ciation the  sum  of  $25,  to  be  annually 
awarded  as  a prize  to  that  student  of  the 
senior  class  of  the  University  of  Washington 
taking  the  economics  course,  who  shall  sub- 
mit the  best  essay  upon  some  financial  or 
economics  subject,  to  be  selected  by  the  said 
executive  officers,  who  shall  also  prescribe 
the  terms  and  conditions. 

This  resolution  was  amended  so  as  to  pro- 
vide a like  prize  for  Whitman  College  and 
the  State  College  at  Pullman,  provided  said 
institutions  have  a course  in  economics  in 
their  curriculum. 

Resolved,  That  the  executive  officers  of 
this  association  are  hereby  authorised  to 
offer  a first  and  second  prize  in  the  sums  of 
$15  and  $10,  respectively,  for  the  first  and 
second  best  essay  bv  a member  of  one  of 
the  Washington  Chapters  of  the  American 
Institute  of  Banking  upon  some  financial 
subject  to  be  selected  by  said  executive  of- 
ficers, who  shall  be  also  authorized  to  fix 
the  terms  and  regulations  to  govern  the  said 
contest. 


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*[  If  you  are  in  the  market  for  new  BANK 
FIXTURES  and  FURNITURE  it  will  be  very  much 
to  your  advantage  to  get  our  ideas.  The 
name  ANDREWS  stands  for  all  that  is  modern 
in  every  detail  of  office  equipment,  and  the 
ANDREWS  produce  has  been  the  standard  for 
nearly  half  a century. 

*[  We  make  only  the  best  that  skill  and  un- 
equalled manufacturing  facilities  can  pro- 
duce, and  charge  you  only  a fair  price  for  it. 
If  Oue  of  our  experienced  traveling  men  will 
be  glad  to  call  on  you  at  your  convenience. 
Illustrated  Booklet  I'pon  Request 

THE  A.  H.  ANDREWS  CO. 

174-176  Wabash  Ave.  CHICAGO  1161-1175  Broadway,  NEW  YORK 


— Reorganization  plans  in  connection  with 
the  amalgamation  of  the  Washington  Trust 
Company  with  the  Dexter  Horton  National 
Bank  of  Seattle  have  been  concluded  so  far 
as  determination  of  the  official  staff  of  the 
bank  goes.  N.  H.  Latimer  will  be  presi- 
dent; R.  H.  Denny  will  continue  as  vice- 
-president, and  W.  H.  Parsons,  of  the  Wash- 
ington Trust  Company,  will  occupy  a simi- 
lar position.  Directors  of  the  Washington 
Trust  Company,  who  will  be  on  the  board  of 
the  Dexter  Horton  National  Bank,  will  be 

C.  J.  Smith,  George  F.  Stone,  J.  W.  Clisj 
and  W.  H.  Parsons.  J.  W.  Clise,  at  present 
president  of  the  Washington  Trust  Com- 
pany, will  retire  from  other  activity  than 
his  position  on  the  directorate  will  require. 
Cashier  S.  F.  Rathbun  and  the  assistant 
cashier,  G.  K.  Betts,  will  hold  the  same  po- 
sitions with  the  trust  and  savings  depart- 
ments. 

Work  is  now  in  progress  toward  prepar- 
ing the  entire  Second  avenue  front  of  the 
New  York  building  for  the  accommodation 
of  the  consolidated  institutions. 

— The  I/OS  Angeles  Hibernian  Savings 
Bank  is  the  name  of  a new  institution  which 
began  business  in  Los  Angeles,  Cal.,  on  June 
1.  The  bank  has  a capital  of  $250,000,  di- 
vided into  2,500  shares  of  $100  each.  Of 
this  amount,  $148,500  has  been  paid  in. 
There  is  no  surplus,  the  institution  being  in 
existence  less  than  sixty  days.  'ITie  deposits 
July  30  amounted  to  $290,000.  The  officers 
are  as  follows:  Robert  G.  Hill,  president; 

D.  F.  McGarry  and  George  W.  Lichtenber- 
ger,  vice-presidents;  George  A.  J.  Howard, 
cashier,  and  Walter  R.  Holly,  assistant 
cashier. 

CANADA 

— On  September  1 the  Royal  Bank  of 
Canada  will  open  a London  branch  office  at 
2 Bank  Buildings,  Princess  street,  under 
the  management  of  Mr.  James  Mackie. 

— At  the  annual  meeting  on  June  6 of  the 
Quebec  Bank,  head  office  Quebec,  net  profits 
of  $378,927  for  the  year  ending  May  14, 


1910,  were  reported,  comparing  with  $252,- 
771  for  the  previous  year.  The  present 
year’s  report  shows  $318,598  available  for 
distribution,  there  having  been  $39,671  to 
the  credit  of  profit  and  loss.  The  bank  ap- 
plied $175,000  in  dividends  (at  the  rate  of 
seven  per  cent,  per  annum  on  its  capital  of 
$2,500,000) ; set  aside  $5,000  for  the  pension 
fund  and  $100,000  was  written  off  bank 
premises  account,  leaving  $38,598  to  be  car- 
ried forward.  The  deposits  of  the  institu- 
tion amount  to  $10,064,023,  while  its  re- 
sources aggregate  $15,709,630.  It  has  been 
decided  to  change  the  annual  meeting  from 
the  first  Monday  in  June  to  the  first  Mon- 
day in  December.  John  T.  Ross  is  presi- 
dent of  the  bank  and  B.  B.  Stevenson  is 
general  manager. 


BANKS  CLOSED  OR  IN  LIQUIDA- 
TION 

ARKANSAS. 

Newark — Merchants  & Planters  Bank;  closed. 
Siloam  Springs — Bank  of  Siloam  Springs; 
closed. 

ILLINOIS. 

Chicago — Commercial  National  Bank;  in  vol- 
untary liquidation. 

KENTUCKY. 

Louisville — Third  National  Bank;  in  volun- 
tary liquidation. 

MAINE. 

Biddeford— York  County  Savings  Bank; 
closed. 

MISSOURI. 

Tipton — Bank  of  Tipton;  closed. 

NORTH  CAROLINA. 

Chapel  Hill— Peoples  Bank;  closed. 

OHIO. 

Loudon ville — Citizens  Savings  Bank;  closed. 
North  Hampton — North  Hampton  Banking 
Co.;  in  hands  of  receiver. 

Walhonding — Walhonding  Bank;  closed. 

OKLAHOMA. 

Alfalfa — Security  State  Bank:  closed. 
Walhonding— Walhonding  Bank;  closed. 

PENNSYLVANIA. 

Philadelphia— Merchants  National  Bank;  in 
voluntary  liquidation. 

441 


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PUBLISHERS*  ANNOUNCEMENTS 


A GOOD  REVIEW  THE  BOOK  OF  THE  HOUR 


Anna  Youngman’s  “The  Economic 
Causes  of  Great  Fortunes.” 


It  is  worth  remarking  that  the  ownership 
of  a great  fortune  in  former  times  seems 
only  to  have  occasioned  wonder  and  ad- 
miration, while  in  modern  days  It  h-as  been 
challenged  and  has  occasioned  much  criti- 
cism, some  bitterness,  and  even  a tendency 
to  limitation  by  governmental  authority. 

In  “The  Economic  Causes  of  Great  For- 
tunes” Miss  Youngmon  treats  her  subject 
sanely  and  temperately,  without  however 
glossing  over  any  of  the  facts  which,  ap- 
parently with  authority,  she  presents.  She 
considers  great  fortunes  to  be  of  three 
types:  Fortunes  from  purely  private  activi- 
ties, as  in  land  speculations,  illustrated  by 
that  of  John  Jacob  Astor;  fortunes  acquired 
from  the  manipulation  of  corporation  se- 
curities, particularly  railway  corporations,  the 
method  of  Jay  Gould;  and  the  group  for- 
tunes of  very  modern  times,  best  repre- 
sented by  the  Rockefeller  and  Morgan  in- 
terests. Of  these-  three  she  gives  a brief 
and  compact  history,  showing  how  Astor  by 
the  time-honored  method  of  buying  cheap 
and  selling  dear,  by  his  superior  knowledge 
and  judgment  in  buying  cheap  land  in 
raoidlv  growing  commercial  centers,  inevi- 
tably won  his  great  rewards:  how  Gould  by 
his  audacity  and  command  of  resources 
created  situations.  In  his  handling  of  cor- 
porations and  their  securities,  by  which  he 
wa«  riblo  to  help  himself  to  sums  appar- 
ently only  limited  by  his  forbearance,  for 
which  he  was  never  conspicuous;  and  finally 
how  the  great  financial  magnates  of  the 
present  day,  by  their  unlimited  control  of 
funds,  by  their  banking  power  and  the  vast- 
ness of  their  operations,  have  created  the 
group  fortunes  so  called. 

The  last  two  chapters  consider  the  per- 
sonal and  non -personal  factors  involved  in 
getting  and  the  social  services  rendered  by 
the  owners  of  great  fortunes.  The  author 
indicates  that,  while  the  personal  factor  is 
important,  vet  there  usually  comes  a time 
when  it  becomes  quite  secondary  and  the 
non-personal  factor  assumes  the  lead,  as  In 
the  increase  of  the  values  of  the  Astor  lands, 
or  the  vast  additions  to  group  fortunes  by 
reason  of  the  rapid  industrial  development 
of  America. 

As  to  the  value  of  the  social  services  ren- 
dered in  the  creation  of  a great  fortune. 
Miss  Youngman  thinks  that  there  is  grave 
doubt  whether  the  amount  of  a man’s  gains 
bears  any  necessary  relation  to  the  social 
services  rendered,  and  that  they  are  at  least 
grossly  out  of  proportion.  She  gives  many 
illustrations  of  this,  and  other  apt  ones 
might  be  suggested,  as,  for  instance,  the 
monetary  reward  to  the  discoverer  of 
diphtheria  anti- toxin  as  compared  to  that  of 
the  promotors  of  the  Steel  Trust. 

Miss  Youngman’s  book  shows  a great  deal 
of  cartful  research,  is  concise  and  sug- 
gestive, and  can  be  recommended  to  ell 
students  of  social  matters  as  well  as  to  the 
general  reader. 

442 


AS  the  pendulum  does  not  always  swing 
>■  in  one  direction,  it  was  to  be  expected 
that  the  campaign  against  the  rail- 
roads and  other  corporations  would  not  go 
on  forever  without  meeting  some  opposition. 
The  railroads  are  not  purely  “malefactors 
of  great  wealth.”  They  have  actually  done 
something — a great  deal,  in  fact — for  the 
prosperity  of  the  country,  though  many 
people  seem  to  have  forgotten  that  fact. 
It  is  brought  freshly  to  their  minds,  how- 
ever, in  a new  and  strikingly  interesting 
book  by  Arthur  E.  Stilwell,  entitled,  “Con- 
fidence, or  National  Suicide?”  Mr.  Stilwell 
is  a railroad  president,  and  speaks  from 
that  point  of  view;  but  what  he  has  to  say 
is  replete  with  sound  information  and  good 
sense,  and  is  presented  picturesquely  and 
with  a logic  that  is  convincing. 

He  does  not  stop  with  an  argument  for 
justice  to  the  railroads,  but  sharply  criti- 
cises the  bear  raiders,  describes  accurately 
our  craze  for  money  making,  and  interest- 
ingly sums  up  many  of  the  prominent 
phases  of  our  business  life. 

It  is  a "book  that  may  be  read  with  keen 
enjoyment  and  thought  about  with  profit. 

Incidentally,  it  may  be  said  that  in  pub- 
lishing this  book  The  Bankers  Publishing 
Company  made  a record  for  rapid  w'ork. 

Mr.  Stilwell  wrote  the  book  on  his  way 
back  from  Europe  early  in  August.  The 
entire  manuscript  was  written  on  shipboard. 
Promptly  upon  his  arrival  in  New  York, 
he  communicated  with  The  Bankers  Pub- 
lishing Company,  and  inquired  how  quickly 
a 120-page  cloth  bound  book  could  be  pub- 
lished. He  was  informed  that  it  could  be 
done  inside  of  two  or  three  weeks.  This 
period  being  satisfactory  to  Mr.  Stilwell, 
arrangements  were  completed  and  the  man- 
uscript turned  over  to  us  August  15. 

Copies  were  in  the  mails  to  customers  on 
August  25.  Anybody  who  understands  the 
multifarious  details  of  the  printing  and 
publishing  business  will  realize  how  much 
work  this  involved.  In  this  case,  our  own 
records  for  quick  work  were  broken. 

The  demand  for  this  book  is  so  great  that 
the  probabilities  are  that  a second  edition 
will  soon  be  on  the  press. 


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PHOTO  BY  DAVIS  AND  BANDFORD,  N.  Y. 

LEWIS  E.  PIERSON 

Retiring  President  American  Bankers’  Association 


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THE 


BANKERS  MAGAZINE 

ELMER  H.  YOUNGMAN,  Editor 

SIXTY-FOURTH  YEAR  OCTOBER,  1910  VOLUME  LXXXI,  NO.  4 

THE  BANKERS'  CONVENTION 


rJpHE  convention  of  the  American 
Bankers’  Association,  - which 
opened  in  Los  Angeles,  California,  on 
October  3,  with  President  Lewis  E. 
Pierson  in  the  chair,  promises  to  be  a 
memorable  one  in  the  association’s  his- 
tory. It  is  a significant  fact  that  the 
convention  should  be  held  anywhere  on 
the  Pacific  Coast  outside  of  San  Fran- 
cisco. In  fact  Seattle,  Tacoma  and  Los 
Angeles  could  any  of  them  suitably  en- 
tertain the  convention  now,  so  remark- 
able has  been  their  growth  in  recent 
years. 

Ins  Angeles  is,  of  course,  one  of  the 
delightful  cities  of  the  world,  and  its 
business  and  population  have  increased 
of  late  years  in  a ratio  hardly  equalled 
elsewhere  in  the  country.  No  doubt  the 
bankers  who  attended  the  recent  con- 
vention had  abundant  cause  to  be  pleased 
with  California  and  with  its  Southern 
Metropolis. 

Under  President  Pierson’s  adminis- 
tration the  American  Bankers’  Associa- 
tion has  advanced  to  its  highest  point  in 
membership,  and  its  practical  service 
to  the  bankers  of  the  country  has  never 
been  greater.  The  work  done  by  the 
several  sections  and  by  the  various  com- 
mittees has  become  very  wide  in  its 
scope  and  of  large  practical  usefulness. 

This  work  has,  it  is  true,  related 
largely  to  the  ordinary  details  of  bank- 
ing. But  this  is  necessarily  so,  for  these 


are  the  things  of  chief  concern  to  the 
bankers.  And  it  is  but  natural  that  in 
their  association  they  should  attend 
principally  to  those  things  that  bear 
most  directly  upon  their  business. 

And  yet,  while  not  criticising  the  as- 
sociation for  this  apparent  narrowness 
of  its  activities,  the  hope  may  be  ex- 
pressed that  in  the  future  the  association 
shall  have  more  to  show  in  the  way  of 
accomplishment  of  some  things  that 
concern  the  banking  business  as  a whole. 
The  association  has  done  much  to  in- 
culcate sound  views  of  banking  and  fi- 
nance, and  much  more  in  showing  how 
it  is  possible  for  bankers  to  co-operate 
in  securing  results  which  heretofore 
were  left  to  individual  initiative. 

Much  remains  to  be  done.  The  bank- 
ers need  to  be  united  locally  for  action 
on  collections,  paying  interest  on  de- 
posits, bank  supervision,  and  for  other 
purposes.  Effective  action  yet  remains 
to  be  taken  on  the  currency  and  for 
strengthening  the  banking  and  financial 
system.  These  are  great  problems,  and 
united  action  on  some  of  them  may  be 
difficult  and  even  impossible.  But  the 
things  already  done  through  the  efforts 
of  the  American  Bankers’  Association 
warrant  the  belief  that  much  is  to  be 
expected  from  the  closer  spirit  of  asso- 
ciation that  has  developed  among  the 
bankers  of  the  country. 

443 


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444 


THE  BANKERS  MAGAZINE 


BUSINESS  AND  THE  CROPS 

^XTHILE  the  business  situation  of 
late  has  been  far  from  satis- 
factory, it  may  be  expected  to  improve 
materially  before  the  close  of  the  year 
on  account  of  the  marketing  of  the 
crops.  As  shown  by  the  original  inves- 
tigations made  by  the  Continental  and 
Commercial  National  Bank  of  Chicago, 
the  principal  crops  this  year,  although 
showing  some  shortages  as  compared 
with  bumper  years,  are  well  above  the 
ten-years*  average.  With  good  prices 
this  will  bring  in  a stream  of  wealth 
that  can  not  fail  in  exerting  a far-reach- 
ing influence  in  reviving  business  all 
over  the  country. 

Perhaps,  too,  the  worst  is  known  with 
respect  to  the  Government’s  attitude 
toward  business.  As  the  next  session  of 
Congress  must  be  a short  one,  radical 
legislation  will  hardly  get  through. 
And  if  the  new  House  should  be  Dem- 
ocratic, as  now  generally  expected,  there 
will  be  little  chance  of  legislation  of 
any  kind  save  of  the  most  perfunctory 
character,  for  the  Senate  is  pretty  sure 
to  remain  Republican. 

The  abuses  revealed  in  corporate  af- 
fairs have  perhaps  led  to  an  excess  of 
zeal  on  the  part  of  the  public  in  dealing 
with  certain  phases  of  business.  This 
mental  attitude  will  have  to  undergo 
some  modification  before  the  country  can 
expect  to  return  permanently  to  nor- 
mally prosperous  conditions. 


THE  PRESIDENT'S  AMBITION 

CONFIRMATION  of  the  legislative 
ambitions  of  the  President  were 
afforded  some  time  ago  by  the  Washing- 
ton correspondent  of  the  Boston  “Trans- 
cript,” who  said: 

“As  for  President  Taft,  it  will  be  con- 
ceded that  his  chief  interest  for  the  next 
two  years  will  be  in  completing  his  circle 
of  legislative  reforms.  His  ambition  is 
legislative,  not  political.” 


The  correspondent  neglects  to  cite  the 
particular  clause  of  the  Constitution  that 
warrants  the  President  in  making  a leg- 
islative programme  of  any  sort  his  chief 
interest.  Of  course,  it  may  be  unfair 
to  accept  the  above  statement  as  fairly 
reflecting  the  President’s  position, 
though  it  receives  confirmation  from 
comparatively  recent  events. 

The  correspondent  states  that  Presi- 
dent Taft  8 uncompleted  legislative  pro- 
gramme is  still  large  and  important,  and 
goes  on  to  enumerate  Federal  incorpora- 
tion of  industrial  concerns  and  a number 
of  other  items.  It  is  a large  and  am- 
bitious programme,  and  if  legislation 
could  make  a country  great,  prosperous 
and  happy,  the  United  States  ought  to 
make  a record  when  these  new  laws  are 
passed. 

Yet,  with  no  lack  of  respect  for  the 
President,  the  opinion  may  be  ventured 
that  the  country  would  get  along  quite 
as  well  if  he  would  sacrifice  some  of  his 
legislative  ambitions  to  a performance 
of  the  duties  more  specifically  imposed 
on  him  by  the  Federal  Constitution. 


COST  OF  CASUALTY  INSURANCE 

TTI7TTH  the  increased  tendency 
T v toward  stricter  legislative  reg- 
ulation of  the  liability  of  employers  for 
accidents  to  their  workmen,  it  may  be 
expected  that  the  rates  for  casualty  in- 
surance will  advance.  That  legislation 
governing  such  liability  is  growing  more 
stringent  is  witnessed  by  two  acts  re- 
cently passed  in  New  York.  . Writing 
of  the  added  liability  under  the  new 
laws,  Mr.  Frank  E.  Law,  assistant  sec- 
retary of  The  Fidelity  and  Casualty 
Company  of  New  York  says: 

“The  liability  of  employers  is  in- 
creased in  two  ways.  In  the  first  place, 
the  fellow-servant  and  assumption  of 
risk  defenses  have  been  practically  de*- 
troyed  and  the  burden  of  proof  of  con- 
tributory negligence  has  been  put  upo* 


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COMMENT 


445 


* 


* 


the  employer.  This  radical  change  in 
the  law  affects  all  employers.  In  the 
second  place,  in  certain  employments 
determined  to  be  especially  dangerous 
the  employer  becomes  liable  to  pay  to 
an  injured  workman,  or  if  the  workman 
is  killed  then  to  his  dependent*,  com- 
pensation whether  the  injury  was  caused 
by  the  fault  of  the  employer  or  the  faidt 
of  the  workman.  Hitherto  it  has  been 
necessary  to  show  that  the  employer 
was  at  fault  in  order  to  recover  damages. 
No  recovery  could  be  had  under  other 
circumstances.  As  the  law  has  stood 
heretofore,  but  one  workman  in  eight 
recovered  anything ; under  the  new  law 
all,  or  nearly  all,  workmen  injured  in 
the  employments  named  in  the  law  will 
receive  compensation.” 

It  is  claimed  that  the  liability  insur- 
ance companies  have  never  made  any 
money  on  this  branch  of  their  business. 
If  this  be  true,  and  their  liabilities  are 
increased,  it  would  seem  to  follow",  as  a 
natural  consequence,  that  they  must 
either  increase  their  rates  or  go  out  of 
business. 

At  all  events,  it  could  hardly  be  ex- 
pected that  a much  greater  liability  on 
the  part  of  employers,  and  hence  on  the 
part  of  companies  furnishing  such  **n- 
surance,  would  not  lead  to  higher  rates. 
Certainly  not  unless  *he  rates  already 
charged  were  exorbitant,  and  this  the 
companies  deny. 

Public  opinion  is  undoubtedly  tend- 
ing toward  enlarging  the  responsibilities 
of  employers,  and  the  latter  will  natural- 
ly seek  to  shift  this  added  burden  upon 
the  shoulders  of  the  liability  companies, 
and  to  compensate  themselves  for  the 
increased  risk  the  companies  will  raise 
their  rates.  This  they  must  do  in 
obedience  to  sound  business  principles 
and  to  enable  them  to  meet  their  obli- 
gations. 

l 


CONDITION  OF  THE  CROPS 

lCpOR  several  years  it  has  been  the  cus- 
tom of  the  Commercial  National 
Bank  of  Chicago  (now  the  Continental 
Commercial  National)  to  make  a sum- 
mary of  crop  and  business  conditions. 
As  there  have  been  many  gloomy  reports 
about  the  crops,  the  following  will  be 
found  of  interest: 

"Our  reports  indicate  a total  wheat 
crop  of  657,000,000  bushels,  or  80,000,- 
000  bushels  less  than  last  year’s  record 
production,  but  equal  to  a ten  years' 
average  production.  Corn  promises  a 
yield  of  3,000,000,000  bushels,  or  225,- 
000,000  bushels  above  the  previous  sea- 
son and  25  per  cent,  over  a ten  years' 
average  crop.  The  oats  yield  will  ex- 
ceed last  year's  excellent  production 
with  a total  of  1,071,000,000  bushels, 

200.000. 000  bushels  over  the  ten-year 
average.  Barley  will  equal  last  year’s 
crop  of  128,000,000  bushels,  and  rye 
will  exceed  the  previous  season,  being 
31,500,000  bushels,  comparing  with  30,- 
000,000  bushels.  The  total  production 
of  these  grains,  as  reported  to  us,  is 

4.906.000. 000  bushels,  while  the  ten- 
year  average  is  4,431,000,000  bushels. 
Cotton  condition  indicates  a crop  of  1 1 ,- 
000,000  bales,  or  700,000  bales  above 
last  year.” 

Surely  this  is  far  from  a gloomy  pros- 
pect. The  crops  are  the  basis  of  our 
national  prosperity ; and,  apparently, 
the  crops  are  all  right. 


OUR  UNAPPEASABLE  APPETITE 
FOR  CURRENCY 

TTITITH  a volume  of  currency  much  in 
v excess  of  that  of  any  other  com- 
mercial nation,  we  are  still,  like  Oliver 
Twist,  clamoring  for  “more.”  It  is  said 
that  the  Treasury  has  printed  already 
$500,000,000  of  the  Aldrich- Vreeland 
stuff  with  which  the  country  could  be 
flooded  if  the  bankers  once  give  their 


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446 


THE  BANKERS  MAGAZINE 


consent.  There  seems  little  probability 
that  they  will  do  so. 

Here  and  there  you  find  a man  who 
does  not  agree  with  the  new  school  of 
inflationists.  In  an  interview  in  a New 
York  newspaper  some  time  ago,  Mr. 
Wm.  Sherer,  the  veteran  manager  of 
the  New  York  Clearing-House  Associa- 
tion, discussing  the  proposed  formation 
of  a national  currency  association,  said: 

“There  is  nothing  to  my  mind  to  prove 
that  emergency  currency  would  be  an 
unmixed  blessing.  The  history  of  the 
last  fifty-six  years  shows  that  business 
has  been  conducted  with  a very  small 
amount  of  cash  per  capita.  It  has  been 
done  on  credit,  and  always  will  be  done 
on  credit  to  a great  extent.  Cash  cre- 
ates an  appetite  for  cash.  The  more 
currency  you  provide,  the  more  will  be 
called  for.  I doubt  whether  it  would 
ever  be  possible,  once  the  process  were 
started,  to  catch  up  with  the  demand.” 

When  so  many  people  are  preaching 
in  favor  of  practically  unlimited  paper 
issues,  it  requires  courage  to  talk  like 
this. 


AN  OLD-FASHIONED  EXECUTIVE 

JpUNNY  notions  as  to  the  duties  of 
executives  are  entertained  by  Gov- 
ernor Judson  Harmon  of  Ohio.  Writ- 
ing recently  in  reply  to  a request  of  the 
Mayor  of  Columbus  that  a special  ses- 
sion of  the  Legislature  be  called,  the 
Governor  said : 

“I  am  bound  in  frankness  to  say  that 
your  sending  such  a letter  at  this  time 
and  promptly  giving  it  to  the  press  sug- 
gests a desire  to  make  up  by  fertility  in 
recommending  new  laws  for  the  lack  of 
efficiency  in  enforcing  existing  laws  with 
which  you  are  charged  by  the  public  in 
general.” 

The  notion  that  an  executive  officer 
has  anything  to  do  with  enforcing  the 
laws  already  existing  is  hopelessly  old- 
fashioned  and  out  of  date. 


The  business  of  an  executive,  from 
President  to  town  constable,  is  to  have  a 
“legislative  programme,”  to  harp  on  it 
unceasingly  and  to  move  heaven  and 
earth  to  have  it  carried  out.  This  not 
only  conceals  the  executive’s  inefficiency, 
but  gains  him  a great  reputation  as  a 
reformer. 

Evidently  Governor  Harmon  has  not 
kept  up  with  the  times  and  has  failed  to 
inform  himself  of  the  revised  and  gen- 
erally-accepted interpretations  of  the 
Constitution.  Such  a man  in  office  is  ex- 
ceedingly dangerous  to  lawbreakers,  for 
he  may  think  it  his  business  to  enforce 
the  law  instead  of  expending  all  his  en- 
ergies in  demanding  new  legislation.  Of 
course,  such  notions  are  not  to  be  toler- 
ated in  this  progressive  age. 


NATIONAL  BANK  EXAMINA- 
TIONS 

J^XAMINERS  of  national  banks  who 
are  lax  in  the  performance  of  their 
duties  are  not  having  an  easy  time  of 
it.  Comptroller  Murray  recently  an- 
nounced his  intention  of  taking  the  field 
himself  with  a view  to  finding  out  just 
why  some  examiners  do  not  succeed  in 
having  unsatisfactory  conditions  correct- 
ed in  banks  under  their  charge.  He 
finds  that  most  of  the  examiners  experi- 
ence no  difficulty  in  getting  banks  to  at 
once  take  steps  to  remedy  any  faults 
brought  to  their  attention.  There  are 
a few  examiners,  however,  that  stop 
after  reporting  unsatisfactory  conditions 
to  the  Comptroller.  Mr.  Murray  wishes 
to  ascertain  why  in  some  cases  it  is  pos- 
sible to  get  action  that  will  remove  cause 
for  criticism  and  impossible  to  do  any- 
thing effective  in  others  and  he  also 
wishes  to  learn  why  some  of  the  exam- 
iners fail  to  ascertain  conditions  which, 
if  reported  to  the  Comptroller  in  time, 
might  have  been  remedied  and  the  bank 
saved  from  insolvency. 

Perhaps  no  Comptroller  has  been 


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COMMENT 


447 


more  vigilant  than  Mr.  Murray  in  en- 
deavoring to  enforce  the  National  Bank- 
ing Act  and  to  make  the  supervision  ex- 
ercised by  the  Comptroller's  Bureau 
effective.  ' He  might,  and  not  without 
reason,  have  complained  that  the  law  is 
in  many  respects  inadequate  and  that' 
the  whole  system  of  supervision  needs 
overhauling,  and  thus  have  sought  to 
excuse  any  shortcomings  of  his  Bureau 
in  th£  matter  of  supervising  the  na- 
tional banks.  But  he  did  not  do  so.  He 
has  gone  to  work  with  the  tools  he  had, 
and  has  tried  to  get  the  best  results  pos- 
sible from  the  law  just  as  it  stands. 
That  his  efforts  to  have  the  directors 
take  a more  active  interest  in  the  affairs 
of  their  banks  has  borne  fruit,  can 
hardly  be  doubted.  He  has  also  spurred 
the  examiners  in  the  performance  of 
their  duties  and  has  secured  co-opera- 
tion between  the  National  and  State  of- 
ficials charged  with  bank  supervision. 
All  this  should  and  undoubtedly  will 
bring  about  great  improvement  in 
banking  conditions. 

We  believe  another  important  result 
will  follow  Mr.  Murray's  vigorous  ef- 
forts to  make  the  present  methods  of 
supervision  efficient.  If,  after  all  he 
has  done,  it  should  be  found  that  the* 
supervision  exercised  by  the  Comptrol- 
ler is  ineffective,  the  fault  must  be  as- 
cribed to  the  law  itself  and  not  to  its 
administration. 

The  vast  increase  in  population  and 
wealth  and  the  multiplication  of  banks 
have  increased  the  difficulties  of  super- 
vising the  banks  from  Washington. 
Many  needed  amendments  in  the  present 
law  have  been  repeatedly  recommended 
by  successive  Comptrollers  of  the  Cur- 
rency. Should  these  be  adopted,  it  will 
probably  be  found  necessary  to  bring 
the  banks  together  in  some  form  of 
district  organization,  and  to  supple- 
ment the  examinations  made  by  the 
Government  with  a system  of  inspection 
carried  on  by  the  banks  themselves. 


WATCHING  THE  OWNERS  OF 
AUTOMOBILES 

*0  ALTIMORE  bankers,  according  to 
the  “Sun"  of  that  city,  are  keep- 
ing a close  watch  on  the  owners  of 
automobiles,  with  a view  to  finding  out 
if  such  luxuries  are  within  the  means  of 
those  indulging  in  them.  Newspaper 
reports  and  addresses  of  bankers  indi- 
cate that  the  same  course  is  being  fol- 
lowed by  bankers  in  other  parts  of  the 
country. 

The  automobile  is  only  one  of  many 
forms  of  extravagance  that  call  for 
attention  by  the  bankers.  That  it  is 
singled  out  for  so  much  comment  prob- 
ably arises  from  the  fact  that  it  is  the 
most  palpable  kind  of  extravagance. 
One  may  cultivate  other  equally  ex- 
pensive habits  with  a great  deal  less 
publicity.  Gluttony,  drink  and  gam- 
bling may  be  a source  of  greater  waste 
than  the  ownership  of  an  automobile, 
but  these  extravagances  are  not  open  to 
the  public  eye.  The  owner  of  an  auto- 
mobile, however,  glories  in  his  extrava- 
gance. In  fact,  this  particular  form  of 
extravagance  is  born  of  the  love  of  dis- 
play. The  joyful  owner  comes  tearing 
down  the  street,  raising  a cloud  of  dust, 
and  blowing  his  horn,  thus  exhibiting 
his  superiority  over  the  humble  pedes- 
trian or  the  owner  of  more  modest  and 
less  noisy  vehicles. 

But  when  the  automobile  mania  no 
longer  troubles  the  bankers,  a new  out- 
break, and  perhaps  a more  dangerous 
one,  looms  in  sight.  Navigating  the  air 
is  not  only  a costly  form  of  amusement, 
but  one  that  will  keep  the  banker  busy 
in  watching  for  his  borrowers  who  may 
sail  the  “upper  deeps."  How  is  the 
banker  to  know,  even  with  the  aid  of  a 
powerful  field-glass,  whether  the  ship 
he  sees  aloft  was  paid  for  with  funds 
borrowed  from  his  bank?  All  the 
aviator  will  have  to  do  is  to  borrow  his 
money  in  one  county  and  build  his  ship 
in  another.  Kite-flying  has  always  been 


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448 


THE  BANKERS  MAGAZINE 


a source  of  annoyance  to  the  banker, 
and  this  latest  form  of  it  also  contains 
interesting  possibilities. 


BANKERS  AND  BANKING 
PROBLEMS 

/ADDRESSING  the  recent  annual 
convention  of  the  Indiana  Bank- 
ers* Association,  Mr.  Arthur  Rey- 
nolds, president  of  the  Des  Moines 
(Iowa)  National  Bank,  strongly  ap- 
pealed to  the  bankers  of  the  country 
to  show  more  active  interest  in  legis- 
lation relating  to  banking  and  currency. 
He  very  justly  intimated  that  but  for 
the  apathy  of  the  bankers  the  Postal 
Savings  Bank  bill  might  have  been 
defeated. 

This  apathetic  attitude  of  bankers 
may  be  accounted  for  in  various  ways. 
In  the  first  place,  the  banker  working 
under  existing  laws,  to  whose  operation 
he  has  become  accustomed,  knows  just 
what  to  expect.  He  knows  how  the  law 
affects  his  own  business  and  that  of  his 
competitors.  A new  law  is  full  of 
uncertainties.  It  may  give  the  bank  a 
better  chance  to  make  money,  and  it 
may  not.  Or  if  the  bank  is  a State 
bank,  any  extension  of  privileges  to 
the  national  bank  will  simply  add  to  the 
advantages  of  a competing  institution. 
This  view  may  be  narrow,  overlooking 
the  profit  that  might  be  derived  by  bene- 
fits to  the  community  arising  from  a 
modification  of  the  National  Banking 
Act.  But  it  is  the  view  apt  to  be  taken 
by  the  average  banker  nevertheless,  and 
not  without  reason. 

Bankers  know,  too,  that  they  can  do 
business  with  a currency  and  banking 
system  however  unscientific  and  clumsy. 
They  conform  to  conditions  as  they  find 
them,  and  trouble  little  about  the  at- 
tainment of  banking  ideals.  For  ex- 
ample, the  currency  of  China  is  chaotic. 
But  the  banks  there  do  not  worry  much 
about  that  fact.  They  have  learned 


how  to  turn  it  to  their  own  profit.  And 
one  of  the  most  enlightened  bankers  of 
this  country  declared  to  us  not  long 
ago  that  his  bank  made  a profit  out  of 
the  domestic  exchange  complications  in 
the  panic  of  1907.  The  banks  of  New 
York  and  other  cities  probably  know 
that  a scientific  system  of  clearing 
country  checks  would  be  of  immense 
benefit  to  the  commerce  of  the  United 
States.  But  they  are  not  sitting  up  of 
nights  devising  such  a system.  They 
have  learned  how  to  profit  by  existing 
conditions. 

The  banker  is  in  the  banking  busi- 
ness as  a business.  He  can  not  be 
expected  to  take  more  than  a per- 
functory interest  in  things  not  directly 
concerning  the  success  of  his  institu- 
tion. 

But  despite  all  this,  we  believe  the 
bankers,  by  their  indifference  to  bank- 
ing and  currency  problems,  are  not 
adequately  caring  for  the  trusts  com- 
mitted to  them.  Waiving  the  advantage 
to  the  community  that  would  follow 
upon  the  adoption  of  a wiser  system — 
an  advantage  in  which  the  banks  could 
not  fail  to  share — it  can  readily  be 
seen  that  the  banks  would  derive  a 
direct  profit. 

If  the  banks  were  authorized,  under 
proper  restrictions,  to  issue  credit  cur- 
rency, they  could  serve  the  business 
community  much  more  efficiently  than 
they  do  at  the  present  time. 

If  savings  deposits  were  segregated 
from  the  general  deposits,  and  invested 
in  high-grade  securities,  and  if  national 
banks  were  authorized  to  establish  sav- 
ings departments  and  to  employ  savings 
deposits  in  making  loans  on  real  estate, 
the  banks  could  more  safely  and  effec- 
tually meet  the  banking  needs  of  the 
people. 

The  bankers  who  fail  to  see  the 
direct  benefits  they  would  derive  from 
every  wise  amendment  of  the  banking 
laws  are  at  least  short-sighted. 

Perhaps  in  estimating  the  attitude 


Digitized  by  t^ooQle 


COMMENT 


**9 


of  bankers  toward  banking  and  cur- 
rency legislation,  one  fact  is  not  suffi- 
ciently considered.  Federal  legislation 
applies,  of  course,  only  to  banks  op- 
erating under  national  charters,  and 
these  are  fewer  than  the  State  and  pri- 
vate banks  and  loan  and  trust  com- 
panies. Even,  therefore,  if  all  the 
national  bankers  were  united  in  favor 
of  certain  reforms  (which  is  by  no 
means  the  case)  their  influence  might 
be  overcome  by  the  greater  number  of 
banks  of  other  classes.  We  imagine 
this  to  be  one  reason,  and  perhaps  the 
chief  one,  why  bankers  have  such  slight 
influence  in  shaping  Federal  legislation 
with  respect  to  banking.  The  influence 
that  might  be  wielded  is  practically 
nullified  by  the  conflicting  interests  of 
'the  different  classes  of  banks. 


STRENGTHENING  THE  NATION- 
AL BANKING  SYSTEM 

AN  important  paper  by  Professor 
O.  M.  W.  Sprague  of  Harvard 
appeared  in  the  August  number  of  the 
“Quarterly  Journal  of  Economics.”  It 
is  the  second  paper  in  the  series  on 
“Proposals  for  Strengthening  the  Na- 
tional Banking  System.”  Professor 
Sprague  thinks  that  the  character  of 
the  security  for  bank-note  circulation 
is  of  less  importance  than  has  been  com- 
monly assumed  in  recent  discussion  of 
banking  and  currency  problems.  He 
is,  however,  in  favor  of  an  asset  cur- 
rency. But  it  is  his  opinion  that  there 
can  not  be  much  currency  elasticity 
under  any  system  so  long  as  the  banks 
continue  to  pay  interest  on  deposits. 

As  the  entire  abolition  of  such  in- 
terest payments  is  not  thought  possible, 
the  suggestion  is  made  that  interest  be 
paid  only  on  the  minimum  weekly,  fort- 
nightly or  monthly  balance,  during  six 
/ months’  periods. 

The  payment  of  interest  on  bankers’ 


balances  not  only  attracts  the  idle 
money  to  the  financial  centers,  but  vir- 
tually compels  the  city  banks  to  lend 
at  all  times  close  to  the  permissible 
limit  in  order  to  recoup  themselves  for 
the  amounts  they  pay  out  in  the  shape 
of  interest  on  these  deposits. 

Professor  Sprague’s  studies  of  our 
banking  problems  have  attracted  wide 
attention  and  interest.  In  a subsequent 
paper  he  will  treat  of  a central  bank 
or  central  organization  with  limited 
functions,,  and  no  doubt  his  suggestions 
along  this  line  will  prove  as  interesting 
as  those  which  have  preceded  them. 


CURRENCY  REFORM  AT  LAST 

pj'OR  nearly  a quarter  of  a century, 
economists,  bankers,  financiers  and 
others  have  been  carrying  on  a cam- 
paign in  behalf  of  currency  reform. 
Bankers’  conventions  have  talked  about 
it.  Commissions  have  been  appointed. 
Essays  and  addresses  by  the  thousands 
have  con!ipassed  the  subject  round 
about.  Pamphlets,  books — whole  li- 
braries of  them — have  “held  the  subject 
up  in  every  light  of  which  it  is  cap- 
able,” and  it  has  not  been  all  in  vain. 

At  last,  currency  reform  is  an  ac- 
complished fact — the  size  of  the  paper 
currency  is  to  be  reduced  from  8. 04 
inches  wide  by  7*28  inches  long  to  2.5 
inches  wide  by  6 inches  long! 

Upon  those  responsible  for  this  hap- 
py and  auspicious  culmination  of  the 
long  and  arduous  labors  of  the  currency 
reformers  we  bestow  our  congratula- 
tions. It  can  no  longer  be  said  that 
financial  legislation  does  not  reflect  in- 
telligent public  opinion. 

Besides,  our  paper  currency  is  cer- 
tainly too  big.  As  prices  rise,  one  hard- 
ly knows  whether,  in  going  to  market, 
to  put  his  money  in  his  pocketbook  or 
in  the  market-basket.  Salaries,  wages 
and  incomes  are  also  at  such  a high 


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THE  BANKERS  MAGAZINE 


figure  that  everybody’s  purse  is  bulg- 
ing with  money. 

The  reduction  of  the  size  of  the 
paper  bills  is  a noble  work.  It  will 
save  the  Government  money,  and  will 
relieve  the  possessors  of  overfat  purses 
of  much  annoyance. 

In  view  of  this  great  reform,  who 
now  can  say  that  the  currency  re- 
formers Lave  labored  in  vain? 


RESERVE  CITY  BANKS 

LOSER  scrutiny  of  the  affairs  of 
national  banks  acting  as  reserve 
agents  will  be  a part  of  the  future  policy 
of  the  Comptroller  of  the  Currency.  Re- 
quests by  country  banks  for  the  desig- 
nation of  a reserve  agent  will  not  be 
approved  by  the  Comptroller  until  it 
is  established  to  his  satisfaction  that 
the  proposed  reserve  agent  is  in  a sound 
condition. 

As  has  been  repeatedly  said,  in  these 
pages  and  elsewhere,  a fundamental 
weakness  of  our  banking  system  lies  in 
the  inadequate  equipment  of  the  re- 
serve banks.  They  are  not  fitted  prop- 
erly to  perform  the  duties  imposed 
upon  them  by  law.  Their  capital  and 
reserves  are  insufficient,  their  manage- 
ment wanting  in  that  catholic  spirit 
that  should  rule  such  institutions,  and 
they  lack  the  authority  to  issue  credit 
notes. 

If  Congress  could  be  brought  to  a 
realization  of  these  defects — which  are 
by  no  means  theoretical,  but  have  been 
plainly  and  repeatedly  demonstrated 
by  experience — and  would  set  out  to 
remedy  them,  the  banking  situation 
would  be  greatly  strengthened.  Re- 
forms of  this  character  would  be  quite 
as  effective  as  a central  bank — prob- 
ably more  so — and  they  would  provoke 
less  political  hostility. 

The  Comptroller’s  decision  to  ex- 
cise a more  careful  watch  over  the 


reserve  city  banks  is,  of  course,  com- 
mendable. Even  under  the.  present  im- 
perfect laws  he  can  do  much  to  correct 
weakness  among  these  institutions. 


COTTON  BILLS  OF  LADING 

P UROPEAN  bankers  refused  to  ac- 
cept the  railway  validation  of 
cotton  bills  of  lading,  and  the  Ameri- 
can bankers  have  declined  to  give  fur- 
ther guarantees.  Though  this  means  a 
dead-lock  in  the  negotiations  under 
way  for  some  time,  hope  of  a satisfac- 
tory solution  of  the  difficulty  has  not 
been  altogether  abandoned. 

The  European  bankers  seem  to  think 
that  the  proposed  validation  certificate 
did  not  offer  adequate  protection 
against  forged  bills  of  lading,  while 
the  committee  of  American  bankers  re- 
garded the  demands  made  upon  them 
as  violative  of  sound  banking  prin- 
ciples and  in  contravention  of  legal  pro- 
visions concerning  the  rights  of  banks 
to  make  guarantees. 

Whether  the  snarl  will  be  straight- 
ened out,  or  whether  certain  European 
banks  will  act  independently  and  ac- 
cept the  railway  validation  certificates 
as  satisfactory,  remains  to  be  seen.  No 
doubt  a way  will  be  found  to  market 
the  cotton  crop. 

This  controversy  has  illustrated 
afresh  the  close  dependence  of  finan- 
cial transactions  upon  the  maintenance 
of  confidence  in  carrying  on  banking 
operations.  The  appearance  of  a few 
forged  bills  of  lading  has  served  to 
disturb  long-established  business  rela- 
tions between  the  American  and  Euro- 
pean banks,  and  has  threatened  tem- 
porarily to  interfere  with  trade  run- 
ning into  the  hundreds  of  millions. 

The  committee  representing  the 
bankers  on  this  side  claim  that  the  Euro- 
pean banks  are  asking  assurances  that 
they  themselves  refuse  to  give. 


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PICTURESQUE  INDUSTRIES  OF  A UNIQUE  STATE 

By  Leonora  Beck  Ellis 


'T'HE  manufacturing,  the  industrial 
South!  We  are  by  no  means  ac- 
customed to  such  a phrase.  The  South 
of  the  old  land-holding  aristocracy, 
the  home  of  the  Virginia  cavalier,  the 
Carolina  cotton  or  rice  kings,  the  Louisi- 
ana sugar  prince, — all  those  vivid  sug- 
gestions and  conditions  of  an  earlier, 
more  picturesque,  but  less  prosperous 
era,  we  know  by  heart. 

But  this  new  phrase,  this  awakening 
of  a whole  great  section  to  its  own  pos- 
sibilities, its  latent  power,,  this  swinging, 
sweeping  movement  towards  the  de- 
velopment of  vast  natural  resources,  this 
upward  lift  of  what  the  world  has  been 
calling  a slothful,  unambitious  popula- 
tion, until  it  will  stand  soon  the  peer  of 
any  as  regards  industrial  progress,  and 
educational  facilities  as  well, — this  we 
are  hardly  yet  adjusted  to,  have  scarce- 
ly learned  to  look  on  as  our  easy  por- 
tion. 

But  such  it  is;  and  a strange  story  it 
makes,  running  through  even  the  last 
decade  and  a half  of  swift  development. 

For,  do  you  realize  that  fifteen  years 
ago  we  were  raising  cotton  to  sell  to 
England  and  the  east  at  five  cents  a 
pound,  and  we  were  buying  back  the 
finished  products  at  an  enormous  profit 
to  the  manufacturers  of  the  old  world 
and  the  new? 

A few,  hundred  thousand  spindles  and 
a meagre  quota  of  looms  were  making 
sorry  show  of  handling  an  insignificant 
portion  of  our  great  staple,  while,  re- 
garding our  other  native  resources  of  a 
hundred  rich  kinds,  we  seemed  deeply 
ignorant  or  wholly  apathetic.  With 
white-fanged  poverty  gripping  hard  on 
every  side,  it  appeared  to  mfeny  of  us 
mere  madness  when,  shortly,  the  call 
sounded  forth,  “Cotton  mills  in  cotton 
fields  our  first  condition  of  salvation! 
The  South's  resources  for  herself, — and 
God  for  all !" 

It  is  not  intended  to  rehearse  now  the 
quick,  successive  stages  by  which  we 


leaped,  in  less  than  two  decades,  from 
eight  hundred  thousand  to*  more  than 
nine  million  of  spindles,  from  five  to 
fifteen  cent  cotton;  in  short,  from  a 
direfully  poverty-ridden  South  to  one 
smiling  under  the  seal  of  a deeply, 
surely  based  prosperity? 

No,  it  was  not  of  cotton  and  its  stir- 
ring romance  we  started  to  speak,  al- 
thpugh  it  appears  inevitable  that  we 
drift  towards  the  wonderful  staple  when 
we  talk  of  prosperity.  v 

It  was  of  a more  picturesque  indus- 
trial development  we  were  thinking:  not 
cotton  mills,  not  coal  mines,  nor  iron 
furnaces,  not  the  manufacture  of  our 
splendid  southern  woods  into  fine  fur- 
niture,— none  of  these  nor  their  allied 
forms  of  wealth-producing,  progress- 
making  development. 

There  are  scores  of  small  industries 
and  manufactures  that  combine  to  make 
a solid  basis  of  prosperity  for  any  state 
or  country.  The  utilization  of  home 
material,  even  the  simplest,  and  of  home 
labor  to  the  very  best  advantage,  is  the 
safest  road  by  which  to  travel  when 
starting  in  the  race  for  national  wealth. 

In  the  South  we  have  one  State  which 
has  hitherto  been  regarded  rather  as  a 
great  national  sanatorium,  or  else  an  in- 
teresting play-ground,  with  possible 
gardens  and  orange  groves  interspersed, 
all  perhaps  rendered  more  or  less  uncer- 
tain by  probable  thermal  variations. 
This  is  Florida^  our  peninsula  of  sun- 
shine and  roses,  thrown  out  between  the 
Mexican  Gulf  and  the  Atlantic  Ocean. 

The  average  man  thinks  of  the  penin- 
sula as  a pleasant  place  on  which  to 
make  a winter  home,  a little  playtime 
expanse  lying  outside  of  the  busy  region 
where  grain  and  cotton,  coal,  iron,  tim- 
ber, and  other  integral  factors  of  wealth 
stimulate  to  large  enterprise. 

Many  and  Varied  Industries. 

In  point  of  fact,  no  little  country,  of 
either  the  old  world  or  the  new,  can 

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show  the  picturesque  and  varied  indus- 
tries of  this  unique  Southern  State,  nor 
can  another  of  so  sparse  jbl  population 
show  the  wonderful  expansion  of  Flor- 
ida, in  the  last  five  years,  as  concerns 
the  utilization  of  its  own  native  pro- 
ducts, its  own  raw  material,  from  small 
resources  to  great. 

Not  alone  the  tropic-looking  gardens 
of  scarlet  poinsettia,  golden  accacia,  and 
rosy  oleander  hedges,  nor  its  increasing 
areas  of  bananas,  pineapples,  guavas, 
and  other  West  Indian  fruits,  nor  its 
terraced  lemon  and  lime  orchards,  sug- 
gesting Spain, — not  one  nor  all  of  these 
and  their  kind  would  leave  with  us  so 
deep  an  impression  of  having  been  in  a 
foreign  country,  as  we  get  from  the 
glimpses,  in  one  little  Floridian  port 
after  another,  of  such  industries  as 
sponge-harvesting  and  selling,  mullet- 
fishing and  marketing,  oystering,  clam- 
ming, tortoise-shell  gathering,  or,  again, 
the  loading  of  those  huge  Norwegian, 
French,  and  English  vessels  with  phos- 
phate and  naval  stores,  or  yet,  again,  in 
the  interior,  the  kaolin  works  here  and 
there,  the  numerous  fibre  factories — for 
the  conversion  of  palm  fibre  and  leaf 
into  articles  of  commerce, — mattress- 
making from  the  Spanish  moss,  an  occa* 
ftonal  silk-worm  farm,  and  lastly  the 
r:t'nsive  Cuban  cigar  factories  at 
1 ..mpa  and  Key  West. 

On  a recent  sailing  trip  down  the 
West  Coast,  along  a course  unvisited  by 
us  for  five  years,  we  found  much  to 
please  as  well  as  surprise.  Fishing  ham- 
lets had  grown  into  sizable  ports,  chan- 
nels had  been  dredged,  foreign  steam- 
ers were  entering  where  only  fishing 
smacks  had  hitherto  been  acquainted, 
and  scattered  all  over  the  fertile  spong- 
ing fields,  from  St.  Marks  to  Anclote 
light,  were  the  lateen  sails  of  the  Greek 
sponge  divers,  absolutely  unknown  to 
us  three  years  ago. 

Below  Cedar  Key,  we  ran  into 
Crystal  River  Bay,  then  up  the  broad, 
fair  stream  eight  miles  to  the  railroad 
station  and  prosperous  little  town, 
where  a pencil  factory,  cannery,  and 
fibre  factory,  and  several  fish  houses 
afford  employment  to  hundreds  of  in- 
dustrious workers.  We  found  scores  of 


nice  homes,  several  churches,  and  a good 
school,  where  a few  years  back  there 
had  been  only  a cluster  of  shanties.  At 
a large  general  store,  we  asked  the 
meaning  of  the  seven  or  eight  big  for- 
eign vessels  we  had  noted  lying  in  an 
upper  harbor  of  %he  bay. 

Exports  to  Foreign  Lands. 

*' ‘That's  Port  Inglis,  at  the  mouth  of 
the  Withlacoochee,"  was  the  answer. 
“It’s  phosphate  the  boats  are  loading 
with, — to  go  to  every  part  of  Europe.” 

Do  you  catch  the  significance?  Mil- 
lions of  dollars  per  annum  pouring  in 
through  this  little  harbor,  unknown  half 
a dozen  years  ago  save  to  the  trapper 
or  to  the  wandering  fisher,  and  still 
scarcely  heqrd  of  except  in  connection 
with  this  branch  of  commerce.  The  air 
of  general  prosperity  became  more  and 
more  comprehensible. 

After  a few  hours  at  these  points,  we 
sailed  on  down  the  coast,  putting  in  at 
various  small  ports  and  finding  every- 
where a busy  and  prosperous  people. 
Fishing  boats  were  scudding  up  or 
down,  plying  their  craft  in  the  life-filled 
waters,  then  running  in  with  their  finny 
cargoes  to  this  port  or  that,  whence  the 
car  or  schooner  loads  of  mullet,  snap- 
per, sea-trout,  or  pompano,  packed  in 
ice  or  salted  down,  were  to  be  shipped 
to  various  parts  of  the  United  States  or 
Cuba,  bringing  in  return  the  golden  tide 
of  dollars  each  season  to  these  coast 
people. 

And  the  sponging  business, — that  is 
the  most  interesting  of  all,  the  most 
picturesque.  Probably  few  persons  out- 
side of  the  peninsula  and  the  direct 
channels  of  this  trade  realize  that  all 
the  markets  of  the  United  States  and  a 
large  demand  in  England  are  supplied 
with  that  important  article  of  commerce, 
the  sponge,  from  a limited  area  here  in 
the  Gulf  of  Mexico,  the  fields  that  are 
now  successfully  worked  lying  from 
three  to  twenty  miles  off-shore,  and  ex- 
tending southward  with  varying  fer- 
tility, from  latitude  27  degrees  to  SO 
degrees  N., — that  is,  in  local  marine 
parlance,  from  Anclote  Light  to  Saint 
Marks. 

In  this  expanse,  our  native  spongers 


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PICTURESQUE  INDUSTRIES  OF  A UNIQUE  STATE 


458 


And  their  Cuban  and  Spanish  brothers 
have  been  at  work  for  something  over 
fifty  years , though  not  by  the  diving 
method.  They  have  used  the  long-poled 
hooks,  and  hence  been  unable  to  gather 
the  commodity  in  waters  over  forty  feet 
deep.  Yet  they  gradually  pushed  the 
eastern  sponge  from  the  American  mar- 
ket, and  moreover  began  to  send  a sur- 
plus of  the  cheap  grade  grass  sponge 
to  England,  for  mattress  making  and 
similar  purposes.  They  brought  up  the 
industry,  in  a generation’s  time,  from 
most  meagre  beginnings  to  touch  the 
million-dollar  mark,  and  that  at  a time 
when  it  counted  much  to  the  State. 

Development  of  the  Sponge  In- 
dustry. 

But  the  implements  of  the  trade  were 
awkward,  the  business  poorly  handled, 
and  a revolution  in  it  was  sure  to  come. 

It  was  through  this  modern  invasion 
of  the  Greeks  that  the  revolution  came 
to  our  marine  industry,  and  it  seems  to 
us  to  have  come  with  remarkable  sud- 
denness. 

Three  years  ago  the  first  Greek  divers 
found  their  way  to  us  from  the  ex- 
hausted Mediterranean  fields.  Their 
diving  suits,  their  oddly  rigged  boats, 
their  alien  speech,  brought  to  these 
quiet  hamlets  as  much  interest  as  a 
circus, — and  greater  novelty. 

But  to-day  over  two  thousand  Greeks 
are  on  this  coast,  and  the  lateen  sails 
are  as  common  a sight  as  the  fisherman’s 
rig.  There  is  shown  an  immense  in- 
crease in  the  sponge,  yield  and  in  the 
monetary  returns  f rom  this  marine 
harvest. 

True,  we  legislated  speedily  against 
the  alien,  first  throwing  him  wholly 
outside  the  three-mile  limit  to  work,  and 
in  water  of  no  less  than  fifty  feet  depth. 
He  quietly  assured  us  that  he  had  no 
desire  to  dive  in  shallower  seas.  Then 
we  enacted  the  statute  of  the  closed  and 
open  season  for  sponging,  which  is  more 
effective  as  well  as  more  needed;  but  it 
does  undoubtedly  keep  the  revenue  cut- 
ters busy  chasing  the  violators. 

But  the  Greek  diver  is  here  to  stay, 
and  there  is  indeed  fair  promise  of  his 
making  a good  inhabitant.  He  is  well 


adapted  to  our  climate  and  work,  is  not 
a bad  citizen,  appearing  healthful,  both 
physically  and  morally,  and  he  amalga- 
mates easily  with  the  half-Spanish  and 
Cuban  population  already  on  our  coast 
Since  we  are  bound  to  accept  our  share 
of  immigration,  why  not  as  well  give 
fair  play  to  these  Mediterranean  peo- 
ple? We  shall  assimilate  them  along 
with  the  Latins  already  with  us,  all  of 
whom  are  suited  to  the  climatic  and 
other  conditions  of  peninsula  Florida 
and  especially  adapted,  by  training  as 
well  as  by  ancestral  instincts,  to  aid  in 
the  development  of  our  diversified  small 
industries  and  manufactures.  From 
such  new  strains  of  blood,  there  will 
come  to  the  South  a new  thrift  and  apti- 
tude we  greatly  need, — that  is,  for 
bringing  in  and  multiplying  through  the 
country  those  small  gains  and  revenues 
entering  by  all  legitimate  even  if  narrow 
channels, — where  hitherto  we  have 
oftener  sat  passive,  waiting  for  what 
might  drift  in  through  the  one  broad 
channel  familiar  to  us. 


PRACTICAL  BANKING  CONTRI- 
BUTIONS WANTED  ia 

HELPFUL  articles  relating  to  the 

day  work  of  banks  savings  bg^T 
and  trust  companies  are  desired  for  publi 
cation  in  The  Baxkxis  Magazine. 

Short,  bright  paragraphs,  telling  in  a clear 
and  interesting  way  of  some  of  the  methods, 
systems  and  ideas  employed  in  the  most 
progressive  banks  of  the  country,  will  be 
especially  welcome. 

Contributions  accepted  by  the  editor  will 
be  paid  for  on  publication. 


LOCAL  REPRESENTATIVES 
WANTED 

THE  Bankeis  Magazine  wishes  to  se- 
cure a local  representative  in  each  of 
the  large  cities  of  the  country  to  secure 
subscriptions  and  to  act  as  a general  repre- 
sentative. 

Libera]  arrangements  will  be  made  with 
responsible  persons.  Preference  given  to 
those  employed  in  banks  or  familiar  with 
the  banking  business. 

For  particulars,  address  Bankers  Pub- 
lishing Co.,  258  Broadway,  New  York. 


Digitized  by  t^ooQle 


PRACTICAL  BANKING 


THE  RUBBER  STAMP  AS  A TIME  SAVER  IN 

BANKS 

By  Edgar  G.  Alcorn 


/^\NE  of  the  handiest  and  most  useful 
articles  jn  a bank  is  the  rubber 
stamp.  The  number  and  variety  of 
stamps  are  so  abundant  that  the  uses  to 
which  they  may  be  put  are  almost  un- 
limited. It  is  surprising  what  an  im- 
mense amount  of  fime  and  work  they 
will  save  in  an  ordinary  bank  in  the 
course  of  a single  day. 

Yet  there  are  many  banks  which  fail 
to  appreciate  their  value.  They  per- 
haps do  not  keep  over  half  a dozen 
stamps  on  hand.  About  the  extent  of 
their  investment  along  this  line  is  a 
"paid”  stamp,  an  "endorsement”  stamp, 
and  one  or  two  "band  daters.”  Instead 
of  a dozen  rubber  stamps,  there  are  but 
few  banks  that  could  not  make  good  and 
profitable  use  of  at  least  fifty  of  them. 

Rubber  stamps  are  not  expensive,  the 
cost,  in  fact,  being  infinitesimal  when 
their  utility  and  the  time  and  labor 
saved  is  taken  into  consideration.  There 
are  several,  such  as  those  that  have  been 
mentioned,  that  are  absolutely  essential 
in  any  bank,  large  or  small.  The  "paid” 
stamp,  the  "endorsement”  stamp,  and 
the  little  "band  dating”  stamps  are  al- 
most in  constant  daily  use.  "Address” 
stamps,  while  not  essential,  are  great 
time  savers.  These  are  stamps  which 
bear  the  name  and  address.  A bank 
should  have  one  for  every  bank  with 
which  it  has  frequent  correspondence. 
At  leisure  moments  the  mail  clerk,  or 
anyone  else,  can  stamp  a supply  of  en- 
velopes and  thus  avoid  the  necessity  of 
addressing  with  pen  and  ink  a lot  of 
them  at  rush  moments. 

Upright  cabinets  containing  numerous 
pigeon-holes  are  made  in  which  supplies 
of  addressed  envelopes  are  kept.  There 
is  a pigeon-hole  for  each  bank,  and  they 
are  so  placed  in  the  cabinet  that  the  ad- 
dresses on  the  envelopes  are  visible,  and 


consequently  the  hand  may  be  readily 
laid  on  any  envelope  desired. 

"Autograph  stamps”  will  also  save 
the  president  and  cashier  of  national 
banks  a lot  of  time  and  tedious  work. 
Circulating  notes  are  often  received  in 
large  amounts  and  in  small  denomina- 
tions, and  the  task  of  writing  one’s  sig- 
nature with  pen  and  ink  on  these  notes 
is  rather  a laborious  one.  The  rubber 
stamp  accomplishes  the  work  in  but  a 
few  minutes.  While  there  is  no  author- 
ity for  affixing  the  signatures  of  bank 
officers  on  circulation  with  rubber 
stamps,  a great  many  do  it,  and  there 
has  not  as  yet  been  any  objection  raised. 

The  presenting  and  return  of  unpaid 
collections  has  become  quite  a source  of 
expense  and  annoyance  to  banks.  It  is 
becoming  the  custom  of  business  firms 
to  use  the  banks  as  collection  or  mere 
"dunning”  agencies.  They  send  collec- 
tions against  customers  whom  they  know 
do  not  pay  drafts,  and  with  no  idea  that 
the  collections  will  be  paid.  But  it  is 
a convenient  and  impressive  way  of  re- 
minding a customer  that  his  account  is 
due  or  past  due.  A draft  drawn  against 
him,  or  a notice  through  the  local  bank, 
they  think,  will  be  more  effectual  or 
assure  greater  promptness  than  the 
usual  statement  from  the  house  itself. 

These  collections  have  to  be  entered, 
presented,  and  returned,  all  of  which  re- 
quires time,  labor,  and  expense  for  the 
outlay  of  postage  and  stationery.  The 
banks  have  for  a long  time  assumed  this 
burden  without  complaint,  but  there  has 
recently  arisen  a disposition  on  the  part 
of  some  to  refuse  to  handle  collections 
unaccompanied  by  ten  or  fifteen  cents 
in  stamps,  to  pay  the  cost  of  presenting 
and  returning  them  if  not  paid. 

A rubber  stamp  such  as  the  one  fol- 
lowing is  used  in  this  connection.  This 


454 


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PRACTICAL  BANKING 


455 


memorandum  is  stamped  on  the  draft 
itself  or  on  the  letter  sent  with  the  re- 
turned draft. 

RETURNED  UNPAID 
The  enclosed  collection  is  returned  unpaid 
for  the  reasons  endorsed  thereon.  Special 
care  and  attention  has  been  given  to  this 
item,  and  you  are  requested  to  kindly  remit 
....  cents  in  stamps  to  cover  cost  of  en- 
tering, presenting,  and  returning.  Payment 
of  same  will  insure  our  attention  to  your 
future  collections. 

FIRST  NATIONAL  BANK 
Wheaton,  111. 

Cashier. 

It  is  necessary  to  protest  a note  on 
the  day  it  is  due  in  order  to  hold  the  en- 
dorsers, but  unless  there  is  some  dispute 
or  some  likelihood  of  a bank  being  com- 
pelled to  resort  to  legal  measures  to  col- 
lect a note,  it  will  avoid  protesting  un- 
less absolutely  necessary.  Some  men 
would  consider  it  a very  serious  offense 
to  protest  their  paper.  Protest  is  neces- 
sary, however,  unless  waived  by  the  en- 
dorser. The  following  stamp  may  be 
conveniently  used  for  such  purpose: 

PROTEST,  DEMAND,  AND  NOTICE 
OF  NON-PAYMENT  is  hereby  waived  on 
the  within  note,  and  consent  is  given  to  any 
extension  or  renewal  thereof  without  notice. 


Notes  are  often  presented  to  banks 
for  discount  or  as  collateral  for  a loan. 
These  notes  must  be  assigned,  and  care 
should  be  taken  that  the  assignment  is, 
explicit  and  valid.  In  a written  assign- 
ment something  may  be  omitted  or  may 
not  be  entirely  legible.  A rubber  stamp 
assignment  corresponding  to  the  follow- 
ing would  be  proper: 

FOR  VALUE  RECEIVED  I hereby  as- 
sign the  within  note  to  the  FIRST  NA- 
TIONAL BANK  OF  HOPED  ALE,  OHIO, 
and  guarantee  the  payment  thereof  at  matu- 
rity, or  at  any  time  thereafter,  waiving  pro- 
test, demand,  and  notice  of  non-payment. 


Customers  of  banks  often  give  others 
permission  to  sign  their  checks  and  en- 
dorse items  for  deposit.  Before  paying 
such  checks  a bank  should  require  writ- 
ten authority  from  the  customer,  author- 
izing such  person  or  persons  to  sign  and 


endorse  his  name  to  checks.  . For  this 
purpose  it  is  convenient  to  have  a rub- 
ber stamp  like  the  following,  and  using 
one  of  your  own  blank  pass  books,  stamp 
the  powers  of  attorney  therein  in  the 
order  in  which  they  are  given.  Thus, 
such  powers  of  attorney  will  be  kept 
together  in  permanent  .form  and  may  be 
readily  referred  to  at  any  time: 

HEREBY  AUTHORIZE 


To  sign  ....  name  to  checks  drawn  against 
my  account  in  THE  FIRST  NATIONAL 
BANK  OF  HOPEDALE,  OHIO,  and  also 
authorize  ....  to  endorse  checks  and  collec- 
tions to  be  deposited  to  ....  account. 


Checks,  drafts,  certificates  of  deposit, 
etc.,  are  often  lost,  and  when  duplicates 
are  issued  the  bank  should  be  indemni- 
fied against  any  loss  arising  from  the 
issue  of  the  duplicate.  A rubber  stamp 
worded  as  follows  and  stamped  on  thfe 
back  and  at  the  top  of  the  duplicate 
item  will  be  sufficient  to  hold  the  suc- 
ceeding endorsers  liable  for  such  losses: 

IN  CONSIDERATION  of  the  payment 

of  this  duplicate  the  original  being 

lost,  the  endorsers  of  this  check  hereby 
jointly  and  severally  agree  to  keep  harm- 
less and  indemnified  THE  FEDERAL  NA- 
TIONAL BANK  OF  UNIONVILLE, 
OHIO,  its  successors  and  assigns,  of,  and 
from  and  against  aJ  loss,  damage,  and  ex- 
pense of  every  name,  character,  and  descrip- 
tion in  any  way  arising  from  or  growing  out 
of  the  payment  of  this  check,  without  pre- 
sentation of  the  original,  and  also  to  return 
to  the  said  bank  the  original  if  found. 

Application  is  sometimes  made  by  the 
customers  of  smaller  banks  for  a con- 
venient and  safe  form  of  carrying  their 
funds  while  traveling.  For  this  pur- 
pose the  various  express  companies  and 
the  larger  city  banks  issue  travelers' 
checks.  A small  bank,  however,  may  by 
using  the  little  rubber  stamp  below,  con- 
vert their  own  drafts  drawn  on  their 
New  York  correspondent  into  travelers' 
checks.  The  person  to  whom  the  draft 
is  payable  and  the  cashier  both  sign 
their  names  on  the  lines  provided  by  the 
stamp  at  the  time  the  draft  is  purchased. 
The  payee  endorses  the  draft  only  when 
presented  at  the  bank  to  be  cashed  and 


Digitized  by  t^ooQle 


456 


THE  BANKERS  MAGAZINE 


in  the  presence  of  the  teller  cashing  the 
check.  The  waiver  is  stamped  across 
the  face  of  the  draft,  and  the  drafts 
may  be  issued  in  such  denominations  as 
are  desired  by  the  purchaser: 

IDENTIFICATION  waived  if  endorsement 
corresponds  with  the  signature  below. 


Cashier. 

Payments  of  part  interest  and  prin- 
cipal are  often  made  on  notes.  They 
are  endorsed  on  the  back  of  the  note, 
and  rubber  stamps  may  be  provided  for 
the  purpose,  which  are  very  convenient 
and  which  make  a much  neater  appear- 
ance than  the  written  endorsements. 
When  a part  of  the  principal  is  paid  the 
date  and  amount  of  payment  should  be 
endorsed.  The  following  shows  a form 
of  this  stamp: 

19. . PAID  ON  THE  WITHIN 

9 

When  the  interest  or  any  part  of  it  is 
paid,  the  endorsement  should  show  the 
date  of  payment,  the  date  to  which  the 
interest  is  paid,  and  the  amount  paid. 
The  following  stamp  answers  the  pur- 
pose: 

19..  INTEREST  PAID  TO 

19..  9 

Since  the  advent  of  the  adding  ma- 
chine the  pass  book  is  now  used  ex- 
clusively for  deposits  in  most  banks. 
Formerly  the  debit  page  only  was  used 
for  deposits,  while  on  the  credit  page 
the  customer  entered  the  checks  drawn 
against  his  account.  Or  if  the  customer 
did  not  do  so,  the  bank  did  it  for  him, 
not  only  listing  the  amount  of  the 
checks,  but  also  the  date  and  to  whom 
they  were  payable.  This  system  became 
very  burdensome  to  the  clerical  force  of 
the  bank,  and  should  never  have  been 
imposed  upon  them. 

Now,  as  a rule,  the  deposits  only  are 
entered  on  both  the  debit  and  credit 
sides  of  the  pass  book.  When  a book  is 
balanced  the  deposits  are  totaled,  the 
total  checks  set  down  below,  and  the 
difference  between  the  two  being  the 
balance,  is  entered  on  the  line  below. 
The  canceled  checks  are  listed  on  the 


adding  machine  and  surrendered  with 
the  slip.  ^ . 

Balancing  the  pass  books  in  thla  way, 
of  course,  requires  a certain  amount  of 
ruling,  which  by  use  of  the  rubber  stamp 
form  below  may  be  accomplished  by  a 
single  stroke: 


Total  Deposits 

Less  total  checks  surrendered  

Balance 

It  may  require  considerable  per- 
suasion to  induce  the  customers  of  some 
banks,  who  have  long  been  in  the  habit 
of  listing  their  checks  on  their  pass 
books,  or  having  the  bank  enter  them, 
to  desist  from  the  practice.  A little 
rubber  stamp  such  as  the  following, 
stamped  in  the  front  of  the  book,  may 
assist  in  accomplishing  the  desired  re- 
sult: 

DO  NOT  ENTER  CHECKS  ON  THIS 
BOOK. 

Many  country  banks  do  not  have  a 
sufficient  number  of  collateral  loans  to 
justify  having  printed  a supply  of  reg- 
ular collateral  form  of  note.  A rubber 
stamp,  worded  as  follows  and  stamped 
on  the  face  of  a regular  note,  will  con- 
vert it  into  a collateral  form: 

hereby  pledge  as  collateral  secu- 
rity to  the  within  note  the  following  proper- 
ty, authorizing  the  bank  to  sell  the  same  at 
private  or  public  sale  without  advertise- 
ment or  notice,  upon  the  non-performance  of 
this  promise: 


There  are  a number  of  practical 
stamp  racks  which  makes  it  possible  to 
keep  a large  number  of  stamps  in  a con- 
venient and  orderly  manner.  These 
racks  are  usually  fastened  in  parallel 
rows  on  the  wall  above  the  desks.  In 
the  rear  of  each  stamp-holder  should  be 
placed  an  “index  card,"  upon  which 
should  appear  an  impression  of  the 
stamp  belonging  to  the  particular  holder 
in  which  it  is  kept.  If  the  stamps  are 
thus  properly  indexed  or  labeled,  any 
stamp  can  be  almost  instantly  located, 
and  the  return  of  the  stamp  to  its 
proper  place  is  assured. 


Digitized  by  t^ooQle 


POSTING  AND  PROVING  METHODS  IN  SAVINGS 

BANKS 


By  W.  H. 

AS  a proposition  in  accuracy,  all 
^ bookkeeping  resolves  itself  into 
getting  the  right  amount  on  the  right 
account,  and  he  is  the  ideal  bookkeeper 
who  never  gets  the  wrong  amount  on 
the  wrong  account,  or  the  wrong  amount 
on  the  right  account,  or  the  right  amount 
upon  the  wrong  side  of  the  right  ac- 
count. 

The  transactions  of  a large  savings 
bank  are  multitudinous,  and  worst  of  all 
are  spasmodic,  coming  like  an  avalanche 
during  the  interest  periods  and  in  the 
interim  running  more  or  less  uniformly. 


Kniffin,  Jr. 

The  system  must  therefore  be  adapted 
to  the  rush  periods  as  well  as  the  slack 
times,  and  the  force  large  enough  to 
handle  the  work  at  its  maximum,  which 
makes  the  work  much  less  trying  dur- 
ing the  quiet  periods  than  is  usally  the 
case  in  commercial  banks,  where  there  is 
the  daily  grind  of  grist,  which  must  be 
completed  before  the  force  is  at  liberty. 
This  work  is  so  nicely  adjusted,  that  in 
a fifty-million-dollar  bank  in  Greater 
New  York  it  is  no  unusual  thing  to  find 
the  force  at  liberty  within  fifteen  min- 
utes after  the  doors  have  closed.  In  a 


Form  1— The  journal-cash  through  which  aU  transactions  are  carried.  All  items  on  the  ] 
general  ledger  are  listed  in  the  first  column.  The  next  four  columns  represent  ledger  groups, 
and  may  be  expanded  to  take  in  as  many  accounts  as  may  be  thought  advisable  f in  order  to  ex-  I 
pedite  the  work.  Loans  on  bond  and  mortgage  are  entered  in  the  “ B ” and  “ M *’  column.  But 
this  may  be  included  in  the  general  ledger  column.  If  three  thousand  accounts  were  made  on 
group,  an  ordinary  book  of  this  sort  would  provide  for  about  fifteen  thousand  accounts.  Be- 
yond that,  other  systems  here  shown  are  better.  This  is  admirably  adapted  to  small  banks. 

457 


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458 


THE  BANKERS  MAGAZINE 


PROOF  OF  BALANCES. 


CREDIT  DEPOSITS. 


Cremt  Deposits. 


k*w  iiura 


5 


IJ-l  I 


<2> 


I / o o 
/ o 
/ © 
~ J- 
1/  J 


*****  tbo  lt«M  Dot#  ooon  pootod  to  the  indfar  acootmt*  fro*  tb«  ttek«U. 

oboot,  on  obiofa  only  tbo  w*b«.of  tbo  oooomrt  ocpooro,  w t«*en  to 
tbo  lodges  and  obotovor  orodlt  U found  on  that  account  lo  ontorod  in  tbo 
ooluor.  Mzkod  *3«  and  foctod  obon  tbo  Hot  lo  completed.  Tbo  total  la 
oon^uod  oltb  tbo  dotacbod  poxtHr.  and  if  it  agrees,  It  la  proof  toot  tfce 
poatinge  axo  ooxxoct  aa  to  mabor  cf  acoount  ccd  aaount. 


PROOF  OF  BALANCES.  CREDIT  DEPOSITS. 


Hrt  "*•  la  non  ooapiete.  Part  la  atlW  blank.  Tbe  aboot  la  again  t 
„*®  tbo  ledger  and  the  no*  «j»d  old  balanooa  ontorod  aa  t|i*f  appear 

E tbo  ledger.  To  tho  total  of  old  balanooa  la  addod  tbo  total  cradlto 
lft'%  fcMtin£*  *€'**»  tb®  oork  hao  b«*n  dono 
iadJJJiilnti?*  ' PO^lOfa,  and  account  nuabora  have  boon 

Form  2— Coupon  lyatem  of  potting  tod  proving 


hundred-million-dollar  bank,  the  work  is 
generally  completed  within  half  an 
hour  after  the  closing  of  the  doors.  Rush 
periods  and  interest  times,  of  course, 
necessitate  longer  hours,  but  even  these 
are  not  unduly  extended.  On  a quiet 
day  the  transactions  in  a large  bank  will 
number  a thousand,  and  on  a busy  one, 
in  one  of  the  largest  New  York  banks 
are  reported  to  have  been  over  ten 
thousand. 

The  proposition  that  confronts  every 
savings  bank  is  to  devise  a system  of 
posting  and  proving  that  will  not  per- 


mit an  error  to  get  past  the  posting 
check.  If  it  does,  it  will  give  trouble 
at  the  next  trial  balance,  and  trouble 
with  the  trial  balance  is  the  most  un- 
welcome visitor  that  can  come  into  a 
savings  bank,  large  or  small. 

Accounting  bt  Groups. 

The  foundation  of  all  posting  systems 
is  the  grouping  of  the  accounts.  This 
is  so  generally  the  custom  that  it  may 
be  taken  as  a settled  savings  bank 
policy.  At  a meeting  of  the  representa- 
tives of  a majority  of  the  savings  banks 


Digitized  by  t^ooQle 


SAVINGS  BANKS 


459 


of  New  York  and  Brooklyn,  held  re- 
cently, this  question  was  put,  and  it  was 
found  that  all  but  one  made  this  a prac- 
tice,— that  one  being  in  a bank  carrying 
about  seven  thousand  accounts  and  con- 
sidering them  all  one  group,  which  is  a 
serious  mistake,  as  the  grouping  into 
smaller  lots  would  be  a decided  ad- 
vantage. Just  how  small  the  groups 
should  be  is  a matter  of  opinion,  but  the 
smaller  the  bank  the  smaller  can  be  the 
grouping,  and  in  the  case  cited,  groups 
of  either  two  or  three  thousand  would 
help  materially  in  expediting  the  work. 
If  ledgers  are  used,  one  ledger  would 
naturally  include  a group,  but  if  cards 
or  loose  leaf  systems  are  in  vogue,  the 
accounts  may  be  grouped  numerically/ 
as,  for  instance,  l-r-1,000;  1,001 — 

2,000,  and  so  on. 

It  is,  of  course,  of  utmost  importance 
that  the  items  be  properly  distributed 
to  the  various  groups,  or  the  system 
falls  down.  But  by  the  coupon  system, 
herein  described,  combined  with  post- 
ings direct  from  tickets,  incorrect  dis- 
tribution is  impossible.  The  classifica- 
tion is  usually  accomplished  in  one  of 
three  ways:  First,  through  the  use  of 

the  cash-journal  (Form  1);  second, 
through  the  distribution  sheets  used  in 
connection  with  the  coupon  system  of 
posting  and  proving  (Forms  2 and  8) ; 
third,  through  miscellaneous  methods, 
sample  of  which  see  Form  4.  We  shall 
discuss  the  first  two  methods  in  this 
paper;  the  last  method  being  reserved 
for  another  number,  in  which  will  be 
fouhd  several  plans  in  actual  operation 
in  savings  banks. 

Where  a simple  method  is  desired  and 
the  coupon  system  is  not  adaptable  on 
account  of  the  lack  of  clerical  force,  a 
better  scheme  could  hardly  be  devised 
than  the  one  presented  below,  which 
consists  of  a plan  which  retains  all  the 
good  features  of  the  journal  method 
and  eliminates  all  the  undesirable.  It  is 
the  custom  in  many  banks  before  prov- 
ing the  cash  transactions  of  the  day  to 
enter  all  drafts  and  deposits,  together 
with  the  general  ledger  items,  on  the 
journal  or  cash  book.  Some  banks  run 
a deposit  journal,  a draft  journal  and 
a “general  journal,”  to  which  the  other 


items  are  carried  before  posting  to  the 
general  ledger.  By  Form  1 it  will  be 
seen  that  before  cash  is  proven  by  this 
method  the  permanent  records  in  detail 
must  be  made.  This  is  not  or  should  not 


be  necessary  as  a preliminary  to  proof 
of  cash.  In  advocating  the  use  of  the 
teller’s  cash  sheet  as  a counter  proof  of 
cash,  the  writer  speaks  from  experience. 
If  time  is  an  element  to  be  considered. 


Digitized  by  t^ooQle 


Form  3— Coupon  system  of  posting  and  proving,  used  in  connection  with  pass-book 


460 


THE  BANKERS  MAGAZINE 


Form  4— Account  grouping  and  proof  posting  by  adding  machine 

EXPLANATION— 44A44— 44 A44— 44A44  are  three  deposit  tickets  in  section  2.  “B”  is  the  total 
of  the  same  items  made  on  adding  machine.  44C 44  is  the  proof  of  posting.  After  items  are  listed 
on  machine,  they  are  listed  by  number  and  initials  only  on  44  G,”  and  the  amount  entered  either 
in  total  or  itemized  in  the  proper  column  of  the  journal.  After  postings  are  made,  the  amounts 
are  entered  from  the  ledgers  on  44  C 44  and  compared  with  adding  machine  total,  and  if  totals 
agree  postings  have  been  correctly  made.  The  slips  for  each  section  are  pinned  together  as 
soon  as  assembled  and  added,  and  filed  in  this  manner. 

* This  is  the  amount  shown  on  the  pass-book  after  the  present  entry  has  been  made,  and  is 
compared  with  ledger  balance  in  proving.  « 


and  accuracy  as  well,  the  use  of  this 
idea  will  accomplish  both.  It  is  quite 
generally  used  in  commercial  banks,  and 
ought  to  be  in  savings  banks  as  a quick 
and  accurate  proof.  It  ought  not  to 
be  necessary  to  list  every  deposit  by 
name  and  number  and  distribute  to 
the  proper  group  before  the  teller  can 
satisfy  himself  that  his  cash  is  correct. 
At  three  o’clock  he  is,  or  ought  to  be, 
concerned  that  his  work  has  been  cor- 
rect during  the  day,— let  the  permanent 
and  complete  record  of  his  doings  be 
chronicled  later. 

By  referring  to  the  preceding  paper, 
several  forms  of  teller’s  cash  sheets  will 
be  found.  No  particular  form  is  neces- 


sary, as  long  as  it  totals  the  debits  and 
credits  of  the  day.  The  form. shown. 
Form  5 (reprinted  from  the  September 
number),  has  an  added  feature  in  that 
it  is  a proof  also  of  the  journalizing  of 
the  same  work.  The  process  is  as  fol- 
lows: As  the  drafts  and  deposits  come 
in  during  the  day,  they  are  listed  by 
number  and  amount  only,  without  re- 
gard to  the  sequence  of  accounts , in  the 
debit  and  credit  columns.  After  listing, 
they  can  be  posted  to  the  ledgers  or 
cards  if  desired,  or  this  may  be  done 
after  journalizing.  As  soon  as  the  doors 
are  closed,  the  columns  are  added.  The 
credits  are  added  to  the  cash  on  hand 
as  of  the  previous  night,  the  debits  de- 


Digitized  by  t^ooQle 


SAVINGS  BANKS 


461 


ducted,  and  the  result  is  the  amount 
called  for.  If  by  the  rules  of  the  bank, 
postings  are  required  to  be  made  the 
same  day,  this  can  be  done  direct  from 
the  tickets.  The  next  morning  these  are 
assembled  in  their  respective  groups, 
and  written  up  on  the  journal  (Form 
1).  The  totals  of  the  journal  are  car- 
ried until  the  end  of  the  month,  and  the 
difference  between  the  debit  and  credit 
sides  must  give  the  same  results  as  ob- 
tained on  the  teller’s  cash  sheet.  If 
these  figures  prove,  it  indicates  that  the 
items  have  been  correctly  entered.  If 
not  correctly  entered,  there  will  be  a 
difference  which  will  readily  be  found 
by  checking  from  the  teller’s  sheet. 
The  ledger  postings  are  checked  back 
from  the  journal,  and  we  have  thus  gone 
around  a triangle,  not  having  done  the 
same  work  twice,  nor  having  done  a 
stroke  of  needless  work.  To  post  from 
call  is  highly  dangerous,  as  many  bank 
men  will  testify.  The  eye  is  more  ac- 
curate than  the  ear,  and  wherever  oral 
posting  and  proving  is  in  vogue,  the 
sooner  it  is  abandoned  the  better  for  all 
concerned.  Amusing  and  annoying 
errors  have  been  traceable  to  this 
method,  and  it  has  nothing  to  recom- 
mend it.  A study  of  Form  5 is  sure  to 
be  attended  by  good  results  and  will 
repay  any  bank  running  with  but  one 
teller. 

The  Coupon  System  op  Posting. 

This,  of  course,  does  not  insure  get- 
ting the  amounts  in  the  proper  groups, 
and  to  verify  this  process  nothing  can  be 
done  but  go  over  the  journal  columns 
and  ascertain  that  the  grouping  has  been 
properly  done.  This  is  but  the  work  of 
a very  few  minutes.  But  the  coupon 
system  which  we  shall  consider  at  length 
has  so  many  advantages  over  all  other 
schemes,  and  is  in  use  in  so  many  banks, 
that  it  would  seem  but  a matter  of  time 
when  the  fundamental  idea  embodied  in 
this  system  will  be  found  in  all  savings 
bank  posting  systems.  It  will  accom- 
plish four  very  desirable  things,  viz.: 
(1)  It  insures  getting  the  right  amount 
on  the  right  account  and  on  the  right 
side  of  the  account.  (2)  It  prevents 
wrongful  grouping.  (8)  It  will  posi- 
s 


tively  prevent  an  error  in  extending  the 
balance.  (4)  It  will  insure  that  the 
same  entry  is  made  on  the  ledger  as  is 
made  on  the  pass  book. 

The  foundation  of  the  whole  scheme 
is  “blind”  work, — i.  e.,  the  clerk  has 
nothing  before  him  to  make  it  easy  to 
make  errors  in  his  postings.  A study  of 
Forms  2 and  8 is  suggested  in  this  con- 
nection, and  what  follows  is  based  upon 
these  forms. 

The  sheet,  whatever  the  minor  details 
may  be,  is  divided  roughly  into  three 
portions:  (1)  List  of  deposits  (we  are 

considering  only  the  credit  entries) ; (2) 
proof  of  posting;  (8)  proof  of  ledger 
extensions.  Some  banks  omit  the  last 
named  portion  and  use  the  first  two 
only,  verifying  the  balance  by  another 
process.  Usually  a sheet  is  used  for 
each  ledger  or  group  of  accounts.  In 
the  present  case  we  have  ledger  “B” 
(Form  2).  As  the  deposit  tickets  are 
received  they  are  taken  by  the  distribu- 
tion clerk  and  entered  upon  the  proper 
sheet,  corresponding  to  the  ledger  or 
group  to  which  the  entry  belongs.  In 
the  present  case  credits  are  on  yellow 
sheets  and  debits  on  blue,  and  the  de- 
posit tickets  and  draft  receipts  corre- 
spond with  the  distribution  sheets  in 
color,  and  it  is  practically  impossible  to 
get  a debit  on  a credit  sheet,  or  vice 
versa.  This  clerk  fills  in  the  num- 
ber of  the  account,  skips  a col- 
umn and  extends  the  amount  on  the 
perforated  portion,  which,  after  cash 
has  been  balanced,  is  detached  and  goes 
to  the  head  bookkeeper  or  secretary.  In 
some  banks  it  is  merely  turned  under. 
The  items  may  be  carried  to  the  journal 
in  bulk,  or  itemized,  as  in  the  process 
above  described.  Postings  are  made  di- 
rect from  original  tickets  to  ledger. 
After  postings  are  completed,  another 
clerk  (or  in  smaller  banks  the  same 
one)  takes  the  sheet,  which  now  con- 
tains nothing  but  the  number  of  the 
account,  or  in  some  cases  the  number 
and  name  and  in  others  only  part  of  the 
name,  and  turning  to  the  account  he  puts 
down  whatever  he  finds  posted  and  at 
the  same  time,  the  new  balance  and  the 
old  one.  In  one  large  New  York  bank 
the  posting  clerk  merely  extends  the 


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462 


THE  BANKERS  MAGAZINE 


balance  as  it  will  be  when  the  item  is 
posted.  The  check  clerk  ascertains  what 
amount  will  so  affect  the  balanee  and 
puts  its  down,  both  on  ledger  and  proof 
sheet.  When  his  list  is  completed,  the 
amount  of  the  deposits  is  added  to  (in 
case  of  debits  it  would  be  deducted 
from)  the  old  balance,  and  if  the  totals 


not  find  the  item  on  that  ledger,  but 
may,  of  course,  post  an  item  through 
gross  carelessness  on  ledger  “D”  that 
should  have  gone  on  ledger  “B,”  or  on 
the  wrong  account,  or  got  the  number 
mixed,  etc.,  and  if  so,  nothing  will  it 
show  up  until  trial  balance  time,  when 
there  will  be  found  an  unchecked  item. 


Form  5— Teller's  proof  of  cash 
(Reprinted  from  September  number) 


agree,  the  work  has  been  correctly 
done.  The  total  credits  must  equal 
the  total  on  the  detached  portion 
equal  the  total  on  the  detached  portion 
and  the  * "proof  of  balance”  columns 
equal  each  other,  with  the  additions  or 
deductions  mentioned  above  (Form  2). 
This  absolutely  insures  that  the  correct 
amount  has  gone  on  the  proper  account, 
on  the  proper  side  of  the  account  and 
that  the  extensions  are  correct.  If  im- 
properly grouped,  the  posting  clerk  will 


No  system  will  prevent  careless  bun- 
gling. 

To  insure  that  the  same  item  goes  on 
the  ledger  as  appears  on  the  pass  book, 
some  banks,  instead  of  transcribing  from 
the  tickets  to  the  distribution  sheets 
make  these  entries  from  the  pass  book . 
The  book  goes  from  the  teller  to  the 
distribution  clerk,  who  enters  upon  the 
proper  sheet  whatever  he  finds  on  the 
book . 

This  is  a very  good  plan  and  works 
exceedingly  well.  It  necessitates,  of 


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SAVINGS  BANKS 


463 


course,  additional  clerks,  but  the  ac-  examples  of  these  ideas,  worked  out  in 
curacy  is  well  worth  the  cost.  In  the  practice  in  several  banks  in  different 
next  paper,  the  abstract  discussion  of  parts  of  the  country,  and  will  be  well 
this  subject  will  give  place  to  concrete  worth  the  reader’s  attention. 


THE  POSTAL  SAVINGS  BANK  SOON  TO  BE  A 

REALITY 


ACCORDING  to  present  indications, 
^ before  the  close  of  the  present 
year  the  United  States  will  have  en- 
tered upon  what  promises  to  be  one  of  the 
experiments  of  its  history.  Having  ex- 
experiment of  its  history.  Having  ex- 
isted for  nearly  a century  and  a quarter 
without  a bank  in  every  postoffice,  and 
without  this  useful  appendage,  having 
made  a “considerable  degree”  of  pro- 
gress, it  is  now  to  launch  out  as  banker- 
to-the-people,  and  endeavor  to  promote 
habits  of  thrift  and  industry  among  the 
masses,  and  incidentally  settle  some  of 
its  troublesome  bond  problems.  The 
former  is  to  be  accomplished  not  only 
by  placing  a bank  at  every  cross  roads 
postoffice,  as  aforesaid,  but  by  offering 
the  thrifty  citizen  (aliens,  also)  security 
absolute  and  two  per  cent,  interest.  The 
latter  object  is  to  be  gained  by  using 
the  funds,  or  part  of  them,  to  retire  the 
three  per  cent,  bonds,  and  it  is  expected 
that  the  first  $63,000,000  “thrift 
money”  will  be  so  used.  The  depositor 
may  also,  if  he  wishes,  buy  bonds  of 
the  Government  in  multiples  of  twenty 
dollars,  the  obliging  postmaster  assist- 
ing him  to  that  end. 

The  initial  appropriation  ($100,000) 
is  utterly  inadequate  to  more  than 
formulate  plans  and  open  a few  experi- 
mental stations,  but  the  Postmaster- 
General  promises  that  a few  such  will 
be  in  operation  within  a few  months.  It 
is  doubtful  if  the  larger  cities,  like  New 
York  and  Chicago,  will  be  covered  at 
the  beginning,  on  account  of  the  lack  of 
funds. 

The  management  of  the  system  will 
be  under  the  supervision  of  the  Postmas- 
ter-General, the  Secretary  of  the  Treas- 
ury and  the  Attorney-General,  whose 
pleasant  duty  it  will  be  devise  a scheme 
to  handle  the  multitudinous  details  that 


attend  such  a vast  undertaking.  The 
clerical  work  of  receiving  and  paying 
money,  making  proper  entries  both  at 
the  office  of  deposit  and  at  headquarters, 
the  internal  system  of  audit  and  the 
selection  and  designation  of  depositories 
will  call  for  a large  amount  of  labor.  It 
is  understood  that  the  systems  of  some 
of  the  largest  savings  banks  have  been 
investigated,  in  order  to  ascertain  the 
adaptability  of  the  methods  there  in 
vogue  to  the  Postal  System.  The  expe- 
rience of  other  countries  where  postal 
banks  are  now  in  operation  will,  of 
course,  furnish  the  groundwork  for  the 
general  administrative  details.  The 
proposition  that  confronts  the  Board  of 
Managers  is  not  how  to  get  the  money, 
— that  will  take  care  of  itself,  and  no 
advertising  expert  need  be  employed  to 
inaugurate  an  advertising  campaign ; 
but  the  perplexing  question  is  how  to 
handle  it  from  a bookkeeping  stand- 
point. 

It  is  understood  that  the  pass  book, 
so  familiar  to  savings  bank  depositors, 
and  quite  universally  used,  both  in 
banks  and  postal  systems,  will  give  way 
to  a certificate  of  deposit,  the  nature  of 
which  has  not  been  fully  decided  upon. 

Small  deposits  will  be  accepted 
through  the  “stamp  system,”  and  no 
one  will  be  permitted  to  deposit  more 
than  $100  in  any  month,  nor  to  have 
more  than  $500  to  their  credit  at  one 
time.  Payment  of  principal  and  inter- 
est is  assured  by  pledge  of  the  faith  of 
the  United  States. 

The  funds  are  to  be  deposited  in  State 
and  national  banks  in  the  communities 
in  which  the  deposits  are  received  at 
two  and  one-quarter  per  cent.  Five  per 
cent,  of  the  total  deposits  is  to  be  held  in 
the  Treasury  as  a reserve  guaranty 
fund.  The  applications  from  banks  de- 


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464 


THE  BANKERS  MAGAZINE 


siring  to  act  as  such  depositories,  and 
the  requests  from  postmasters  asking 
that  their  offices  be  made  postal  de- 
positories, demonstrate,  in  a measure, 
the  demand  for  such  an  institution. 

A recent  report  of  the  Treasury  De- 
partment states  that  566  postmasters 
have  asked  to  be  designated  depositories, 
and  the  number  of  banks  reaches  over 
1,100.  As  was  contemplated  at  the  be- 
ginning, the  Middle  West  takes  the  lead 
in  this  demand,  closely  followed  by  the 
South  and  Far  West.  Pennsylvania, 
which  now  has  but  thirteen  strictly  sav- 
ings banks  and  more  than  1,400  build- 
ing and  loan  associations,  heads  the  list 
with  forty-five  postmasters  and  125 
banks;  Minnesota,  with  fourteen  savings 
banks,  responds  with  forty-six  postmas- 
ters and  sixty-eight  banks;  Ohio,  forty- 
nine  offices  and  sixty-eight  banks; 
Illinois,  which  now  has  no  strictly  sav- 
ings banks,  shows  thirty-three  post- 
offices  and  fifty-seven  banks;  Wisconsin, 
twenty-five  postoffices  and  sixty-one 
banks.  A report  of  the  same  nature  is- 
sued about  August  1,  showed  that  only 
four  and  four-tenths  per  cent,  of  the 
applications  came  from  the  New  Eng- 
land States,  while  New  York  State  pre- 
sented but  eighteen  requests  from  post- 
masters and  thirty-eight  applications 
from  banks.  Texas  comes  forward  with 
thirty-seven  postoffice  requests  and 
forty-four  bank  applications. 

The  dearth  of  applications  from  New 
York  and  New  England  is  to  be  ex- 
pected, for  this  section  is  the  home  of 
the  mutual  savings  bank.  Of  the  642 
mutual  savings  banks,  as  given  in  the 
last  report  of  the  Comptroller  of  the 
Currency,  nearly  six  hundred  are  in 
these  States.  While  the  field  is  not 
fully  covered,  as,  for  instance,  in  New 
York,  where  about  one-half  of  the  coun- 
ties have  no  such  institutions,  the  pres- 
ent savings  banks  are  so  well  and  favor- 
ably known  and  cover  such  a wide  terri- 
tory that  together  with  the  savings  de- 
partments in  banks  and  trust  companies 
they  afford  ample  savings  facilities,  and 
no  urgent  demand  for  postal  savings 
banks  has  manifested  itself.  Doubtless, 
in  the  large  cities,  the  foreign  popula- 


tion, accustomed  to  look  upon  the  gov- 
ernment as  its  banker,  will  make  free 
use  of  this  innovation,  and  leave  their 
money  in  the  country  where  they  earn  it 
— at  least,  let  us  hope  so. 

The  effect  upon  existing  banks  is 
problematical.  Many  savings  banks  men 
are  of  opinion  that  once  the  saving  habit 
is  formed,  and  the  people  become  ac- 
quainted with  the  earning  power  of 
money,  they  will  become  dissatisfied  with 
a two  per  cent,  return  and  turn  to  the 
regular  banks  where  larger  income  may 
be  obtained.  It  will,  no  doubt,  draw 
millions  out  of  hiding,  some  of  which 
will  remain  on  deposit,  some  will  go  into 
bonds  and  some  into  other  banks. 


HAS  LIST  OF  BAD  BANKERS 

Comptroller  Murray  Watches  The  Undesir- 
ablea 

HON.  LAWRENCE  O.  MURRAY,  Comp- 
troller of  the  Currency,  addressing 
a convention  of  the  National  Association  of 
Supervisors  of  State  Banks,  which  was  held 
in  Washington,  September  12,  13  and  14, 
proposed  to  them  a working  co-operation 
with  the  national  bank  examiners.  He  de- 
clared he  had  in  his  office  a list  of  men  who 
as  officers  of  national  banks  had  proved  in- 
competent and  had  been  removed  from  of- 
fice, and  said  that  if  any  of  them  should 
make  application  to  organize  State  banks 
their  names  would  be  furnished  to  the  State 
banking  authorities.  In  turn  he  proposed 
that  the  State  supervisors  should  furnish 
to  the  national  system  the  names  of  men 
who  had  been  driven  out  of  the  State  banks. 

During  the  last  eighteen  months,  the 
Comptroller  said,  he  had  refused  108  appli- 
cations to  form  national  banks  because  the 
men  behind  them  had  been  found  incompe- 
tent or  dishonest;  that  there  was  not  enough 
business  to  make  the  proposed  institutions 
profitable,  or  that  the  applicants  were  men 
without  standing  within  their  communities. 

Weak  banks  and  failures,  said  Mr.  Mur- 
ray, almost  always  come  from  banks  which 
should  never  have  been  chartered.  The 
practice  of  concealing  liabilities  was  grow- 
ing fast,  he  said,  and  he  described  a system 
which  be  believed  was  quite  general  and 
which  he  intended  to  investigate. 


Digitized  by  t^ooQle 


BANKING  AND  COMMERCIAL  LAW 

Conducted  by  John  J.  Crawford,  Eaq.,  Author  Uniform  Negotiable  Instruments  Act 


RECENT  DECISIONS  OF  INTEREST  TO  BANKERS 


WRONGFUL  REFUSAL  TO  PAY 
CUSTOMER'S  CHECK- 
AMOUNT  OF  DAMAGES. 

THIRD  NATIONAL  BANK  OF  ST. 

LOUIS  us.  OBER. 

UNITED  STATES  CIRCUIT  COURT  OP  AP- 
PEALS, EIGHTH  CIRCUIT,  APRIL  II,  1910. 

Where  a depositor’s  check  is  dishonored 
when  he  has  funds  on  deposit  to  meet  it,  he 
has  a right  of  action  against  the  bank  for  a 
violation  of  his  legal  rights,  and  is  entitled 
to  recover  at  least  nominal  damages. 

If  he  is  a merchant  or  trader,  it  will  be 
presumed  without  futher  proof  that  sub- 
stantial damages  .have  been  sustained;  but 
in  other  cases  special  damages  must  be  al- 
leged and  proved. 

Before  Hook  and  Adams,  Circuit  Judges, 
and  Amidon,  District  Judge. 

JLTOOK,  Circuit  Judge:  This  was  an 
action  by  William  A.  Ober  to  re- 
cover damages  of  the  Third  National 
Bank  of  St.  Louis  for  its  failure  to  pay 
a check  drawn  by  him  on  his  account. 
He  obtained  a judgment,  and  this  writ 
of  error  was  prosecuted. 

Ober,  who  lived  in  Natchez,  Miss., 
had  a small  account  with  the  defendant 
bank  at  St.  Louis,  Mo.,  and  wishing  to 
transfer  a part  of  it  to  his  home  bank, 
he  drew  a check  in  its  favor  for  $50. 
At  the  time  his  account  with  defendant 
had  a credit  balance  of  $122.14.  When 
in  due  banking  course  the  check  was 
presented,  defendant  refused  payment 
on  the  ground  that  Ober’s  account  had 
been  withdrawn.  The  check  was  pro- 
tested for  non-payment.  There  was  no 
malice  or  ill  will  in  the  action  of  defend- 
ant. It  was  due  solely  to  a clerical 
error  of  a bookkeeper.  Ober  was  not  a 
merchant  or  trader.  He  sued  for  the 
protest  fees,  and  for  general  damages 
to  his  honor,  truth  and  business  standing. 
Aside  from  the  protest  fees,  no  special 
damages  were  alleged  in  his  petition, 
and  the  evidence  at  the  trial  disclosed 
none.  He  received  a verdict  and  judg- 
ment for  $500. 


The  trial  court  refused  defendant's 
request  that  the  jury  be  instructed  to 
confine  their  verdict  to  the  protest  fees 
and  interest.  It  then  instructed  them 
substantially  as  follows: 

There  is  no  evidence  that  defendant 
acted  maliciously  in  refusing  payment 
of  the  check,  nor  that  plaintiff  sustained 
special  damage.  If  there  was  evidence 
of  this  character,  you  would  be  justified 
in  awarding  substantial  damages.  As 
there  was  no  malice,  but  only  a book- 
keeper’s mistake,  and  as  special  dam- 
ages are  not  shown,  the  question  is: 
What  is  the  measure  of  damage?  The 
plaintiff  is  entitled  to  recover  the  pro- 
test fees  “and  such  other  damages  as 
under  all  the  evidence  in  the  case  you 
may  believe  he  is  entitled  to.  * * * 

You  are  all  business  men,  and  I am  dis- 
posed to  leave  the  question  entirely  to 
your  decision  and  judgment,  without  any 
special  comment,  only  saying  to  you, 
however,  that  you  ought  not  limit 
your  verdict  to  nominal  damges,  but  to 
give  the  plaintiff  such  tdkiperate  dam- 
ages as  you,  in  your  judgment,  may 
deem  to  be  reasonable  compensation  for 
the  injury  he  sustained  by  dishonoring 
his  check.  As  to  this  you  are  the  sole 
and  exclusive  judges." 

The  jury  retired  and  returned  into 
court  for  further  explanation  of  the  in- 
structions, saying: 

“We  want  to  know  whether  we  are  re- 
quired to  give  plaintiff  some  substantial 
damages." 

The  court  responded  that  the  instruc- 
tions meant: 

“There  should  be  no  excessive  dam- 
ages, and  not  mere  nominal  damages; 
that  the  jury  should  award  such  dam- 
ages as  they  believe  from  all  the  circum- 
stances plaintiff  is  entitled  to." 

Appropriate  exceptions  were  taken  by 
defendant.  As  already  observed  there 
was  a verdict  for  $500. 

With  some  exceptions  the  underlying 

4*S 


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466 


THE  BANKERS  MAGAZINE 


principle  of  the  law  of  damages  is  com- 
pensation for  the  injury  done.  In 
cases  of  malice,  willful  wrongdoing,  a 
conscious  disregard  of  the  rights  of 
others,  and  the  like,  an  additional  award 
may  be  given  by  way  of  punishment. 
Again,  every  invasion  of  a legal  right  is 
presumed  in  law  to  cause  an  injury,  and, 
though  none  is  shown,  there  may  never- 
theless be  a recovery  of  nominal  dam- 
ages, with  costs  of  the  action.  Such  a 
recovery  is  a judicial  recognition  of  the 
right  and  an  admonition  that  it  cannot 
be  invaded  with  impunity.  The  rela- 
tion between  banker  and  depositor  is 
one  of  contract.  The  right  of  the  lat- 
ter is  that,  to  the  extent  of  his  credit 
balance  subject  thereto,  his  checks 
drawn  and  presented  according  to  the 
customs  and  usages  of  the  business  shall 
be  promptly  honored.  For  a breach  of 
this  right  an  action  for  damages  will 
lie.  If  the  depositor  is  a merchant  or 
trader,  it  will  be  presumed,  without  fur- 
ther proof,  that  substantial  damages 
have  been  sustained.  (Schaffner  vs. 
Ehrman,  139  111.  109;  James  Co.  vs. 
Bank,  105  Tenn.  1 ; Svendsen  vs.  Bank, 
64  Minn.  40.) 

This  rule  proceeds  upon  the  fact, 
commonly  recognized,  that  the  credit  of 
a person  engaged  in  such  a calling  is 
essential  to  the  prosperity  of  his  busi- 
ness, and  the  dishonoring  of  his  checks 
is  plainly  calculated  to  impair  it  and  to 
inflict  a most  serious  injury.  In  com- 
mon opinion,  substantial  damage  is  the 
natural  and  probable  consequence  of  the 
act,  and  therefore  a substantial  recovery 
may  be  had,  without  pleading  or  proof 
of  special  injury.  A leading  case  upon 
this  subject  is  Rolin  vs.  Steward,  14  C. 
B.  595,  23  L.  J.  C.  P.  148.  It  was  one 
of  the  dishonoring  of  the  checks  of 
merchants  or  traders.  In  one  of  the 
opinions,  Williams,  J.,  said: 

“As  to  the  alleged  misdirection,  I 
think  it  cannot  be  denied  that  if  one 
who  is  not  a trader  were  to  bring  an  ac- 
tion against  a banker  for  dishonoring  a 
check  at  a time  when  he  had  funds  of 
the  customer  in  his  hands  sufficient  to 
meet  it,  and  special  damages  were  al- 
leged and  proved,  the  plaintiff  would 


be  entitled  to  recover  substantial  dam- 
ages. And  when  it  is  alleged  and 
proved  that  the  plaintiff  is  a trader,  I 
think  it  is  equally  clear  that  the  jury,  in 
estimating  the  damages,  may  take  into 
their  consideration  the  natural  and  nec- 
essary consequences  which  must  result  to 
the  plaintiff  from  the  defendant’s 
breach  of  contract,  just  as  in  the  case 
of  an  action  for  a slander  of  a person 
in  the  way  of  his  trade,  or  in  the  case  of 
an  imputation  of  insolvency  on  a trader, 
the  action  lies,  without  proof  of  special 
damage.” 

On  the  other  hand,  if  the  depositor  is 
not  a merchant  or  trader,  there  is  no 
such  presumption  of  substantial  injury, 
and  his  recovery  should  be  a nominal 
one,  unless  he  pleads  and  proves  some 
special  damage.  (Bank  of  New  South 
Wales  vs.  Milvain,  10  Vic.  L.  R.  [Law 
Cases]  3;  Burroughs  vs.  Bank,  87  Hun. 
6,  affirmed  without  opinion,  156  N.  Y. 
663.)  Upon  this  latter  proposition 
there  is  confusion  and  conflict  in  the  de 
cisions  of  the  courts,  due  in  large  part 
to  the  undiscriminating  application  of 
Rolin  vs.  Steward  to  cases  wholly  unlike 
it  in  the  important  particular  mentioned. 
But  we  think  the  rule  stated  is  more  in 
accord  with  the  fundamental  principles 
of  the  law  of  damages. 

Counsel  contends  that  the  presumption 
arising  in  the  case  of  a merchant  or 
trader  is  merely  that  he  possesses  credit, 
and  that  when  the  depositor  is  not  a 
merchant  or  trader  the  fact  not  pre- 
sumed may  be  established  by  proof,  and 
the  same  right  to  substantial  damages 
would  then  follow.  The  character  of 
the  presumption  is  misconceived.  It  is 
not  so  much  the  possession  of  credit,  as 
it  is  that  substantial  injury  thereto  has 
been  inflicted  by  the  dishonoring  of  the 
check.  The  very  reason  for  allowing 
general  substantial  damages  to  a mer- 
chant or  trader,  without  a showing  of 
special  injury,  implies  a contrary  rule, 
generally,  as  to  those  not  of  that  class. 
A mere  technical  violation  of  a right  is 
no  just  basis  for  a recovery  of  general 
and  substantial  damages,  where  no  ac- 
tual injury  is  shown,  and  none  appear 
to  follow  as  the  natural  and  probable 


Digitized  by  t^ooQle 


BANKING  LAW 


467 


consequences  of  the  act.  In  the  case 
before  ns  there  was  no  averment  of  par- 
ticular circumstances  or  special  injury, 
aside  from  the  protest  fees,  and  none 
were  proved.  On  the  contrary,  wit- 
nesses of  plaintiff,  who  knew  of  the  dis- 
honoring of  his  check,  testified  that  his 
credit  was  not  injured.  We  think  the 
court  erred  in  instructing  the  jury  that 
the  verdict  should  be  for  more  than  the 
protest  fees  and  nominal  damages. 

The  judgment  is  reversed,  and  the 
cause  remanded  for  a new  trial. 


CHECK  PAYABLE  THROUGH  A 
DESIGNATED  BANK  — RIGHT 
OF  DRAWEE  BANK  TO  REFUSE 
PAYMENT  WHEN  OTHERWISE 
PRESENTED . 

FARMERS'  BANK  OF  NASHVILLE  vs. 

JOHNSON,  KING  & CO. 

SUPREME  COURT  OF  GEORGIA,  MAT  11, 

1910. 

Where  a check  was  drawn  on  a bank  lo- 
cated in  another  town  than  that  in  which 
the  drawer  resided,  and  immediately  follow- 
ing the  direction  to  the  drawee  bank,  which 
was  in  the  lower  left-hand  corner  of  the 
check,  there  were  stamped,  at  the  time  when 
the  check  was  drawn,  the  words  “Payable 
through  [a  named  bank  in  another  city  of 
the  same  State]  at  current  rate,”  this  was  a 
material  part  of  the  direction;  and  the 
drawee  bank  was  not  required  to  pay  the 
check  when  not  presented  through  the  bank 
thus  named,  but  directly  by  a third  bank. 

Under  such  circumstances,  if  the  third 
bank,  which  held  the  check,  presented  it  to 
the  drawee  bank,  and  the  latter  indorsed  on 
it  the  statement  that  it  would  be  paid  when 
presented  through  the  named  bank,  this  did 
not  authorize  the  bank  holding  the  check  to 
have  it  protested. 

For  the  holder  of  a check  to  unlawfully 
cause  a protest  of  it  to  be  made,  and  notice 
to  be  given  to  the  drawer  and  indorsers, 
without  proper  presentation  for  payment, 
according  to  its  terms,  furnishes  a cause  of 
action  to  the  drawer. 

JOHNSON,  KING  A CO.,  a corpora- 
**  tion  doing  business  in  Macon, 
brought  suit  for  damages  against  the 
Farmers'  Bank  of  Nashville,  Ga.  The 
petition  as  amended  alleged  as  follows: 
On  December  30,  1905,  the  plaintiff  is- 
sued a check,  of  which  the  following  is 
si  copy:  “Johnson,  King  & Company, 


$62.00.  No.  1044.  Macon,  Ga.,  Dec. 
30th,  1905.  Pay  to  the  order  of  Haw- 
ley & Hoops,  sixty-two  and  47-100, 
$62.47  dollars.  Johnson,  King  & Co., 
by  Jno.  C.  Holmes.  V.  P.  & Gen.  Mgr. 
To  Bank  of  Nashville,  Nashville,  Ga. 
Payable  through  the  Citizens'  Bank  of 
Valdosta,  Valdosta,  Ga.,  at  current 
rate.” 

On  the  same  date  the  plaintiff  issued 
three  other  checks  drawn  on  the  Bank 
of  Nashville,  similar  in  form  to  the  one 
above,  and  differing  only  as  to  amount 
and  the  name  of  the  payee.  The,words,  # 
“Payable  through  the  Citizens'  Bank  of 
Valdosta,  Valdosta,  Ga.,  at  current 
rate,"  were  stamped  on  each  check. 

The  checks  were  presented  to  the  Bank 
of  Nashville,  at  Nashville,  Ga.,  by  the 
Farmers’  Bank  of  Nashville,  Ga.;  three 
of  them  being  presented  on  January  8, 
1906,  and  one  on  January  6,  1906. 
Upon  presentation  the  Bank  of  Nash- 
ville entered  on  the  back  of  the  checks, 
“Will  pay  when  presented  through  the 
Citizens’  Bank  of  Valdosta,  Georgia.’* 

Thereupon  the  Farmers*  Bank  of 
Nashville  caused  the  checks  to  be  pro- 
tested, each  protest  bearing  the  same 
date  as  the  presentation  for  payment; 
and  notice  of  dishonor  was  sent  to  cer- 
tain indorsers  and  to  the  drawer.  The 
Bank  of  Nashville  never  refused  to  pay 
the  checks,  but,  through  its  officers, 
stated  to  the  Farmers'  Bank  of  Nash- 
ville that  it  objected  to  the  manner  in 
which  the  checks  were  presented,  it 
being  different  from  the  terms  expressed 
on  their  face,  and  that  they  would  be 
honored  when  presented  through  the 
Citizens’  Bank  of  Valdosta. 

At  the  time  when  the  checks  were 
drawn,  and  when  presented  to  the  Bank 
of  Nashville  by  the  Farmers'  Bank  of 
Nashville,  the  plaintiffs  had  a sufficient 
amount  of  money  on  deposit  in  the  Citi- 
zens' Bank  of  Valdosta,  subject  to 
check,  for  their  payment.  The  plain- 
tiff had  an  arrangement  with  the  Bank 
of  Nashville  by  which  all  checks  drawn 
on  that  bank  would  be  paid  if  presented 
through  the  Citizens*  Bank  of  Valdosta. 

The  Farmers'  Bank  of  Nashville  will- 
fully disregarded  the  terms  of  the 


Digitized  by  t^ooQle 


468 


THE  BANKERS  MAGAZINE 


checks,  which  were  that  they  were  “pay- 
able through  the  Citizens'  Bank  of  Val- 
dosta, Valdosta,  Ga.,  at  current  rate,” 
and,  for  the  purpose  of  casting  suspi- 
cion upon  the  credit  of  the  plaintiff  be- 
fore the  commercial  world,  protested  the 
checks  and  thereby  damaged  the  plain- 
tiff. The  protest  was  made  for  the  pur- 
pose of  causing  the  plaintiff  to  become 
offended  with  the  Bank  of  Nashville, 
and  of  forcing  it  to  become  a depositor 
with  the  Farmers'  Bank  of  Nashville 
and  its  associates.  The  defendant  de- 
murred to  the  petition.  The  demurrer 
was  overruled,  and  the  defendant  ex- 
cepted. 

Lumpkin,  J.  (after  stating  the  facts 
as  above) : A story  is  told  of  a distin- 
guished writer  on  the  subject  of  nego- 
tiable instruments,  to  the  effect  that, 
when  he  was  asked  what  first  suggested 
to  him  the  idea  of  preparing  such  a 
work,  he  answered  that  he  became  inter- 
ested in  the  question  as  to  whether  a de- 
mand was  necessary  in  order  to  enforce 
by  suit  a promissory  note  or  acceptance 
payable  by  its  terms  at  a specified  place, 
and  that  the  extensive  inquiry  on  this 
subject  into  which  he  was  led  suggested 
to  him  the  utility  of  a new  work  on  ne- 
gotiable instruments. 

The  story  further  proceeds  that,  when 
the  inquirer  asked  him  whether  such  a 
demand  was  necessary,  he  humorously 
replied  that  he  had  forgotten.  Whether 
this  is  without  foundation  or  not,  it 
serves  to  indicate  the  wealth  of  inhar- 
monious learning  which  has  been  lav- 
ished upon  a question  which,  at  first 
sight,  would  appear  to  be  quite  narrow. 
Much  of  the  conflict  in  authorities  has 
arisen  over  the  question  whether,  in  an 
action  against  the  maker  of  a promis- 
sory note  or  the  acceptor  of  a bill  of  ex- 
change payable  at  a particular  place,  it 
was  necessary  to  aver  and  prove  a de- 
mand at  such  place. 

In  England  the  authorities  were  di- 
vided on  the  subject  of  such  accept- 
ances. The  Court  of  King's  Bench  held 
that  where  there  was  an  aceptance  pay- 
able at  a specified  place  it  was  not  neces- 
sary to  allege  or  prove  demand  at  that 
place,  in  a suit  against  the  acceptor. 


The  Court  of  Common  Pleas,  on  the 
other  hand,  held  that  this  made  a quali- 
fied acceptance,  and  that  presentment  at 
the  place  stipulated  must  be  averred  and 
proved. 

In  1820  the  case  of  Rose  vs.  Young, 
2 Brod.  8c  Bing.  165  (6  E.  C.  L.  83), 
came  before  the  House  of  Lords.  It 
was  there  decided  that,  where  the  ac- 
ceptance named  a place  of  payment,  de- 
mand at  such  place  must  be  averred  and 
'proved. 

In  the  following  year  an  act  of  Par- 
liament was  passed  on  the  subject,  de- 
claring that  an  acceptance  payable  at 
a banker's  or  other  specified  place,  with- 
out more,  should  be  deemed  a general  ac- 
ceptance; but  if  it  were  expressed  to  be 
payable  at  a banker's  or  other  place 
“only,  and  not  otherwise  or  elsewhere," 
it  would  be  a qualified  acceptance.  This- 
statute  did  not  deal  with  promissory 
notes,  and  some  of  the  decisions  make  a 
distinction  as  to  them,  where  the  place 
of  payment  was  named  in  the  body  of 
them. 

In  this  country  a contrary  doctrine  to* 
that  declared  by  the  House  of  Lords 
was  laid  down  by  the  Supreme  Court  of 
the  United  States  in  the  case  of  Wallace 
vs.  McConnell,  13  Pet.  186,  10  L.  Ed. 
95.  It  was  held  in  that  case  that  in  ac- 
tions on  promissory  notes  against  the 
maker,  or  on  bills  of  exchange  against 
the  acceptor,  where  the  note  or  bill  is 
made  payable  at  a specified  time  and’ 
place,  it  is  not  necessary  to  aver  in  the 
declaration,  or  prove  on  the  trial,  that  a 
demand  for  payment  was  made,  in  order 
to  sustain  the  action;  but,  if  the  maker 
or  acceptor  was  at  the  place  at  the  time 
designated  and  was  ready  and  offered  to- 
pay  the  money,  it  is  matter  of  defense, 
to  be  pleaded  and  proved  on  his  part. 

This  decision  has  been  generally  fol- 
lowed in  America,  and  the  ruling  has. 
been  adopted  in  this  State.  Dougherty* 
vs.  Western  Bank  of  Georgia,  13  Ga. 
287.  It  was  said  by  this  court  that  the 
defendant  may  plead  readiness  to  pay  at* 
the  place  stipulated,  or  damages  sus- 
tained by  him  in  consequence  of  the 
neglect  or  omission  to  make  the  de- 
mand, and,  upon  proof  of  his  plea,  thq- 


Digitized  by  t^ooQle 


BANKING  LAW 


469 


•defendant  shall  be  exonerated  to  the 
-extent  of  the  damages  which  he  has  sus- 
tained. 

It  will  be  observed  that  the  decisions 
-above  mentioned  have  reference  to  a 
w se  in  which  the  acceptor  of  a bill  of 
•exchange  or  a maker  of  a promissory 
note  is  sued,  not  to  questions  involving 
the  liability  or  release  of  indorsers  or 
•drawers  of  accepted  bills. 

In  many  respects  a check  is  like  an 
inland  bill  of  exchange;  but  there  are 
some  differences.  A “check”  has  been 
defined  to  be  “a  draft  or  order  upon  a 
bank  or  banking  house,  purporting  to 
“be  drawn  upon  a deposit  of  funds  for 
the  payment  at  all  events  of  a certain 
sum  of  money  to  a certain  person  there- 
in named,  or  to  him  or  his  order,  or  to 
“bearer,  and  payable  instantly  on  de- 
mand.” (2  Daniel  on  Negotiable  In- 
struments [5th  Ed.]  § 1566.) 

A check  does  not  have  to  be  accepted 
upon  presentment,  but  paid,  if  good  and 
if  properly  presented.  One  of  the  dif- 
ferences between  a common  check  and 
an  ordinary  inland  bill  after  its  ac- 
ceptance is  in  relation  to  the  drawer. 
In  the  former,  the  drawer  is  the  princi- 
pal debtor,  and  the  check  purports  to  be 
made  upon  a fund  deposited;  in  the  lat- 
ter, the  acceptor  is  the  principal  debtor. 
The  negligence  of  the  holder  of  a check 
in  not  making  due  presentment,  or  as  to 
giving  the  drawer  notice  of  dishonor, 
does  not  absolutely  discharge  him  from 
liability  except  to  the  extent  to  which 
he  may  have  suffered  loss  or  injury  by 
reason  of  such  negligence. 

These  principles  have  been  stated  be- 
cause citations  have  been  made  of  cases 
^which  arose  under  them.  They  do  not, 
however,  fully  cover  the  present  case. 
Here  the  drawee  of  a check  was  a bank 
in  a different  place  from  where  the 
check  was  drawn  and  the  drawer  re- 
sided. The  direction  to  the  drawee  bank 
was  at  the  left-hand  lower  corner  of  the 
•check,  and  immediately  under  it  were 
the  words,  “Payable  through  the  Citi- 
zens' Bank  of  Valdosta,  Valdosta,  Ga., 
-at  current  rate.”  The  check  was  not 
forwarded  through  the  Valdosta  Bank, 
tut  came  into  the  possession  of  a bank 


in  Nashville,  Ga.,  the  place  where  the 
drawee  bank  was  located,  and  was  thus 
presented  to  it. 

Whether  the  check  was  deposited  with 
such  demanding  bank,  or  sent  to  it  for 
collection,  or  how  it  became  the  holder, 
is  not  stated.  On  presentment,  the 
drawee  bank  indorsed  on  the  back  of  the 
check  these  words,  “Will  pay  when  pre- 
sented through  the  Citizens'  Bank  of 
Valdosta.”  Thereupon  the  check  was 
protested  for  non-payment,  and  suit  to 
recover  damages  was  brought  by  the 
drawer  against  the  collecting  bank, 
which  caused  the  protest  to  be  made,  on 
the  ground  that  such  protest  was  wrong- 
ful and  was  maliciously  made. 

Two  questions  are  involved : ( 1 ) 

Whether  the  words,  “Payable  through 
the  Citizens’  Bank  of  Valdosta,”  etc., 
formed  a part  of  the  check,  which  the 
drawee  bank  was  bound  to  regard,  or 
which  it  had  the  right  to  disregard. 
(2)  Whether  this  direction  required  pay- 
ment through  the  Valdosta  Bank,  or 
whether  it  was  merely  permissive,  so 
that  payment  could  be  demanded 
through,  that  channel  or  directly  from 
the  drawee  bank  of  Nashville.  If  the 
presentment  to  the  drawee  was  required 
to  be  made  through  the  Valdosta  Bank, 
then  the  drawee  had  the  right  to  decline 
payment  except  upon  presentment  in 
that  manner;  and  if  the  bank  holding 
the  paper  refused  to  recognize  such  rea- 
son for  non-payment  on  presentment  by 
it,  and  caused  the  check  to  be  protested, 
and  notice  to  be  given,  this  was  unwar- 
ranted. 

It  was  contended  that  the  words, 
“Payable  through  the  Citizens’  Bank  of 
Valdosta,”  etc.,  followed  the  signature, 
and  formed  no  part  of  the  check,  but 
amounted  merely  to  a memorandum, 
which  the  holder  of  the  check  did  not 
have  to  regard.  In  England  there  is  a 
well-known  usage,  which  has  now  been 
made  the  subject  of  an  act  of  Parlia- 
ment, for  the  drawer  or  holder  of  a 
check  to  “cross”  it  with  the  name  of  a 
banker. 

In  2 Daniel  on  Negotiable  Instru- 
ments (5th  Ed.)  § 1585a,  it  is  stated 
that  the  effect  of  this  was,  “before  the 


Digitized  by  t^ooQle 


470 


THE  BANKERS  MAGAZINE 


statute  which  now  exists,  a direction  of 
the  drawee  bank  to  pay  the  check  to  no 
one  but  a banker ; or  rather,  according  to 
the  cases,  with  only  a caution  or  warn- 
ing to  the  drawees  that  care  must  be 
used,  in  paying  it  to  any  one  else.” 

In  1 Morse  on  Banks  8c  Banking  (4th 
Ed.)  § 245,  it  is  said:  “In  this  country 
the  system  of  'crossed  checks,’  strictly 
so  called,  is  unknown.  But  of  late  the 
germ  of  a similar  custom  has  begun  to 
manifest  itself.  Occasionally  checks 
have  stamped  or  written  upon  them  some 
form  of  words  which  is  intended  to  se- 
cure their  payment  exclusively  through 
the  clearing  house.  No  especial  form 
has  as  yet  been  generally  accepted,  and 
the  legal  effect  of  none  of  those  in  use 
has  ever  been  passed  upon.  It  is  safe 
to  say,  however,  that  there  is  no  ques- 
tion but  that  the  drawer  could  embody 
in  his  order  a direction  to  his  bank  to 
pay  only  upon  presentation  of  the  in- 
strument in  the  usual  course  through  the 
clearing  house,  and  that  such  a direction 
would  be  as  valid  and  as  binding  upon 
the  bank  as  a direction  to  pay  only  to 
the  order  of  a particular  person. 

“If  the  check  be  payable  to  the  order 
of  A.  B.,  it  is  probable  that  the  privilege 
of  including  such  instructions  in  his  or- 
der, when  indorsing  over,  might  be  ac- 
corded to  him,  certainly  indorsements  in 
this  form  are  very  frequent,  and  no 
bank  would  be  safe  in  disregarding 
them.  Supposing  the  direction  to  be 
properly  given,  the  collecting  and  the 
paying  bank  must  both  respect  it,  and 
the  English  cases  above  mentioned 
would  be  precedent  directly  in  force. 
It  would  amount  to  an  express  designa- 
tion by  the  drawer,  or  the  payee,  of  the 
manner  alone  in  which  payment  is  au- 
thorized to  be  demanded  or  made.” 

A check  being  in  the  nature  of  an  or- 
der on  a bank  or  banker  to  pay  a certain 
sum  purporting  to  be  on  deposit,  there 
would  seem  to  be  no  reason  why  the 
drawer  could  not  direct  the  bank  to  pay 
only  when  presented  through  a specified 
channel  or  by  a particular  person  or 
bank.  The  drawer  is  not  compelled  to 
make  the  check  payable  to  bearer  or  or- 
der. Likewise,  no  sound  reason  is  per- 


ceived why,  in  giving  direction  to  the 
bank  of  deposit,  he  cannot  make  an  ad- 
dition to  the  mere  order  for  payment. 

If  the  person  to  whom  the  check  is 
delivered  is  not  willing  to  accept  it  with 
such  direction,  he  cannot  reject  it;  but 
if  he  accepts  it  payable  only  through  a 
particular  bank,  or  through  a particular 
banker,  he  cannot  insist  that  the  bank 
on  which  it  is  drawn  must  disregard  this 
direction  given  to  it  by  its  depositor  on 
the  face  of  the  paper.  No  ground  has 
been  suggested  why  such  a direction  by 
one  to  his  banker,  in  ordering  the  latter 
to  pay  money,  is  illegal  or  unreasonable; 
the  banks  being  in  the  same  State  and 
not  far  distant  from  each  other. 

The  case  in  hand  ddes  not  present  the 
question  of  whether  the  drawer  of  the 
check  has  been  wholly  or  partially  dis- 
charged by  negligence  or  delay  in  pres- 
entation, but  whether,  in  giving  direc- 
tion to  his  banker  to  pay  the  check,  he 
can  lawfully  direct  payment  to  be  made 
through  a certain  medium,  and  whether 
the  bank,  when  so  instructed,  is  bound 
to  disregard  such  direction  at  the  de- 
mand of  another  collecting  bank. 

In  Nazro  8c  Green  vs.  Fuller,  24 
Wend.  374,  it  was  held  that  an  altera- 
tion of  a promissory  note  by  the  payee 
thereof,  so  as  to  make  it  purport  to  be 
payable  at  a particular  place,  vitiates  it 
.in  the  hands  of  an  indorsee,  so  that  he 
cannot  recover  upon  it  in  an  action 
against  the  maker;  and  that,  if  it  be 
doubtful  whether  it  be  an  alteration  of  a 
note  or  a mere  memorandum  by  the 
payee  indicating  where  demand  for  pay- 
ment should  be  made  to  charge  him  as 
indorser,  the  question,  it  seems,  should 
be  submitted  to  a jury. 

In  Warrington  vs.  Early,  2 Ellis  8c 
Black.  (75  E.  C.  L.  763),  a promissory 
note  was  made  payable  six  months  after 
date,  “with  lawful  interest.”  After  it 
had  been  signed,  without  the  assent  of 
the  maker,  but  with  the  assent  of  the 
holder,  there  was  added,  in  the  corner 
of  the  note,  “interest  at  six  per  cent,  per 
annum.”  It  was  held  that  this  addition 
materially  altered  the  contract,  and  that 
the  holder  could  not  recover  on  the  note 
against  the  maker. 


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471 


As  to  alteration  in  written  contracts 
in  this  State,  see^  Civ.  Code  1895,  §§ 
8702,  8703 ; Gwin  vs.  Anderson,  91  Ga. 
827;  Hotel  Lanier  vs.  Johnson,  103  Ga. 
604 ; Pritchard  vs.  Smith,  Stewart  & Co., 
77  Ga.  463.  See,  also,  Woodworth  vs. 
Bank  of  America,  19  Johns.  391;  Polo 
Mfg.  Co.  vs.  Parr,  8 Neb.  379;  Farm- 
ers’ Bank  of  Kentucky  vs.  Ewing,  78 
Ky.  264;  Wait  vs.  Pomeroy,  20  Mich. 
425,  4 Am.  Rep.  395 ; 1 Daniel  on  Nego- 
tiable Instruments  (5th  Ed.)  §§  149, 
150,  pp.  173,  174,  and  citations;  4 Am. 
& Eng.  Enc.  L.  (2d  Ed.)  137  (11),  140; 
McCalla  ys.  McCalla,  48  Ga.  502 ; May- 
or and  Council  of  Griffin  vs.  City  Bank 
of  Macon,  58  Ga.  584. 

It  is  commonly  stated  that  the  con- 
tract must  be  collected  “from  four  cor- 
ners” of  the  document,  and  no  part  of 
what  appears  there  is  to  be  excluded; 
and  Mr.  Daniel,  in  his  work  on  Nego- 
tiable Instruments,  has  somewhat  broad- 
ly declared  that,  as  indorsements  are 
made  on  the  back  of  a negoitable  instru- 
ment, it  might  be  said  that  the  purport 
of  the  instrument  is  to  be  collected  from 
“the  eight  corners.”  1 Dan.  Neg.  Inst. 
(5th  Ed.)  § 151,  p.  175. 

A distinction  is  sometimes  made  be- 
tween an  entry  upon  a note  or  check  at 
the  time  when  it  is  made,  and  which  is 
intended  as  a part  of  it,  and  a mere 
memorandum  made  by  some  person  for 
convenience,  and  forming  no  part  of  the 
instrument.  In  the  case  before  us  the 
direction  immediately  follows  the  name 
of  the  drawee  bank.  From  the  allega- 
tions of  the  petition  it  appears  to  have 
been  placed  there  when  the  check  was 
drawn,  as  a part  of  the  direction  fb  the 
bank.  It  was  a material  part  of  such 
direction,  and  the  drawee  bank  had  the' 
right  to  decline  to  disregard  it. 

It  was  argued  that  the  statement  that 
the  check  was  “payable”  through  the 
Valdosta  Bank  did  not  indicate  the  ex- 
clusive method  of  collection,  but  gave 
to  the  holder  an  option  to  present  it 
through  that  medium  or  through 
any  other  medium  to  the  Nashville 
Bank.  If  a negotiable  instrument  is 
payable  at  one  of  two  banks,  it  may  be 
presented  for  payment  to  either.  The 


word  “payable”  has  been  defined  as  fol- 
lows: “That  may,  can,  or  should  be 

paid;  Suitable  to  be  paid;  that  may  be 
discharged  or  settled  by  delivery  o£ 
value;  matured;  now  due.”  Webster’s 
Dictionary. 

As  commonly  employed  in  commer- 
cial paper  or  contracts,  in  stating  the 
time  or  manner  of  payment,  the  word 
“payable”  does  not  give  to  the  debtor 
an  option  or  privilege  of  paying  at  such 
time  or  in  such  manner,  but  signifies  that 
payment  is  to  be  thus  made.  If  it  should 
be  stated  in  a note  or  bill  of  exchange 
that  the  amount  mentioned  was  payable 
in  thirty  days,  clearly  the  expression 
would  mean  that  such  amount  was  to  be 
paid  at  that  time,  not  merely  that  the 
debtor  might  then  pay  it.  So  if  an  ob- 
ligation should  be  declared  to  be  pay- 
able in  gold  coin  of  a certain  fineness, 
it  would  mean  that  it  was  to  be  thus 
paid. 

And  so  numerous  illustrations  might 
be  given.  A direction  in  a check  to  the 
drawee  bank  that  it  is  “payable” 
through  another  named  bank  means  that 
it  is  to  be  paid  in  that  way.  (City  of 
Alma  vs.  Guaranty  Savings  Bank,  60 
Fed.  203,  80  C.  C.  A.  564;  Cate  vs. 
Patterson,  25  Mich.  191,  194;  John- 
son vs.  Dooley,  65  Ark.  71 ; Easton  vs. 
Hyde,  }8  Minn.  90  [Gil.  83];  Webster 
vs.  Cook,  38  Cal.  423.)  Taken  in  con- 
nection with  the  direction  from  the 
drawer  of  the  check  to  the  drawee  bank 
to  pay  a certain  sum,  the  addition  meant 
that  the  sum  was  to  be  paid  through  the 
Valdosta  Bank. 

It  follows,  from  what  has  been  said, 
that  under  the  allegations  of  the  petition, 
the  drawee  bank  had  a right  to  decline 
to  pay  the  checks  until  presented 
through  the  Valdosta  Bank,  and  that, 
upon  its  entering  upon  the  back  of  the 
check  that  it  would  pay  when  so  pre- 
sented, the  collecting  bank  was  not  au- 
thorized to  cause  the  check  to  be  pro- 
tested and  notice  to  be  given.  It  was 
therefore  not  erroneous  for  the  trial 
judge  to  overrule  the  demurrer  to  the 
petition.  We  have  not  discussed  the 
motive  which  it  was  alleged  actuated 


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THE  BANKERS  MAGAZINE 


the  collecting  bank  in  causing  the  pro-  Co.,  128  Ga.  80,  57  S.  E.  78,  11  L.  R. 
test  to  be  made,  as  without  it  we  hold  A.  [N.  S.]  224;  State  Mutual  Life  As- 
that  the  petition  set  out  a cause  of  ac-  sociation  vs.  Baldwin,  116  Ga.  855,  48 
tion.  (Atlanta  National  Bank  vs.  Davis,  S.  E.  262.) 

96  Ga.  884,  28  S.  E.  190,  51  Am.  St.  Judgment  affirmed.  All  the  Justices 
Rep.  189;  Hilton  vs.  Jesup  Banking  concur. 

NOTES  ON  CANADIAN  CASES  AFFECTING  BANKERS 

[Edited  by  John  Jennings,  B.A..  L.L.B.,  Barrister,  Toronto] 


BANKINGS  ECURITY  FOR 
DEBT— ASSIGNMENT  OF 
LEASE— TRANSFER  OF  BUSI- 
NESS— OPERA  TI ON  OF  BANK. 

THE  ONTARIO  BANK  VS.  CHA8.  B.  MCALLIS- 
TER AND  JANE  B.  MCALLI8TER  (S.  C. 

R.  [48],  888.) 

By  Section  76,  sub-section  1 (d)  of  “The 
Bank  Act”  (R.  S.  C.,  1906,  ch.  29),  a bank 
may  “engage  in  and  carry  on  such  business 
generally  as  appertains  to  the  business  of 
banking”;  by  sub-section  2 (a)  it  shall  not 
“either  directly  or  indirectly  . . . en- 
gage or  be  engaged  in  any  trade  or  business 
whatsoever”;  section  81  authorises  the  pur- 
chase of  land  in  certain  cases,  of  which  a 
direct  voluntary  conveyance  by  the  owner  is 
not  one. 

Held , affirming  the  judgment  of  the  Court 
of  Appeal  (17  Ont.  L.  R.  145),  Duff  and 
Anglin,  JJ.,  dissenting,  that  these  provisions 
of  the  Act  do  not  prevent  a bank  from 
agreeing  to  take  in  payment  of  a debt  from 
a customer  an  assignment  of  a lease  of  the 
latter’s  business  premises  and  to  carry  on 
the  business  for  a time  with  a view  to  dis- 
osing  of  it  as  a going  concern  at  the  ear- 
est  possible  moment. 

' | ^HE  McAllister  Milling  Company 
were  indebted  to  the  Ontario  Bank 
in  approximately  the  sum  of  $70,000, 
and  certain  agreements  were  entered 
into  whereby  the  company  surrendered 
to  the  bank  all  their  title  and  interest 
in  their  assets,  including  their  leases, 
and  the  bank  practically  carried  on  the 
business  as  a going  concern  for  some 
time,  in  the  hope  of  realizing  their  in- 
debtedness. After  the  business  was  dis- 
continued, the  landlord  claimed  rent  un- 
der the  lease  from  the  plaintiffs,  Mc- 
Allister, who  asked  in  this  action  that 
the  bank  indemnify  them  against  pay- 
ment of  such  rent.  Almost  the  only 
legal  point  involved  was  as  to  the  valid- 
ity of  the  whole  agreement,  being 
claimed  on  behalf  of  the  bank  (since 


become  insolvent)  that  the  whole  trans- 
action was  ultra  vires.  The  Court  of 
Appeal  for  Ontario  did  not  sustain  this 
deeision  and  the  matter  came  before  the 
Supreme  Court  of  Canada. 

Judgment  (Sir  Chas.  Fitzpatrick, 
CJ.f  and  Davies,  Idington,  Duff  and 
Anglin,  J.J.):  The  following  is  from 
the  judgment  of  Mr.  Justice  Davies:  I 
confess  that  I have  had  great  difficulty 
in  making  up  my  mind  whether  or  no 
the  transaction  now  impeached  as  ultra 
vires  of  the  bank  was  so  or  not.  1 am 
even  yet  by  no  means  free  from  doubt, 
but  my  conclusion  is  that,  considering 
its  real  nature,  object  and  purpose,  the 
impeached  transaction  may  be  held  to 
be  one  of  those  which  may  be  fairly  and 
reasonably  implied  as  being  within  the 
general  powers  given  to  the  bank  by 
sub-section  (d)  of  section  76  of  the 
“Bank  Act/’  and  as  not  being  within  the 
excepted  prohibitions  contained  in  sub- 
section 2 (a)  of  that  section. 

The  section  reads : 

The  bank  may  . . . 

(d)  engage  in  and  carry  on  such  business 
generally  as  appertains  to  the  business 
of  banking. 

(2)  Except  as  authorized  by  this  Act  the 
bank  shall  not,  either  directly  or  indi- 
rectly, 

’ (a)  deal  in  the  buying  or  selling,  or  barter- 
ing of  goods,  wares  and  merchandise, 
or  engage  or  be  engaged  in  any  trade 
or  business  whatsover. 

I concede  that  in  order  to  sustain 
my  conclusion  of  law  I am  bound  to 
bring  the  impeached  transaction  within 
the  enabling  clause  and  to  exclude  it 
from  the  prohibitory  clause  of  the  sec- 
tion. 

But  I am  not  bound  to  show  express 
words  in  the  statute  conferring  upon 
the  bank  all  the  powers  which  it  may 


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BANKING  LAW 


473 


lawfully  use  to  carry  out  its  legitimate 
objects  or  purposes.  It  is  quite  suffi- 
cient if  I can  show  they  may  be  derived 
by  fair  and  reasonable  implication  from 
the  provisions  of  the  Act  and  have  not 
been  expressly  prohibited  or  excluded 
from  the  general  powers  conferred. 
That  is  the  law  as  I understand  it. 

In  agreeing  to  take  over  the  lease  and 
milling  business  as  a “going  concern” 
for  a limited  time,  in  order  to  dispose 
of  it  to  some  advantage,  the  bank  may 
be  said  to  have  violated,  in  a literal 
sense,  the  prohibition  in  the  latter  part 
of  sub-section  2 (a)  against  engaging  in 
any  business  whatever.  But  if  the  gen- 
eral powers  of  the  bank  of  engaging  in 
and  carrying  on  “such  business  gen- 
erally as  appertains  to  the  business  of 
banking”  given  by  sub-section  (d)  are 
large  enough  and  broad  enough  to  cover 
such  a transaction  as  that  now  under 
discussion,  of  course  it  would  not  come 
within  the  prohibitory  clause,  even 
though  the  words  of  that  clause  literally 
applied  might  cover  it. 

Banks  from  the  very  nature  of  the 
business  they  are  expressly  authorized 
to  carry  on,  must  necessarily  loan  to 
customers  and  others  large  amounts  of 
money  and  frequently  find  themselves 
with  debts  owing  to  them  by  persons 
who  are  insolvent  or  unable  to  pay.  The 
assets  of  such  debtors  may,  in  this  coun- 
try at  any  rate,  consist  in  part  of  a “go- 
ing concern,”  valuable  as  such,  but  of 
little  value  if  wound  up  by  sale  under 
execution  or  mortgage,  or  they  may  con- 
sist of  perishable  goods  on  the  way  to 
a market  or  logs  cut  on  timber  limits 
ready  to  be  floated  down  the  river  to 
market  or  mill,  or  in  process  of  such 
flotation. 

Such  debtors  might  be  quite  willing 
to  hand  over  all  their  assets  to  the  bank 
absolutely  in  compromise  or  settlement 
of  their  indebtedness.  To  compel  the 
parties  to  resort  in  every  case  to  the 
strict  statutory  methods  permitted  of 
taking  security  and  afterwards  realizing 
on  it  in  due  legal  form,  might  in  many 
cases  cause  great  loss  without  any  ap- 
parent reason.  Perishable  goods  might 
not  be  disposable  while  on  the  way  to 
a market  except  at  ruinous  loss,  and  the 


same  may  be  said  of  logs  being  floated 
to  their  mill  or  market.  If  the  “Bank 
Act”  means  that  the  bank  may  not  take 
over  and  accept  absolutely  in  payment 
of  its  debt  the  real  and  personal  prop- 
erty of  its  debtor,  but  must  in  all  cases 
first  take  security  upon  it  and  realize 
afterwards  on  such  security,  there  is  an 
end  to  the  argument.  No  possible  loss 
which  may  follow  the  prescribed  course 
can  avail  the  parties.  But  it  does  not 
appear  to  me  the  “Bank  Act”  does  so 
say.  There  is  nothing  in  the  Act  which 
says  that  though  all  parties  may  agree 
that  the  simplest  and  least  costly  way  of 
closing  out  a hopeless  account  is  to  give 
the  debtor  an  immediate  release  in  con- 
sideration of  a direct  transfer  of  his 
property,  such  a settlement  must  neces- 
sarily be  declared  ultra  vires. 

It  seems  to  me  that  in  all  such  cases 
it  must  be  a question  of  fact  to  be  de- 
termined by  the  court  on  the  special  cir- 
cumstances of  each  case,  whether  there 
was  or  was  not  a violation  of  the  pro- 
hibition of  sub-section  2 (a)  against 
dealing  in  the  buying  or  selling,  or  bar- 
tering of  goods  or  being  engaged  in  any 
business  whatever;  or  whether  the  sub- 
stance of  the  transaction  was  not  rather 
and  really  a bona  fide  compromise  or 
settlement  of  a debt  due  the  bank,  al- 
though such  settlement  or  compromise 
might  incidentally  involve,  in  one  sense, 
a buying  or  selling  or  an  engaging  in 
business.  But  where  the  subirtance  of 
the  transaction  is  found  to  be  a bona 
fide  compromise  or  settlement  of  a past 
due  debt,  as  under  the  facts  and  circum- 
stances I would  hold  the  transaction  in 
question  in  this  case  to  be,  then  it  seems 
to  me  it  might  fairly  be  claimed  as  im- 
pliedly authorized  by  the  sub-section 
(d)  of  section  76,  even  though  solely  to 
avoid  enormous  loss  it  may  involve,  as 
in  this  case  it  did,  the  running  of  the 
mill  as  a “going  concern”  for  what 
would  be  deemed  a reasonable  time,  in 
order  to  dispose  of  it  without  ruinous 
loss. 

A strong  argument  was  made  against 
the  legality  of  such  an  absolute  assign- 
ment of  the  milling  property  and  asset* 
of  the  McAllister  Company  as  was 
taken  by  the  bank  in  this  case  arising 


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474 


THE  BANKERS  MAGAZINE 


out  of  the  80th,  81st  and  82nd  sections 
of  the  Act,  which  authorize  the  bank  to 
take  mortgages  and  hypothecs  of  realty 
and  personality  as  “additional  security” 
for  past  due  debts,  and  enable  it  to  pur- 
chase any  real  or  immovable  property 
offered  for  sale  urfder  execution,  etc.,  or 
by  a prior  mortgagee,  or  by  the  bank 
itself  under  a power  of  sale,  and  so  en- 
able the  bank  to  acquire  an  absolute  title 
in  lands  mortgaged  to  it  either  by  re- 
lease or  sale  or  foreclosure  of  the  equity 
of  redemption. 

These  sections  are  enabling  ones  and 
are  intended  to  confer  upon  the  bank 
reasonable  and  necessary  powers  to  take 
mortgages  and  hypothecs  from  their 
debtors  by  way  of  “additional  security” 
for  debts  contracted  to  the  bank  in  the 
course  of  its  business,  and  to  realize 
upon  such  mortgages  by  foreclosure  or 
sale,  and  acquire  and  hold  the  absolute 
title  “either  by  obtaining  a release  of 
the  equity  of  redemption”  or  otherwise. 
Their  purpose  and  object  was  to  enable 
the  banks  to  take  and  realize  securities 
for  debts  contracted  to  them.  They  did 
not  relate  to  cases  where  the  bank  was 
compromising  its  debt  and  accepting 
something  from  the  debtor  in  absolute 
discharge.  They  should  not  be  con- 
strued as  being  exhaustive  of  the  bank’s 
powers  or  methods  of  realizing  payment 
or  satisfaction  from  its  debtor’s  prop- 
erty of  the  debt  due  to  the  bank,  or  as 
taking  away  from  the  banks  by  implica- 
tion any  powers  which  they  might  rea- 
sonably be  held  to  have  arising  out  of 
the  power  to  engage  in  and  carry  on 
such  business  generally  as  appertains  to 
the  business  of  banking.  They  are  not 
prohibitive  sections  in  any  way,  but  en- 
abling only,  and  while  I recognize  the 
strength  and  force  of  the  argument  as 
to  the  intention  of  the  legislature  to  be 
derived  from  them,  I am  not,  on  my 
construction  of  sub-section  (d)  of  sec- 
tion 76  and  the  powers  reasonably  to  be 
implied  from  it,  able  to  say  that  real  or 
personal  property  may  not  be  taken  by 
the  bank  in  “absolute  payment  and  dis- 
charge of  its  debt”  from  an  impecunious 
or  defaulting  debtor,  notwithstanding 
those  sections  which  provide  for  the 
manner  in  which  additional  “security” 


may  be  taken  and  realized  upon  for 
debts  due  the  bank  not  by  way  of  com- 
promise and  discharge.  Banking  busi- 
ness in  Canada  must  from  the  very  cir- 
cumstances of  the  case,  I should 
imagine,  be  conducted  upon  a broader 
and  somewhat  more  elastic  basis  than 
in  fully  developed  business  communities 
such  as  Great  Britain,  and  in  constru- 
ing the  powers  conferred  upon  banks  to 
carry  on  such  business  generally  as  ap- 
pertains to  the  business  of  banking  it  is 
fair  that  Canadian  conditions  should  be 
fully  considered  and  allowed  for.  Large 
advances  must  be  made  from  time  to 
time  to  lumbermen,  fishermen  and  trad- 
ers of  different  kinds  to  enable  them  to 
cut,  catch,  win  and  market  the  natural 
products  of  the  country  and  debts  and 
risks  necessarily  incurred  possibly 
greater  than  the  more  conservative  sys- 
tems of  Great  Britain  would  approve. 
It  might  in  many  circumstances  be  un- 
just and  cause  unnecessary  and  unrea- 
sonable loss  to  confine  the  banks  to  the 
“additional  securities”  clauses  as  the 
only  way  or  means  open  to  them  to  real- 
ize their  debts. 


PROMISSORY  NOTE— ACCOMMO- 
DATION MAKER  — LIABILITY 
OF— PAYEE  PLEDGE  NOTE  TO 
BANK  AFTER  MATURITY  AS 
COLLATERAL  SECURITY- 
RIGHT  OF  BANK  TO  RECOVER 
AMOUNT  DUE  BANK  BY  PAYEE 
—BANK  TRUSTEE  FOR  PAYEE 
FOR  BALANCE  OF  NOTE  — 
BILLS  OF  EXCHANGE  ACT , ss. 
54  and  70. 

MERCHANTS  BANK  VS.  TH0MP80N  (l6  O. 

W.  R.,  p.  770). 

Payee  pledged  a past  due  note  to  bank  as 
collateral  security  to  his  indebtedness.  Bank 
sued  on  note.  Certain  collateral  matters 
arising  between  payee  and  maker  of  the  note 
were  pleaded  as  a defence. 

Held , that  the  bank  held  the  note  for 
value  so  far  as  payee  was  indebted  to  the 
bank,  and  could  recover  to  the  extent  of 
that  amount  under  Bills  of  Exchange  Act, 
ss.  54  and  70;  that  there  were  no  equities 


Digitized  by  t^ooQle 


BANKING  LAW 


475 


attaching  to  the  note;  that  bank  was  trustee 
for  payee  for  balance  of  note. 

JUDGMENT  (Sir  John  Boyd,  C.): 
The  defendants  are  sued  upon  a 
promissory  note  for  $2,000,  made  on 
July  1,  1907,  by  Living  and  the  two  de- 
fendants jointly  and  severally  to  C.  H. 
Fox,  and  now  held  by  the  bank,  plaint- 
iffs. The  note  was  given  to  answer  the 
price  of  one-half  interest  in 'the  manu- 
facturing agency  of  Fox.  It  is  dis- 
puted as  to  the  exact  effect  of  the  agree- 
ment made  in  respect  of  this  purchase, 
which  is  dated  March  19*  1907,  and  I 
do  not  think  it  needful  to  discuss  the 
legal  situation  of  the  parties  thereto  on 
the  present  record. 

Fox  borrowed  from  the  bank  and  left 
this  note  with  the  bank  on  September 
12,  1907,  as  collateral  security  and  also 
for  collection.  It  was  not  discounted, 
and  the  amount  lent  to  Fox  was  some 
$500.  The  note  fell  due  on  October  4, 
and  was  not  paid.  The  defendants 
were  notified  that  the  note  was  falling 
due,  but  was  not  protested,  the  bank  not 
being  aware  or  not  being  informed  of 
the  fact  that  the  defendants  were  only 
securities  for  Living.  Fox  owed  the 
bank  $800  at  the  date  the  note  matured. 
On  January  29,  1908,  the  Fox  liability 
to  the  bank  was  cleared  off.  He  became 
again  indebted  to  the  bank,  and  this  was 
cleared  off  on  March  81. 

The  judgment  then  outlines  the  mat- 
ters which  arose  between  the  immediate 
parties  to  the  note  which  the  defendants 
claimed  released  them  from  liability 
thereon. 

The  bank  sues  on  the  promissory 
note  and  holds  it  for  value  so  far  as 
Fox  is  indebted  to  the  bank,  and  can  re- 
cover to  this  extent  under  secs.  54  and 
70  of  the  Bills  of  Exchange  Act.  There 
is  no  equity  attaching  to  the  note, 
though  it  may  be  regarded  as  repledged 
to  the  bank  after  it  was  overdue.  What- 
ever collateral  matters  may  arise  as  be- 
tween Fox  and  Living  which  may  enure 
to  the  discharge  of  the  sureties  quoad 
Fox,  they  are  not  open  for  discussion 
on  this  record.  To  the  extent  of  the 
bank’s  claim,  judgment  should  be  given 
for  payment  with  costs ; as  to  the  residue 


of  the  note,  the  bank  holds  it  as  trustee 
for  Fox,  and  the  right  thereto  should 
be  litigated  in  some  proceeding  to  which 
Fox  and  Living  are  parties.  This  may 
be  ingrafted  on  the  present  record — or 
what  is  perhaps  better,  a new  action 
may  be  instituted  in  respect  of  it  in 
which  the  interest  of  Fox  and  the  three 
makers  of  the  note  may  be  properly 
considered  and  adjudicated  on. 

Sec.  54  of  the  Bills  of  Exchange  Act 
reads  as  follows:  — 14 Where  value  has, 
at  any  time,  been  given  for  a bill,  the 
holder  is  deemed  to  be  a holder  for 
value  as  regards  the  acceptor  and  all 
parties  to  the  bill  who  became  parties 
prior  to  such  time. 

“Where  the  holder  of  a bill  has  a 
lien  on  it,  arising  either  from  contract 
or  from  implication  of  law,  he  is  deemed 
to  be  a holder  for  value  to  the  extent  of 
the  sum  for  which  he  has  a lien.” 

Sec.  70  of  the  Bills  of  Exchange  Act 
reads  as  follows: — “Where  an  overdue 
bill  is  negotiated,  it  can  be  negotiated 
only  subject  to  any  defect  of  title  af- 
fecting it  at  its  maturity,  and  thence- 
forward no  person  who  takes  it  can  ac- 
quire or  give  a better  title  than  that 
which  had  the  person  from  whom  he 
took  it. 

“A  bill  payable  on  demand  is  deemed 
to  be  overdue  within  the  meaning  and 
for  the  purposes  of  this  section,  when  it 
appears  on  the  face  of  it  to  have  been 
in  circulation  for  an  unreasonable 
length  of  time. 

“What  is  an  unreasonable  length  of 
time  for  such  purpose  is  a question  of 
fact.” 


BANKS  AND  BANKING— CHECK 
INITIALED  BY  LOCAL  MAN- 
AGER-CASHED BY  ANOTHER 
BANK— FIRST  BANK  REFUSED 
PAYMENT— RIGHT  TO  RECOV- 
ER ON  CHECK  FROM  FIRST 
BANK— CUSTOM  OF  BANKERS . 

8COTT  VS.  THE  MERCHANTS  BANK  OP 
CANADA. 

One  Huether,  a customer  of  two  banks, 
presented  two  checks  drawn  by  himself, 
for  $7,950  and  $2,050,  and  asked  for  the 
cash  from  the  Dominion  Bank,  promising  to 
deposit  a marked  check  for  $10,000  on  Mer- 


Digitized  by  t^ooQle 


476 


THE  BANKERS  MAGAZINE 


chants  Bank.  Later  in  the  day,  Huether 
presented  his  check  for  $10,000  on  Mer- 
chants Bank,  with  letter  “D”  placed  upon  it 
by  manager  of  Merchants  Bank.  Dominion 
Bank  paid  the  two  checks,  but  the  Mer- 
chants Bank  refused  to  pay  the  $10,000 
check  when  presented.  Both  banks  sus- 
pended their  managers,  plaintiff  being  called 
upon  to  pay  the  $10,000  to  Dominion  Bank, 
which  he  did,  taking  an  assignment  of  the 
Dominion  Bank’s  rights  against  Merchants 
Bank  and  brought  action  to  recover. 

Held,  that  the  action  should  be  dismissed 
on  the  ground  that  the  placing  of  the  letter 
“D”  on  the  check  was  only  authority  of  the 
manager  to  the  ledger  keeper  to  certify  to 
the  check  and  this  not  having  been  done, 
the  Merchants  Bank  was  not  liable. 

TPHIS  was  an  action  brought  by 
plaintiff  Scott  as  assignee  of  the 
Dominion  Bank  against  the  Merchants 
Bank  of  Canada.  Scott  had  been  man- 
ager of  the  branch  of  the  Dominion 
Bank  at  the  town  of  Berlin,  and  one 
C.  N.  Huether,  a brewer,  kept  his  malt 
account  at  that  branch  of  the  Dominion 
Bank  and  kept  his  general  account  at 
the  branch  of  the  Merchants  Bank,  the 
defendants  in  this  action. 

On  the  day  above  mentioned  Huether 
drew  two  checks  on  the  Dominion  Bank 
for  $7,950  and  $2,050,  respectively, 
each  payable  to  cash  or  bearer  and 
signed  by  himself.  He  presented  these 
at  the  Dominion  Bank  and  at  the  same 
time  informed  the  plaintiff  that  Deavitt 
(local  manager  of  the  Merchants  Bank) 
would  give  a certified  check  for  $10,- 
000,  drawn  on  the  defendants  to  cover 
them.  Upon  this  statement  being  made 
by  him  to  plaintiff,  the  latter  instructed 
his  accountant  to  cash  the  checks,  if  the 
covering  check  were  brought  in.  Plaint- 
iff almost  immediately  after  left  the 
bank  office,  to  go  to  Toronto.  Later  in 
the  day  Huether  returned  with  a check 
bearing  the  same  date,  drawn  on  the 
Merchants  Bank,  payable  to  cash  or 
bearer  for  $10,000,  signed  by  himself, 
and  which,  it  was  said — and  there  was 
no  doubt — then  had  the  letter  or  initial 
“D”  upon  it,  placed  there,  as  Huether 
stated  to  the  accountant  and  as  appears 
to  have  been  the  fact,  by  Deavitt.  Un- 
der the  circumstances  the  Dominion 
Bank  paid  the  first  mentioned  checks  on 
the  same  day. 

The  $10,000  check  when  presented  to 


defendants  by  the  Dominion  Bank  on* 
the  following  Monday  was  not  paid. 
Mr.  Scott  returned  on  Monday  evening 
and  learning — on  Tuesday  morning — 
what  had  occurred,  went  to  see  Deavitt, 
and  asked  the  reason  for  the  action  of 
the  defendants  in  not  honoring  the 
check.  He  stated  that  Deavitt  then  told 
him  to  send  the  check  in  the  next  morn- 
ing, and  it  would  be  paid. 

It  was  said  that  on  this  Tuesday 
there  was  as  between  the  two  banks  in 
connection  with  their  daily  transactions, 
a balance  of  $6,518,  due  from  the  Do- 
minion Bank  to  defendants,  and  that 
plaintiff  declined  to  pay  this  until  as- 
sured by  the  local  manager  of  the  de- 
fendants that  the  $10,000  check  would 
be  paid.  Upon  receiving  such  assurance 
the  said  balance  was  paid. 

It  was  contended  in  argument  at  the 
trial  that  the  payment  of  this  sum  of 
$6,518  by  Dominion  Bank  to  defendants 
was  obtained  on  the  distinct  undertak- 
ing of  the  local  manager  of  defendants, 
that  the  $10,000  check  in  question  would 
be  paid,  and  that  was  important  in  con- 
sidering whether  the  plaintiff  should  or 
should  not  have  judgment  for  the  $10,- 
000  in  this  action. 

Judgment  (Hon.  Mr.  Justice 
Sutherland):  I cannot,  however,  see 

that  any  effect  can  be  given  to  such  a 
contention.  The  $6,518  was  a sum 
which  represented  a balance  on  other 
transactions,  quite  apart  from  the  $10,- 
000,  and  I think  I must  assume  was 
properly  payable  by  the  Dominion  Bank 
to  the  defendants  and  which  it  could 
not  have  been  compelled  to  pay  quite 
apart  from  the  question  of  the  check 
which  is  in  issue  in  this  action. 

On  Wednesday  morning  the  check  for 
$10,000  having  been  again  sent  to  the 
defendants’  office,  the  plaintiff  person- 
ally went  there  and  asked  the  account- 
ant if  it  was  paid.  He  was  told  in  re- 
ply that  it  was  not.  He  then  asked  to 
see  the  check,  and  on  it  being  produced 
noticed  that  the  letter  “D”  had  been 
erased.  On  asking  the  ledger-keeper 
who  had  done  this,  he  was  told  by  him 
that  he  himself  had  done  it  under  in- 
structions from  Deavitt.  Plaintiff  then 
saw  Deavitt,  and  was  told  by  him  that 


Digitized  by  t^ooQle 


BANKING  LAW 


477 


the  inspector  of  the  defendants'  bank 
was  there,  and  the  check  for  $10,000 
could  not  be  paid.  The  plaintiff  then 
saw  and  explained  the  whole  transaction 
to  the  inspector,  but  got  no  satisfaction. 

In  consequence  of  the  failure  of  the 
defendants  to  pay  the  $10,000  check, 
the  Dominion  Bank  called  upon  the 
plaintiff  to  do  so,  and  suspended  him. 
The  defendants  also  suspended  Deavitt. 
The  plaintiff  having  paid  the  note,  took 
an  assignment  from  the  Dominion  Bank 
in  the  following  words: — 

“In  consideration  of  $1  we  hereby 
transfer,  assign  and  set  over  unto 
Thomas  Martin  Scott  all  our  right,  title 
and  interest  in  and  claim  to  a certain 
sum  of  $10,000,  advanced  by  the  said 
Scott  while  manager  of  our  branch  at 
Berlin  upon  two  checks  dated  20th 
February,  1909,  for  $7,950  and  $2,050, 
respectively,  drawn  by  C.  N.  Huether 
on  the  Dominion  Bank,  payable  to  cash 
or  bearer,  and  also  all  our  right,  title,  in- 
terest and  claim  to  a certain  check  for 
$10,000,  dated  February  20th,  1909, 
drawn  by  C.  N.  Huether  on  the  Mer- 
chants Bank  of  Canada,  payable  to  cash 
or  bearer.  We  also  transfer,  assign  and 
set  over  unto  the  said  Scott,  the  above 
mentioned  checks  and  our  right,  title 
and  interest  therein.  This  assignment 
is  made  in  order  to  enable  the  said  Scott 
to  take  such  proceedings  against  the 
said  parties  or  either  of  them  as  he  may 
be  advised,"  and  brought  this  action  in 
his  own  name  to  recover  the  $10,000 
and  interest. 

In  their  statement  of  defence  the  de- 
fendants deny  that  the  said  check  was 
duly  initialed  as  alleged  by  the  plaintiff 
or  that  the  defendants'  manager  had 
any  authority  to  certify  it,  or  they  were 
in  any  way  bound  by  the  alleged  action 
of  their  manager  in  the  matter.  They 
further  say  there  were  no  funds  at  the 
credit  of  Huether  in  their  bank  at  the 
time  the  said  check  was  drawn,  and 
they  were  under  no  obligation  to  him  or 
to  the  holder  of  the  check  to  pay  the 
same. 

It  appears  from  the  evidence  of  one 
Beamer,  the  accountant  of  the  Domin- 
ion Bank  at  Berlin,  in  February,  1909, 
and  from  circulars  of  that  bank  to 


which  he  was  referred  in  his  cross-ex- 
amination, that  their  usual  course  as  to 
certifying  checks  is  that  the  ledger- 
keeper  must  initial  them  and  put  the 
folio  of  the  ledger  upon  them ; that  this 
is  the  general  rule,  and  that  the  initial 
of  the  bank  manager  is  the  authority  to 
the  ledger-keeper  to  do  so.  In  this  case 
it  was  plain  to  the  officials  of  the  Do- 
minion Bank  that  the  usual  course  pur- 
sued in  their  own  bank  had  not  been 
followed.  It  is  said  by  Mr.  Braith- 
waite,  the  manager  of  the  Bank  of 
Montreal,  in  Toronto,  and  a banker  of 
experience,  that  the  initial  of  the  bank 
manager  is  merely  an  authorization  to 
the  ledger-keeper  to  certify  the  check 
as  against  the  man’s  account,  and  that 
checks  or  drafts  should  be  entered  in 
the  ledger,  stamped  and  initialled  by 
the  ledger-keeper.  He  says  he  knows 
of  no  other  course  in  bank  practice,  and 
that  any  other  course  would  be  a dan- 
gerous one.  W.  A.  Hamilton,  the  in- 
spector of  the  defendant  bank,  says  that 
the  proper  course  is  to  have  the  check 
charged  to  the  customer’s  account,  the 
bank  stamp  put  on  it  with  the  ledger 
folio,  and  the  initials  of  the  ledger- 
keeper.  Rule  221  of  the  defendant 
bank  is  to  the  same  effect,  and  the 
standing  rule  of  banks  generally.  He 
also  says  that  the  manager’s  initial  is 
merely  an  authorization  to  the  ledger- 
keeper.  The  reason  assigned  for  the 
rule  and  the  danger  from  point  of  bank- 
ing practice  of  a deviation  therefrom 
was  pointed  out  by  Mr.  Braithwaite, 
and  shows  the  practice  to  be  a salutary 
one. 

If  the  ledger-keeper  did  not  enter  the 
check  in  the  ledger  there  would  be  noth- 
ing to  indicate  to  an  inspector  that  the 
check  had  been  issued  against  the  cus- 
tomer’s account.  On  an  inspection  his 
account  might  appear  to  have  a certain 
balance,  and  if  checks  had  been  issued 
against  it,  but  uncertified  by  the  ledger- 
keeper,  and  not  entered  against  the  ac- 
count, that  balance  would  be  fictitious. 

Request  was  made  to  have  the  Do- 
minion Bank  added  as  party  plaintiff, 
upon  which  branch  of  the  case  the  judg- 
ment reads  as  follows: — 


Digitized  by  t^ooQle 


478 


THE  BANKERS  MAGAZINE 


“It  seems  to  me  that  this  is  a case  in 
which  it  was  necessary  for  the  plaintiff, 
in  order  to  succeed,  to  show  that  there 
was  such  a custom  between  the  banks  as 
to  authorize  payment  of  the  check  in 
question,  and  under  the  circumstances 
indicated.  He  has  failed  to  do  this.  On 
the  contrary,  it  has  been  shown  that  the 
well  known  and  customary  rule  of  banks 
in  such  cases  is  against  such  a mode  of 
payment.  There  is  nothing  to  indicate 
that  the  defendants  gave  their  local 
manager  or  agent,  Deavitt,  any  author- 
ity to  depart  from  their  well  known 
rules.  The  bank  itself  made  no  repre- 


sentation to  the  plaintiff  or  to  the  Do- 
minion Bank.  If  Deavitt  did  so,  it  was 
without  the  defendants’  authority,  and 
I do  not  see  how  they  can  in  any  way  be 
held  liable  to  the  plaintiff  or  to  the 
Dominion  Bank.  It  simply  amounts  to 
this,  that  individual  officials  of  the  Do- 
minion Bank  on  their  own  responsibil- 
ity relied  too  much,  at  first  on  the  initial 
and  later  on  the  word,  of  a fellow  bank- 
er in  the  same  town.  I have  come  to 
this  conclusion  with  regret  under  the 
circumstances.  The  action  will  be  dis- 
missed with  costs,  if  the  defendants  ask 
for  them.” 


REPLIES  TO  LAW  AND  BANKING  QUESTIONS 

OoMtioni  in  Banking  Law— submitted  by  subscribers — which  may  be  of  sufficient  general  interest 
to  warrant  publication  will  be  answered  In  this  department 


RIGHT  OF  SHAREHOLDER  TO  IN- 
SPECT BOOKS  OF  NATIONAL 
BANK 

Newark,  N.  J.,  Sept.  2,  1910. 
Editor  Bankers  Magazine: 

Sir:  A person  who  appears  on  the  stock- 
book  of  this  bank  as  the  owner  of  125  shares 
called  at  the  bank  the  other  day  and  de- 
manded that  he  be  allowed  to  inspect  some 
of  the  books  of  the  bank.  We  asked  him  to 
state  the  purpose  for  which  he  desired  to  do 
this,  but  he  refused  to  say.  We  then  in- 
formed him  that  until  be  should  give  us 
some  satisfactory  reason,  we  must  decline 
his  request  Were  we  right  in  doing  so? 

Preside  xt. 

Answer:  Yes.  Where  a stockholder 

demands  such  an  inspection,  a due  re- 
gard to  the  interests  of  the  bank  and 
the  other  stockholders  requires  that  the 
officers  should  be  satisfied  that  the  pur- 
pose is  a proper  one.  For  while  it  is 
settled  that  a stockholder  in  a national 
bank  has  the  right  to  inspect  the  books 
in  a proper  case  and  for  a proper  pur- 
pose (Guthrie  vs.  Harkness,  199  U.  S. 
148),  yet  the  right  is  one  which  is  en- 
forced only  in  the  sound  discretion  of 
the  court  and  under  suitable  safeguards 
to  protect  the  interests  of  all  concerned ; 
and  such  an  inspection  will  not  be  al- 
lowed for  a speculative  purpose,  or  to 
gratify  idle  curiosity,  or  to  aid  some 
ulterior  object.  (Woodward  vs.  Old 
Second  Nat.  Bank,  Bankers  Magazine, 
June,  1909,  p.  955.)  In  People  ex  rel 


Hunter  vs.  National  Park  Bank  (122 
App.  Div.  [N.  Y.]  685),  the  attorney 
for  the  petitioner  called  upon  the  presi- 
dent of  the  National  Park  Bank  of  New 
York,  and  requested  an  inspection  of  the 
list  of  stockholders,  claiming  to  be  a 
stockholder,  or  to  represent  stockhold- 
ers, but  declined  to  state  whom  he  repre- 
sented, or  for  what  purpose  he  desired 
the  list  of  stockholders.  The  request 
was  refused,  and  the  petitioner  having 
applied  for  a mandamus,  the  president 
of  the  bank  submitted  an  affidavit  in 
which  he  stated  these  facts,  and  further 
stated  that  he  believed  and  charged  it  to 
be  the  fact  that  the  relator  was  not  a 
bona  fide  stockholder  of  the  bank,  and 
did  not  desire  a list  of  the  stockholders 
for  any  proper  or  legitimate  purpose, 
or  for  the  protection  of  any  proper  or 
legitimate  interest  of  any  stockholder  in 
the  bank,  but  sought  to  obtain  the  list 
for  some  ulterior  and  improper  purpose. 
The  Court  said:  “When  a stockholder 

of  a corporation  shows  a legal  right  to 
an  inspection  of  the  books  of  the  cor- 
poration he  is  entitled  to  enforce  that 
right  by  mandamus. 

“This  rule,  however,  is  subject  to  the 
qualification  that  the  granting  of  a man- 
damus is  always  in  the  judicial  discretion 
of  the  court,  and  a strict  legal  right  will 
not  be  enforced  when  it  appears  that  the 
application  is  not  made  in  good  faith  for 
a legitimate  and  proper  object.  It  is 


Digitized  by  t^ooQle 


BANKING  LAW 


479 


sufficient  in  the  first  instance  to  show 
the  existence  of  a clear  legal  right  to 
the  relief  demanded;  bnt  if,  in  answer 
to  the  application,  facts  are  presented 
to  the  court  from  which  the  inference 
can  fairly  be  drawn  that  the  applica- 
tion is  not  made  in  good  faith  for  the 
protection  of  the  applicant  or  of  the 
corporation,  but  is  made  for  some  ulte- 
rior or  improper  purpose,  especially 
when  it  appears  that  a small  number  of 
shares  of  stock  of  an  important  finan- 
cial corporation  have  been  acquired  for 
the  express  purpose  of  making  an  ap- 
plication for  a list  of  the  stockholders 
of  the  corporation  which  is  not  to  be 
used  by  the  owners  of  the  stock  making 
the  application,  but  for  others  whose 
names  are  not  disclosed  and  for  pur- 
poses not  disclosed,  the  burden  is  cast 
upon  the  party  making  4he  application 
to  affirmatively  show  that  he  is  acting  in 
good  faith,  for  a legitimate  purpose  and 
his  own  or  the  corporation’s  protection. 

“In  this  case  it  appears  that  the  at- 
torney who  is  representing  the  plaintiff 
had  for  over  a year  prior  to  the  time 
when  the  relator  acquired  his  stock, 
made  persistent  demands  upon  the  presi- 
dent of  this  corporation  for  a list  of 
stockholders,  refusing  to  state  for  whom 
he  made  the  demand  or  the  object  for 
which  he  required  this  information. 
These  demands  being  refused,  there 
were  then  purchased  four  shares  of 
stock  of  the  defendant  corporation, 
which  were  transferred  to  a clerk  in  the 
office  of  a firm  of  attorneys,  who  shortly 
thereafter  made  a demand  for  an  in- 
spection of  the  stock  book  as  a stock- 
holder, persistently  refusing  to  state  the 
purpose  for  which  he  desired  the  infor- 
mation, whether  or  not  he  was  acting 
for  others  or  for  whom  he  was  acting. 
He  was  accompanied  in  making  this  de- 
mand by  the  attorney  who  had  insisted 
upon  obtaining  the  information  for  un- 
disclosed clients,  and  was  represented 
by  the  same  attorney  in  instituting  these 
proceedings  to  enforce  his  rights  as  a 
stockholder. 

“These  facts,  I think,  require  from 
the  relator  a free  and  frank  disclosure 
of  his  object  in  making  the  application, 
the  use  to  which  he  wished  to  put  the 


information  that  he  required,  whether 
or  not  he  was  acting  on  his  own  behalf 
or  on  behalf  of  others  whose  names 
were  not  disclosed,  as  well  as  the  object 
in  seeking  to  obtain  information  to 
which  persons  who  are  not  stockholders 
are  not  entitled.’’ 


SUIT  BY  BANK  WHERE  DRAFT  IN- 
DORSED “FOR  COLLECTION ” 

Brooklyn,  N.  Y.,  August  31,  1910. 
Editor  Bankers  Magazine : 

Sir:  We  have  just  received  a draft  in- 
dorsed to  us  “for  collection,”  with  instruc- 
tions to  institute  suit  immediately,  if  the 
draft  should  not  be  paid  on  presentation. 
The  draft  was  not  paid.  Now,  what  I wish 
to  know  is  whether  under  such  an  indorse- 
ment, we  can  bring  suit  in  the  name  of  our 
bank.  Cashier. 

Answer:  There  was  formerly  some 

doubt  whether  a person  to  whom  paper 
had  been  indorsed  “for  collection’*  could 
sue  thereon  in  his  own  name.  But  the 
point  is  no  longer  open  to  dispute  in  any 
of  the  States  which  have  adopted  the 
Negotiable  Instruments  Law;  for  that 
statute  expressly  provides  that  a re- 
strictive indorsement — and  an  indorse- 
ment for  collection  is  of  this  character 
— confers  upon  the  indorsee  the  right 
to  bring  an  action  upon  the  instrument 
that  the  indorser  could  bring.  (Sec.  87, 
New  York  Act.) 


DEPOSIT  TO  MEET  OUTSTAND- 
ING CHECK -CHARGING  OFF 
DEPOSITOR  S NOTE 

Cleveland,  Ohio,  Sept.  3,  1910. 
Editor  Bankers  Magazine : 

Sir:  We  hold  the  note  of  A.,  which  is  past 
due.  He  has  an  account  with  us,  but  since 
the  note  matured  has  no  balance  to  his 
credit.  He  comes  in  and  makes  a deposit, 
saying  to  the  teller  at  the  time  that  he  is 
making  it  for  the  purpose  of  paying  a post- 
dated check  which  he  had  given  on  a certain 
date,  which  was  before  the  note  fell  due. 
The  question  has  arisen  whether  we  had  the 
right  to  charge  the  note  to  his  account  after 
this  deposit  was  made  and  return  the  check 
unpaid.  Please  give  us  your  opinion. 

Vice-President. 

Answer:  Where  a deposit  is  made 

for  a special  purpose,  and  the  bank  is 


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480 


THE  BANKERS  MAGAZINE 


apprised  of  that  fact  at  the  time  it  re- 
ceives the  deposit,  it  must  apply  the 
money  accordingly,  and  cannot  use  it  to 
pay  its  own  claims.  (First  Nat.  Bank 
of  Hazard  vs.  Barger,  Bankers  Maga- 
zine, Nov.,  1909,  p.  718.)  In  the  case 
cited,  the  court  said : “The  law  is  that 

if  a bank  receives  a general  deposit 
from  one  who  is  indebted  to  it,  the  bank 
has  the  right  to  charge  the  depositor’s 
account  with  such  indebtedness;  but  if 
the  bank  receives  the  deposit  with  notice 


that  it  is  made  for  the  purpose  of  meet- 
ing outstanding  checks  drawn  by  the 
depositor,  it  has  no  right  to  charge  & 
depositor’s  account  with  sums  due  it  by 
the  depositor,  and  thus  defeat  the  per- 
sons holding  the  outstanding  claims, 
from  collecting  their  checks.  This  rule 
applies  only  when  the  bank  has  notice 
of  the  previous  appropriation  of  the 
sum  deposited,  or,  in  other  words,  that  it 
is  a special  deposit  to  meet  outstanding, 
checks  issued  by  the  depositor.” 


FOREIGN  BANKING  AND  FINANCE 

Conducted  by  Charles  A.  Conant 


BANK  UNDERWRITINGS 

/COMMENTING  on  the  dangers  of 
underwritings  by  banks,  as  illus- 
trated by  the  embarrassment  of  the 
Niederdeutsche  Bank  of  Dortmund, 
“The  Economist”  (London)  says: 

“As  illustrative  of  the  big  ambitions 
of  this  provincial  bank,  the  newspapers 
are  printing  long  lists  of  companies 
which  it  has  established  or  transformed 
from  private  undertakings  during  its 
brief  career,  and  in  which  its  directors 
occupy  leading  positions  as  directors. 
These  companies  include  another  bank, 
two  brewery  companies,  a rubber  tire 
company  and  another  rubber  company, 
a motor-dray  company,  a marble  and 
granite  works,  a wood  or  timber  con- 
cern of  a kind  not  specified,  two  ship- 
ping companies,  a real  estate  company, 
and  several  others  whose  business  is  not 
described.  Not  all  of  these  were 
founded  by  the  bank;  a few  of  them 
were  only  transformed  into  companies 
by  it ; but  its  directors  have  positions  on 
the  directorates  of  nearly  all. 

“This  affair,  therefore,  again  calls  at- 
tention in  a striking  way  to  the  dangers 
attending  the  German  system  of  bank- 
ing, under  which  nearly  all  the  larger 
institutions  have  very  intimate  finan- 
cial connections  with  industrial  compa- 
nies of  various  kinds,  underwriting  their 
stock  issues  with  the  capital  of  their 


own  depositors;  opening  credit  account* 
for  them  on  an  extensive  scale,  and  hav- 
ing a representative  on  their  boards.  It. 
must  be  admitted  that  the  system  works 
well  enough  in  the  hands  of  capable  and* 
honest  directors;  but  there  will  always- 
be  enough  exceptions  to  this  rule  to  serve 
as  warnings  of  the  dangers  to  which  it 
may  lead  in  the  hands  of  men  lacking 
the  integrity  or  financial  intelligence  to* 
work  it  safely  and  successfully.” 


JAPAN’S  REVENUES  AND  EX- 
PENDITURES 

TPHE  tendency  of  all  State  budgets 
toward  extraordinary  increases  of* 
recent  years  has  occasioned  widespread 
comment  and  has  been  the  despair  of 
finance  ministers.  Perhaps  in  no  coun- 
try has  this  tendency  been  so  marked  as- 
in  Japan.  Of  course,  there  are  special 
circumstances  that  have  operated  to  in- 
crease the  Japanese  budget — such  as  the* 
recent  emergence  of  the  country  into  a 
modern  political  and  industrial  State, 
and  the  wars  with  China  and  Russia. 
From  1867  to  1889  the  total  revenue 
was  always  below  100,000,000  yen,  and* 
it  was  not  until  1897  that  the  two-hun- 
dred million  mark  was  reached.  In 
1907  the  maximum  of  yen  857,000,000' 
was  attained,  from  which  there  has  been* 


Digitized  by  t^ooQle 


Digitized  by  t^ooQle 


New  Bank  Ad.  Series 

READY 

Get  in  Your  Order  Quickly! 

We  have  just  issued  a third  series  of  60  Commercial 
Bank  Advertisements  which  are  sold  to  only  one  bank 
in  a community — the  first  one  that  applies. 

These  advertisements  are  along  the  same  lines  which 
have  made  the  previous  series  so  successful  as  business 
getters. 

They  are  printed  on  pads,  ready  to  be  sent  to  the 
newspaper  with  the  slight  changes  necessary  to  adapt 
them  to  local  conditions.  The 

60  Commercial  Bank 
Advertisements 

are  sold  in  connection  with  the  third  edition  of  our  bank  adver- 
tising text-book,  “Pushing  Your  Business, ” by  T.  D.  MacGregor, 

for  $3.00. 

We  also  have  in  preparation  a new  series  of  too  Savings  Bank 
Advertisements.  Price,  $5.00. 

Write  now  for  the  new  series  of  Commercial  Bank  Ads.  and  make 
a reservation  on  the  ioo  Savings  Ads.,  which  will  be  out  later  in 
the  month.  Ads.  and  book  sent  on  approval,  if  you  wish. 

We  have  on  hand  a quantity  of  the  previous  series  of  Com- 
mercial Bank,  Savings  and  Trust  Company  Advertisements 
Ask  for  our  special  combination  offer  on  the  whole  outfit  of  new 
and  old  ads.,  aggregating  414  separate  advertisements  on  all 
phases  of  banking. 

The  Bankers  Publishing  Company 

253  Broadway,  New  York 


Digitized  by  t^ooQle 


FOREIGN  BANKING  AND  FINANCE 


481 


4i  reduction  to  yen  534,000,000  for  the 
present  year. 

Naturally,  so  vast  an  increase  of 
revenues  and  expenditures  in  so  short  a 
time  has  not  taken  place  without  consid- 
erable strain.  Yet  it  is  learned  from 
the  "Financial  and  Economic  Annual  of 
1910”  that  not  only  was  there  no  in- 
crease of  loans  in  the  preceding  fiscal 
year,  but  the  policy  of  increasing  the 
redemption  of  outstanding  loans  was 
adopted,  and  the  total  transferred  to  the 
national  debt  sinking  fund  in  1910-11 
will  come  up  to  yen  193,960,000,  or  yen 
10,800,000  more  than  for  the  preceding 
year.  Besides,  loans  in  home  and  for- 
•eign  markets  have  been  raised  recently 
to  the  amount  of  yen  281,000,000,  and 
the  proceeds  devoted  to  the  conversion 
of  the  five  per  cent,  loans  into  four  per 
•cents. 


BRITISH  BANK  MERGER 
CANCELLED 

X>  ECENTLY  the  Lancashire  and 
Yorkshire  Bank,  established  in 
1872  and  having  122  offices  and  £10,- 
000,000  total  deposits,  made  plans  for 
merging  with  Parr’s  Bank,  London, 
but  later  the  merger  arrangement 
was  cancelled.  The  latter  insti- 
tution was  established  in  1865,  to  ac- 
quire the  business  of  Messrs.  Parr  & 
Co.  It  has  absorbed  some  twenty  other 
banks  or  private  banking  firms,  and  the 
total  of  the  deposits  and  current  ac- 
counts is  now  *£48,700,602,  making  this 
the  sixth  in  size  among  the  leading  Eng- 
lish joint-stock  banks. 


LONDON  JOINT-STOCK  AND 
PRIVATE  BANKS 

AN  analysis  of  the  last  published  bal- 
**  ance-sheets  of  certain  of  the  Lon- 
don joint-stock  banks  is  made  and  pre- 
sented by  H.  W.  Birks,  Egypt  House, 
36  New  Broad  street,  London,  E.  C.  It 
gives  particulars  of  the  various  items, 
together  with  comparisons  for  the  pre- 
vious half-year.  Eight  banks  are  in- 
cluded in  the  tables — London  County 
and  Westminster,  National,  London 
Joint  Stock,  London  City  and  Midland, 


Union  of  London  and  Smiths,  London 
and  South  Western,  London  and  Pro- 
vincial, and  Martin's. 

The  paid-up  capital  of  these  institu- 
tions on  June  30,  1910,  was  £17,814,- 
022;  reserve  funds,  £13,400,313,  and 
deposits,  including  current  accounts, 
£272,757,079. 


LONDON  BANK  PROFITS 

OANKING  in  London  for  the  first 
^ half  of  the  current  year  has  been 
considerably  more  profitable  than  it  was 
in  the  last  half  of  the  preceding  year. 
Here  are  the  profits  of  a number  of  the 
leading  London  banks,  as  reported  by 
the  London  "Bankers’  Magazine": 

First  half  First  half 
1909  1910 

London  City  & Midland . £364,708  £387,530 
London  and  Provincial..  90,756  90,398 

Barclay  & Company. . . . *486,695  *494^264 

Union'  of  London  and 

Smiths  190,827  257,365 

Capital  and  Counties ...  *284,723  *309,385 

London  and  So.  Western.  85,157  97,546 

London  Joint  Stock....  188,300  226,053 

* For  the  twelve  months. 


GERMAN  BANK  CIRCULATION 

A CCORDING  to  the  London  "Stat- 
ist,"  the  failure  to  use  checks 
more  generally  in  making  payments  in 
Germany  calls  for  a larger  use  of  cur- 
rency than  necessary.  It  says,  in  the 
issue  of  August  20: 

"Last  year  at  the  end  of  September 
there  was  an  excess  circulation  of  £28,- 
500,000,  and  if  trade  is  as  active  this 
year  as  it  was  last  the  excess  circulation 
in  September  will  be  considerably  over 
£30,000,000,  certainly  a large  figure. 
It  has,  of  course,  to  be  borne  in  mind 
that  these  deficiencies  do  not  mean  as 
much  in  Germany  as  they  would  else- 
where. All  that  they  involve  is  the  pay- 
ment of  more  taxation.  Were  it  possible 
for  Germany  to  reform  its  methods  of 
payment  and  to  bring  checks  into 
greater  use  the  situation  in  Germany 
would  be  very  greatly  improved  and  the 
quantity  of  cash  in  the  bank  would  be 
fully  sufficient  for  its  requirements. 


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482 


THE  BANKERS  MAGAZINE 


Possibly  one  of  these  days  the  German 
people  will  adopt  modern  methods  of 
cash  payments.” 


THE  BANK  OF  FRANCE 

A FEATURE  always  of  interest  is 
**  the  amount  of  small  bills  dis- 
counted by  the  Bank  of  France.  The 
report  of  this  institution  for  1909  shows 
that  the  number  of  bills  below  eight 
shillings  was  219,732.  And  the  num- 
ber of  trade  bills  below  $20  increases 
steadily,  amounting  to  3,661,826  in 
1909,  or  nearly  one-half  the  entire  num- 
ber handled  by  the  bank. 

In  1909  the  discount  rate  of  the  Bank 
of  France  remained  fixed  at  three  per 
cent.,  while  the  rate  of  the  Bank  of 
England  was  changed  six  times  after 
January  1,  reaching  a maximum  of  five 
per  cent. 


THE  BANK  OF  NORTH  QUEENS- 
LAND, LIMITED 

AT  the  ordinary  general  meeting  of 
the  shareholders  of  this  bank, 
July  22,  the  Forty-fourth  Report  of  the 
bank  showed  that  the  net  profits  for  the 
last  half-year,  after  the  usual  deduc- 
tions, were  £4,716  11s.  4d.,  to  which 
was  added  £3,775  8s.  9d.,  carried  for- 
ward from  last  year.  After  paying  a 
dividend  at  the  rate  of  five  per  cent,  per 
annum,  allotting  £5,000  to  contingency 
account,  and  providing  for  income  tax, 
a balance  of  £824  Is.  9d.  was  carried 
forward  to  the  next  half  year. 

Deposits  on  June  30,  1910,  were 
£641,672,  compared  with  £586,440  a 
year  ago. 

The  Bank  of  North  Queensland  was 
incorporated  under  the  Companies  Act 
of  1863.  Its  head  office  is  at  Brisbane. 


TRUST  COMPANIES 

Conducted  by  Cl*y  Herrick 


THE  ECONOMIC  POSITION  OF  THE  TRUST 

COMPANY 


T\  OUBTLESS  the  most  important 
reason  for  the  growth  of  the  trust 
company  as  an  institution  is  to  be  found 
in  its  splendid  adaptation  to  the  com- 
mercial and  financial  tendencies  of  the 
age,  and  to  the  economic  services  which 
it  renders  not  to  the  individual  alone 
but  to  the  community  as  a whole.  Com- 
ing into  prominenoe  at  the  time  when 
the  business  of  the  country  was  under- 
going the  transformation — still  incom- 
plete— from  the  old-time  individual 
proprietor  to  the  ordinary  corporation, 
and  from  the  ordinary  corporation  to 
the  so-called  trusts,  it  occupies  a posi- 
tion which  makes  it  of  incalculable  ben- 
efit to  the  individual  citizen  and  to  the 
large  aggregations  of  wealth  repre- 
sented by  the  giant  corporations  of  the 
day.  It  stands  between  the  common 


man  and  the  great  enterprise,  and  in- 
terprets the  one  to  the  other,  joins 
their  hands  and  gives  to  each  a share 
in  the  activities  of  the  other.  Without 
it,  the  great  corporation  would  be  se- 
riously crippled  for  lack  of  funds  and 
for  lack  of  support  by  the  man  of 
moderate  means;  without  it  the  man  of 
ordinary  means  would  with  difficulty,  if 
at  all,  have  any  share  in  the  larger 
enterprises  of  the  times. 

Few  people  of  the  younger  genera- 
tion, indeed,  realize  the  great  changes 
which  have  taken  place  in  the  methods 
of  conducting  business  in  this  country 
during  the  past  twenty  or  thirty  years. 
That  short  period  has  seen  the  origin 
and  growth  of  nearly  all  of  our  giant 
corporations.  It  has  seen  the  aban- 
donment of  the  “cut-throat”  competi- 


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TRUST  COMPANIES 


48  8 


tion  of  former  times  and  the  adoption 
of  the  theory  of  co-operation.  Not  that 
competition  has  been  entirely  done 
away  with,  nor  that  co-operation,  es- 
pecially in  its  better  and  more  complete 
form,  has  yet  become  the  established 
order  of  things  in  the  business  world. 
Yet  one  needs  but  to  compare  the  con- 
ditions found  in  business  forty  years 
ago  with  those  of  to-day  to  see  what  a 
vast  change  has  come  over  the  ways  in 
which  men  view  the  two  theories. 

Then,  two  men  engaged  in  the  same 
line  of  business  felt  that  they  had  be- 
fore them  a life  long  contest,  a never- 
ending  competition  for  business.  In 
the  contest,  it  might  be  that  one  would 
be  the  more  successful  and  gain  the 
greater  volume  of  business — perhaps 
even  drive  the  other  out,  to  find  a new 
competitor  rising  for  the  struggle.  But 
whatever  the  outcome,  each  expected 
that  the  contract  would  go  on,  continued 
by  them  or  by  their  successors. 

Under  similar  circumstances  to-day, 
almost  instinctively  the  question  arises 
in  the  mind — how  long  will  this  con- 
tinue before  a combination  is  effected, 
and  the  two  men  unite  their  efforts  un- 
der the  form  of  a corporation?  To-day 
the  probability  of  such  an  outcome  is 
ever  present  to  the  mind;  a few  genera- 
tions ago  it  was  only  a remote  possi- 
bility, if  even  that.  It  extends  beyond 
the  individual,  beyond  the  small  cor- 
poration, to  the  great  corporations 
m which  ever  tend  to  amalgamate  into 
still  greater  ones  until  the  particular 
line  of  business  is  in  the  hands  of  one 
colossal  corporation  controlling  the 
whole  situation,  with  no  competitor,  all 
engaged  in  the  business  bending  their 
efforts  not  in  competition  but  in  co-op- 
eration. 

That  this  represents  the  distinct  ten- 
dency of  the  age  cannot  be  doubted; 
whether  it  is  on  the  whole  a condition 
which  bodes  good  to  the  general  public, 
is  of  course  another  question.  As  a 
statement  of  facts,  it  cannot  be  gain- 
said; as  a statement  of  recommended 
policy,  it  is  open  to  discussion.  The 
writer  cannot  but  feel  that  it  is  in  the 
line  of  true  progress,  and  that  it  will  go 
on  until  we  have  a genuine  co-operation 


fn  the  full  meaning  of  the  term — a co- 
operation which  will  concern  not  only 
the  producers,  but  the  consumers  also, 
not  merely  a co-operation  for  the  profit 
of  and  the  monopolistic  control  by  the 
few  who  direct  any  industry,  but  a 
genuine  co-operation  which  shall  dic- 
tate the  management  of  every  human 
industry  with  proper  regard  for  rights 
and  interests  of  the  capital  invested,  the 
workers  employed  and  public  served. 
That  we  have  as  yet  taken  only  a step 
towards  such  an  ideal  is  of  course  true; 
it  is  a fact  that  up  to  the  present  time 
the  co-operation  has  been  too  much  con- 
fined to  the  interests  of  the  few  who 
control,  that  the  change  has  been  ac- 
companied by  some  outrageous  injus- 
tices, and  that  in  the  process  of  read- 
justment some  individuals  have  suffered 
most  cruelly.  But  the  writer  pins  his 
faith  not  to  the  present  but  to  the 
future.  If  he  mistakes  not  the  signs  of 
the  times  and  the  temper  of  the  Ameri- 
can people,  the  public  conscience  is  so 
aroused  and  the  public  intelligence  so 
informed,  that  this  question  will  not 
be  settled  until  it  is  settled  right  and 
this  country  be  blessed  with  an  economic 
system  based  upon  the  co-operation  of 
all  for  the  common  good. 

For  the  present,  however,  we  must 
take  things  as  they  are — and  it  is  of 
interest  to  know  the  position  of  the 
trust  company  and  its  relation  to  pres- 
ent economic  conditions.  The  trust 
company  finds  itself  in  a civilization 
abounding  in  great  corporations  which 
control  industry  and  commerce  and  trans- 
portation. What  is  its  relation  to  them, 
and  what  its  relation  to  the  individual 
citizen  ? What,  if  anything,  does  it 
do  to  secure  for  its  customers  and  for 
the  general  public,  who  may  at  their 
option  become  its  customers,  a share  in 
the  activities  and  the  profits  of  busi- 
ness enterprises? 

The  corporation,  whether  large  or 
small,  finds  the  trust  company  of  great 
use,  if  not  indispensable,  in  a variety 
of  ways.  At  the  inception  of  the  cor- 
poration, the  trust  company  is  utilized 
in  the  underwriting,  as  transfer  agent 
or  registrar  for  the  certificates  of  stock, 
as  depositary,  as  trustee  for  bond  is- 


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484 


THE  BANKERS  MAGAZINE 


sues.  The  facilities  and  the  experience 
of  the  trust  company  make  it  almost  a 
necessity  for  these  purposes.  The  ser- 
vices demanded  are  of  such  a character 
that  few  individuals  have  either  the 
equipment  or  the  responsibility  needed. 
Throughout  the  life  of  the  corporation 
the  usefulness  of  the  trust  company  con- 
tinues, in  the  transfer  and  registering  of 
the  stock,  the  duties  of  the  trustee  of 
bond  issues,  the  handling  of  reorganiza- 
tions when  necessary  and  in  numerous 
matters  that  may  require  attention  from 
time  to  time.  In  these  matters  the  trust 
company  protects  and  safeguards  the 
rights  of  the  investing  public. 

For  the  better  classes  of  securities 
issued  by  the  corporations,  the  trust 
company  is  an  important  factor  in  fur- 
nishing a market.  It  ranks  as  an  im- 
portant customer  for  bond  issues  and 
furnishes  a considerable  part  of  the 
capital  necessary  for  the  conducting  of 
corporate  enterprises.  It  gathers  funds 
in  small  amounts  from  a multitude  of 
customers,  the  aggregate  of  such  funds 
forming  considerable  sums  which  would 
not  otherwise  be  available.  Without 
this  service — which  the  trust  company 
renders,  of  course,  in  company  with 
other  savings  banking  institutions — the 
great  volume  of  business  carried  on 
to-day  would  be  impossible  because  of 
lack  of  capital.  Thousands  of  small 
sums,  each  too  small  to  be  independent- 
ly employed  as  capital  or  invested,  arc 
gathered  by  the  trust  company  in  the 
form  of  deposits;  and  large  amounts  of 
capital  are  thus  provided  which  make 
possible  the  carrying  on  of  great  enter- 
prises which  benefit  the  whole  people. 
Funds  that  would  otherwise  be  idle  and 
unproductive  are  put  to  work  and 
made  to  produce,  adding  to  the  sum  of 
human  wealth.  This  is  an  important 
economic  service. 

The  funds  thus  provided  are  avail- 
able not  alone  for  private  corporations, 
but  for  State  and  municipal  corporations, 
of  whose  bond  issues  the  trust  com- 
panies are  large  buyers.  Many  a town 
and  city  is  able  to  secure  funds  for  im- 
provements at  low  rates  of  interest  be- 
cause trust  companies  and  other  savings 
Institutions  have  gathered  small  sums 


and  made  them  available  for  investment. 

To  the  individual  the  trust  company 
offers  services  which  the  increasing  com- 
plexity of  our  civilization  make  it  more 
and  more  difficult  for  him  to  perform 
for  himself,  or  to  get  other  individuals 
to  do  for  him.  With  a superior  equip- 
ment, a thorough  training  and  an  ample 
responsibility,  it  is  prepared  to  execute 
for  him  any  legal  trust  while  he  lives, 
and  to  care  for  his  estate  and  the  prop- 
erty of  his  heirs  after  he  has  passed 
away. 

Through  its  banking  and  savings  de- 
partments, the  trust  company  enables 
the  individual,  whether  of  large  or  of 
small  means,  to  share  in  the  profits 
of  corporate  enterprises.  The  funds  re- 
ceived on  deposit  are  to  a considerable 
extent  invested  in  bonds  and  stocks  of 
railroads  and  other  corporations.  The 
dividends  or  interest  on  these  securities 
pass  to  the  credit  of  the  trust  company, 
which  distributes  the  larger  part  of 
such  income  to  its  depositors  in  the 
form  of  interest  on  their  deposits.  The 
depositors  are  thus  indirectly  stock- 
holders and  bondholders  in  the  enter- 
prises, whose  securities  the  trust  com- 
pany holds,  and  in  this  way  are  vitally 
interested  in  the  success  of  those  enter- 
prises. This  is  as  true  of  the  small 
depositor  as  of  the  large  depositor.  If 
his  deposit  is  only  ten  dollars,  a portion 
of  it  is  invested  in  securities,  and  the 
interest  on  his  account  is  derived  from 
the  earnings  of  the  corporations  issuing 
the  securities. 

Thus  does  the  trust  company  link 
together  the  interests  of  the  depositor 
and  of  the  corporation.  Without  the 
capital  supplied  by  a multitude  of  small 
deposits,  the  corporation  could  not 
operate;  and  without  the  earnings  of 
the  corporation,  the  depositor  could  not 
receive  interest  on  his  deposit.  The 
trust  company  serves  to  provide  funds 
for  large  enterprises  and  to  distribute 
the  profits  of  their  operation  widely 
among  the  people.  It  is  not  asserted 
that  this  is  the  purpose  of  the  trust 
company,  or  that  the  latter  is  a phi- 
lanthropic institution;  but  it  is  pointed 
out  that  as  a matter  of  fact  the  trust 
company  does  operate  to  distribute 


Digitized  by  t^ooQle 


TRUST  COMPANIES 


485 


some  of  the  profits  of  corporations — 
even  of  the  iniquitous  “trusts” — among 
the  masses  of  the  people.  Anyone  who 
has  a dollar  to  deposit  may,  at  his  op* 
tion,  share  in  such  profits.  The  larger 
capitalist  may  purchase  a block  of 
stock  or  of  bonds,  and  take  his  profits 
together  with  whatever  risk  is  in- 
volved. He  has  still  the  advantage  that 
accrues  to  the  man  of  large  means. 
But  the  smaller  capitalist — and  anyone 
who  has  saved  a dollar  is  to  that  ex- 
tent a capitalist — may  at  least,  through 
the  trust  company,  have  a small  share 
in  the  undertaking.  Let  us  hope  that 
in  due  time  his  share  will  increase. 

The  extent  to  which  the  funds  in  the 
keeping  of  trust  companies  are  supplied 
by  persons  of  relatively  small  means 
is  shown  by  a study  of  the  average 
size  of  savings  deposits  in  such  institu- 
tions. From  the  figures  gathered  from 
862  trust  companies  in  the  United 
States  by  the  Monetary  Commission,  it 
appears  that  there  were  held  by  these 
companies,  in  1909,  $657,697,417  of 
savings  deposits,  belonging  to  1,965,838 
depositors.  This  makes  the  average 
savings  deposit  about  $835.  Many  of 
the  single  deposits  of  course  amounted 
to  several  thousands  dollars,  and  a 
great  many  of  them  amounted  to  from 
one  to  ten  dollars  each.  The  dividends 
paid  by  these  trust  companies  were 
thus  distributed  among  nearly  two 
million  people.  The  actual  number 
served  by  all  the  trust  companies  of 
the  country  was  much  larger,  as  the 
number  of  such  companies  is  more  than 
1,600. 

The  trust  company  also  holds  vast 
amounts  of  corporate  securities  for  the 
clients  of  its  trust  department,  who  re- 
ceive more  directly  the  dividends  on 
their  holdings.  For  the  more  well-to-do 
of  its  customers,  it  acts  as  a large  dis- 
tributor of  corporate  securities  through 
participations  in  underwritings  and 
through  its  bond  department.  And  to 
the  holders  of  securities  it  affords,  in 
its  safe  deposit  department,  a secure 
place  for  the  safe-keeping  of  their 
valuables. 

It  must  be  evident,  then,  that  the 
trust  company  has  an  important  part 


in  these  days  when  the  business  of 
the  country  is  being  largely  con- 
ducted by  giant  corporations,  in  adding 
to  the  funds  available  for  the  carrying 
on  of  great  enterprises;  and  on  the 
other  hand  in  giving  to  the  people  the 
opportunity  to  share  in  their  ownership 
and  their  profits.  It  is  an  important 
link  in  the  chain  of  our  civilization.  It 
represents  the  corporations,  and  it 
represents  the  people.  It  vests  a part 
of  the  ownership  of  the  corporations  in 
the  people.  It  acts  to  bind  together 
more  closely  the  capitalist  and  the  la- 
borer— or  better,  the  large  capitalist 
and  the  small  capitalist.  And  when 
the  relations  between  the  two  classes 
grow  more  equitable  and  more  amica- 
ble— as  they  must  and  will — the  trust 
company  may  prove  one  of  the  import- 
ant agencies  in  the  good  work. 


TRUST  COMPANY  FORMS 

HTHE  book  of  “Forms  for  Trust  Com- 
panies,”  which  has  been  in  prepara- 
tion by  a committee  of  the  Trust  Com- 
pany Section  of  the  American  Bankers9 
Association  for  somewhat  over  a year, 
has  made  its  appearance,  and  is  being 
sold  to  members  of  the  Association  at 
$15 — to  others  $20.  The  book  is  eleven 
by  fourteen  inches  in  size,  bound  in  full 
morocco  with  leather  lining  and  gilt 
edges,  with  145  pages.  It  contains  some 
600  different  forms,  selected  from  a 
large  number  submitted  by  trust  com- 
panies all  over  the  country,  the  repro- 
ductions being  one-half  the  dimensions 
of  the  original  forms. 

The  committee  in  charge  of  the  work 
consisted  of  Joseph  N.  Babcock,  trust 
officer  The  Trust  Company  of  America, 
New  York,  chairman;  Charles  L.  Mosh- 
er, vice-president  The  Guardian  Sav- 
ings and  Trust  Company,  Cleveland; 
George  H.  Stuart,  third  assistant 
treasurer  The  Girard  Trust  Company, 
Philadelphia,  and  Philip  S.  Babcock, 
the  secretary  of  the  Trust  Company 
Section.  In  the  selection,  arrangement 
and  classification  of  the  forms  this 
committee  has  shown  excellent  judg- 
ment, and  has  borne  in  mind  the  needs 


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486 


THE  BANKERS  MAGAZINE 


of  the  smaller  companies  as  well  as 
those  of  the  larger  ones. 

The  forms  are  arranged  under  the 
following  general  headings:  Banking, 
deposits,  withdrawals,  general  forms, 
collections,  books  and  statements,  gen- 
eral books  and  statements,  loans  and 
discounts;  Trusts,  real  estate,  bond  and 
mortgage  loans,  corporate  bond  trus- 
teeships, bond  transfers  and  registra- 
tions, payment  of  coupons,  reorganiza- 
tions, stock  transfers  and  registrations, 
savings,  safe  deposit,  foreign  exchange. 

The  book  will  prove  of  great  value  to 
new  companies  and  to  old  companies 


who  wish  to  improve  their  forms  or  de- 
vise new  ones.  When  the  forms  are 
not  exactly  adaptable  to  a particular 
company — as  will  often  be  the  case  in 
any  collection  of  forms — it  is  not  a 
difficult  matter  to  make  them  conform 
to  the  particular  need;  while  it  is  to 
be  remembered  that  these  forms  are  the 
results  of  years  of  experience  on  the 
part  of  a large  number  of  successful 
companies.  The  section  is  performing 
a valuable  service  in  the  publication 
of  this  work,  and  is  to  be  congratulated 
on  the  undertaking. 


INVESTMENTS 

Conducted  by  Franklin  Escher 


WALL  STREET  AND  WASHINGTON 

By  M.  C.  Lavallette 


TPHE  time  just  previous  to  election 
usually  finds  politics  exerting  an 
important  influence  on  the  financial 
markets.  This  year  is  no  exception  to 
the  rule;  quite  the  contrary.  On  ac- 
count of  the  Roosevelt  element  in  the 
situation,  on  account  of  the  bitter  strife 
in  the  Republican  party,  on  account  of 
the  strong  possibility  of  the  election  of 
a Democratic  majority  in  Congress,  the 
connection  between  politics  and  finance 
has  been  drawn  exceptionally  close.  In 
all  the  literature  going  out  of  Wall 
Street,  “Washington”  is  being  given  a 
position  of  predominating  inportance. 

For  the  purpose  of  gauging  its  ef- 
fect on  the  markets,  this  influence  of 
“Washington”  ought  really  be  divided 
into  three  parts.  In  the  first  place, 
Wall  Street  is  worried  over  the  question 
as  to  whether  there  is  to  be  any  further 
railroad  legislation  and  any  more  tin- 
kering with  the  tariff.  In  the  second 
place,  the  impending  Supreme  Court 
decisions  in  the  case  of  American  To- 
bacco and  Standard  Oil  hang  over  the 
market  like  a cloud,  out  of  which  no  one 
knows  when  the  storm  may  break.  In 
the  third  place,  the  question  of  what 
the  Interstate  Commerce  Commission 


may  do  with  regard  to  freight  rates  is 
of  the  utmost  importance — in  the  opin- 
ion of  a good  many  people  will  be  the 
determining  factor  in  the  question  of 
whether  railroad  dividends  can  or  can- 
not be  maintained. 

Tariff  Revision  Likely. 

With  regard  to  the  possible  further 
revision  of  the  tariff,  it  would  seem  as 
though  the  sentiment  demanding  fur- 
ther revision,  and  apparent  in  every 
part  of  the  country,  would  inevitably 
force  the  issue.  From  the  middle  West, 
into  every  part  of  the  country,  appears 
to  have  spread  this  sentiment.  It  is 
unconfined  to  any  class  or  any  party. 
That  the  thinking  people  in  this  coun- 
try consider  that  the  Payne-Aldrich  bill 
was  no  real  redemption  of  the  pledge 
of  the  Republican  party  at  the  last 
presidential  election  is  becoming  more 
and  more  evident.  Two  years  ago  the 
country  demanded  revision  of  the  tariff. 
In  the  course  of  a year  it  got  some- 
thing— a churning  over  of  schedules 
with  a little  rearrangement  here  and 
there — but  no  real  revision,  at  least  no 
real  revision  downward. 

On  account  of  the  strong  forces 


Digitized  by  t^ooQle 


INVESTMENTS 


487 


which  have  been  at  work  since  then  the 
great  mass  of  voters  has  finally  been 
stirred  up  to  the  idea  that  real  revision 
of  the  tariff  can  and  ought  to  be  had. 
For  a while  the  makers  of  the  Payne- 
Aldrich  bill  seemed  to  hope  that  pros- 
perity in  the  country  would  smooth 
■down  the  opposition  to  the  bill  they 
had  created,  -and  eventually  cause  the 
country  to  become  satisfied  therewith. 
That,  however,  has  not  come  to  pass. 
The  country  has  been  fairly  prosperous, 
it  is  true,  but  early  in  the  year  so  sharp 
a check  was  administered  to  the  upturn 
in  things  that  the  attention  of  the  peo- 
ple at  large  has  been  very  forcibly  di- 
Tected  to  the  tariff  and  tariff  matters. 
Instead  of  people  becoming  more  satis- 
fied with  the  tariff  work  done  by  the 
last  Congress,  dissatisfaction  has 
grown,  and  grown  rapidly.  Nor  have 
even  the  Republican  leaders  failed  to 
see  the  hand-writing  on  the  wall.  With- 
out hesitation  it  can  be  said  that  in  the 
innermost  circles  it  is  now  admitted  that 
a,  bad  mistake  was  made  and  that  at  the 
next  session  of  Congress  a real  revision 
of  the  tariff  will  have  to  take  place. 

Railroad  Legislation  Less  Likely. 

With  regard  to  the  probability  of  fur- 
ther railroad  legislation,  the  case  is  a 
little  different.  The  President,  it  is 
true,  did  not  succeed  in  getting  Con- 
gress to  embody  in  the  railroad  law  all 
those  provisions  which  he  would  have 
liked  to  have  seen  embodied  therein, 
but  the  Act  as  passed  can  certainly  be 
said  to  be  representative  of  the  leg- 
islation which  the  Republican  platform 
demanded. 

That  it  is  a good  law  and  compre- 
hensive is  becoming  plainer  as  time  goes 
on,  though,  naturally,  there  is  a certain 
amount  of  dissatisfaction  with  it.  The 
powers  granted  the  Interstate  Com- 
merce Commission,  it  is  true,  are  con- 
tinually a thorn  in  the  side  of  the  rail- 
roads. But,  then,  that  was  to  have  been 
expected — closer  government  regulation 
of  interstate  commerce  was  inevitable, 
and  the  railroads  knew  that  it  was  only 
a matter  of  time  before  it  came  about. 
But  taking  the  law  as  a whole,  it  is  a 
good  law  and  well  liked  by  the  rail- 


roads and  by  the  great  mass  of  the  peo- 
ple. The  fact  that  it  could  be  im- 
proved, that  something  could  be  added 
to  it  here  and  there  to  make  it  better, 
by  no  means  says  that  it  will  be  further 
changed  or  amended  in  the  near  future. 
No  one  knows  better  than  those  who 
were  responsible  for  the  railroad  act  the 
dangers  of  over  legislation.  . Every- 
thing seems  to  point  to  the  fact  that,  as 
good  a railroad  law  as  the  one  enacted 
having  been  passed,  they  ought  to  let  it 
go  at  that  and  be  satisfied.  From  the 
danger  of  further  regulatory  railroad 
legislation  the  country  has  little  to  fear. 

Deciding  the  “Trust  Cases.” 

With  regard  to  the  Supreme  Court 
decisions  in  the  “trust  cases”  little  more 
can  be  said  than  was  said  when  the  re- 
argument  of  these  cases  was  decided 
upon  early  in  the  summer.  The  Su- 
preme Court,  it  is  true,  has  undergone 
important  changes  in  its  personnel,  but 
from  the  changes  which  have  been  made 
it  has  been  impossible  to  read  anything 
concerning  what  the  future  action  of 
the  august  body  is  likely  to  be.  By  the 
appointment  of  Governor  Hughes  to 
the  Supreme  Court,  an  element  of  un- 
certainty has  been  introduced  from 
which  a number  of  persons  who  are  ac- 
customed to  take  long  chances  in  their 
deductions  have  figured  out  that  the 
Court  might  act  in  this  or  that  way. 
Conjecture  and  surmise  are  an  inalien- 
able right.  Nobody,  however,  need 
bother  much  about  these  wild  guesses. 
Nothing  more  is  known  now  than  was 
known  several  months  ago  concerning 
what  the  Supreme  Court  is  likely  to  de- 
cide. The  only  thing  that  is  definitely 
known  is  that  the  cases  are  soon  again 
to  come  up,  are  to  be  re-argued  with  all 
the  usual  parade  of  complicated  and 
conflicting  testimony,  and  that  there  is 
every  probability  that  business  will  be 
correspondingly  disturbed  thereby. 

Freight  Rates. 

The  other  thing  that  is  worrying 
Wall  Street  is  the  question  of  what  the 
Interstate  Commerce  Commission  is  go- 


Digitized  by  t^ooQle 


of  Established  Gas  and  Electric  Conpaeies 

These  bonds  are  issued  by  prosperous  Companies  of  New  England  and  the 
Middle  West;  companies  whose  business  has  been  developed 
by  years  of  constant  and  growing  service,  whose  credit  is 
firmly  established  and  whose  ability  to  carry  their  bonded 
debt  has  been  proven  through  periods  of  prosperity  and  of 
general  business  depression. 


The  control  of  these  companies  Is  vested  In  the  NATIONAL  LIGHT,  HEAT  A POWER 
COMPANY,  New  York,  which,  through  its  various  sub-companies,  controls  the  lighting 
franchises  of  some  Twenty  Cities  and  Towns. 

double:  security 

Each  of  these  Bonds  bears  the  unconditional  Guarantee  of  the  National  Light,  Heat 
A Power  Company  as  to  prompt  payment  of  principal  and  interest.  This  Guarantee 
means  protection,  Insurance  against  loss  and  tne  constant,  unremitting  supervision  and  in- 
terest of  a large  and  successful  corporation  which  controls  these  valuable  properties. 

DENOMINATION  $500  AND  fl.Mft. 

For  offerings  and  full  information  address  Bond  Dept. 

A.  H.  Bickmore  & Go.,  Investment  Securities  30  Pine  Street,  New  York 


ing  to  order  with  regard  to  railroad 
freight  rates.  At  the  time  of  writing, 
investigation  into  the  Western  freight 
rate  situation  has  been  completed  at 
Chicago,  and  hearings  on  the  plea  of 
the  eastern  roads  that  they  be  allowed 
to  raise  their  rates  are  being  held  in 
New  York.  What  will  be  the  outcome 
no  one  but  a prophet  may  foresee.  But 
from  the  testimony  already  given  and 
the  general  character  of  the  proceedings 
at  these  hearings,  it  must  be  said  that  it 
seems  altogether  probable  that  the  rail- 
roads will  get  a substantial  part  of  what 
they  are  asking  for.  This  is  not  the 
place  nor  the  time  to  enter  into  any  dis- 
cussion of  the  arguments  which  both 
sides  have  advanced.  They  have  been 
in  the  papers  ad  nauseam,  and  most 
readers  seem  to  have  stopped  following 
the  question  closely.  Out  of  the  ruck 
of  conflicting  statements,  charges,  and 
counter  charges,  there  seems,  however, 
to  have  risen  a pretty  well  defined  idea 
that  the  transportation  companies  have 
had  a good  deal  of  right  on  their  side 
and  that  their  plea  will  not  have  been 
made  in  vain.  Not  improbably  they 
have  asked  for  more  than  they  are  en- 
titled to.  Not  improbably  they  have 
demanded  more  than  they  expect  to  get. 
Full  account  of  that  very  human  proba- 
bility will  be  taken  by  the  Commerce 
Commission.  The  full  advance  in  rates 
asked  for  will  probably  be  allowed  in 
very  few  cases.  What  seems  likely  to 
happen,  though,  is  that  in  the  many 

418 


cases  where  increases  are  justified  a 
moderate  advance  will  be  allowed. 

A Restraining  Influence. 

From  the  very  nature  of  this  general 
influence  of  “Washington/*  it  is  evi- 
dent that  the  whole  thing  is  very  much 
of  a restraining  influence  on  business 
and  finance.  Will  the  tariff  be  revised? 
— there  is  a question  which  naturally 
checks  commercial  operations.  What 
will  be  the  decision  of  the  Supreme 
Court  with  regard  to  the  right  of  the 
big  corporations  to  do  business  in  their 
present  form? — in  that  question  is  to 
be  found  the  reason  for  the  aversion  of 
investors  to  the  trust  stocks.  Is  the 
Interstate  Commerce  Commission  sure 
to  grant  the  railroads  reasonable  ad- 
vances in  rates? — just  there  lies  the  rea- 
son for  the  idea  prevalent  in  so  many 
quarters  that  railroad  dividends  will 
not  be  maintained  on  their  present 
basis.  Uncertainty,  harassment,  fear 
that  business  a year  from  now  may  not 
be  done  in  its  present  form — here  are 
strong  individual  reasons  for  the  pres- 
ent stagnation  of  commerce  and  finance. 
They  are  big  questions,  and  the  inde- 
cision regarding  them  is  doing  a lot  of 
harm.  Fortunately,  the  time  when  they 
are  bound  to  be  settled  one  way  or  an- 
other is  coming  reasonably  near. 


Digitized  by  t^ooQle 


©If*  Union  National  Nank 

CAPITAL  $1,600,000  (0*  SURPLUS  $900,000 


QEO.  H.  WORTHINGTON,  Pr».id.nt 
J.  F.  HARPER,  Vlce-Pre.ldent 
E.  R.  FANCHER,  Vlce-Pr«»l<J*nt 
a A.  COULTON,  Cashier 
W.  E.  WARD,  Asst.  Cashier 


({Organized  in  <884.  Mote  than 
twenty  live  yean  of  service  back 
of  us.  May  we  be  of  use  to  you? 


UTILITY  THE  BASIS  OF  MORTGAGE  LOANS 

By  W.  H.  Kniffin,  Jr.,  Cashier  Home  Savings  Bank,  Brooklyn,  N.  Y. 


17  OR  a time  so  long  that  the  memory 
A of  man  “runneth  not  to  the  contra- 
ry/* land  and  buildings  have  been 
pledged  for  money  advances,  and  in  ac- 
cepting such  security  the  lender  has 
realized  that  he  held  a pledge  of  prime 
quality,  and  the  borrower  offered  the 
best  he  had.  Such  transactions  may  be 
traced  in  the  common  law  of  England 
to  a time  antedating  the  Norman  Con- 
quest. 

In  many  places,  especially  in  small 
towns  and  country  districts,  it  has  come 
to  pass  that  to  hold  your  neighbor’s 
property  under  mortgage  is  a harsh  and 
unjust  proceeding.  To  make  this  a 
practice,  is  to  be  rated  as  a money-grab- 
ber, an  oppressor  of  the  poor,  and  if 
foreclosure  becomes  necessary,  that  is 
the  height  of  infamy  and  you  are 
henceforth  branded  a crafty  Shylock 
forever  crying,  “I  will  have  my  bond !” 
Even  children  seem  to  get  the  impres- 
sion that  to  live  under  the  cloud  of  a 
mortgage  is  a badge  of  dishonor  and 
something  is  wrong  with  the  head  of 
the  household;  but  to  own  one’s  home 
“free  and  dear”  is  a mark  of  distinc- 
tion, a true  indication  of  prosperity. 

Tins  Mortgage  as  an  Investment. 

In  the  larger  cities,  however,  the 
mortgage  assumes  an  entirely  different 
aspect,  and  becomes  a business  propo- 
sition, not  only  profitable  but  popular. 
As  an  investment  it  is  constantly  at- 


tracting the  people  of  limited  means 
who  desire  a larger  income  rate  than  ob- 
tains in  savings  bank  circles.  And  if 
made  on  a savings  bank  basis, — that  is, 
with  ample  margin,  and  the  risk  care- 
fully selected  according  to  accepted 
principles  of  safety,  it  is  one  of  the 
most  attractive  forms  of  investment  and 
surely  one  of  the.  safest.  There  is  no 
good  reason  why  the  man  with  five  or 
ten  thousand  dollars  should  not  make 
his  own  mortgage  loans  and  thereby  re- 
ceive the  full  income,  rather  than  make 
his  investment  through  the  medium  of  a 
savings  bank  and  sacrifice  from  one  to 
two  per  cent.  And  the  shrewd  deposi- 
tor is  gradually  finding  this  out. 

On  the  other  hand,  the  mortgage 
plays  its  best  role  as  a help  to  realty 
ownership,  as  thousands  will  testify.  It 
is  perhaps,  one  of  the  few  forms  of 
debt  that  a man  can  afford  to  incur. 
A little  experience  in  the  real  estate 
world  will  demonstrate  that  the  mort- 
gage is  a most  desirable  aid  in 
real  estate  speculation,  for  properties 
with  mortgages  already  on,  at  a fair 
rate,  are  much  more  easily  bought  and 
sold  than  if  full  equity  were  demanded. 
It  not  only  requires  less  cash,  but  dollar 
for  dollar,  money  will  show  a larger 
profit,  than  if  the  property  were  free  of 
debt. 

If  a mortgage  census  of  the  real  es- 
tate of  New  York  were  to  be  taken,  it 
would  doubtless  show  that  the  majority 

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of  property  is  mortgaged.  Many  par- 
cels carry  second  liens,  but  these  are 
often  speculative  properties,  in  which 
the  owner  desires  to  have  as  little  equity 
as  possible,  in  order  to  keep  his  cash 
capital  fully  employed.  They  are  usu- 
ally installment  mortgages,  at  a higher 
rate  than  the  first  lien,  and  quite  gen- 
erally with  a bonus  to  the  lender  run- 
ning from  five  per  cent,  upward.  They 
are  not  the  most  desirable  form 
of  mortgage  activity,  but  if  made  with 
due  care  are  immensely  profitable  as 
those  who  have  made  fortunes  out  of 
this  form  of  investment  will  testify. 

Utility  the  Final  Test  of  Value. 

There  are  degrees  of  goodness  in 
mortgage  loans  as  well  as  in  other 
forms  of  investment.*  As  one  property 
is  more  desirable  to  own  than  another, 
so  is  a mortgage  on  one  more  desirable 
than  a loan  on  another.  As  a funda- 
mental principle  it  may  be  stated  that 
no  mortgage  is  better  than  the  proper- 
ty, and  the  property  no  better  than  its 
final  utility.  No  matter  what  may  be 
the  quality  of  the  bond,  it  is  the  prop- 
erty that  must  be  analyzed  in  order  to 
ascertain  how  good  the  loan  really  is. 
The  bond  may  be  worthless  long  be- 
fore it  shall  come  into  play.  There  are 
certain  features  that  make  for  security 
and  others  that  make  for  risk,  and  he 
is  a wise  investor  who  discovers  what 
they  are  and  applies  them.  But  the 
easiest,  if  not  the  best  test  of  all  is: 
what  is  the  adaptability,  the  converti- 
bility, the  utility  of  the  property 
pledged?  The  honest  contryman  who 
bought  a sewing  machine  at  an  auction 
for  a quarter,  remarking,  “If  it  haint 
no  good  for  sewin',  it'll  make  a mighty 
fine  flower  stand,*'  had  an  eye  to  the 
economic  principle  of  final  utility  of 
sewing  machines.  Of  a like  mind  must 
490 


be  every  successful  lender  on  mortgage 
risk. 

A rag  is  a rag,  but  when  its  useful- 
ness as  a piece  of  cloth  is  over  it  may 
become  a piece  of  fine  writing  paper. 
Iron  is  always  iron,  and  when  its  value 
in  one  form  ceases,  it  goes  into  the  melt- 
ing pot  and. comes  out  with  a new  utili- 
ty. It  is  a public  and  private  necessi- 
ty, and  although  affected  by  market 
changes  will  ever  be  in  broad  and  stea- 
dy demand  on  account  of  its  many  use- 
fulnesses. The  price  may  be  high  or 
low,  but  its  .utility  never  ceases.  This 
principle  is  true  in  the  most  common 
form  of  pledge,  that  of  personal  prop- 
erty with  the  pawnbroker.  The  gen- 
tleman under  the  three  balls  considers 
the  utility  of  the  goods  offered  him 
long  before  the  value  is  determined.  Of- 
fer him  a diamond,  and  before  he 
tests  the  stone,  he  must  consider  (per- 
haps unconsciously)  whether  diamonds 
are  in  demand  or  not.  He  knows  it  has- 
no  great  value  otherwise  than  for  or- 
nament. But  offer  him  a watch  or  a 
ring,  and  although  the  watch  market 
may  be  glutted,  the  demand  for  gold 
will  never  cease,  and  if  he  cannot  seH 
the  diamond  he  can  always  melt  the 
watch  for  its  gold. 

We  may  judge  a mortgage  loan  by 
a similar  process  of  reasoning.  He  is  a 
wise  investor  who  never  forgets  to  look 
into  the  future  and  judge  his  loan  by 
what  might  happen,  and  to  carefully 
analyze  the  final  utility  of  the  pledge. 
If  gold  is  standard  of  value  because 
of  its  broad  usefulness  and  constant 
demand  the  world  over,  and  may  easily 
and  inexpensively  be  converted  from 
one  form  to  another,  that  property  is 
the  most  desirable  as  a mortgage  risk 
which  meets  the  same  conditions.  The 
rental  value,  cost  to  reproduce,  location, 
tides  of  travel,  development,  accessi- 
bility, all  have  to  do  with  ultimate 


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worth,  bat  to  forget  to  inquire  what 
use  he  would  make  if  forced  to  take  un- 
der mortgage  foreclosure  is  to  forget 
the  vital  element  in  such  investments. 
It  matters  not  who  may  be  on  the 
bond — no  bond  is  better  than  the  man, 
and  the  best  of  men  fail.  However 
much  we  may  value  the  moral  risk, 
the  property  risk  must  receive  due  con- 
sideration if  success  is  to  attend  such 
ventures.  Every  unsatisfied  deficiency 
judgment  attests  the  fact  that  a bond 
has  become  worthless,  and  the  invest- 
ment no  better  than  the  pledge.  Let 
us  examine,  briefly,  several  classes  of 
mortgage  loans  in  the  light  of  their  util- 
ity and 'ascertain  their  status  as  mort- 
gage risks. 

The  Farm. 

At  first  sight  the  farm  would  seem 
to  lead  the  list  of  desirable  mortgage 
risks,  and  for  many  years  such  loans 
were  looked  upon  as  being  all  that  a 
mortgage  loan  should  be;  but  experi- 
ence has  taught,  that  while  fundamen- 
tally they  fulfill  every  requirement  of 
safety,  practically  they  have  been  dis- 
appointments. 

Aside  from  a place  to  live  and  “enjoy 
the  view/*  the  chief  value  of  the  farm 
is  in  its  productivity — its  ability  to 
make  things  grow.  It  is  the  nation’s 
best  asset  and  vital  to  human  existence. 
In  some  sections  farm  lands  are  of 
great  and  increasing  value,  and  in 
others  the  values  are  constantly  dimin- 
ishing. The  former  is  true  of  the  . West 
and  latter  largely  in  the  New  England 
States.  One  savings  bank  in  Massachu- 
setts that  was  obliged  to  close  its  doors 
recently,  was  brought  to  a state  of  in- 
solvency through  depreciation  of  its 
farm  loans.  The  sole  value  of  the  farm 


being  dependent  upon  its  productivity* 
anything  that  affects  the  crops  affects 
the  mortgage  risk.  A series  of  poor 
years,  drouths,  pestilences,  poor  soil  or 
soil  exhaustion  soon  cut  into  the  savings 
of  the  prosperous  years  and  foreclosure 
stares  the  poor  farmer  in  the  face,  and 
with  a farm  on  his  hands,  the  last  estate 
of  the  investor  is  worse  than  the  first. 

Summer  Hotels. 

As  profitable  as  may  be  the  business 
of  “taking  in”  summer  boarders,  the 
chief  criticism  against  a property  oper- 
ated for  this  purpose  is  that  there  are 
times  when  summer  boarders  cannot  or 
will  not  consent  to  be  “taken  in.” 
Neither  size,  location  or  natural  advan- 
tages will  cure  the  defect  of  limited 
utility,  and  panics  and  backward  sea- 
sons play  havoc  with  the  earning  power 
of  such  properties.  Some  cheap  hotels 
earn  good  incomes,  while  other  “swell” 
hostelries  barely  pay  expenses.  A sea- 
son of  ten  weeks  is  all  too  short  to  pay 
the  bills  of  twelve  months,  and  many 
mountain  and  seaside  resorts  have 
proven  veritable  “Jonahs”  to  their 
owners.  The  changing  tides  of  travel 
have  left  many  a fine  hotel  empty  and 
deserted  and  the  property  itself  as  un- 
desirable as  a mortgage  thereon.  Prior 
to  the  Long  Beach  development,  the  old 
Long  Beach  Hotel  was  such  a property. 
It  was  a mighty  structure,  a quarter  of 
a mile  in  length  and  costing  upward  *of 
$800,000.  Extensive  improvements  were 
made  early  in  the  year  1907,  costing 
thousands  of  dollars,  and  as  its  dors 
were  about  to  open  for  the  season,  fire 
swept  it  clean,  leaving  but  a hole  in  the 
ground,  a massive  chimney  and  $50,000 
insurance  (all  that  could  be  placed) 
to  represent  the  investment  of  nearly 

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a million.  Somebody’s  bond  might  have 
saved  the  mortgagee  from  loss;  but  the 
property  risk  was  very  bad. 

For  Men  of  Wealth  Only. 

Perhaps  one  of  the  poorest  mortgage 
risks  that  can  be  found  is  the  country 
estate — the  idling  place  for  the  man 
of  wealth.  As  a place  to  play  golf  and 
get  away  from  the  summer’s  heat  and 
spend  week-ends,  (and  money)  it  is 
ideal;  but  the  trouble  is  that  it  is  gen- 
erally unremunerative,  expensive  to  own 
and  to  maintain,  and  only  the  few  can 
afford  the  luxury  that  such  life  brings. 
It  is  said  that  one  country  estate  on 
Long  Island  costs  the  owner  one  thou- 
sand dollars  a day.  Unlike  its  neigh- 
bor, the  farm,  it  rarely  supports  the 
life  that  is  on  it  and  must  be  classed 
as  a luxury  pure  and  simple,  with  no 
redeeming  features  aside  from  the 
pleasure  to  be  had  within  its  domain. 
The  market  is  therefore  limited,  sale 
slow  and  very  uncertain  and  under  the 
hammer  it  would  fare  badly.  The  his- 
toric failure  of  the  Third  Avenue  Sav- 
ings Bank  of  New  York  was  due,  in  a 
large  measure,  to  loans  of  this  character. 
After  the  memorable  run  which  “ate  its 
heart  out”  it  found  itself  stripped  of  its 
quick  assets,  and  what  was  left  of  the 
wreck  principally  invested  in  mortgage 
loans  on  suburban  property  that  proved 
impossible  to  realize  upon. 

The  House  of  Mirth. 

In  the  theater  we  have  another  ex- 
ample of  one-utility-property,  and  one 
of  the  best.  Like  the  hotel,  its  value 
consists  largely  in  its  earning  power. 
It  caters  to  the  demand  for  amusement, 
and  when  money  is  plentiful  and  the 
people  posperous,  it  may  be  a good 
thing;  but  in  reverses  it  must  stand 
dark  and  empty.  The  advent  of  the 
five  - cent  - moving  - picture  - house  has 

492 


placed  many  an  expensive  property 
in  jeopardy.  New  York  City  has 
over  one  hundred  theaters,  not  counting 
the  “nickelodians,”  and  the  surrender 
to  the  moving  picture  craze  of  some  of 
the  best  located  and  at  one  time  suc- 
cessful houses  bears  witness  to  the  fickle- 
ness of  this  class  of  property.  It  can 
readily  be  seen  that  the  usefulness  of 
this  type  of  structure  having  ceased,  it 
could  be  altered  only  at  great  expense, 
on  account  of  the  structural  conditions, 
and  in  many  cases  would  have  to  be 
torn  down.  The  refusal  of  the  best 
banks  and  mortgage  companies  to  loan 
on  this  class  of  property  is  sufficient  to 
stamp  such  risks  as  undesriable.  In- 
dividuals of  a speculative  turn  of  mind 
often  make  a practice  of  loaning  on 
theater  property,  but  the  risk  is  a specu- 
lation rather  than  an  investment. 

The  House  of  Worship. 

Church  property  is  in  a class  by  it- 
self. As  a mortgage  risk  it  is  somewhat 
similar  to  the  theatre,  but  with  this 
distinction,  that  as  an  institution  it  has 
nothing  to  offer  in  the  amusement  line 
and  must  cater  to  the  higher  instincts 
of  mankind  if  it  would  win  support. 

It  has  no  earning  power,  and  is  de- 
pendent solely  upon  free-will  offerings, 
which,  on  account  of  changing  condi- 
tions are  apt  to  fall  away  at  critical 
times  and  leave  a heavy  burden  behind. 
The  church  that  is  endowed  is  rare; 
the  church  in  debt  is  common.  And 
the  interest  charge  hangs  over  the  head 
of  the  faithful  like  a nightmare  and 
haunts  the  poor  preacher  and  his  con- 
gregation like  the  shadow  of  death.  All 
over  Greater  New  York  may  be  found 
buildings  that  were  once  full  of  pros- 
perous people,  now  standing  idle,  with 
broken  windows  and  mouldy  walls, 
gayly  adorned  with  cheap  theatrical 
advertisements.  The  utility  of  such 


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buildings,  while  limited,  is  not  absolute, 
like  the  theatre,  and  many  such  have 
been  turned  into  manufacturing  plants, 
electric  light  stations,  moving  picture 
shows,  etc.  Church  mortgages  are,  like 
theaters,  not  in  favor  with  the  most 
critical  lenders  on  mortgage  security. 

The  Business  Block. 

The  value  of  a well  located  and  well 
built  business  property  cannot  be  ques- 
tioned. As  long  as  the  human  race  is 
“full  of  desires”  buying  and  selling 
must  go  on.  And  that  property  which 
affords  the  best  opportunity  to  cater  to 
these  desires  will  prove  the  most  de- 
sirable risk.  Intrinsically,  many  prop- 
erties could  never  have  the  values  that 
now  obtain,  were  it  not  for  collateral 
causes  that  affect  the  property,  such 
as  location,  tides  of  travel,  and  the  vol- 
ume of  business  created  by  favorable 
situation.  The  amount  of  business  de- 
pends as  much  upon  trivial  conditions, 
such  as  side  of  the  street,  position  of 
the  sun  during  certain  hours,  the  class 
of  people  passing  and  the  number  per 
hour,  as  upon  the  enterprise  and  sa- 
gacity of  the  tradesman.  The  many 
things  affecting  trade,  naturally  reflect 
upon  the  rental  value  and  this  upon  the 
property  value,  and  in  making  such 
loans  the  value  based  upon  capitaliza- 
ized  rentals  is  often  taken  as  the  basis. 
In  the  large  cities  these  features  are 
more  noticeable  than  in  smaller  places, 
yet  the  underlying  principles  are  the 
same  everywhere. 

Some  of  the  vast  values  in  New  York 

i 


are  not,  in  a sense,  real,  but  created 
by  such  peculiar  conditions.  The  finan- 
cial interests  that  are  commonly  known 
as  “Wall  Street”  have  created  values 
unheard  of  and  seemingly  impossible. 
Take  those  banks  and  brokerage  houses 
to  another  part  of  the  city  and  values 
would  shrink  over  night.  But  while 
they  “center  about  the  center,”  it  often 
becomes  profitable  to  tear  down  a mod- 
ern fourteen  story  office  building  and 
erect  in  its  place  one  three  times  as 
high.  This  is  now  being  done  for  the 
Bankers  Trust  Company,  corner  Wall 
and  Nassau  streets. 

Such  properties  are,  however,  as 
quick  to  feel  a change  for  the  worse  as 
for  the  better.  Prior  to  the  opening 
of  the  Brooklyn  and  Williamsburgh 
Bridges,  lower  Fulton  street  and  Broad- 
way, in  that  Borough,  were  lined  with 
substantial  stores,  which  paid  good  ren- 
tal and  did  a prosperous  business  on  ac- 
count of  the  crowds  passing  up  and 
down  these  streets  night  and  morning. 
But  the  opening  of  the  bridges  “backed 
up”  this  tide  of  travel  several  blocks 
and  turned  it  over  the  bridges,  while 
the  closing  of  the  Broadway  ferries 
within  the  past  two  years  made  a bad 
matter  worse,  and  a visit  to  these  sec- 
tions will  quickly  demonstrate  that  in 
the  changing  conditions  due  to  the 
growth  of  cities,  such  matters  must  be 
carefully  watched  and  readjustments 
made  at  the  least  sign  of  danger.  The 
public  improvement  that  benefits  one 
section  is  just  as  apt  to  harm  another, 

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and  he  is  the  lucky  man  who  can  an- 
ticipate both. 

The  Poor  Man's  Cottage  or  the 
Rich  Man's  Palace. 

To  live  is  a necessity  as  well  as  to 
die;  but  to  live  within  marbled  walls, 
amid  costly  tapestries  and  old  paintings, 
is  not  necessary  nor  is  it  always  desir- 
able. The  same  rule  by  which  the 
grocer  thrives  along  side  the  jeweler 
who  starves,  holds  good  in  this  instance. 
The  one  is  a necessity;  the  other  a lux- 
ury, Who  could,  or  would,  buy  Sena- 
tor Clark's  palace  on  Fifth  avenue? 
Few  or  none.  The  man  who  could, 
would  want  to  build  one  to  his  own 
taste  and  the  man  who  would,  couldn't 
at  one  hundredth  its  cost.  But  let  the 
modest  home  around  the  corner  be 
placed  on  the  market  and  a thousand 
stand  ready  to  bid,  while  its  wealthy 
neighbor  is  begging  in  vain  for  buyers. 
It  matters  not  that  the  bujlders  have 
run  riot  in  their  endeavor  to  cater  to 
the  wealth  of  the  big  cities  and  build 
apartments  that  require  fortunes  to 
build  and  fortunes  to  occupy,  the  vast 
multitude  will  never  be  able  to  aspire  to 
the  apartment  but  must  be  contented 
to  live  in  a five-room  flat. 

Convertibility,  the  flat,  the  tenement, 
the  modest  two-story-and-basement  has 
none,  nor  does  it  need  it.  The  univer- 
sal demand  for  cheap  rents  makes  this 
class  of  property  the  peer  of  all  as  a 
mortgage  risk.  Tenants  at  some  price 
can  always  be  found — save  at  times 
when  the  exodus  to  Europe  is  very 
great  and  even  then,  the  tide  will  al- 
ways turn  backward  again.  Intrinsic- 
ally a loan  of  $5,000  on  a two- 
or  three-family  house,  such  as  abound 
in  many  cities,  is  vastly  superior  to  a 
risk  on  any  of  the  above  described 

494 


properties.  The  utility  of  the  dwelling 
may  be  limited  to  housing  human  beings, 
but  as  long  as  humanity  must  have 
shelter,  and  as  long  as  men  and  women 
mate  and  marry,  the  demand  for  modest 
homes  will  never  cease.  New  York 
City  has  a thousand  marriages  every 
week.  This  means  a thousand  new 
homes.  It  means  business  for  the  real 
estate  man  as  well  as  the  furniture 
dealer.  It  means  good  mortgage  loans 
as  well  as  good  rents. 

If  a million  dollars  were  to  be  placed 
on  mortgage  loans,  in  equal  amounts 
among  the  various  classes  of  risks  men- 
tioned above,  and  the  loans  upon  dwell- 
ings and  business  properties  made  to 
average  about  $5,000,  in  the  course  of" 
a period  long  enough  to  make  a fair 
test,  say  twenty-five  years,  the  results 
would  undoubtedly  prove  that  the  loans 
on  property  used  for  dwelling  purposes 
would  show  fewer  losses,  less  trouble 
and  delay  in  payment  of  interest  thaa 
any  other  class  of  risks.  Not  that  there 
are  not  good  loans  to  be  had  on  farms 
and  boarding  houses,  churches  and 
theaters,  but  the  elements  that  make  for 
strength  are  so  apparent  in  the  former 
and  so  lacking  in  the  latter,  that  good 
luck  as  well  as  good  management  must 
attend  such  ventures  if  favorable  re- 
sults are  to  be  obtained. 


BANK  NOT  A CREDITOR 

IN  reports  of  the  bankruptcy  proceedings 
of  the  National  Mining  Exploration  Co., 
it  has  been  erroneously  stated  in  a 
number  of  instances  that  the  Liberty  Trust 
Company  of  Boston  was  a creditor  to  the 
extent  of  $250,000.  This  statement  ap- 
parently arises  through  a misconception  of 
the  facts,  as  the  trust  company  is  simply 
trustee  for  the  National  Mining  Exploration 
Company’s  $250,000  six  per  cent,  convertible 
bond  issue.  The  National  Mining  Explora- 
tion Company  does  not  owe  a dollar  to  the 
Liberty  Trust  Company. 


Digitized  by  t^ooQle 


Miners  Bank,  Joplin,  Mo. 

We  cordially  invite  correspondence  relative  to  opportunities  and  investments,  the  advan- 
tages of  Joplin  as  a manufacturing  point,  etc.  Accounts  and  collections  also  invited. 

Capital,  $100,060  Surplus,  $100,000  Deposits,  $750,000 


THE  RAILROADS  AND  THE  GOVERNMENT 

PUT  IT  IN  THE  SPECIFICATIONS 
By  Arthur  £.  S til  well,  President  Kansas  City,  Mexico  and  Orient  Railway 


'T'HE  voters  of  the  United  States  will 
some  day  demand  stable  condi- 
tions, such  as  are  needed  to  conduct 
legitimate  business  with  safety.  They 
will  know  that  some  of  the  existing  con- 
ditions are  unjust  and  will  investigate 
and  analyze  present  financial  conditions, 
for  it  is  clearly  apparent  that  the  regu- 
lations imposed  on  the  railroads  are 
neither  logical  nor  do  they  evince  busi- 
ness sense.  Since  these  regulations  an- 
nually grow  more  burdensome  and  com- 
plicated the  expense  of  complying  with 
them  is  becoming  a greater  tax  on  the 
railroads  and  on  the  nation. 

With  remedied  conditions/  prosperity 
and  progress  would  arise  on  every  side 
and  remain  with  us  for  years;  they  are 
easy  to  attain — ours  when  we  demand 
them. 

The  railroads  of  the  United  States 
now  represent  an  investment  of 
$13,700,000,000;  they  are  rim  by  the 
railroad  commissions  of  the  forty-six 
different  states  and  by  the  Interstate 
Commerce  Commission.  Admit  that  all 
the  commissioners  are  good  men,  (and 
no  doubt  they  are),  still  they  are  hu- 
man. Even  were  they  divine  could  their 
task  be  accomplished? 

It  is  just  bull-luck  that  financial  con- 
ditions are  not  worse  than  they  are. 

Railroads  develop  the  country;  they 
give  the  nation  twenty-five  times  more 
revenue  than  the  railroad  stockholders 
ever  draw  out  of  their  investments. 

If  it  is  such  a snap  to  build  railroads, 
why  do  not  some  of  the  states  construct 
railroads,  since  they  dug  canals? 

Here  are  the  conditions  and  they  are 
getting  worse  all  the  time.  When  the 


railroad  commissioners  were  first  ap- 
pointed in  each  state,  there  was  not  in 
the  air  such  radicalism  as  now  exists; 
to  hit  big  investments  required  nerve 
and  they  had  no  striking  examples  of 
how  to  strike  capital  down  and  the  peo- 
ple did  not  demand  it. 

Capital  was  regarded  as  a sacred 
trust  and  was  looked  on  as  a blessing, — 
as  it  was. 

The  railroad  commissioners  ap- 
proached their  job,  gingerly,  as  a man 
for  the  first  time  goes  near  an  electric 
dynamo;  but  at  last  they  got  up  nerve 
(realizing  that  the  voters  were  look- 
ing for  antagonistic  results),  and  in- 
augurated requirements,  which,  at  first, 
did  not  impose  heavy  burdens  on  the 
roads.  But  each  incoming  board  of 
commissioners  found  so  many  restric- 
tions exacted  by  its  predecessors,  that 
to  show  results,  it  inflicted  requirements 
that  did  hurt,  and  that  did  impose  bur- 
dens. 

Now  all  these  conditions  were  exacted, 
by  states  which  had  no  investment  in 
the  railroads ; through  men  with  no 
financial  interest  in  the  properties  they 
undertook  to  run, — men,  whom  the  cap- 
ital which  built  the  road  would  never 
have  selected  for  the  job  of  managing 
it. 

Must  the  railroads  meekly  accept  un- 
fair conditions  for  the  sake  of  peace,  or 
fight  all  the  time  for  their  lives?  The 
injustices  practiced  upon  them  have  be- 
come habitual  and  are  silently  borne, 
but  how  on  earth  can  it  be  right  that 
people  with  no  interest  in  the  enterprise 
shall  impose  forty-seven  different  kind* 

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THE  BANKERS  MAGAZINE 


of  restrictions  upon  nearly  Fourteen 
Billion  Dollars  of  invested  capital?  I 
firmly  believe  that  the  unfairness  of 
this  deal  is  the  cause  of  the  panics  and 
depressions  of  the  last  ten  years. 

A Fixed  Policy. 

I am  in  favor  of  controlling  railroads 
by  a fixed  policy,  making  the  require- 
ments everywhere  the  same,  and  as  sim- 
ple as  can  be  framed  in  order  to  execute 
the  laws  and  guard  public  safety.  We 
have  standard  fire  insurance  policies 
which  embody  fair  conditions.  Why 
cannot  the  United  States  and  the  rail- 
roads agree  on  a fair  contract  between 
the  roads  and  the  states  and  govern  all 
by  the  same  requirements? 

Why  cannot  specifications,  as  for 
building,  be  mutually  agreed  upon  so 
that,  when  capital  makes  up  its  mind  to 
build  a railroad,  it  may  read  the  rules 
governing  the  investment  and  if  it  does 
not  like  them, — may  invest  in  some 
other  enterprise,  or  go  to  Mexico  or 
Argentina  or  Canada,  where  the  build- 
ing of  railroads  is  cordially  invited  and 
heartily  encouraged? 

If  electric  head-lights  are  a requisite, 
insert  it  in  the  specifications;  then  you 
will  not  buy  acetylene  head-lights  on  all 
your  new  engines  one  day  and  the  next 
have  to  change  them  for  electric  lights. 
If  you  must  run  three  passenger  trains 
daily,  even  though  there  is  not  enough 
business  for  two,  put  it  in  the  specifi- 
cations ! If  you  will  not  be  permitted  to 
place  advertising  matter  in  the  stations, 
put  it  in  the  specifications ! If  you 
must  manicure  the  cattle’s  hoofs  and 
braid  pink  ribbons  in  their  tails,  in  tran- 
sit, put  it  in  the  specifications!  If  a 
brakeman  is  needed  at  the  front  while 
trains  are  running  through  cities,  put  it 
in  the  specifications ! there  are  hundreds 
of  surprising,  similar  requirements, 
lately  imposed,  which  I could  mention. 
Let’s  find  or  create  a correct,  state 
standard  and  then  adopt  it  for  all 
roads  throughout  the  Union. 

When  Mexico  wanted  to  make  new 
railroad  laws,  it  invited  all  nations  to 
forward  their  laws;  then  a committee  of 
Mexicans  who  understood  the  business. 


selected  the  best,  from  all  the  regula- 
tions of  all  nations,  and  framed  the  ex- 
cellent railway  laws  of  Mexico.  As  a 
result,  railroad  builders  in  Mexico  un- 
derstand, in  advance,  just  what  they 
may  do  or  may  not  do,  and  the  fixed 
standard  is  a relief  for  the  railways 
and  for  the  nation. 

I do  not  say  that  in  all  cases,  imposed 
traffic  rates  are  fair  or  unfair,  but  there 
are  hundreds  of  instances,  where  the 
state  requirements,  as  to  conditions,  are 
more  unfair  than  the  rates. 

Panics  and  hard  times  may  be  averted 
only  when  the  leading  enterprises  of 
the  country  are  permitted  to  prosper 
through  fair  and  fixed  regulations. 

A Plan. 

This  could  be  brought  about  if  the 
different  states  would  agree  to  appoint- 
ment of  an  arbitration  committee  com- 
prising ten  or  twelve  of  the  representa- 
tive business  minds  of  the  United  States ; 
this  committee  to  draft  a simple  rail- 
way law  that  would  be  uniform  in  its 
requirements.  Such  board  would  un- 
derstand how  to  cut  out  the  driftwood 
of  complications  and  simplify  the  law. 
Then  let  each  state  accept  it  for  a ten 
or  fifteen  year  period. 

This  plan  would  bring  great  pros- 
perity; the  following  influx  of  foreign 
money  would  be  as  great  as  though  a 
Klondike  had  been  discovered  in  the 
heart  of  the  United  States. 

If  the  requirements  now  demanded  of 
railroads  in  New  York  State  are  proper, 
then,  they  would  be  right  in  Colorado; 
and  if  they  are  wrong  in  Texas  they  are 
wrong  in  Connecticut. 

Make  the  law  so  just,  that  it  will 
tease  capital  to  furnish  all  the  money 
needed  for  railroad  building;  that  cap- 
ital may  realize  that  railroad  invest- 
ments will  hereafter  be  governed  by 
safe  and  sane  laws,  all  over  the  country, 
and  that  it  may  make  investments 
which  no  radical  demagogues  can  op- 
press, grind  down  and  ruin.  Each  op- 
erating road  would  then  understand 


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You  Know  Your  Own 
Business  Best 

when  vou  know  how  it  relates  to  general  business  and  financial 
conditions  throughout  the  country.  General  prosperity  and 
general  adversity  must  be  reflected  to  some  extent  in  your  own 
business.  Good  judgment  translated  into  business  action  may 
increase  your  share  in  general  prosperity  and  minimize  your  share  in  general 
adversity.  What,  then,  underlies  good  judgment? 

You  Have  a Mind  of  Your  Own 


with  which  to  size  up  facts  and  draw  conclusions.  You  have  been  years  gathering 
the  facts  of  your  own  business.  We  have  been  years  gathering  the  facts  of  general 
business.  Knowledge,  experience,  a mind  of  your  own,  these  are  the  elements 
of  good  judgment.  The  Financial  Graphic  Service  will  reinforce  your  knowledge 
of  general  conditions  which  means  increased  power  toward  good  judgment  in 
handling  your  own  business  and  financial  problems. 

You  Can  Use  These  Facts 


Our  Service  traces  the  general  trend  of  the  following  : 


in  your  business 

Money 
Circulation 
Stock  of  Gold 
Imports  and  Exports  of  Gold 

Credit 

Deposits 

Loans  to  Deposits 
Reserve  to  Deposits 

Interest 

Commercial  Paper  Interest  Rate 
Collateral  Loan  Interest  Rates 

(6  months.  3 months  and  call  money) 


Prices 

Railroad  Bond  Prices 
Railroad  Stock  Prices 
Industrial  Stock  Prices 
Commodity  Prices 

Business 

Clearings  (Total,  N.  Y.  and  “Outside”) 
Failures 

Railroad  Gross  Earnings 
Foreign  Trade,  etc. 


In  the  Banking  Business 

especially,  knowledge  is  power  for  success.  That  is  why  our  subscription  list 
includes  prominent  banking  institutions  in  this  country,  Canada  and  abroad,  as 
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by  a banker  for  bis  own  use,  to  enable  him  to  interrelate  the  movements  of  his 
own  business  with  the  trend  of  the  country’s  general  business  and  finance.  This 
knowledge  is  important  in  its  bearing  upon  the  money,  credit  and  investment 
commitments  with  which  the  banker  has  constantly  to  deal.  You  cannot  well 
afford  to  be  without  this  important  equipment. 


Financial  Graphic  Service 

FULTQN  BUILDING  NEW  YOW^C!TY 


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498 


THE  BANKERS  MAGAZINE 


what  it  must  do  through  its  set  specifi- 
cations and  if  it  does  not  approve  the 
restrictions  would  refrain  from  build- 
ing. 


The  greatest  question  before  the 
American  people,  is  to  simply  solve  the 
railroad  problem  and  to  do  it  quickly, 
— the  quicker,  the  better! 


RAILWAY  REGULATION 

*By  JudsoQ  C.  Clements 
(of  the  Interstate  Commerce  Commission) 


TN  view  of  the  apparent  impatience 
sometimes  manifested  because  of  the 
incompleteness  of  regulation,  we  should 
not  forget  that  the  whole  railroad  de- 
velopment of  this  country  has  been  ef- 
fected within  the  lifetime  of  some  yet 
living  and  that  no  serious  attempt  was 
made  to  regulate  interstate  commerce 
until  about  twenty-four  years  ago. 
Those  acquainted  with  then  existing 
conditions  with  one  accord  will  admit, 
upon  comparison  with  present  condi- 
tions, that  great  progress  has  been 
made  in  the  direction  of  proper  control. 
The  subject  is  too  great  and  the  ques- 
tions involved  too  important  to  be  dealt 
other  than  with  the  greatest  care  and 
caution,  in  order  that  progress  and  not 
retrogression  shall  result.  It  was  not 
reasonably  to  be  expected  that  the  car- 
riers, which,  up  to  twenty-four  years 
ago,  were  practically  free  from  re- 
straint as  to  interstate  commerce  and  a 
law  unto  themselves,  should,  in  the 
twinkling  of  an  eye,  be  brought  to  a 
recognition  of  their  just  obligations  to 
the  public  which  require  that  all  rates 
shall  be  reasonable  and  just  and  free 
from  undue  discrimination;  nor  that 
those  who  had  profited  from  unjust  dis- 
criminations in  the  form  of  rebates  and 
otherwise  should  at  once  be  converted 
in  their  every-day  dealings  to  the  point 
of  eschewing  and  repudiating  these  dis- 
criminations. At  every  step  in  the 
progress  of  legislation  for  the  control 
of  transportation,  questions  of  consti- 
tutionality have  been  raised  as  well  as 
questions  of  policy  and  of  the  practi- 
cability of  regulation. 

The  Need  op  Regulation. 

Regulation  is  constitutional,  practi- 
cable an'lA^essary.  The  present  sin- 

• From  an  address  by  MV.  Clements  before 
the  Traffic  Club  of  Philadelphia. 


gle  track  railway  mileage  in  the  United 
States  would  several  times  belt  the 
earth  and  is  equal  to  about  the  distance 
from  the  earth  to  the  moon,  and  if  the 
double  tracks,  sidetracks,  etc.,  were 
added,  the  total  mileage  would  of 
course  be  vastly  increased.  During 
the  fiscal  year  ending  June  SO,  1907, 
the  railways  of  the  United  States, 
according  to  their  reports  to  the 
Interstate  Commerce  Commission,  re- 
ceived in  gross  revenue  over  twen- 
ty-eight  hundred  million  dollars, 
whereas  in  the  same  year  the  entire  cir- 
culation of  the  United  States,  including 
money,  certificates  and  treasury  notes, 
was  something  over  twenty-seven  hun- 
dred million  dollars.  It  will  thus  be 
seen  that  the  carriers  received  about 
one  hundred  million  dollars  more  within 
that  year  than  the  entire  circulating 
medium  of  the  country.  These  figures, 
as  well  as  the  mileage  referred  to,  are 
stated  for  the  purpose  of  drawing  at- 
tention to  the  tremendous  importance 
of  the  questions  involved  and  not  as  a 
basis  for  discussion  of  the  reasonable- 
ness of  rates  or  earnings. 

Each  of  the  ninety  million  people  of 
this  country  is  vitally  affected  by  trans- 
portation rates  and  facilities.  The 
command  of  the  law  is  that  rates  shall 
be  reasonable  and  just  and  free  from 
undue  discrimination.  This  is  the  sum 
and  substance  of  the  purpose  of  the 
statute  of  regulation.  Reasonableness 
and  justice  are  the  soul  and  spirit  of 
the  law.  All  the  subsequent  provisions 
of  the  statute  are  matters  of  detail  and 
machinery  intended  for  no  other  pur- 
pose than  to  give  effect  to  these  sub- 
stantive requirements.  There  is  noth- 
ing radical  on  revolutionary  in  a statute 
intended  to  accomplish  such  a purpose. 
These  requirements  are  in  harmony  with 


Digitized  by  t^ooQle 


INVESTMENTS 


499 


the  time-honored  principles  of  common 
law  and  equity  for  ages  approved  by 
the  judgment  and  conscience  of  man- 
kind. These  commands  of  the  statute 
and  the  machinery  to  give  them  effect 
became  necessary  not  because  of  any 
new  departure  from  well-known  and 
long  established  principles  of  justice 
and  equity,  but  because  it  was  demon- 
strated by  experience  that  on  account 
of  the  peculiar  nature  of  transportation 
conditions  and  the  questions  arising 
therefrom  the  usual  methods  of  proced- 
ure in  the  courts  suitable  to  the  settle- 
ment of  ordinary  controversies  were 
wholly  inadequate  to  the  protection  of 
patrons  of  carriers  against  unreasonable 
rates  and  undue  discriminations,  and 
this  for  manifest  reasons.  Unjust  dis- 
criminations directly  and  indirectly 
work  injury  to  the  victims  thereof  in 
manner  and  degree  beyond  measurement 
or  ascertainment,  so  that  adequate 
reparation  is  impracticable. 

Prevention. 

It  follows  that  wise  legislation  will 
continue  to  look  to  the  prevention  of  such 
wrongs  rather  than  to  reparation  after 
the  wrong  has  been  accomplished.  It 
also  follows  that  the  collection  of  unjust 
rates  should  be  prevented  as  far  as  prac- 
ticable, and  to  this  end  the  laws  should 
provide  that  a proposed  advance  in  rate, 
especially  when  the  previous  rate  has 
been  maintained  for  a considerable  pe- 
riod by  the  voluntary  action  of  the  car- 
rier, shall  be  held  in  abeyance  until  its 
reasonableness  and  justice  are  investi- 
gated and  passed  upon.  This  would  be 
in  the  interest  of  all  concerned.  The 
carrier  would  thus  know  in  advance  the 
amount  that  might  lawfully  be  collected 
and  retained  and  the  shipper  would  not 
be  required  to  pay  an  excessive  charge 
and  then  have  to  rely  solely  upon  a 
claim  for  reparation  because  of  an  in- 
jury the  extent  of  which  in  dollars  and 
cents  it  is  impossible  to  measure.  Again, 
in  such  cases  the  only  person  who  may 
claim  reparation  would  be  the  owner  of 
the  freight  while  being  moved  as  such. 
But  he  might  not  have  suffered  the 
greatest  injury.  The  person  really 
damaged  most  might  be  the  seller  of  the 


John  Mvir  & fjo. 

^ THE  SPECIALISTS  IN  ^ I 

ODD  LOTS 


If  you  have  limited  capital  and 
wish  to  deal  in  stocks;  if  you  have 
ample  capital  and  wish  to  be  con< 
servative— trade  in  odd  lots.  First, 
communicate  with  us. 

Send  for  “Odd  L«t  Circular  L” 
Healers  New  York  Stock  Exchaaae 

71  BROADWAY,  NEW  YORK 


freight  or  the  purchaser  thereof,  or 
both,  the  purchasing  and  selling  price 
being  affected  by  the  freight  rate. 

Every  unjust  rate  affects  not  merely 
the  individual,  but  the  community  at 
large  in  greater  or  lesser  degree,  and 
often  the  rates  which  a carrier  may  be 
required  to  establish  affect  the  rates  of 
other  carriers,  so  that  in  order  that  full 
justice  from  every  standpoint  may  be 
secured  and  no  undue  burdens  placed 
upon  the  individual  shipper  or  upon  a 
particular  locality  the  Interstate  Com- 
merce Commission  should  have  authority 
comprehensively  to  investigate  com- 
plaints and  make  orders  for  the  correc- 
tion of  wrongs  involved  in  the  whole  sit- 
uation before  it,  subject,  of  course,  to 
such  review  as  the  law  provides. 

Basis  of  Rates. 

It  is  contended  by  some  that  the  rea- 
sonableness of  rates  which  carriers  may 
charge  has  no  relation  to  the  cost  of 
service  or  to  the  value  of  the  property 
devoted  to  transportation.  If  this  con- 
tention be  sound  and  a carrier  may  earn 
ten,  fifteen  or  a hundred  per  cent,  in 
profits  on  investment  without  being 
amenable  to  the  charge  of  exacting  un- 
reasonable rates,  it  must  follow  as  a 
matter  of  course  that  the  freight-payer 
can  have  no  concern  in  the  matter  of 
capitalization.  But  such  is  not  the  view 
of  the  courts,  and  so  long  as  they  hold 
that  the  carrier  is  entitled  to  earn  a fair 
profit  and  no  more  on  the  value  of  its 
property  devoted  to  transportation  the 
shipper  has  a direct  interest  in  the  obli- 


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gations  and  fixed  charges  which  must  be 
met  by  the  carriers  out  of  earnings  be- 
fore profits  to  the  stockholders  are 
reached.  It  is  almost  universally  true 
that  in  important  rate  cases  the  carriers 
show  the  diminution  of  their  gross  re- 
ceipts by  the  amount  of  fixed  charges, 
including  interest  on  bonds  and  other 
obligations,  sinking  fund,  etc.,  in  order 
to  show  that  there  is  no  undue  profit  to 
the  stockholder  or  owner  after  meeting 
all  these  obligations.  If  these  obliga- 
tions are  recognized  as  binding,  as  they 
are  and  must  be  in  the  absence  of  any 
law  prohibiting  their  issuance — especial- 
ly in  the  hands  of  innocent  holders — it 
is  much  easier  to  show  small  profits  to 
the  stockholder  or  owner.  In  the  Chi- 
cago & Alton  investigation  it  appeared 
that  ten  million  dollars  of  its  bonds, 
taken  by  the  promoters  of  the  reorgan- 
ization at  sixty-five  cents  on  the  dollar, 
were  thereafter  taken  at  ninety-six  cents 
on  the  dollar  by  one  of  New  York's 
great  life  insurance  companies,  holding 
investments  for  the  benefit  of  widows 
and  orphans.  If  such  obligations  were 
held  to  be  void  because  mere  water  infla- 
tion, the  innocent  holder  will  have  been 
cheated  and  robbed.  Until  the  nursery 
story  of  Aladdin  and  his  lamp  is  estab- 
lished as  an  actual  verity  I shall  con- 
tinue to  believe  that  ultimately  the 
money  must  be  contributed  by  somebody 
to  take  care  of  the  obligations  by  means 
of  which  these  great  profits,  or  rather 
absorptions  of  money,  have  been  eff ected 
in  the  manner  indicated. 

Capitalization. 

It  is  even  argued  that  the  increase  of 
capital  stock  by  a dividend  distribution 
of  new  issues  among  the  stockholders  is 
not  reflected  in  the  rates,  is  to  the  bene- 
fit of  the  public,  and  injures  only  the 
stockholders  as  injuring  the  borrowing 
ability  of  the  corporation. 

If  the  rates  are  so  high  as  to  pay 
eight,  ten  or  twelve  per  cent,  dividends, 
the  public  rebel  and  multiply  embar- 
rassments, but  by  doubling  the  stock  in- 
stead of  reducing  the  rates,  resulting  in 
four,  five  or  six  per  cent,  return,  allays 
agitation,  and  yet  the  original  invest- 
ment still  earns  the  higher  rate.  The 


direct  result  of  such  increase  in  capital- 
ization is  to  measure  the  reasonableness 
of  the  rate  by  the  fictitious  capitaliza- 
tion and  to  make  impossible  the  reduc- 
tions to  which  the  public  is  fairly  enti- 
tled. 

Where  any  relation  is  claimed  be- 
tween investment  and  reasonable  rates 
the  tendency  toward  excessive  rates  by 
fictitious  capitalization  is  so  apparent  as 
to  make  denial  absurd. 

In  the  matter  of  earnings  of  the  Suez 
Canal  is  a striking  example  of  the  effect 
of  a limit  of  capitalization  and  profits. 
That  company  is  forbidden  to  earn 
more  than  twenty-five  per  cent,  upon 
the  investment  and  therefore  is  forced 
to  the  necessity  of  occasionally  reducing 
its  rates.  It  would  be  more  adroitly 
managed  here. 

Instances  of  the  inflation  of  stock  by 
the  distribution  of  newly  issued  stock  as 
dividends  to  regular  stockholders  are 
numerous  in  the  history  of  the  financial 
operations  of  our  railroads.  According 
to  a statement  filed  in  the  investigation 
of  the  Harriman  lines,  wherein  it  was 
sought  to  justify  the  Chicago  & Alton 
transaction,  the  stock  of  the  Louisville  & 
Nashville  Railroad  Company  was  in- 
creased 100  per  cent,  in  1880,  the  in- 
crease being  distributed  as  dividends 
among  the  owners  of  the  stock  in  pro- 
portion to  the  amounts  owned  by  them. 

The  Northern  Pacific  in  1881  capital- 
ized under  a new  accounting  $4,667,490, 
issuing  dividend  certificates  therefor 
which  were  subsequently  converted  into 
third  mortgage  bonds.  In  1889  the 
same  company  taking  declared  earnings, 
which  had  been  appropriated  by  pre- 
vious boards  for  equipment,  gave  them 
to  preferred  stockholders  as  dividends 
and  a deposit  of  consolidated  mortgage 
bonds  was  made  with  the  trustee  for 
their  benefit. 

In  1881  the  Atchison  distributed  fifty 
per  cent,  dividend  in  capital  stock. 

In  order  to  make  such  distribution  of 
stock  as  dividends  the  Rock  Island  hav- 
ing issued  additional  stock  in  insufficient 
quantity  for  the  distribution,  purchased 
in  the  market  7,716  shares  that  the  re- 
maining stockholders  might  have  their 
pro-rata  dividend. 


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READJUSTMENT 

A SHORT  SURVEY  OF  PROGRESS  ALREADY  MADE  TOWARD 
SOUNDER  CONDITIONS 

By  John  Terret 


'T'HE  most  casual  survey  of  the  finan- 
cial  papers  which  were  published 
around  the  beginning  of  the  year,  shows 
how  thoroughly  optimistic  general  senti- 
ment was  at  that  time.  In  the  so-called 
reviews  and  forecasts,  in  the  interviews 
with  the  captains  of  industry  which 
were  given  out  at  the  time,  in  the  edi- 
torial comment  upon  the  situation,  a 
roseate  hue  pervaded  everything.  1910 
was  to  be  a banner  year,  industry  and 
commerce  and  finance  were  to  reach 
heights  never  before  attained.  The 
boom  of  1906  had  been  but  preliminary; 
1910  was  to  see  the  full  development  of 
the  movement — a forward  movement  in 
big  affairs  never  before  equaled. 

It  is  almost  pathetic,  in  view  of  what 
has  happened,  to  look  over  these  roseate 
forecasts  of  what  the  present  was  to 
have  been.  Instead  of  the  forward 
movement  in  industry  which  was  to  have 
made  the  whole  world  stand  agape, 
there  has  been  a steady  and  continuous 
tapering-down  of  industrial  activity;  in- 
stead of  the  record  prices  for  securities 
which  were  so  freely  predicted  and  with 
such  confidence,  there  has  been  a long, 
and  painful  and  protracted  decline.  In 
finance  and  commerce  it  has  been  a 
steady  period  of  readjustment. 

In  Commercial  Conditions. 

That  there  was  plenty  of  necessity 
for  the  readjustment  which  has  taken 
place  is  fully  evidenced  by  a glance  at 
general  commercial  conditions  prevail- 
ing at  the  year's  beginning.  At  that 
time,  it  will  be  recalled,  business  of 
every  sort  was  being  done  under  forced 


draught.  The  panic  had  been  met  and 
passed.  Not  so  full  a liquidation  of 
labor  and  of  business  in  general  had 
been  made  as  might  have  been  desired, 
but  the  country’s  industry  had  again 
apparently  struck  the  path  of  progress 
and  business  was  being  done  on  a rising 
plane.  With  characteristic  American 
enthusiasm  bred  of  a desire  to  put  be- 
hind us  as  far  as  might  be  the  unpleas- 
ant conditions  prevailing  in  1907,  busi- 
ness men  in  every  direction  laid  big 
plans  and  prepared  to  carry  them  out. 
In  the  manufacturing  industry  large 
extensions  and  betterments  were  planned 
whereby  capacity  was  to  be  greatly  in- 
creased. In  the  building  industry  all 
sorts  of  ambitious  ideas  and  projects 
were  set  under  way.  The  managers  of 
the  big  railroads,  too,  caught  the  spirit, 
and,  with  the  money  which  they  expect- 
ed to  be  able  to  borrow  so  easily,  made 
arrangements  for  extensions  and  better- 
ments on  a most  enormous  scale.  It 
was  difficult  indeed  to  find  a single  line 
of  industry  in  which  there  did  not  pre- 
vail a spirit  of  hopefulness  manifesting 
itself  in  almost  frenzied  preparations 
to  increase  the  capacity  for  doing  busi- 
ness. 

By  every  one  who  has  been  in  touch 
with  mercantile  conditions,  the  differ- 
ence between  the  way  business  was  done 
then  and  the  way  it  is  being  done  now, 
is  well  known.  For  a while  after  the 
first  of  the  year,  there  was  a strong 
disposition  to  fight  the  idea  that  a false 
start  had  been  made — a determination 
as  it  were  to  carry  out  things  as  they 
had  been  planned.  Not  much  time  had 

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elapsed,  however,  before  it  became  plain 
to  cooler  heads  that  a mistake  had  been 
made,  that  such  a pace  as  had  been  set 
could  never  be  maintained.  That  in- 
stead of  the  heights  which  were  to  have 
been  scaled,  industry  was  face  to  face 
with  a period  which  would  call  for  re- 
trenchment and  readj  ustment  of  a dras- 
tic sort. 

Iron  as  an  Example. 

It  is  impossible  in  the  space  alloted 
here  to  go  into  the  details  of  various 
lines  of  industry.  The  iron  business 
may  be  taken  as  an  example.  The  out- 
put of  iron,  it  will  be  recalled,  had  in 
December  of  last  year  reached  abso- 
lutely unprecedented  proportions.  The 
steel  business  was  active,  it  is  true,  and 
a great  demand  for  iron  existed;  but, 
when  December's  production  crossed 
2,600,000  tons,  that  the  thing  was  being 
over-done  was  generally  acknowledged 
by  all  those  connected  with  the  trade. 
Iron  at  that  time  was  being  stacked  up 
in  the  yards — held  in  anticipation  of 
higher  prices.  Steel  men  knew  it.  They 
knew  too,  that  unless  some  sort  of  a 
check  was  put  to  the  thing  there  was 
bound  to  happen  in  the  iron  industry 
just  what  had  happened  in  copper — a 
state  of  almost  hopeless  surfeit  and 
over-production. 

January  came  along  with  a record  of 
iron  production  showing  that  realization 
of  these  things  had  by  no  means  become 
general.  For  February,  too,  a short 
month,  the  output  was  on  a tremendous 
scale.  But  in  March,  a more  sane  view 
of  things  began  to  be  taken  and  the 
producers  to  realize  that,  for  the  good 
of  the  situation,  too  much  iron  was  being 
made.  Would  over-production  be  con- 
tinued until  the  breaking  point  was 
reached,  or  would  the  situation  be  taken 
firmly  in  hand  and  the  output  of  iron 
gradually  reduced?  Fortunately  the 
latter  course  was  adopted.  March 
showed  a little  falling  off,  April  a little 
more.  In  May  and  June  further  prog- 
ress was  made.  Gradually  the  making 
of  iron  assumed  normal  proportions. 
For  July  and  August  it  has  been  on 
about  the  same  scale  as  during  the  cor- 
responding months  last  year,  when  the 


boom  first  began  to  get  under  way. 
Nothing  is  heard  now  of  over-produc- 
tion, or  of  iron  being  stacked  up  in 
yards  awaiting  to  be  sold. 

In  Other  Lines. 

That  is  what  happened  in  the  iron 
trade.  It  happened  in  a good  many 
other  lines.  In  textiles  the  mills  began  to 
curtail,  to  run  on  slow  time.  In  the  build- 
ing industry  over-ambitious  projects 
were  gradually  abandoned.  Through 
all  industry  and  trade,  a more  conserva- 
tive spirit  began  to  make  itself  felt. 
For  once,  fortunately,  business  men  in 
general  realized  that  they  had  been 
heading  towards  a dangerous  situation, 
and  that  if  a serious  commercial  crisis 
were  to  be  avoided,  it  was  necessary  that 
the  situation  be  handled  with  firmness 
and  in  a spirit  of  moderation. 

In  the  Financial  World. 

Comprehensive  as  was  the  readjust- 
ment which  took  place  in  the  commercial 
world  it  was  no  less  so  in  the  world  of 
finance.  From  an  inflated  and  artificial 
level,  security  prices  fell  continuously, 
until  they  reached  a point  where  a man 
would  have  to  be  a pessimist  indeed  to 
say  that  they  had  not  come  within  meas- 
urable distance  of  values.  The  output 
of  new  securities,  in  the  second  place, 
which,  during  the  opening  months  of 
the  year  had  broken  all  records,  and 
threatened  the  markets  with  another  at- 
tack of  acute  indigestion,  was  cut  down 
to  almost  nothing.  A banking  position, 
in  the  third  place,  which  in  the  spring 
had  rightly  given  cause  for  great  un- 
easiness, was,  by  the  exercize  of  firm- 
ness, moderation  and  forethought,  con- 
verted into  a position  of  really  very 
great  strength. 

Security  Prices. 

Of  the  decline  in  security  prices 
which  has  taken  place  it  is  unnecessary 
to  say  much — investors  are  unfortunate- 
ly too  familiar  with  it  already.  What- 
ever may  have  been  the  criticisms  early 
in  the  year  on  the  way  in  which  security 
prices  had  gone  beyond  the  line  of 
values,  it  can  hardly  be  claimed  that  in 


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the  big  decline  which  has  taken  place  a 
radical  readjustment  of  prices  and 
values  has  not  been  made.  Arising  from 
the  over-enthusiasm  with  which  the  year 
began,  a number  of  pools  and  light 
waisted  speculators  had  by  mid-year 
got  themselves  into  pretty  deep  water. 
Relying  upon  a public  interest  and  par- 
ticipation in  the  market  which  never 
materalixed,  they  had  taken  on  long 
lines  of  stocks,  of  which  they  finally 
found  it  impossible  to  dispose. 

The  summer  months,  it  will  be  re- 
membered, were  marked  by  the  clearing 
up  of  a number  of  accounts  of  this  sort, 
by  the  taking  over  of  speculative  ac- 
counts by  strong  banking  interests.  In 
some  cases,  notably  in  that  of  the  Pear- 
son syndicate,  the  splash  made  by  the 
entrapped  fish  was  so  great  that  it  was 
impossible  to  hide  it  from  the  onlooking 
public.  Aside  from  the  rescues  which 
were  made  in  broad  daylight,  however, 
a good  many  strangling  speculators  and 
little  pools  were  helped  out  without  the 
details  ever  coming  to  light.  It  was  on 
a big  scale  that  the  process  went  on,  and 
through  it  the  situation  was  very  much 
cleared  up.  It  was  all  a result  of  the 
big  decline  in  prices  which  was  taking 
place — all  a phase  of  the  big  readjust- 
ment in  prices  which  was  going  on. 

New  Securities. 

Similarly  with  regard  to  the  check 
put  upon  the  output  of  new  securities. 
As  with  the  speculators  whose  over- 
enthusiasm got  them  into  trouble,  so 
leading  commercial  interests  seemed  to 
get  the  idea  that  they  could  issue  un- 
limited quantities  of  securities,  and 
forthwith  proceed  to  do  so.  After  the 
process  had  been  going  on  for  a little 
while  it  became  apparent  that  no  suffi- 
cient power  of  absorption  existed.  There 
was  some  little  demand  for  the  securi- 
ties on  the  part  of  the  investors,  it  is 


true,  but  not  nearly  enough  to  take  care 
of  these  masses  of  new  bonds  which 
were  being  shoveled  out  on  the  markets. 

Bank  Conditions. 

A banking  situation,  too,  which  in 
the  beginning  of  the  year  it  seemed 
hardly  possible  could  be  built  up  to 
sufficient  strength  to  meet  the  crop- 
moving  demands,  was,  through  heavy 
imports  of  gold  from  abroad,  receipts 
of  cash  from  other  directions,  and  cur- 
tailment of  loans,  built  up  into  a posi- 
tion of  very  great  strength.  After  the 
July  first  report  of  the  Comptroller  had 
made  evident  into  what  an  extended 
position  the  Western  banks  had  got 
themselves,  notice  went  forth  that  a 
check  must  be  put  upon  the  land  specu- 
lation, that  these  Western  institutions 
must  put  themselves  in  shape  to  meet 
the  crop-moving  demands. 

On  both  ends,  thus,  the  situation  was 
strengthened — great  reserves  were  ac- 
cumulated at  New  York,  while  the  in- 
ordinate demand  for  cash  with  which  it 
had  seemed  the  New  York  banks  would 
find  themselves  faced  in  the  autumn, 
was  reduced  to  average  proportions. 

With  the  above  facts  in  mind  regard- 
ing the  readjustment  which  has  taken 
place  in  both  commerce  and  finance,  it 
is  plain  that  a very  great  improvement 
in  general  conditions  has  been  brought 
about.  How  far  has  the  readjustment 
to  go? — that  is  the  great  question  and 
one  not  easy  to  answer.  That  it  has 
gone  a long  way,  however,  and  that 
the  end  of  the  period  of  readjustment 
cannot  be  so  far  ahead,  seems  a reason- 
able conclusion.  For  a time,  while 
political  and  other  conditions  cloud  the 
outlook,  a period  of  uncertainty  is  bound 
still  to  prevail,  but  in  this  idea  that 
there  has  been  a big  readjustment  al- 
ready and  that  it  is  somewhere  near  its 
completion  seems  to  be  good  reason  for 

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believing  that  the  situation  is  very  far 
from  being  as  bad  as  it  looks — that  we 
are  running  into  a period  of  better 
things. 

WITH  REGARD  TO  PRICES 

By  John  W.  Morrison,  of  Norman  W.  Peters 
Sc  Co. 

T^OR  the  second  time  in  the  history  of 
" Wall  Street  the  old  time  theory 
that  if  the  prices  of  stocks  were  put 
high  enough  the  public  would  come  in, 
has  been  proven  a fallacy,  the  first  time 
being  in  the  bull  movement  which  ter- 
minated in  the  panic  of  1907  which  has 
passed  into  history  as  the  “rich  man’s 
panic.” 

The  Public  Looked  On. 

The  year  1909  was  decidedly  a bull 
year,  many  securities  selling  at  prices 
never  before  reached,  but  notwithstand- 
ing this  fact,  public  participation  was 
at  a minimum.  This  was  accounted  for 
in  part  by  the  fact  that  at  the  inception 
of  this  bull  market,  in  October  and  No- 
vember of  1907,  the  funds  of  the  public 
were  unavailable  to  them  owing  to  the 
fact  that  the  banks  were  taking  advan- 
tage of  the  delay  clause  in  the  case  of 
withdrawals.  When  this  money  became 
available  the  market  had  experienced  a 
perpendicular  advance  which  conditions 
did  not  seem  to  warrant,  so  that  the 
average  outsider  assumed  a waiting  atti- 
tude which  was  as  a rule  held  through- 
out the  entire  swing  of  prices,  nothing 
worthy  of  the  name  of  reaction  occur- 
ring. This  is  one  principal  reason  for 
the  fact  that  the  general  public  played 
the  role  of  the  onlooker  in  Wall  Street 
for  so  long. 

The  year  1909  closed  with  many  opti- 
mistic promises  as  to  general  business 
conditions  and  outlook  for  higher  se- 
curity prices  for  1910,  none  of  which 
roseate  forecasts  have  been  fulfilled. 
The  promised  and  expected  “January 
boom”  failed  of  materialization  and  in 
its  stead  we  had  the  Columbus  and 
Hocking  Coal  and  Iron,  and  Rock 
Island  fiascos.  Then  the  fear  of  ad- 
verse decisions  from  the  Supreme  Court 
in  the  Standard  Oil  and  American  To- 


bacco Company  cases  began  to  make 
for  lower  prices.  Later  bad  news  from 
the  spring  wheat  belt  served  as  a de- 
pressing agency  and  lastly  the  railroad 
bill,  which  has  since  become  law,  served 
the  bears  as  excellent  ammunition,  all 
sorts  of  dire  predictions  being  made  as 
to  what  the  bill  would  contain  when  it 
passed  Congress. 

The  Railroad  Bill. 

This  bill  is  by  no  means  as  bad  as  the 
railroad  presidents  would  have  us  be- 
lieve to  be  the  case.  As  a matter  of  fact 
the  railroads  seem  to  be  reaping  what 
they  have  sowed  for  years  by  their 
methods  of  clubbing  their  small  patrons 
until  a sentiment  sprang  up  in  every 
State  which  resulted  in  severe  legisla- 
tion for  the  protection  of  the  individual 
against  the  corporation.  This  senti- 
ment happily  is  dying  out  very  fast. 

The  railroad  bill  as  finally  passed  by 
Congress  does  not  seek  the  undoing  of 
the  railroad  interests — far  from  it — but 
it  does  seek  to  establish  justice  between 
the  roads  and  business  men.  This  bill, 
which  has  been  decried  so  much  of  late, 
will  eventually  be  regarded  as  a bull 
argument  upon  railroad  stocks  and  a 
protection  to  the  holder. 

To  get  a line  as  to  the  probable  ef- 
fect of  this  law  upon  the  prices  of  se- 
curities, it  will  be  necessary  to  go  back 
somewhat,  say  to  March,  1904,  when  the 
Supreme  Court  of  the  United  States 
handed  down  a decision  in  the  Northern 
Securities  case  adverse  to  the  roads. 
Being  unexpected,  the  market  broke 
badl}r  for  a short  time,  but  then  righted 
itself  and  started  upward  upon  a move- 
ment which  terminated  with  the  1907 
panic.  This,  notwithstanding  that  a 
great  many  business  men  were  convinced 
that  the  government  was  interfering 
with  business  enterprise  and  adopting  a 
policy  much  too  “paternal.”  The  rail- 
road bill  has  been  anticipated  for 
months  and  months,  its  terrors  being 
exaggerated  many  magnitudes  while  in 
progress  of  becoming  law — hence  it  has 
been  discounted  in  Wall  Street. 

As  usual  we  are  taking  our  politics 
too  seriously  and  forget  that  the  United 
States  is  like  a growing  youngster  who 


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J.  K.  Rice,  Jr.,  & Co. 

We  have  good  markets  In  unlisted  and  inactive 
securities  and  respectfully  invite  inquiries. 
Phones  7460  to  7466  Hanover.  33  Wall  Street,  N.  Y. 


has  slight  ailments  now  and  again,  but 
is  always  progressing  toward  sturdy 
manhood.  To  be  sure  we  have  ills — 
what  individual,  family,  township  or 
nation  has  not — but  no  man  can  afford 
to  become  bearish  on  the  United  States 
with  its  great  resources  and  fast  in- 
creasing population,  nor  upon  the  se- 
curities of  its  great  corporate  interests 
whose  prosperity  is  bound  to  keep  pace 
with  that  of  the  country. 

The  Swing  of  Prices. 

It  must  be  always  borne  in  mind  that 
there  are  two  sides  to  the  market — the 
public  has  been  prone  to  forget  this  in 
the  swings  from  one  extreme  to  the 
other — when  it  has  been  rising  they 
have  become  over  enthusiastic  and 
thought  the  advance  would  last  indefi- 
nitely. On  the  other  hand,  when  prices 
were  falling  they  concluded  that  the  in- 
dustries of  the  country  were  doomed 
and  that  security  prices  would  never 
recover  notwithstanding  their  experi- 
ence to  the  contrary. 


The  swing  of  prices  can  best  be  il- 
lustrated by  the  pendulum  of  a clock, 
dead  center  representing  intrinsic  value. 
The  pendulum  swings  to  the  right  and 
to  the  left  of  the  center  just  as  security 
prices  swing  above  and  below  intrinsic 
value. 

Whenever  quoted  prices  get  below 
intrinsic  value,  then  the  market  is  in 
process  of  turning  even  though  the  in- 
fluences may  not  be  discernible  at  first, 
but  they  are  surely  at  work  and  will 
surely  swing  the  trend  of  the  market. 

There  seems  to  be  little  doubt  in  any- 
one’s mind  to-day  but  that  our  standard 
securities  are  being  quoted  for  less  than 
their  intrinsic  value,  nor  is  there  any 
doubt  but  that  they  will  sell  much  high- 
er in  the  future,  even  though  they  may 
go  temporarily  somewhat  lower.  The 
last  is  problematical — they  may  have 
seen  bottom — but  the  first  is  a certainty. 
No  man  ever  lost  money  in  purchasing 
anything  for  less  than  its  value  pro- 
vided he  bided  his  time  until  the  value 
asserted  itself  as  it  invariably  has. 


ADVERSE  INFLUENCES 

UNFAVORABLE  FACTORS  IN  THE  SITUATION  SUMMED  UP  FROM 
AN  AUTHORITATIVE  POINT  OF  VIEW 


r | 'ROUBLE  is  about  ihe  easiest  thing 
in  the  world  to  borrow.  “Dis- 
turbing Influences”  are  about  the  easiest 
thing  for  market  commentators  to  find. 
There  are  disturbing  influences  in  the 
present  situation,  but  neither  as  numer- 
ous nor  important  are  they  as  a good 
many  writers  would  have  us  believe.  In 
view  of  all  the  irresponsible  talk  going 
the  rounds,  the  following  summary  of 


“disturbing  influences,”  coming  to  us 
from  the  biggest  bank  in  the  West, — 
the  Continental  and  Commercial,  of 
Chicago — ought  to  be  interesting.  “It 
may  be  said,”  says  this  summary,  “that 
the  disappointment  has  been  due, 
not  to  any  change  in  fundamental 
conditions,  but  to  a reaction  from  the 
extreme  optimism  of  last  fall.  The 
country  was  exhilarated  then  by  the 

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feeling  that  the  depression  was  over  and 
that  another  period  of  prosperity  was 
ahead;  for  the  moment  it  could  not  see 
a cloud  in  the  sky  or  an  obstacle  in  the 
road.  But  there  are  always  problems 
and  perplexities  to  be  dealt  with,  and 
we  had  not  gone  far  in  1910  until  some 
were  met. 

Adverse  Trade  Balance. 

Early  in  the  year  the  unsatisfactory 
state  of  otir  foreign  trade  occasioned 
grave  concern.  With  our  imports  pass- 
ing all  records,  the  prices  of  our  prin- 
cipal products  above  an  export  basis  and 
our  trade  balances  falling  toward  the 
vanishing  point,  how  were  we  to  settle 
the  enormous  indebtedness  that  is  con- 
stantly accruing  from  the  so-called  ‘in- 
visible* items  that  enter  our  account  with 
Europe  ? These  are  the  expenditures  by 
tourists,  freights  paid  to  foreign  ship- 
ping, interest  and  dividend  payments  on 
our  securities  held  abroad,  individual  re- 
mittances, etc.  A large  merchandise 
balance  in  our  favor  is  needed  to  offset 
these  items,  and  in  its  absence  we  must 
either  borrow,  which  is  a temporary  ex- 
pedient, or  sell  securities,  which  means 
that  the  security  market  must  come 
down  to  an  export  basis,  or  we  must  ship 
gold  out  of  our  bank  reserves.  With 
bank  loans  at  a high  level,  heavy  gold 
exports  are  a serious  matter,  while  the 
other  alternative,  lower  prices  on  securi- 
ties, is  certain  to  be  more  or  less  dis- 
turbing. The  situation  was  finally  re- 
lieved by  the  latter  process;  gold  ex- 
ports were  stopped  by  the  sale  of  large 
blocks  of  bonds,  and  our  standard  stocks 
are  now  at  a level  where  there  is  a broad 
international  market  for  them. 

Court  Decisions. 

Other  disturbing  influences  have 
been  the  court  decisions  under  the  anti- 
trust act  and  the  controversy  over  rail- 
way rates.  When  the  law  as  to  indus- 
trial combinations  is  finally  settled,  busi- 
ness will  doubtless  be  adapted  to  it,  but 
so  long  as  the  law  is  undetermined,  ap- 
prehensions concerning  the  outcome  will 
affect  enterprise  unfavorably.  It  seems 
certain  that  in  the  long  run  the  laws 
will  have  to  be  such  that  industrial  de- 


velopment can  go  on  in  a normal  and 
effective  manner,  and  so  framed  and  en- 
forced that  while  the  public  has  a rem- 
edy against  the  exactions  of  monopoly, 
the  wastes  of  excessive  competition  may 
be  avoided.  How  this  may  be  accom- 
plished and  a just  distribution  of  the 
benefits  secured  is  the  problem  with 
which  the  courts  and  lawmakers  are  now 
engaged.  It  cannot  be  avoided,  and  can 
only  be  solved  by  patient  and  fair- 
minded  inquiry  and  experiment. 

Freight  Rate  Controversy. 

The  discussion  over  the  measure  en- 
larging the  powers  of  the  Interstate 
Commerce  Commission  and  the  con- 
troversy over  the  efforts  of  the  railways 
to  advance  freight  rates,  have  occupied 
large  space  in  the  newspapers  and  been 
an  influence  in  the  conservative  attitude 
taken  by  investors.  Unquestionably  the 
expenses  of  the  roads  have  been  greatly 
increased  by  the  concessions  made  to 
their  employees  and  the  rising  prices  of 
all  supplies.  Their  earnings  have  also 
been  unfavorably  affected  by  decisions 
in  specific  rate  cases.  The  rival  cities 
of  the  country,  in  their  fight  for  trade, 
are  contending  constantly  for  freight 
rates  that  will  improve  their  position, 
and  the  success  of  these  contentions 
usually  involves  loss  to  the  railways. 
The  result  of  this  constant  pressure  and 
the  uncertainty  as  to  future  revenues 
has  caused  the  roads  to  hold  up  a large 
amount  of  expenditures  which  they  have 
planned.  A competent  authority  esti- 
mates the  amount  of  such  outlays  imme- 
diately affected  at  $500,000,000.  We 
regard  this  check  as  but  temporary.  Now 
that  the  principle  of  railway  control  and 
the  supervision  of  rates  by  public  au- 
thority is  definitely  established  and  in 
force,  we  look  to  see  an  important  body 
of  public  opinion  take  a stand  for  a fair 
and  reasonable  adjustment  of  the  rates. 

Level  of  Costs. 

The  demands  of  wage  earners,  based 
upon  higher  living  costs,  for  higher 
wages,  have  been  generally  conceded 
without  serious  disturbance  to  industry. 
There  has  been,  however,  an  unfavor- 
able sentimental  effect,  the  impression 


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Dead  Investments 


WHY  NOT  SELL  your  Non-dividend  Paying  Securities  1 We  are  specialists  in 
Inactive  Stocks  and  Bonds,  and  will  be  glad  to  quote  a market  on  all  securities  and  give 
you  any  information  regarding  sauie  that  you  may  desire. 

RE-INVEST 

At  the  present  prloes,  good  dividend  paying  securities  of  Railroads  and  Corporations 
that  have  paid  dividends  for  years,  and  in  all  probability  will  continue  to  do  so,  are  sell- 
ing at  such  a LOW  LEVEL  that  they  present  au  INV  ESTMENT  OPPORTUNITY 
that  is  not  likely  to  be  had  again  in  years. 

WHY  NOT  take  advantage  of  the  present  opportunity  ? 

J.  HATHAWAY  POPE  & CO. 

67  Exchange  Place  Phone  Rectur  3486  New  York  City 

a 


being  widespread  that  our  industries  are 
operating  upon  too  high  a level  of  costs 
for  a permanent  prosperity.  It  is  sig- 
nificant, however,  that  our  exports  of 
manufactures  steadily  increase,  indicat- 
ing that  we  are  gaining  ground  in  the 
world's  markets.  High  wages  are  not 
necessarily  a handicap  to  industry;  they 
are  always  an  accompaniment  of  indus- 
trial progress.  The  more  efficient  and 
productive  a people  become  and  the 
more  machinery  they  use,  the  higher  the 
wage  scale  will  be,  and  the  higher  the 
standard  of  living.  The  wage  scale  and 
standard  of  living  of  one  generation  are 
no  criterion  for  another  generation. 

Particular  industries  have  had  their 
own  special  difficulties,  due  to  temporary 
and  abnormal  conditions.  The  cotton 
mills  are  largely  idle  because  the  price 
of  cotton  cloth  is  out  of  line  with  the 
price  of  raw  cotton.  Whether  the  hold- 
er of  raw  cotton  or  the  buyers  of  cotton 
goods  are  right  in  their  forecasts  of  con- 
ditions after  this  cotton  crop  matures 
remains  to  be  seen,  but  at  present  the 
merchants  are  selling  their  shelves  bare 
and  Massachusetts  mill  owners  have 
been  sending  raw  cotton  to  the  New 
York  market  to  be  resold.  The  woolen 
goods  industry  is  also  demoralized,  ap- 
parently as  a result  of  overstimulus  last 
fall.  A large  proportion  of  the  spin- 
dles have  been  idle,  and  wool  has  been 
nearly  as  cheap  in  the  United  States  as 
in  the  London  market,  despite  the  duty. 
A deadlock  has  existed  between  the 


wool  growers  and  buyers,  but  latest  re- 
ports indicate  that  the  market  will  right 
itself  this  fall  on  a somewhat  higher 
basis. 

Prosperity  Notwithstanding. 

Despite  the  unfavorable  develop- 
ments we  have  referred  to  and  notwith- 
standing some  discordant  notes,  the  gen- 
eral tenor  of  replies  to  our  letter  of  in- 
quiry is  confident  and  encouraging.  The 
country  is  prosperous.  There  is  work 
for  everybody,  in  many  localities  com- 
plaint that  production  is  restricted  for 
want  of  labor  and  the  competition  of 
employers  is  pushing  wages  steadily 
higher.  It  is  interesting  to  note  the 
complaint  everywhere  that  the  automo- 
bile industry  is  making  labor  scarce  and 
dear,  for  it  illustrates  how  each  develop- 
ment of  civilization  reacts  upon  the  con- 
dition of  the  humblest  member  of 
society. 

The  volume  of  business  has  been 
large,  but  there  are  frequent  complaints 
that  competition  is  sharper  and  the  mar- 
gin of  profit  smaller  than  ever,  that 
labor  is  dictatorial  and  that  improved 
methods  are  constantly  required  to  offset 
its  demands.  But  the  story  of  industrial 
progress  reads  like  that  from  the  be- 
ginning. 

It  is  a common  expression  from  the 
smaller  cities  and  towns  that  nothing  is 
known  there  of  business  reaction  or  of 
threatened  trouble  save  what  comes  from 
the  few  large  centers.  To  them  the 

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country  seems  very  prosperous  and  con- 
ditions sound.  Many  of  them  express 
some  impatience  over  the  conservative 
attitude  of  the  banking  fraternity,  whom 
they  accuse  of  being  frightened  at 
shadows.  Nevertheless,  it  is  apparent 
that  the  note  of  warning  was  well  sound- 
ed and  that  a wholesome  effort  to  check 
the  expansion  of  credits  has  been  made, 
and  the  country  is  in  much  better  condi- 
tion because  of  it. 

The  entire  West  has  been  enormous- 
ly, almost  wildly,  prosperous.  The  basis 
of  this  prosperity  has  been  the  high 


prices  for  farm  products,  which  have 
furnished  the  farmers  with  the  means 
to  build  better  homes  and  barns,  drain 
their  lands,  buy  improved  machinery, 
enlarge  their  farms  and  in  not  a few 
instances  commit  the  oft-heralded  of- 
fence of  buying  an  automobile.  We 
have  made  considerable  inquiry  into  this, 
and  our  information  is  that  the  farmer 
who  buys  an  automobile  generally  pays 
cash  for  it  and  is  better  able  to  own  it 
than  most  of  the  town  purchasers.  It 
is  probably  of  more  real  utility  to  him 
than  to  any  other  class  of  purchasers.” 


THE  AUTO  AND  THE  BOND  MARKET 

By  Franklin  Escher 


npWO  or  three  years  ago  it  would 
have  been  impossible  to  consider 
the  automobile  seriously  as  a factor  af- 
fecting the  state  of  the  financial  mar- 
kets. Not  so  to-day.  In  some  of  the 
diatribes  current  against  the  popular 
“gas  buggy”  the  extent  of  its  influence 
is  very  much  exaggerated,  but  that  the 
automobile  craze  is  now  exerting  a dis- 
tinct and  positive  influence  on  the  bond 
market  is  generally  admitted.  It  is  im- 
possible to  get  away  from  it.  Evidences 
of  it  are  to  be  seen  all  the  time. 

As  it  affects  the  investment  markets, 
the  automobile  craze  should  be  consid- 
ered from  three  points  of  view — first, 
with  regard  to  the  way  in  which  it  ab- 
sorbs money  which  would  otherwise  be 
invested  in  securities;  second,  with  re- 
gard to  the  way  in  which  the  purchase 
of  automobiles  has  reduced  and  is  re- 
ducing the  average  bank  account ; third, 
with  regard  to  the  amount  of  capital 
and  labor  which  the  industry  has  drawn 
from  more  productive  lines  and  is  now 
unproductively  employing. 

Diversion  of  Capital. 

Looking  at  the  question  from  the 
first  point  of  view,  it  is  undeniable  that 
the  automobile  is  using  up  great 
amounts  of  money  which  formerly 
fqund  their  way  into  investment  securi- 
ties. Little  need  be  said  regarding  the 


extravagance  manifested  in  this  regard 
— the  determination  on  the  part  of  one 
man  to  own  a car  because  his  neighbor 
owns  one — the  utter  disregard  of  the 
disproportion  between  the  expense  in- 
volved and  the  income  enjoyed.  In 
every  direction,  instances  are  to  be  seen 
of  persons  who,  ten  years  ago,  would 
have  deemed  the  maintenance  of  a horse 
and  carriage  a gross  extravagance,  now 
in  possession  of  automobiles  worth  any- 
where from  one  to  five  thousand  dollars. 
“How  in  the  world  does  he  do  it?  how 
on  his  income  can  he  afford  to  run  a 
car?”  Very  likely  he  can't  afford  to 
run  it,  but  run  it  he  does  nevertheless. 
Smith  has  a car,  and  so  Jones  must 
have  one,  too.  It  makes  little  differ- 
ence if  Smith's  income  is  five  thousand 
dollars  and  Jones'  only  three  thousand. 
Appearances  must  be  kept  up.  If  every- 
one has  an  auto,  I have  got  to  have  one, 
too.  If  economy  as  a result  is  neces- 
sary, very  well.  I'll  economize  in  some 
other  direction. 

That  is  the  spirit  which  is  responsi- 
ble for  this  trimming  of  the  sails  much 
closer  to  the  wind  now  than  formerly, 
for  the  fact  that  everyone  is  inching 
closer  and  closer  to  the  dead  line  of 
expenditure.  The  five  hundred  dollars 
or  the  thousand  dollars  which  used  to 
be  saved  out  of  the  three-or-four-thou- 
sand-dollar-income  are  no  longer  saved. 


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INVESTMENTS 


509 


In  their  place,  a car  of  a little  better 
quality  and  of  a little  higher  price 
stands  at  the  door.  The  annual  visit  to 
the  banker,  as  a result  of  which  another 
bond  used  to  be  put  into  the  family 
safe  deposit  box,  is  no  longer  made.  In- 
dividual amounts  involved  are  small. 
The  aggregate  is  enormous.  Bond  deal- 
ers all  over  the  United  States  are  feel- 
ing it  and  feeling  it  strongly. 

Profit  for  Pleasure. 

Then  with  regard  to  the  second  view- 
point, it  must  not  be  lost  sight  of  that 
the  possession  of  an  automobile  means 
infinitely  more  than  the  initial  expense. 
In  the  first  place,  there  is  the  up-keep 
— regular  expense  for  gas,  tires,  etc., — 
and  of  even  more  importance  than  that, 
there  is  the  depreciation  to  which,  un- 
fortunately, so  little  notice  is  generally 
given.  A man  buys  an  auto.  It  cost 
him  so-and-so  much.  He  figures  that 
to  run  it  will  cost  him  so-and-so  much. 
But  how  often  does  he  figure  that  each 
year  from  one-third  to  one-fifth  of  the 
initial  expenditure  must  be  charged  off 
— that  in  the  course  of  a very  few  years 
he  will  have  something  on  his  hands 
worth  only  a very  small  proportion  of 
what  he  paid  for  it?  And  just  there 
lies  the  force  of  this  second  point.  He 
has  had  a car ; he  has  become  used  to  it ; 
he  needs  it;  he  wants  it.  When  his  car 
gets  out  of  date,  useless,  he  has  to  have 
another.  If  his  income  has  not  provided 
sufficient  accumulation,  the  chances  are 
more  than  good  that  the  money  needed 
will  be  taken  out  of  whatever  he  may 
have  previously  accumulated.  That 
process  is  going  on  all  over  the  country 
and  to  an  enormous  extent.  Bank  ac- 
counts are  being  drawn  down.  Bonds 
which  have  been  held  for  years  and 
years  are  being  sold.  The  money  is 
there;  the  car  is  wanted;  human  nature 
is  frail. 

Selling  of  securities  on  that  account 
has  during  the  past  couple  of  years 
reached  no  inconsiderable  proportions. 
Again  it  is  a case  of  the  individual 
amounts  being  small  but  of  the  aggre- 
gate being  large.  Bond  dealers  used  to 
have  numbers  of  clients  who  came  to 
them  about  once  a year  with  one  thou- 


sand or  two  thousand  dollars  and  put 
it  into  a bond  or  two.  They  still  have 
a few  clients  of  that  kind.  But  they 
have  more  now-a-days  who  come  to 
them  with  a bond  or  two  and  ask  them 
to  sell  them  for  them.  “We  need  the 
money/'  they  say. 

The  Economic  Consideration. 

So  much  for  the  direct  influence  of 
the  automobile  on  the  market  for  securi- 
ties. There  is  a third  side  to  the  ques- 
tion, which  must  also  be  considered. 
The  fact  is  that  the  establishment  of 
this  huge  industry  during  the  past  de- 
cade has  resulted  in  the  diversion  of  the 
labor  of  thousands  of  competent  work- 
men and  of  millions  of  dollars  from  pro- 
ductive to  unproductive  enterprise.  The 
railroads  have  felt  it.  The  factories 
and  mills  have  felt  it  in  the  loss  of 
their  skilled  workmen,  who  have  found 
that  they  could  make  more  money  in 
the  employ  of  automobile  manufactur- 
ers. Men  who  have  planned  to  estab- 
lish productive  industries  of  all  sorts 
have  felt  it.  When  they  have  tried  to 
raise  the  money  which  they  thought 
they  could  get,  only  too  often  have  they 
found  that  the  capital  has  already  gone 
into  an  automobile  plant.  There  is 
only  so-and-so  much  capital  in  a coun- 
try like  this  after  all,  and  when  hun- 
dreds of  millions  of  dollars  of  it  are 
taken  and  put  into  a new  industry,  its 
loss  is  bound  to  make  itself  felt. 

In  speaking  of  the  automobile  indus- 
try as  “unproductive,”  the  fact  is 
not  lost  sight  of  that  the  manu- 
facture of  commercial  self-propelled 
vehicles  is  by  no  means  an  unproductive 
industry.  Some  of  the  automobile  busi- 
ness as  it  stands  to-day  established  is 
just  as  legitimate  and  important  to  the 
welfare  of  the  country  as  the  manufac- 
ture of  farm  wagons  or  trolley  cars. 
But  not  any  very  great  part  of  it.  It  is 
impossible  to  deny  the  fact  that  by  far 
the  greatest  portion  of  self-propelled 
vehicles  manufactured  are  for  pleasure 
purposes,  pure  and  simple — that  they 
wear  out  in  the  course  of  a very  few" 


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years,  leaving  absolutely  nothing  to 
show  for  the  capital  invested. 

It  would  be  a very  narrow  person 
who  would  fail  to  realize  the  economic 
benefits  accruing  from  the  advent  of 
the  automobile — the  greater  degree  of 
comfort  in  living  which  has  come  with 
it,  the  closer  communication  and  the 
greater  degree  of  fellowship  which  it 


has  made  possible.  That,  however,  has 
nothing  to  do  with  the  question  at  issue 
— the  question  of  how  the  automobile 
has  affected  the  market  for  investment 
securities.  As  has  been  said,  the  harm 
which  has  been  done  has  been  very  much 
exaggerated.  But  that  the  prevailing 
stagnation  in  the  market  for  bonds  is 
due  very  largely  to  the  automobile 
seems  an  incontrovertible  fact. 


“WISE  SAWS  AND  MODERN  INSTANCES ” 

By  Aleck  Smart 


HTHE  fetich  worship  of  Wall  Street 
A is  just  as  distinct  and  prevalent 
as  that  of  Central  Africa.  The  poor 
native  on  the  headquarters  of  the  Congo 
pins  his  faith  on  the  bit  of  bone  or  skin 
or  claw  which  he  carries  around  with 
him — his  more  civilized  brother  at  the 
ticker  pricks  a hole  in  the  tape  about  to 
come  through  the  machine  and  makes 
up  his  mind  to  buy  whatever  stock  hap- 
pens to  be  quoted  on  the  place  where 
the  tape  has  been  pierced.  He  is  a 
slavish  adherent  to  tradition  and  the 
“wise  saws  and  instances*'  which  have 
been  handed  down  in  the  Street  from 
times  immemorial,  and  cheerfully  loses 
his  money  according  to  the  routine  pre- 
scribed. 

“Sell  'Em  When  They're  Strong/' 
Etc. 

Of  the  sayings  of  the  Street  which 
pass  current  in  every  broker's  office  a 
hundred  times  a day,  none,  probably,  is 
better  known  than  the  one  which  ad- 
monishes you  to  “sell  'em  when  they  are 
strong  and  buy  ’em  when  they  are 
weak.”  Contrary  to  what  the  average 
man  has  a tendency  to  do  and  wants  to 
do,  this  maxim  of  the  Street,  for  new- 
comers, especially,  has  always  had  an 
irresistible  fascination.  There  is  some- 
thing so  thoroughly  professional  about 
it — it  seems  to  show  such  innate  knowl- 
edge of  the  mysterious  forces  which 
cause  the  market  to  move.  Stocks  get 
strong — it  is  naturally  the  tyro's  idea 
that  they  are  going  to  get  stronger  and 
that  the  thing  to  do  is  not  to  sell  but 
rather  to  buy  more.  How  different  this 


advice  confidentially  handed  out  by  the 
customers'  man — “They’re  strong  now 
and  you  have  a profit;  presently  they’ll 
be  weak;  sell  them  now.’’  Surely  this  is 
a key  to  the  way  things  go.  Surely  this 
is  keeping  out  of  the  way  which  losers 
follow,  and  the  way  to  keep  in  unison 
with  the  great  inner  line  of  market 
forces  directing  the  course  of  things. 

There  is  some  sense  in  this  maxim 
about  selling  on  bulges — there  is 
some  sense  in  all  of  these  Wall 
Street  sayings — but,  on  the  other 
hand,  a very  short  trial  of  that 
sort  of  thing  will  quickly  convince  the 
new  comer  that  the  thing  isn’t  as  easy 
as  it  looks.  Superficial  reference  to 
past  records  only  is  necessary  to  show 
that  the  market  is  by  no  means  weak 
one  day  and  strong  the  next  and  so  on. 
On  the  contrary,  it  is  sometimes  strong 
day  after  day,  or  weak  in  the  same 
fashion.  The  fact  that  stocks  bulge,  by 
no  means  shows  the  prices  are  again  due 
to  fall  off.  Not  infrequently  a sharp 
bulge  is  the  fore-runner  of  a protracted 
advance. 

Inside  Information. 

Another  Wall  Street  maxim  which  has 
a good  deal  more  sense  than  the  first 
one  mentioned  is  that  which  bids  the 
trader  beware  of  inside  advice.  “If  I 
could  only  get  some  real,  good,  inside, 
information  on  some  of  these  stocks  that 
move  up  and  down  in  Wall  Street,  what 
a lot  of  money  I could  make” — how 
often  has  this  thought  gone  through  our 
minds  and  how  many  people  has  it 


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tempted  to  take  unwarranted  risks  with 
their  money?  And  yet,  among  those 
who  are  most  familiar  with  the  game  it 
is  this  very  inside  information  which  is 
most  distrusted  and  feared.  With  the 
wrecks  of  those  who  have  pinned  their 
faith  to  it,  the  financial  shores  are  liter- 
ally strewn.  “Inside  information!*' — 
There  is  such  a thing,  yes,  and  when  it 
is  the  right  kind  of  inside  information, 
money  can  be  made  out  of  it.  But  how 
often  is  information  of  this  kind  actu- 
ally accessible  to  the  outsider?  Some- 
times. 

The  Ticker  Tells. 

Then  there  is  another  superstition 
down  in  the  street  that  “the  ticker  tells 
the  story."  Just  how  an  idea  of  that 
kind  has  been  able  to  survive  the  actual 
course  of  prices  is  hard  to  see.  It  is 
indeed  a striking  tribute  to  the  credulity 
of  those  who  dabble  in  stocks  and  their 
usual  slavishness  to  hide-bound  tradi- 
tion. 

“The  ticker  tells  the  story!"  Yes, 
it  is  true,  but  only  long  after  the  event 
has  taken  place.  Consolidations  go 
through,  a railroad  deal  is  pulled  off, 
the  stock  of  the  company  concerned  lies 
absolutely  inert.  Only  when  the  deal  is 
announced,  only  when  the  insiders  have 
got  the  stock  th&y  want  and  the  cream 
is  all  off,  then  come  the  fireworks  on  the 
ticker.  A lot  of  good  they  do  the  aver- 
age trader  except  to  make  him  lose  his 
money  faster. 

Selling  on  Good  News. 

Again,  there  is  the  saying  about  sell- 
ing on  good  news,  in  which,  it  must  be 
admitted,  there  is  a good  deal  of  under- 
lying sense.  Reference  to  the  market 
course  of  stocks  whose  dividends,  for 
instance,  have  been  raised  during  the 
past  couple  of  years  shows  how  seldom 
it  is  that  the  favorable  development  has 
been  followed  by  increase  in  the  price 
of  the  security.  On  the  contrary,  how 
often  does  it  happen  that  the  announce- 
ment of  an  increased  dividend  is  fol- 
lowed by  a drop  in  the  stock!  There 
are  some  sorts  of  good  news  on  which  it 
may  be  well  to  buy,  but  nine  times  in 
ten,  for  a time  at  least,  stocks  can  be 


sold  on  the  unexpected  announcement 
of  some  development  of  a favorable 
character. 

“When  the  Sap  Runs  Up — " 

Then  there  is  another  saying  which 
the  hoary-headed  habitues  of  brokerage 
offices  seem  to  enjoy  getting  off,  par- 
ticularly in  the  late  winter  months. 
“Buy  them,"  they  say,  “buy  them  when 
the  sap  runs  up  in  the  trees."  Answer 
to  that  is  merely  a matter  of  record. 
Take  any  good  record  of  stock  prices 
and  see  how  often  February  and  March 
have  been  a period  of  rising  prices. 
Sometimes  they  have  been,  sometimes 
they  have  not.  There  is  no  rule  about 
it  one  way  or  the  other. 

Taking  Profits. 

But  of  all  the  sayings  which  tend  to 
confuse  the  mind  of  the  new  comer  and 
help  him  to  lose  his  money,  perhaps  the 
most  important  is  the  one  which  the 
smug  office-man  gets  off  about  “no  one 
ever  gets  poor  taking  profits."  Strange 
as  it  may  seem  to  the  average  trader  in 
a brokerage  office,  one  of  the  hardest 
things  is  to  see  profits  accumulate.  He 
can  see  the  market  go  against  him  and 
a loss  of  one  point,  two  points,  five 
points,  stare  him  in  the  face,  but  if  he 
has  nerve  he  will  grit  his  teeth  and 
make  up  his  mind  to  pull  out  of  it. 
But  let  a stock  come  his  way — let  that 
same  profit  of  one,  two  or  five  points 
accumulate  to  his  credit.  If  he  is 
human,  an  irresistible  desire  to  cash  in  is 
bound  to  seize  him.  His  profit  stares 
him  in  the  face.  He  does  not  want  to 
take  a chance  on  letting  it  go.  He  sells 
out.  The  stock  whose  movement  he  had 
correctly  forecasted  in  his  mind  keeps 
on  going  up  ten,  perhaps  twenty  points 
more.  But  he  is  out  of  it.  It  has  not 
done  him  any  good.  He  figured  that  he 
would  not  “get  poor  taking  profits." 


ATTRACTIVE  INVESTMENTS 

'T'HE  following  question,  which  was 
sent  in  to  the  Wall  Street  Journal, 
is  a succinct  expression  of  what  is  at 
present  uppermost  in  a good  many  in- 


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THE  BANKERS  MAGAZINE 


vestors*  minds.  The  question,  and  the 
answer  which  was  given  to  it,  are  as 
follows: 

I have  about  $60,000  to  invest  and  prefer 
railroad  securities.  Do  you  think  the  pres- 
ent time  favorable  or  would  it  be  advisable 
to  wait?  Would  you  kindly  suggest  such 
railroad  securities  which  you  consider  first- 
class  and  reasonably  secure  as  to  dividends, 
etc.?  Do  you  consider  Union  Pacific  rela- 
tively as  cheap  and  secure  as  anything  on 
the  list? 

Answer:  From  the  action  of  prices 

of  standard  issues  and  the  technical  po- 
sition of  the  whole  market  it  does  not 
appear  that  the  bear  trend,  which  has 
been  in  progress  since  August,  1909*  has 
given  any  definite  signs  of  turning,  and 
consequently  it  would  not  be  surprising 
to  see  quotations  lower  from  time  to 
time.  Practically  all  high-grade  rail- 
road shares  have  suffered  severely  in 
this  decline,  the  average  being  thirty 
points  or  more.  At  this  level  the  aver- 
age yield  is  in  excess  of  5.6  per  cent., 
which  return  is  quite  equitable  and 
should  prove  attractive  to  those  inves- 
tors who  are  looking  towards  safety  of 
principal  and  continuance  of  dividends 
primarily,  rather  than  to  be  able  to  se- 
cure the  very  lowest  quotation  on  de- 
clines. 

If  a preference  exists  for  railroad 
shares  a careful  selection  scattered 
along  the  following  list  should  meet  re- 
quirements: Louisville  & Nashville  pay- 
ing 7 per  cent.,  yielding  4.92  per  cent. ; 
Union  Pacific  paying  10  per  cent.,  yield- 
ing 6.25  per  cent.;  Chicago  & North- 
western paying  7 per  cent.,  yielding 
4.92  per  cent. ; Pennsylvania,  6 per 
cent.,  yielding  4.68  per  cent.;  Illinois 
Central,  7 per  cent.,  to  net  5.42  per 
cent. ; Southern  Pacific,  6 per  cent., 
quoted  to  return  5.30  per  cent. ; Atlantic 
Coast  Line,  6 per  cent.,  to  yield  5.45  per 
cent.;  Atchison,  6 per  cent.,  now  on  a 
6.12  per  cent,  basis.  Chesapeake  & 
Ohio  is  a system  of  great  promise.  Its 
stock  pays  5 per  cent,  and  yields  6.84 
per  cent.  It  is  more  speculative  than 
any  in  the  foregoing  list,  but  this  return 
is  fairly  well  secured.  These  corpora- 
tions have  splendid  physical  properties 
and  earnings  in  past  years  have  been 


sufficient  for  dividends  with  a comfort* 
able  margin.  The  stocks  have  a ready 
market,  and  being  susceptible  to  all 
change  in  the  general  price  movement 
should  show  appreciation  with  any  re- 
turn of  the  upward  swing — at  least  they 
have  as  good  chance  as  any  others  on  the 
list.  Since  1905  the  surplus  available 
for  Union  Pacific  common  has  certainly 
been  sufficient  to  justify  the  10  per 
cent,  disbursement,  and  from  the  pres- 
ent rate  of  earnings,  it  appears  as. 
though  no  difficulty  should  be  experi- 
enced in  maintaining  this  rate.  This, 
surplus  in  1906  was  14.2  per  cent.; 
1907,  16.5  per  cent.;  1908,  16.2  per 
cent.;  1909,  19.1  per  cent.,  and  in  the 
fiscal  year  ended  June  30,  1910,  it  was 
approximately  19  per  cent. 

The  preferred  stocks  of  the  better 
class  industrial  corporations  do  not  of- 
fer the  same  possibilities  marketwise  as 
the  railroads,  since  they  are  more  in- 
active, but  they  make  good  investments 
for  the  business  man,  and  give  a high 
yield  at  these  levels.  Among  the  many 
of  this  character  might  be  mentioned 
the  preferred  stocks  of  such  corpora- 
tions as  United  States  Steel  7 per  cent., 
now  returning  approximately  6.08  per 
cent. ; International  Harvester  7 per 
cent.,  to  net  5.83  per  cent.;  National 
Biscuit  7 per  cent.,  to  net  5.85  per  cent.; 
Virginia-Carolina  Chemical  8 per  cent., 
to  net  6.66  per  cent.;  American  Car  & 
Foundry  7 per  cent.,  quoted  on  a 6.36 
per  cent,  basis.  If  you  care  to  give  any 
consideration  to  railroad  bonds,  we 
might  suggest  a few  such  issues  as 
Atchison  adjustment  4s,  Rock  Island 
Railway  refunding  4s,  San  Antonio  & 
Aransas  Pass  4s,  Wisconsin  Central  gen- 
eral 4s,  as  attractive  at  present  prices. 
These  specific  issues  have  varying  de- 
grees of  security,  but  in  general  are  all 
right  for  a business  man. 


MUNICIPAL  BONDS  AS  INVEST- 
MENTS 

By  D.  Arthur  Bowman 

l^OUNDED  upon  the  very  citizenship 
A of  the  nation  itself,  protected  by 
the  full  faith  and  credit  of  growing 
communities,  guaranteed  by  the  power 


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INVESTMENTS 


513 


of  taxation,  bonds  issued  for  municipal 
purposes  in  recent  years  have  come  to 
take  deservedly  high  rank.  The  growth 
of  the  entire  United  States  has  been 
stimulated  by  the  well-considered  issu- 
ance of  bonds  for  schools,  public  build- 
ings, streets,  sewers,  parks  and  all  pub- 
lic works  which  tend  to  the  universal 
uplift  of  the  people  of  the  country. 

These  bonds  are  the  obligations  of 
the  whole  community.  They  are  a valid 
tax-lien  upon  all  of  the  property  of 
tvery  resident.  The  people  have 
pledged  prompt  payment  of  principal 
*nd  interest  and  the  value  of  a good 
name  is  just  as  great,  where  municipal- 
ities are  concerned,  as  in  the  case  of  in- 
dividuals. So  long  as  the  community 
-endures,  the  holder  of  the  bonds  is  pro- 
tected by  this  pledge.  There  can  be 
nothing  better  and  the  great  and  grow- 
ing  popularity  of  these  bonds  among 
conservative  private  investors  is  there- 
fore easily  accounted  for.  Being  the 
safest  form  of  investment  known,  the 
bonds  of  the  larger  and  better  known 
-communities  have  in  recent  years  at- 
tained such  wide-spread  popularity  as 
to  become  very  high-priced.  The  thriv- 
ing, growing  cities  of  the  Middle  West 
and  the  "tax-districts”  of  the  Southwest 
offer  precisely  the  same  safe  investment 
opportunities  as  in  the  case  of  the  older 
places.  The  securities,  though  less  well 
known,  are  just  as  valuable  and  just  as 
safe  as  the  bonds  of  the  largest  Amer- 
ican cities.  And  the  yield  in  some  in- 
stances is  from  one  to  one  and  one-half 
per  cent,  greater  than  the  income  of 
the  ordinary  metropolitan  municipal 
bond.  Some  of  them  pay  five  and  one- 
half  per  cent. — none  less  than  four  and 
one-quarter  per  cent. 

With  the  institution  of  the  Postal 
Savings  banks  throughout  the  United 
States  and  the  latitude  permitted  for  in- 
vestments in  the  very  type  of  the  securi- 
ties herewith  described,  it  is  believed 
that  a substantial  enhancement  of  value 
is  a reasonable  possibility.  In  addition, 
there  is  the  strong  intimation  of  the 
passage  of  laws  exempting  from  taxes 
municipal  bonds  in  certain  States  of  the 
Middle  West,  and  these,  if  enacted,  will 


unquestionably  exert  immediately  fa- 
.vorable  effect.  Among  the  States  may 
be  mentioned  Missouri,  in  which  legis- 
lation is  pending  for  the  purpose  named 
at  the  time  this  is  being  written.  Many 
investors  also  prefer  municipal  bonds, 
owing  to  their  freedom  and  immunity 
from  legislative  interference  and  re- 
strictions, which  have  affected  the  prices 
of  certain  corporate  securities. 


INVESTMENT  NEWS  AND  NOTES 

— An  interesting  issue  of  seven  per  cent, 
preferred  stock — that  of  the  Sealshipt  Oys- 
ter System,  Inc. — is  being  offered  by  Fuller 
& Co.,  40  Wall  street,  New  York: 

The  Sealshipt  Oyster  System,  Inc.,  is  the 
largest  distributor  of  bulk  oysters  in  the 
world.  It  owns  and  has  in  active  service 
nearly  45,000  of  the  patented  sealshiptors. 
These  patented  packages  are  operated  under 
lease  and  royal  t through  about  80  different 
oyster  shippers  from  Cape  Cod  to  the  Gulf 
of  Mexico.  It  also  has  under  lease  about 
7000  porcelain  display  fixtures  operated 
through  retail  food  dealers  throughout  the 
United  States  and  Canada.  Last  season  the 
shipments  of  sealshipt  oysters  handled  by 
the  sealshipt  system  through  9310  retailers 
and  167  wholesale  houses  in  some  7000  cities, 
showed  an  increase  of  29,744  per  cent,  over 
the  first  season  of  1902-3. 

The  operation  of  the  above  is  much  the 
same  as  the  refrigerator  car  business.  The 
recent  federal  ruling  under  the  “Pure  Food 
Law”  which  prohibits  absolutely  the  inter- 
state shipment  of  oysters  in  tubs  after  May 
1st,  1910,  broadens  enormously  the  field  and 
the  prestige  of  this  company. 

— Municipal  and  corporation  bonds  orig- 
inating in  the  Pacific  Northwest  are  de- 
scribed in  an  interesting  booklet,  “Paciftc 
Northwest  Securities,”  issued  by  the  Davis 
& Struve  Bond  Company  of  Seattle.  De- 
scribing the  Lower  Yakima  Irrigation 
Company  first  mortgage  seven  per  cent, 
gold  bonds,  the  circular  says: 

The  bonds  were  issued  after  the  plant 
had  been  in  successful  operation  for 
some  time;  after  4,000  acres  had  been  sold; 
after  a considerable  portion  of  the  land  un- 
der the  ditch  had  been  under  irrigation  for 
three  years;  after  every  question  of  engi- 
neering, fertility,  water  supply  and  market 
for  the  land  had  been  settled;  after  the  com- 
pany had  3400,000  of  land  sale  contracts  in 
its  treasury;  after  the  proposition  had  passed 
the  promotion  stage  and  was  recognized  as 
the  most  successful  in  the  Pacific  North- 
west, both  physically  and  financially. 


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— “The  Story  of  the  Greatest  Transporta- 
tion Company  in  the  World”  is  the  title  of 
an  interesting  circular  on  the  Pennsylvania 
just  issued  by  J.  Frank  Howell,  New  York: 

“The  New  York  Terminals,”  says  this  cir- 
cular, “represent  ten  years  of  work  and  an 
expenditure  of  $105,000,000,  down  to  date. 
The  investment  is  carried  on  the  books  at 
$57,495,530,  the  balance  having  been  paid 
from  earnings  and  charged  against  surplus 
income  and  profit  and  loss.  These  Terminals, 
with  the  tunnels  under  North  and  East 
rivers  uniting  New  Jersey  and  Long  Island, 
a grant  central  station  and  many  miles  of 
tracks  can  be  properly  described  as  one  of 
the  wonders  of  the  age.  The  engineering 
and  constructive  difficulties  that  had  to  be 
met  and  overcome  would  have  been  impos- 
sible in  less  capable  hands  and  financed  by 
a company  that  did  not  have  unlimited  re- 
sources. The  wonderful  improvement  gives 
to  New  York  passenger  facilities  enjoyed  by 
no  other  large  city  in  the  world,  and  has 
stimulated  its  great  competitor,  the  New 
York  Central,  to  emulative  effort.  It  stands 
a monument  to  the  sagacity,  foresight  and 
high  courage  of  the  great  railroad  generals 
in  control  of  the  policies  of  the  company  at 
a time  when  it  was  confronted  by  a stupend- 
ous problem  that  had  to  be  conquered — the 
handling  of  the  multitudes  of  people  who 
enter  and  depart  from  the  Metropolis.  It  was 
the  greatest  undertaking  ever  entered  upon 
by  a private  corporation.  It  ranks  next  in 
magnitude  to  the  construction  of  the  Pana- 
ma Canal,  a project  financed  by  the  richest 
nation  on  earth.” 

— In  an  attractive  booklet  recently  is- 
sued by  the  Mercantile  Trust  Company  of 
St.  Louis  an  interesting  description  of 
Serial  Notes,  based  on  the  security  of  real 
estate,  is  given. 

“The  Heal  Estate  Serial  Note,”  says  this 
description,  “had  its  Inception  in  the  stormy 
days  of  1907.  In  the  period  immediately  fol- 
lowing the  chaotic  conditions  prevailing  that 
year,  when  money  was  gradually  losing  its 
timidity  and  seeking  an  outlet,  a strong  and 
insistent  demand  developed  for  real  estate 
mortgages. 

“While  corporation  securities  had  reached 
a low  ebb  of  value  as  a result  of  the  finan- 
cial disturbance,  Investments  based  on  well 
located  real  estate  withstood  the  shock  in 
a manner  to  attract  universal  attention  to 
them.  Comparatively  speaking,  but  few 
foreclosures  were  recorded  and  those  only 
where  the  loaning  agency  had  not  exercised 
proper  care  in  the  selection  of  the  security. 
The  loans  foreclosed  were  generally  on 
property  where  there  was  an  expectation  of 
higher  values,  the  true  worth  of  the  realty 
not  having  originally  been  considered.  But 
where  the  mortgages  covered  properties, 
both  business  and  residence,  where  values 
were  permanent  and  established,  nothing 
that  occurred  made  them  less  desirable  or 
attractive 


“At  any  rate,  considering  the  great  amount 
of  money  that  was  invested  hi  mortgages, 
the  loss  was  insignificant  compared  to  other 
securities,  and  in  the  calm  that  followed  the 
storm,  real  estate  loans  became  the  object 
of  much  inquiry.  Many  former  bond  and 
stock  buyers,  the  safety  deposit  box  “In- 
vestor,” as  well  as  his  brother,  who  kept 
his  money  in  the  proverbial  old  stocking,  all 
seemed  to  be  of  one  mind,  and  those  con- 
cerns which  dealt  in  mortgage  securities  and 
had  a reputation  for  conservatism  were  soon 
in  the  position  of  seeking  loans  rather  than 
Investors.” 


— Describing  the  Cotton  Discount  Corpo- 
ration, a company  recently  chartered  for 
the  purpose  of  loaning  money  on  cotton 
to  factors,  buyers,  etc.,  Messrs.  Blake  and 
Reeves  say: 

For  a half  century  or  more  cotton  has 
been  the  king  of  the  American  finance  mar- 
ket and  the  utmost  confidence  in  warehouse 
receipts  backed  by  actual  cotton  has  pre- 
vailed. So  much  faith  in  a cotton  ware- 
house receipt  has  ever  been  in  evidence  that 
until  recently  the  thought  of  a guarantee  by 
a responsible  syndicate  was  not  considered 
seriously  by  either  the  cotton  or  banking 
interests.  The  failures  and  scandals,  how- 
ever, which  have  resulted  from  lax  meth- 
ods of  Inspection  among  the  cotton  ware- 
houses, have  caused  consternation  both  at 
home  and  abroad,  and  the  consequence  has 
been  that  the  leading  European  and  Ameri- 
can bankers  have  announced  their  intentions 
to  discontinue  advancing  money  on  cotton 
unless  guaranteed  by  some  reliable  financial 
institution.  The  situation  is  serious  and 
Cotton  Exchanges  and  Bankers  in  all  the 
leading  cotton  centers  have  had  the  matter 
under  discussion  for  some  time  in  an  at- 
tempt to  solve  the  problem  and  provide 
ample  protection  to  all  moneyed  interests 
by  some  form  of  organization. 

The  time  is  near  at  hand  when  arrange- 
ments must  be  made  to  finance  the  next 
cotton  crop  of  the  United  States,  and  urgent 
calls  are  being  made  by  Southern  borrowers 
for  assurances  of  money  as  needed  for  that 
purpose.  Some  relief  must  be  afforded 
thr.ough  the  endorsement  of  cotton  certificates 
by  a strong  financial  organization,  or  within 
the  next  year  the  stability  of  cotton  as  a 
market  security  will  be  under  serious  ques- 
tion, and  a general  depression  in  all  cotton 
districts  will  prevail. 

The  Cotton  Discount  Corporation  has  for 
its  function  the  financing  of  the  annual 
cotton  crop  of  the  United  States  through  its 
banking  connections.  The  purpose  of  the 
corporation  is  to  concentrate  funds  bor- 
rowed on  guaranteed  warehouse  receipts, 
which  funds  will  in  time  be  loaned  to  the 
cotton  interests  located  throughout  the  cot- 
ton belt. 


Digitized  by  t^ooole 


INVESTMENT  AND  MISCELLANEOUS  SECURITIES 

[Corrected  to  September  20.  approximate  yield  as  figured  October  1.] 


GOVERNMENT,  STATE  AND  CITY  BONDS. 
Quoted  by  J.  Hathaway  Pope  & Co.,  broker* 
in  investment  securities  and  dealers  in  un- 
listed and  Inactive  railroad  and  industrial 
securities,  67  Exchange  pi.,  New  York. 

Name  and  Maturity.  Price.  Yield. 

U.  8.  Gov.,  reg.  2s,  1930 100*4-100%  1.66 

U.  8.  Gov.,  reg.  3s.  1918 102  -102*4  2.60 

Panama  Canal,  reg.  2s,  1936.  .100*4-101  1.94 

Diet,  of  Columbia  8-65s  105  -106 

Alabama  4s,  July,  1956  101  -104*4  8.77 

Colorada  4s.  ’22  (op.  ’12) 95  -100  4.00 

Connecticut  3*4*.  Apr.  ’30....  99  -102  3.37 

Georgia  4*4s,  July  1915 104  -105  8.40 

Louisiana  4s,  Jan.,  1914 96  -101  3.72 

Massachusetts  3*4s,  1940 94*4-  95  8.75 

New  York  State  8s,  '59 101*4-103  2.88 

North  Carolina  6s,  Apr.,  ’19. . 114  *4-116*4  8.80 

South  Carolina  4*4s.  1933 103  -104  4.22 

Tenn.  New  Settlement  3s,  ’13..  95  - 96  4.40 

Va.  6s,  B.  B.  & Co.  Ctfs.,  1871  44  - 47 

Boston  3*4s,  1929  95  - 96*4  8.85 

New  Yorks  City  4*4s,  1957 106*4-107  4.10 

New  York  City  4*4s,  1917 102*4-103*4  3.96 

New  York  City  4s.  1959 98*4-  33  4.06 

New  York  City  4s.  1955 96*4-  97*4  4.05 

New  York  City  8*4s.  1954 86  - 87*4  4.10 

New  York  Coty  3*4s.  1930 89*4-  91  4.12 

New  York  City  rev.  6s,  1910..  101  -101*4  130 

Philadelphia  4s,  Jan.,  1938...  100  -101*4  3.95 

SL  Louis  4s,  July.  1928 100  -101*4  3.92 


SHORT  TERM  SECURITIES. 

Quoted  by  J.  Hathaway  Pope  A Co. 

Following  are  current  quotations  for  the 
principal  short-term  railway  and  industrial 
securities.  Date  of  maturity  is  given,  be- 
cause of  the  importance  of  those  dates  in 
computing  the  value  of  securities  with  so 
near  a maturity.  All  notes  mature  on  the 
first  of  the  month  named  except  where  the 
day  is  otherwise  specified;  interest  is  semi- 
annual on  all.  Accrued  Interest  should  be 
adaed  to  price. 

Name  and  Maturity  Price.  Yield. 

Am.  Cig.  4s,  “A"  Mar.  15,  ’ll  98*4-  39*4  4.92 

Am.  Cig.  4s,  “B"  Mar.  15,  ’12  97*4-  98*4  5.10 

Am.  Locomotive  5s,  Oct.,  '10..  99*4-100*4  4.25 

Bethlehem  Steel  6s,  Nov.,  '14..  97  - 98  6.20 

“Big  Four”  5s.  June,  ’ll 100  -100*4  4.35 

B.  R.  & P.  Equip.  4*4s 99  -100*4 

Chic.  A Alton  5s,  Mar.  15,  ’13  98*4-  99*4  5.26 

C.  H.  A D.  4s.  July.  ’13 96*4-  97*4  5.06 

Diamond  Match  5s.  July,  ’12  98  -100  5.00 

Hudson  Co.  6s,  Oct.,  ’ll 98  -100  6.00 

Interboro  6s.  May,  ’ll 101*4-101*4  8.92 

K.  C.  R.  A L.  6s,  8ept.,  '12..  98  - 99  6.50 

Maine  Central  4s,  Dec.,  ’14....  98  -100  4.26 

Minn.  A St.  Louis  6s,  Feb.,  ’ll  98*4-  99*4  5.58 

New  Orl.  Term.  6s.  Apr.,  '11 . .99*4-100  3.46 

N.Y.C.  Equip.  6s.  Nov.,  '10  100  -101*4  4.15 

N.Y.C.  Equip.  6s,  Nov.,  '14 . .102  *4-108  *4  4.15 

N.Y.C.  Equip.  6S,  Nov.,  '16 . .103*4-104 % 4.15 

N.Y.C.  Equip.  6s,  Nov.,  ’19.  .104*4-106*4  4.1b 

N.Y..N.H.AH.  5s,  Jan.,  ’ll 100  -100*4  8.70 

N.Y..N.H.AH.  5s.  Jan.,  ’12 100*4-101  8.93 

No.  American  5s.  May,  ’12..  99  -100  5.00 

St.  L.  & S.  F.  4*4s.  Feb.,  '12..  95*4-  96*4  6.00 

Southern  Ry.  5s.  Feb.,  1913 98  - 98*4  5.46 

Tidewater  6s.  June.  ’13 100*4-101*4  5.85 

Westinghouse  6s.  Aug.,  *10....  99*4-100*4  4.25 

Wood  Worsted  4*4s,  Mar.,  *11  99*4-  ••  4.50 

Western  Tel.  6s,  Feb.,  ’12 99  - 99*4  6.20 


INACTIVE  RAILROAD  8TOCKS. 
Quoted  by  J.  Hathaway  Pope  A Co. 

Bid.  Asked. 


Ann  Arbor,  pref 65  72 

Arkansas,  Oklahoma  A Western — 4 9 

Atlanta  A West  Point  182 

Atlantic  Coast  Line  of  Conn 285  242*4 

Buffalo  A Susquehanna,  pref 10  12 


Bid.  Asked. 

Central  New  England  10  15 

Central  New  England,  pref 20  27 

Chicago  Bur.  & Quincy 200  220 

Chicago,  Indianapolis  A Louisville.  60  60 

Chicago,  Ind.  A Louisville,  pref. ...  60  75 

Cincinnati,  Hamilton  A Dayton...  3t>  69 

Cincinnati,  Ham.  & Dayton,  pref. . 65  70 

Cincin,  N.  O.  A Tex.  Pac 126  137*4 

Cincin.,  N.  O.  A Tex.  Pac.,  pref...  102  106 

Cincinnati  Northern  60  60 

Cleveland.  Akron  A Columbus 70  84 

Cleve.,  Cin.,  Chic.  A St.  L.,  pref...  96  100 

Delaware  42  46 

Des  Moines  A Ft.  Dodge,  pref 70 

Detroit  A Mackinac  80  90 

Detroit  A Mackinac,  pref 82  90 

Grand  Rapids  & Indiana 40  50 

Georgia,  South  A Florida  30  40 

Georgia,  South  A Florida  1st  pref.  90  95 

Georgia,  South  A Florida,  2d  pref.  70  75 

Huntington  & Broad  Top 8 9 

Huntington  A Broad  Top,  pref 2b 

Kansas  City,  Mexico  A Orient....  17  19 

Kansas  City,  Mex.  A Orient,  pref.  23  25 

Louisville,  Henderson  A St.  Louis.  12  18 

Louisville,  Hend.  A St.  L.,  pref.  . . 30  37 

Maine  Central  202  210 

Maryland  A Pennsylvania  16  24 

Michigan  Central  ' 165  175 

Mississippi  Central  30  36 

Northern  Central,  new  ctfs 200  ... 

Pitts.,  Cin.,  Chic.  A St.  L.,  pref 101  112 

Pittsburg  A Lake  Erie  296 

Pittsburg,  Shawmut  A Northern..  1 ... 

Pere  Marquette  24  35 

Pere  Marquette,  1st  pref 46  58 

Pere  Marquette,  2d  pref SO  40 

St.  Louis.  Rocky  ML  A Pac.,  pref.  . . 40 

Seaboard  1st  pref 70  7b 

Seaboard  2d  pref 42  4b 

Spokane  A Inland  Empire 30  50 

Spokane  A Inland  Empire,  pref. . . 60  70 

Virginian  17  22 

Vandalia  80  84 

Williamsport  A North  Branch  1 4 


GUARANTEED  STOCKS. 

Quoted  by  J.  Hathaway  Pope  A Co. 

(Guaranteeing  company  in  parentheses.) 

Bid.  Asked. 

Albany  & Susquehanna  (D.  A H.)..270  300 

Allegheny  A West’n  (B.  R.  I.  & P.).135  145 

Atlanta  A Charlotte  A.  L.  (So.R.R.)  .174  184 

Augusta  & Savannah  A.  L.  (Cen. 

of  Ga.j  104  112 

Beech  Creek  (N.  Y.  Central) 90  98 

Boston  A Lowell  (B.  & M.) 206  215 

Bleecker  St.  A F.  Ry.  Co.  (MeL 

St.  Ry.  Co.)  15  22 

Boston  A Albany  (N.  Y.  Cen.).... 21 8 221 

Boston  A Providence  (Old  Colony). 270  290 

Broadway  & 7th  Av.  R.  R.  Co. 

(Met.  St.  Ry.  Co.)  115  136 

Brooklyn  City  R.  R.  (Bk.  H.  R.  R. 

Co.)  156  160 

Camden  A Burlington  Co.  (Penn. 

R.  R.)  140  160 

Catawlssa  R.  R.  (Pbila.  A Read.)..  112  120 

Cayuga  A Susquehanna  (D.L.AW.) .215 
Cent.  Pk.  N.AE.  R.R.  (Met.  St.  Ry.)  16  25 

Christopher  A 10th  St.  R.  R.  Co. 


(M.  S.  R.)  75  90 

Cleveland  A Pittsburg  (Pa.  R.  R.).164  170 

Cleveland  A Pittsburg  Betterment . . 93  100 

Columbus  A Xenia  (Pa.  R.  R.) 200  216 

Commercial  Union  (Com’l  C.  Co.)..  100  110 

Commercial  Union  of  Me.  (Com.  C. 

Co.)  100 

Concord  A Montreal  (B.  A M.) 166  170 

Concord  A Portsmouth  (B.  A M.)..168 
Conn.  A Passumpslc  (B.  A L.)..130  185 

Conn.  River  (B.  A M.)  260  270 

Dayton  A Mich.  pfd.  (C.  H.  A D.)..180  190 

Delaware  A Bound  B.  (Phila.  A R.).190  200 

Detroit,  Hillsdale  A S.  W.  (L.  8.  A 

M.  S.)  96  100 

East  Pa.  (Phila.  & Reading)  130  138 


515 


Digitized  by  LjOOQle 


516  THE  BANKERS  MAGAZINE 


Bid.  Asked. 

Eighth  Av.  St.  R.  R.  (M.  S.  R.  Co.) 250  800 


-Elmira  A Williamsport  pfd.  (Nor. 

Cen.)  135  140 

Erie  & Kalamazoo  (J.  S.  A S. )....220  240 

Erie  & Pittsburg  (Penn.  R.  R.)....135 
Franklin  Tel.  Co.  (West.  Union) . . 40  60 

Ft.  Wayne  & Jackson  pfd.  (L.  S.  & 

M.  S.)  125  185 

Forty-second  St.  & G.  St.  R.  R. 

(Met.  St.  Ry.)  200 

Georgia  R.  R.  & Bk.  Co.  (L.  A N. 

A A.  C.  L.)  252  262 

Gold  A Stock  Tel.  Co.  (W.  U.) 100  110 

Grand  River  Valley  (Mich.  Cent.).. 118  126 

Hereford  Railway  (Maine  Central).  86  92 

Inter  Ocean  Telegraph  (W.  U.)....  90  100 

Illinois  Cen.  Leased  Lines  (111.  Cen.)  95  100 

Jackson.  Lans.  & Saginaw  (M.  C.)..  84  90 

Joliet  A Chicago  (Chic.  A Al.) 164  172 

Kalamazoo.  Al.  A G.  Rapids  (L.  S. 

A S.)  130 

Kan.  C..  Ft.  Scott  A M.,  pfd.  (St. 

L.  & S.  F.)  69  76 

K.  C.  St.  L.  A C.  pfd.  (Chic.  & Al. ).125  140 

Lake  Shore  Special  (Mich  S.  & N. 

Ind.)  330  860 

Little  Miami  (Penn.  R.  R.) 205  216 

Little  Schuylkill  Nav.  A Coal  (Phil. 

& R ) 110  120 

Louisiana  & Mo.  Rlv.  (Chic.  & Atl.)150  166 

Mlno  Hill  & Schuylkill  Hav.  (F.  A 

R ) 120  126 

Mobile  A Birmingham  pfd.  4%  (So. 

Ry  ) 68  76 

Mobile  A Ohio  (So.  Ry.)  75  85 

Morris  Can.  pfd.  (Lehigh  Valley)..  170 
Morris  & Essex  (Del.  Lack.  & W.).173  180 

Nashville  & Decatur  (L.  A N. )....185  192 

N.  H.  A Northampton  (N.  Y.,  N.  H. 

& H.)  100 

N J.  Transportation  Co.  (Pa.R.R.) . 250  255 

N.  Y.,  Brooklyn  A Man.  Beach  pfd 

(L.  I.  R.  R.)  107  118 

N.  Y.  A Harlem  (N.  Y.  Central) ....  280  810 

N.  Y.  L.  A Western  (D.  L.  A W.).120  125 

Ninth  Av.  R.  R.  Co.  (M.  St.  Ry.  Co.)  150  180 

North  Carolina  R.  R.  (So.  Ry.) 156  164 


North  Pennsylvania  (Phila.  A R. )..196  ... 

North.  R.  R.  of  N.  J.  (Erie  R.  R.).  85  95 

Northwestern  Telegraph  (W.  U.)..105  112 

Nor.  A Wor.  pfd  (N.Y..N.H.AH.) . .208 
Ogden  Min.  R.R.  (Cen.R.R.ofN.J.) . 95  105 

Old  Colony  (N.Y..N.H.AH.)  80  86 

Oswego  A Syracuse  (D.  L.  A W.)..215  225 

Pacific  A Atlantic  Tel.  (W.  U.) 60 

Peoria  A Bureau  Val.  (C.R.I.AP.) . .175  185 

Philadelphia  A Trenton  (Pa.R.R.) . 248 
Pitts.  B.  A L.  (P.  L.  E.  A C.  Co.).  32  85 

Pitta,  Ft.  Wayne  A Chic.  (Pa.R.R.)166 
Pitts.,  Ft.  Wayne  A Chic,  special 

(Pa.  R.  R.)  155  165 

Pitts.  A North  Adams  (B.  A A.).  127  134 

Pitta,  McW’port  A Y.  (P.  A L.  E. 

M.  S.)  117  125 

Providence  A Worcester  (N.  Y.,  N. 

H.  A H.)  260  300 

Rensselaer  A Saratoga  (D.  A H.)..190  200 

Rome  A Clinton  (D.  A H.) 135  145 

Rome.  Watertown  A O.  (N.Y.Cen. )118  125 

Saratoga  A Schenectady  (D.  A H.)166  176 

Second  Av.  St.  R.  R.  (M.  S.  R.  Co.)  10  20 


Southern  Atlantic  Tel.  (W.  U.)...  80  100 

Sixth  Av.  R.  R.  (Met.  S.  R.  Co.).. 112  130 

Southwestern  R.  R.  (Cent,  of  Ga.).100  110 

Troy  A Greenbush  (N.  Y.  Cent.).. 165 
Twenty-third  St.  R.  R.  (M.  S.  R.)..200  250 

Upper  Coos  (Maine  Central)  ....135  146 

Utica  A Black  River  (Rome,  W. 

A O.)  166  176 

Utica,  Chen.  A Susqueh.  (D.  L. 

A W.)  144  155 

United  N.  J.  A Canal  Co.  (Pa.R.R.) . 241  248 

Valley  of  New  York  (D.,  L.  A W.).122  180 

Ware  R.  R.  (Boston  A Albany) ...  .160  ... 

Warren  R.  R.  (D.,  L.  A W.) 168  175 


NEW  YORK  CITY  RAILWAY,  GAS  AND 
FURRY  COMPANY  BONDS  AND  STOCKS. 
Quoted  by  Williamson  A Squire,  members  New 
York  Stock  Exchange,  brokers  and  dealers  in 
Investment  securities,  25  Broad  street,  New 
York  City. 

Bid.  Asked. 


Bleecker  St  A Ful  Fy 


1st  4s  

JAJ 

64 

60 

Bway  Surf  Ry 

1st  5s.. 1924 

JAJ 

102 

104 

Bway  A 7th  Av  stock 

120 

135 

Bway  A 7th  Av 

Con  5s. 1943 

JAJ 

100 

102 

Bway  A 7th  Av  2d  6s.  1914 

JAN 

99 

100% 

Col  A 9th  Av 

1st  6s.. 1993 

MAS 

95 

100 

Christopher  A 

10th  St 

QJ 

80 

95 

Dry  Dk  E B A 

Bat  6s. 1932 

JAD 

96 

100 

Dry  Dock  E B 

; A Bat 

Ctfs  6s  

FAA 

40 

49 

42d  St  M A St  N Av  6s.  1910  MAS  99 % 100% 

Lex  Av  A Pav  Fy  5s..  1922  MAS  95  98 

Second  Av  Ry  stock 7 14 

Second  Av  Ry  1st  6s.  .1909  MAN  97%  99 

Second  Av  Ry  Cons  5s.  1948  FAA  50  60 

Sixth  Av  Ry  stock 120  135 

South  Ferry  Ry  1st  68.1919  AAO  88  91 

Tarryt’n  W P A M 5s.  1928  MAS  GO  80 

Union  Ry  1st  6s 1942  FAA  100  102 

Westchester  El  Ry  58.  1943  JAJ  65  85 

Yonkers  Ry  1st  5s..  1946  AAO  70  85 

Central  Union  Gas  5s..  1927  JAJ  99%  101 

Equitable  Gas  Light  6s.  1932  MAS  104  107 

New  Amst  Gas  Cons  5s.  1948  JAJ  98  100 

N Y A E R Gas  1st  6s.  1944  JAJ  100  108 

N Y A E R Gas  Con  6s.  1945  JAJ  96  100 

Northern  Union  Gas  6s.  1927  MAN  99  101 

Standard  Gas  Light  6s.  1930  MAN  100  108 

Westchester  Light  5s.. 1950  JAD  100  102 

Brooklyn  Ferry  Gen  6s.  1943  ....  16  23 

Hoboken  Fy  1st  mtg  5s.l946  MAN  102  105 

NY  A Bkn  Fy  1st  Mt  68.1911  JAJ  98  97 

NY  A Hobok  Fy  Gen  68.1946  JAD  95  99 

NY  A East  River  Fy QM  20  28 

10th  A 83d  St  Ferry AAO  30  40 

10th  A 23d  St  Fy  1st  5s.  1919  JAD  65  76 

Union  Ferry  QJ  26  29 

Union  Ferry  1st  5s 1920  MAN  98  97 


EQUIPMENT  BONDS. 

Quoted  by  Biake  A Reeves,  dealers  in  Invest- 
ment securities,  34  Pine  st..  New  York. 
Quotations  are  given  in  basis. 

Bid.  Asked. 

At!.  Coast  Line  4%,  Mar.,  *17 4%  4% 

Buff.,  Roch.  A Pitts.  4 % %,  Apr.,  '27  4%  4% 

Canadian  Northern  4%%,  Sept.,  *19  5%  5 

Central  of  Georgia  4%%,  July,  ’16  5 4% 

Central  of  N.  J.  4%,  Apr.,  '13 4%  4% 

Ches.  A Ohio  4%,  Oct.,  '16 6 4% 

Chic.  A Alton  4%.  June,  ’16 5%  5 

Chic.  A Alton  4%%,  Nov.,  ’18..  5%  5 

Chic.,  R.  I.  A Pac.  4%%,  Feb.,  '17  6%  4% 

Den.  A Rio  Grande  5%,  Mar.,  'll  6%  4% 

Del.  A Hud.  4%%,  July,  '22 4%  4% 

Erie  4%,  Dec.,  ’ll  6 B 

Erie  4%,  June,  '13  6 6 

Erie  4%.  Dec.,  ’14  6 6 

Erie  4%,  Dec.,  ’15  . . a b 

Erie  4%,  Juno,  *16  6 6 

N.  Y.  Cent.  5%,  Nov.,  '11  4%  4% 

N.  Y.  Cent.  5%.  Nov.,  '18 4%  4% 

No.  West  4%,  Mar.,  '17  4%  4% 

Pennsylvania  4%,  Nov.,  *14 4%  4% 

Seaboard  Air  Line  June,  *11..  6 5 

So.  Ry.  4%%,  Series  E,  June.  '14  6%  4% 


COAL  BONDS. 

Quoted  by  Frederick  H.  Hatch  A Co.,  dealers  la 
investment  securities,  80  Broad  street.  New 
York. 

Bid.  Asked. 

Beech  Creek  C.  A Coke  1st  6s,  1944.  70  76 

Cahaba  Coal  Min.  Co.  1st  6s,  19^2.105  110 

Clearfield  Bltum  Coal  1st  4s,  1940.  80  85 

Consolidated  Indian  Coal  1st  Sink- 


ing Fund  5s.  1935 90  98% 

Continental  Coal  1st  5s.  1952 95  100 

Fairmount  Coal  1st  6s,  1981 98  9B 

Kanawha  A Hocking  Coal  A Coke 
1st  Sinking  Funds  5s,  1961 99  101 


Digitized  by  i^ooQle 


INVESTMENTS 


517 


' • Bid.  Asked. 

Monongahela  River  Con.  Coal  A 


Coll.  Tr.  6s.  1947  95  97 

New  Mexico  Railway  A Coal  1st  A 

Coll  Tr.  5s,  1947  95  97 

New  Mexico  Railway  A Coal  Con. 

A Coll.  Tr.  5s.  1951... 94  96% 

CVGara  Coal  Co.  1st  5s.  Sept.,  1955.  70  80 

Pittsburg  Coal  Co.  1st  & Coll.  Tr. 

Sinking  Fund  5s.  1954  106  110 

Pleasant  Val.  Coal  Co.  1st  5s.  1928.  90  9b 

Pocohontas  Consol.  Collieries  1st 

6s.  1967  80  85 

Somerset  Coal  Co.  1st  Bs,  1932....  92  9b 

Sunday  Creek  Co.  Coll.  Tr.  5s.  1944  64  67 

Vandalia  Coal  1st  5s.  1930  100 

Victor  Fuel  1st  6s.  1963  86  87 

Webster  Coal  & Coke  1st  6s.  1942..  80  83ft 

West  End  Coll.  1st  5s.  1913  95 


ACTIVE  BONDS. 

Quoted  by  Swartwout  & Appenzellar,  bankers, 
members  New  York  Stock  Exchange,  44  Pine 


street.  New  York. 

Bid.  Asked. 

Amer.  Agri.  Chem.  5s  101  101% 

Amer.  Steel  Foundries  4s.  1923...  66  68 

Amer.  Steel  Foundries  6s.  1935... 100  102 

Balt.  & Ohio.  Southwest.  DIv.  3%s.  90  91 

Bethlehem  Steel  5s  84  85 

Chi.,  Burlington  A Quincy  Gen.  4s.  97%  98 

Chi.,  Burl.  & Quincy  111.  DIv.  4s...  99%  99% 

Chi.,  Burl.  & Quincy  III.  DIv.  3%s.  87%  88 

Cin.,  Hamilton  A Dayton  4s 97  97% 

Denver  A Rio  Grande  Ref'ng  5s..  91%  92 

Louis.  A Nashville  unified  4s 97%  98% 

Mason  City  A Ft.  Dodge  4s 80  83 

Norfolk  A West.  Divisional  4s...  92  93 

Savannah.  Florida  A Western  6s.. 119  124 

Va.  Carolina  Chem.  1st  5s 99%  100 

Western  Maryland  4s 85  86 

Wheeling  A Lake  Erie  cona  4s....  81  82 

Wis.  Central.  Superior  A Duluth  4s  93  94 

Western  Pacific  6s  94%  95  ^ 


MISCELL ANEOCS  SECURITIES. 

Quoted  by  J.  K.  Rice,  Jr.,  A Co.,  brokers  and 
dealers  in  miscellaneous  securities,  33  Wall 
street.  New  York. 


Bid.  Asked. 

American  Brake  Shoe  A F.  com..,.  84  87 

American  Brake  Shoe  A F.  pyef...  .123  126 

American  Brass  119  123 

American  Chicle  com 218  224 

American  Chicle  pref 99  104 

American  Coal  Products  94  98 

American  Gas  A Electric  com 41  44 

American  Gas  A Electric  pref....  39  42 

Adams  Express  262  263 

American  Express  230  260 

American  Light  A Traction  com.. 284  290 

American  Light  A Traction  pref..  101  104 

American  District  Tel.  of  N.  J. . . 49  52 

Bordens  Condensed  Milk  pref 101  103 

Bush  Terminal  gg  96 

Cripple  Creek  Central  com 20  30 

Cripple  Creek  Central  pref 40  47 

Del.,  Lack.  A Western  Coal  200  210 

Du  Pont  Powder  com 146  152 

Babcock  A Wilcox  97  101 

Bordens  Condensed  Milk  com 110%  111% 

Du  Pont  Powder  pref  83  86% 

E.  W.  Bliss  com 120  126 

E.  W.  Bliss  pref 125  186 

Hudson  A Manhattan  com 16  18% 

International  Nickel  com 133  138 

International  Nickel  pref 88  93 

International  Silver  com 50  80 

International  Silver  pref 106  112 

Int.  Time  Recording  com 175  200 

Int.  Time  Recording  pref 107  115 


Bid.  Asked. 

Kings  Co.  E.  L.  A P .121  124 

Oil  Fields  of  Mexico  60  65 

Otis  Elevator  com 48  61 

Otis  Elevator  pref 90  98 

Pacific  Gas  A Electric  com 56  57 

Pacific  Gas  A Electric  pref 86  87 

Phelps,  Dodge  A Co 185  206 

Pope  Manufacturing  com 69  64 

Pope  Manufacturing  pref 77%  80% 

Producers  Oil  138  146 

Royal  Baking  Powder  com 185  195 

Royal  Baking  Powder  pref 101  105 

Safety  Car  Heating  A Lighting. ...  123  125% 

Sen  Sen  Chiclet  182  188 

Singer  Manufacturing  275  280 

Standard  Coupler  com: 80  40 

Texas  (Oil).  Company  184  138 

Texas  A Pacific  Coal 97  102 

Tri-City  Railway  A Light  com 22  25 

Tri-City  Railway  A Light  pref 88  92 

U.  S.  Express  98  108 

U.  S.  Motors  com 64  57 

U.  S.  Motors  pref 70  75 

Union  Typewriter  com 39  42 

Underwood  Typewriter  pref 98  102 

Underwood  Typewriter  com 53  57 

Virginian  Railway  17  22 

Wells  Fargo  Express  159  165 

Western  Pacific  20  25 

Worthington  Pump  pref  104  108 


POWER  COMPANY  BONDS. 

Quoted  by  Wm.  P.  Bonbrlght  A Co.,  bankers, 
members  of  the  New  York  Stock  Exchange, 
24  Broad  street,  New  York. 

Bid.  Asked. 


Guanajuato  Power  A Electric  Co. 

Bonds,  6%.  due  1982  tint.)  93  97 

Guanajuato  Power  A Electric  Co. 

Pref.,  6%,  cumulative  (ex  com. 

stk.  div.)  75  80 

Guanajuato  Power  A El.  Co.  Com.  32  ... 

Arizona  Power  Co.,  bonds  6%,  due 

1933  85  93 

Arizona  Power  Co.  pref 40  50 

Arizona  Power  Co.  com 18  23 

Great  Western  Power  Co.  bonds, 

5%,  due  1946  80  86 

Western  Power  Co.  pref 46  49 

Western  Power  Co.  com 26  29 

Mobile  Elec.  Co.  bds.t  5%,  due  1946  88  90 

Mobile  Electric  Co.  pref.,  7 % 80  ... 

Mobile  Electric  Co.  com 25  30 

Amer.  Power  A Lt.  Co.,  pref.,  6%..  79  81 

Amer.  Power  A Lt.  Co.  com 45  48 


FOREIGN  GOVERNMENT  AND  MUNICIPAL 
BONDS. 

Reported  by  Zimmerman  A Forshay,  9-11  Wall 
street.  New  York. 

Bid.  Asked. 


German  Govt.  3%s  92%  93% 

do  3s  83%  84% 

Prussian  Consols  4s  101%  102% 

Bavarian  Govt.  4s 100%  101% 

Hessian  Govt.  3%s  90%  91% 

Saxony  Govt.  3s 82%  88% 

Hamburg  Govt.  3s  81%  82% 

City  of  Berlin  4s  100%  101% 

City  of  Cologne  4s  99%  100% 

City  of  Augsburg  4s  99%  100% 

City  of  Munich  4s  99%  100% 

City  of  Frankfurt  3%s  92%  93% 

City  of  Vienna  4s  95%  96% 

Mexican  Govt.  5s  99%  100% 

Russian  Govt.  4s 91  92 

French  Govt.  Rente  3s  97%  98% 

British  Consols  2%s  80  81 


Digitized  by  t^ooQle 


BANK  AND  TRUST  COMPANY  STOCKS 

[Corrected  to  September  20,  1910.] 


NEW  YORK  BANK  STOCKS. 

Reported  by  Hornblower  & Weeks,  members 
New  York  and  Boston  Stock  Exchanges,  42 
Broadway,  New  York. 

Dlv.  Rate.  Bid.  Asked. 


Aetna  National  Bank  . . . . 

8 

175 

Amer.  Exchange  Nat.  Bk. .. 

10 

230 

Audubon  Bank  

115 

125 

Bank  of  America 

26 

580 

600 

Bank  of  the  Manhattan  Co. 

12 

320 

335 

Bank  of  the  Metropolis.... 

16 

380 

410 

Bank  of  N.  Y.,  N.  B.  A 

14 

310 

325 

Bank  of  Washington  Hts. . 

8 

280 

Battery  Park  Nat.  Bank... 

110 

Bowery  Bank  

12 

380 

Bronx  Borough  Bank 

20 

300 

Bryant  Park  Bank  

155 

165 

Butchers  & Drovers  Bank.. 

6 

135 

145 

Century  Bank  

6 

160 

175 

Chase  National  Bank  . . . . 

6 

425 

Chatham  National  Bank.... 

16 

300 

325 

Chelsea  Exchange  Bank.... 

8 

200 

Chemical  National  Bank... 

15 

425 

440 

Citizens  Central  Nat.  Bk. .. 

6 

150 

160 

Coal  & Iron  Nat.  Bank.... 

6 

145 

Colonial  Bank  

10 

400 

Columbia  Bank  

12 

350 

Corn  Exchange  Bank 

16 

300 

315 

East  River  Nat.  Bank 

6 

100 

120 

Fidelity  Bank  

6 

165 

175 

Fifth  Avenue  Bank  

100 

4000 

4500 

Fifth  National  Bank  

12 

300 

First  National  Bank  

32 

830 

860 

Fourteenth  Street  Bank. . . . 

6 

150 

160 

Fourth  National  Bank  . . . . 

8 

185 

190 

Gallatin  National  Bank  . . . . 

14 

325 

340 

Garfield  National  Bank 

12 

300 

German-American  Bank.... 

6 

140 

150 

German  Exchange  Bank.... 

20 

460 

. • . 

Germania  Bank  

25 

600 

Greenwich  Bank  

10 

260 

Hanover  National  Bank.  . . . 

16 

600 

630 

Importers’  & Traders  Nat. 

Bank  

24 

540 

560 

Irving  Nat.  Exchange  Bk. 

8 

200 

210 

Jefferson  Bank  

10 

175 

Liberty  National  Bank  . . . . 

20 

600 

Lincoln  National  Bank  . . . . 

10 

400 

430 

Market  & Fulton  Nat.  Bk.  . 

12 

245 

255 

Mechanics  & Metals  Nat 

Bank  

12 

240 

250 

Mercantile  Nat.  Bank  

6 

160 

Merchants*  Ex.  Nat.  Bk... 

6 

160 

Merchants’  Nat.  Bank  . . . . 

7 

170 

180 

Metropolitan  Bank  

8 

200 

Mount  Morris  Bank  

10 

250 

Mutual  Bank  

8 

275 

Nassau  Bank  

8 

240 

260 

Nt.  Bk.  of  Commerce  

8 

200 

205 

Nat.  Butchers  & Drovers.. 

6 

135 

145 

National  City  Bank  

10 

370 

880 

National  Park  Bank  

16 

355 

360 

National  Reserve  Bank  . . . . 

6 

100 

105 

New  Netherlands'  Bank.... 

5 

210 

N.  Y.  County  Nat.  Bank... 

40 

950 

New  York  Bkg.  Assn.. 

14 

310 

325 

N.  Y.  Produce  Ex.  Bank. . 

8 

160 

170 

Night  & Day  Bank  

230 

Nineteenth  Wark  Bank  . . . . 

260 

Northern  Bank  

*6 

105 

Pacific  Bank  

8 

230 

240 

People’s  Bank  

10 

260 

280 

Phenlx  National  Bank  

8 

185 

200 

Plaza  Bank  

20 

600 

. . . 

Seaboard  National  Bank... 

12 

390 

Second  National  Bank  . . . . 

12 

375 

400 

Sherman  National  Bank. . . 

125 

State  Bank  

io 

300 

Twelfth  Ward  Bank  

6 

150 

Twenty-Third  Ward  Bk... 

6 

i 85 

Union  Ex.  Nat.  Bank  

8 

160 

Washington  Heights  Bank. 

276 

West  Side  Bank  

i2 

600 

. . . 

Yorkville  Bank  

20 

525 

NEW  YORK  TRUST  COMPANY  STOCKS. 

Dlv. 

Rate. 

Bid. 

Asked. 

Astor  Trust  Co 

8 

340 

355 

Bankers’  Trust  Co 

16 

610 

660 

Brooklyn  Trust  Co 

20 

4 35 

Carnegie  Trust  Co 

8 

105 

i 25 

Central  Trust  Co 

45 

990 

1010 

Columbia  Trust  Co.  - 

8 

270 

285 

618 


Dlv.  Rate.  Bid.  Asked. 


Commercial  Trust  Co 

115 

Empire  Trust  Co 

10 

300 

810 

Equitable  Trust  Co 

Farmers’  Loan  & Trust  Co. 

24 

460 

470 

(par  $25)  

50 

1650 

1700 

Fidelity  Trust  Co 

6 

200 

210 

Flatbush  Trust  Co 

8 

210 

Franklin  Trust  Co 

8 

210 

220 

Fulton  Trust  Co 

10 

290 

Guaranty  Trust  Co 

32 

790 

810 

Guardian  Trust  Co 

175 

Hamilton  Trust  Co 

12 

270 

Home  Trust  Co 

4 

105 

Hudson  Trust  Co 

6 

160 

International  Bank’g  Corp.  . 

90 

105 

Kings  Co.  Trust  Co 

16 

500 

Knickerbocker  Trust  Co.... 

12 

280 

290 

Lawyers’  Mortgage  Co 

Lawyers’  Title  Insurance  & 

12 

230 

245 

Trust  Co 

12 

250 

260 

Lincoln  Trust  Co 

130 

140 

Long  Isl.  Loan  & Trust  Co. 
Manhattan  Trust  Co.  (par 

12 

300 

$30)  

12 

375 

Mercantile  Trust  Co 

30 

725 

Metropolitan  Trust  Co 

24 

535 

Mutual  Alliance  Trust  Co. . 

iis 

130 

Nassau  Trust  Co 

8 

175 

National  Surety  Co 

8 

245 

N.  Y.  Life  Ins.  & Trust  Co. 

45 

lioo 

1120 

N.  Y.  Mtg.  & Security  Co.  . 

12 

190 

205 

New  York  Trust  Co 

32 

650 

People’s  Trust  Co 

12 

285 

Queens  Co.  Trust  Co 

115 

126 

Savoy  Trust  Co 

100 

Standard  Trust  Co 

16 

400 

Title  Guar.  & Trust  Co 

20 

485 

495 

Trust  Co.  of  America  

10 

320 

330 

Union  Trust  Co 

50 

1330 

U.  S.  Mtg.  & Trust  Co 

24 

460 

470 

United  States  Trust  Co 

50 

1176 

1215 

Van  Norden  Trust  Co 

210 

Washington  Trust  Co 

U 

365 

Williamsburg  Trust  Co 

80 

ioo 

Windsor  Trust  Co 

6 

. . . 

125 

BOSTON  BANK  STOCKS. 


Reported  by  Hornblower  & Weeks,  members 
New  York  and  Boston  Stock  Exchanges.  60 
Congress  St.,  Boston. 

Dlv.  Last 
Name.  Rate.  Sale. 


Atlantic  National  Bank  

Boylston  National  Bank  

Commercial  National  Bank  

Eliot  National  Bank  

First  National  Btfnk  

First  Ward  Bank  

Fourth  National  Bank  

Merchants  National  Bank  

Metropolitan  National  Bank  

National  Bank  of  Commerce 

National  Market  Bank,  Brighton.. 
Nat.  Rockland  Bank,  Roxbury.... 

National  Shawmut  Bank  

National  Union  Bank  

National  Security  Bank  

New  England  National  Bank  . . . . 

Old  Boston  National  Bank  

People’s  National  Bank,  Roxbury.. 

Second  National  Bank  

South  End  National  Bank  

State  National  Bank  

Webster  & Atlas  National  Bank... 

Winthrop  National  Bank  

* No  public  sales. 


6 

151* 

4 

102* 

6 

140 

8 

225 

12 

400 

8 

185 

7 

173* 

10 

266 

6 

122 

6 

173* 

6 

119* 

8 

167 

10 

875 

7 

198 

12 

• 

6 

152 

5 

127 

5 

122* 

10 

255 

5 

104* 

7 

170 

7 

175 

10 

325 

BOSTON  TRUST  COMPANIES. 


Dlv.  Last 
Name.  Rate.  Sale. 


. . . 8 

325 

• 

Bay  State  Trust  Co 

7 

. . . . 8 

185 

369 

458 

Boston  Safe  D.  & T.  Co.  . . . 
City  Trust  Co 

14 

. . . . 12 

Columbia  Trust  Co 

. . . . 5 

120 

205 

106 

Commonwealth  Trust  Co 

. . . . 6 

Dorchester  Trust  Co 

. . . . 5 

Exchange  Trust  Co 

Digitized  by  u.ooQie 


INVESTMENTS 


519 


Dlv.  Last 
Name.  Rate.  Sale. 

Federal  Trust  Co 6 138 

International  Trust  Co 16  400 

Liberty  Trust  Co 6 

Mattapan  D.  & T.  Co 6 201 

Mechanics  Trust  Co 6 110 

New  England  Trust  Co 15  325 

Old  Colony  Trust  Co 20  735 

Puritan  Trust  Co 8 219 

State  Street  Trust  Co 8 • 

United  States  Trust  Co 16  225 

• No  public  sales. 


CHICAGO  STATE  BANKS. 

Dlv.  Rate.  Bid.  Asked. 


Ashland  Exchange  Bank..  ..  ...  112 

Austin  State  Bank  10  280 

Central  Trust  Co 7 160  163 

Chicago  City  Bank  10  174  180 

Chicago  Savings  Bank  ....  6 144  148 

Citizens  Trust  Co 4 125 

Colonial  Tr.  & Sav.  Bank..  10  190  195 

Drexel  State  Bank  6 ...  151 

Drovers  Tr.  A Sav.  Bank..  8 175  180 

Englewood  State  Bank....  6 114 

Farwell  Trust  Co 6 120  125 

Hibernian  Banking  Assn..  8 203  210 

Illinois  Tr.  & Sav.  Bank...  20  499  505 

Kaspar  State  Bank  10  250 

Kenwood  Tr.  & Sav.  Bk...  7 134  140 

Lake  View  Tr.  & Sav.  Bk..  5 138  141 

Merchants  Loan  & Tr.  Co.  . 12  400  408 

Metropolitan  Tr.  & Sav.  Bk.  6 119  122 

Northern  Trust  Co 8 ...  318 

North  Avenue  State  Bank.  .6  145  150 

North  Side  State  Bank 6 135 

Northwest  State  Bank  ....  4 117  120 

Northwestern  Tr.  & Sav.  Bfk..  6 137  142 

Oak  Park  Tr.  A Sav.  Bank  . . 308  312 


Dlv.  Rate.  Bid.  Asked. 


Peoples  Stock  Yards  State 

Bank  10  200 

Prairie  State  6 250 

Pullman  Loan  & Tr.  Bank.  8 160  ... 

Railway  Exchange  Bank...  4 125 

Security  Bank  6 170  175 

Sheridan  Tr.  & Sav.  Bank..  6 144  148 

South  Side  State  Bank 135  160 

State  Bank  of  Chicago....  12  334  338 

State  Bank,  Evanston  ....  10  278 

Stockmen’s  Trust  Co 6 115  118 

Stock  Yards  Savings  Bank  S ...  215 

Union  Bank  6 134  138 

Union  Trust  Co 8 325 

Wendell  State  Bank  110 

West  Side  Tr.  & Sav.  Bank  . . 175 

Western  Trust  6 150  155 

Wilmette  Ex.  State  Bank 110  115 

Woodlawn  Trust  8 135  140 


CHICAGO  NATIONAL  BANK  STOCKS. 

Reported  by  Hornblower  & Weeks,  members 
New  York  and  Boston  Stock  Exchanges,  152 
Monroe  St.,  Chicago. 

Dlv.  Rate.  Bid.  Asked. 


Calumet  National  Bank  ...  6 150 

City  National,  Evanston...  12  800  ... 

Corn  Exchange  Nat.  Bank..  16  406  415 

Drovers  Deposit  Nat.  Bank.  10  220  225 

First  National  Bank  16  410  416 

First  Nat.  Bk.  of  Englewood  10  250 

Fort  Dearborn  Nat.  Bank.  . 8 175  180 

Live  Stock  Exchange  Nat. 

Bank  10  224  229 

Monroe  National  Bank  ....  4 130  135 

Nat.  Bank  of  the  Republic..  8 ...  198 

National  City  Bank  6 203  208 

National  Produce  Bapk  ....  4 144  147 


TO  PUNISH  ATTACKS  ON  BANKS 

American  Bankers'  Association  Endeavoring  to  Secure  State  Laws 


AX  Iowa  bank  has  recently  reported  to 
l the  association  that  some  of  its 
best  customers  have  been  receiving 
anonymous  letters  advising  them  to  take 
out  their  money  from  the  institution, 
and  the  bank  has  asked  for  advice  re- 
garding the  matter.  It  has  been  advised 
by  Thomas  B.  Caton,  general  counsel 
of  the  American  Bankers'  Association,  to 
place  the  locating  and  identifying  of 
the  offenders  in  the  hands  of  this  associa- 
tion's local  detective  agents,  and,  if  possi- 
ble, to  procure  the  punishment  of  such  of- 
fenders under  the  Iowa  libel  law.  The  stat- 
ute of  Iowa,  so  far  as  applicable  to  this  par- 
ticular case,  defines  a libel  as  “The  malicious 
defamation  of  a person  made  public  by 
. . . writing  . . . tending  to  . . . 

deprive  him  of  the  benefits  of  public  confi- 
dence.” 

Whether  or  not  offenders  of  this  kind  can 
be  punished  under  this  law  is  questionable. 
In  Pennsylvania,  three  years  ago,  in  a some- 
what a similar  case  where  a person  sent  out 
circulars  broadcast  notifying  all  holders  of 
his  checks  on  a certain  bank  to  present  them 
immediately,  failing  which  he  would  no 
longer  be  responsible — he  having  no  checks 
outstanding  qn  such  bank  and  the  circulars 
being  malicious  and  intending  to  injure  the 
standing  of  the  tbank — the  court  held  the 
offender  could  not  he  punished,  as  under  the 
law  of  Pennsylvania  a corporation  could 


not  be  libeled,  and  it  recommended  the  en- 
actment of  a special  statute  to  govern  such 
offenses. 

In  December,  1907,  the  general  counsel 
drafted  the  following  proposed  law  espe- 
cially to  cover  this  class  of  offences: 

“Any  person  who  shall  wilfully  and  ma- 
liciously make,  circulate  or  transmit  to  an- 
other or  others  any  statement,  rumor  or 
suggestion,  written,  printed  or  by  word  of 
mouth,  which  is  directly  or  by  inference 
derogatory  to  the  financial  condition  or  af- 
fects the  solvency  or  financial  standing  of 
any  bank,  savings  banks,  banking  institution 
or  trust  company  doing  business  in  this 
State,  or  who  shall  counsel,  aid,  procure  or 
induce  another  to  start,  transmit  or  circu- 
late any  such  statement  or  rumor,  shall  be 
guilty  of  a felony  or  misdemeanor,  and  upon 
conviction  thereof,  shall  be  punished  by  a 
fine  of  not  more  than  five  thousand  dollars 
or  by  imprisonment  for  a term  of  not  more 
than  five  years,  or  both.” 

The  enactment  of  this  law  has  been  pro- 
cured in  several  States,  but  not,  as  yet,  in 
Iowa,  and  the  occurrence  just  reported  in- 
dicates the  need  of  such  a statute  in  that 
State.  The  matter  will  be  brought  to  the 
attention  of  the  secretary  ajid  legislative 
committee  of  the  Iowa  Bankers*  Association 
prior  to  the  next  meeting  of  the  Iowa  Legis- 
lature. 


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AMERICAN  BANKERS’  ASSOCIATION 

PROGRAMME  OF  THE  ANNUAL  CONVENTION  HELD  AT  LOS  ANGELES 
MONDAY,  OCTOBER  3,  191# 


GENERAL  registration  for  the  associa- 
tion, Trust  Company,  Savings  Bank 
and  Clearing-House  Sections,  and  the 
organization  of  secretaries,  at  headquarters 
hotel — The  Alexandria. 

Committee  meetings  in  rooms  assigned  at 
The  Auditorium. 

Meeting  of  the  executive  council,  2 o'clock 
p.  m„  in  Choral  Hall,  The  Auditorium. 

Executive  council  banquet,  7 o'clock  p.  m., 
at  Hotel  Alexandria.  Tendered  by  the 
clearing-house  and  the  affiliated  banks  of 
Los  Angeles. 

FIRST  DAY  CONVENTION. 

Tuesday,  October  4,  1910. 

Convention  called  to  order  at  10  o’clock 
a.  m.,  sharp,  by  the  president,  Lewis  E. 
Pierson. 

Invocation  by  Rev.  Robert  J.  Burdette, 
pastor  emeritus.  Temple  Baptist  Church  of 
Los  Angeles. 

Addresses  of  Welcome:  Hon.  James  N. 
Gillett,  Governor  of  California;  Hon.  George 
Alexander,  Mayor  of  Ia>s  Angeles;  W.  H. 
Holliday,  President  Los  Angeles  Clearing- 
House  Association. 

Response  to  Addresses  of  Welcome:  George 
II.  Russel,  Detroit,  Mich.,  ex-president  of 
the  association. 

Annual  Address  of  the  President,  Lewis 
E.  Pierson,  New  York  City. 

Annual  Report  of  the  General  Secretary, 
Fred  E.  Farnsworth,  New  York  City. 

Annual  Report  of  the  Treasurer,  P.  C. 
Kauffman,  Tacoma,  Wash. 

Report  of  the  Auditing  Committee. 

Annual  Report  of  the  General  Counsel, 
Thomas  B.  Pa  ton.  New  York  City. 

Annual  Report  of  the  Executive  Council, 
William  Livingstone,  Chairman,  Detroit, 
Mich. 

Annual  Report  of  the  Standing  Protective 
Committee,  Fred  E.  Farnsworth,  Secretary. 
Adjournment  at  one  o’clock. 

Afternoon  Session — Tiro  O’clock. 

Reports  of  Various  Committees. 
Addresses. 

Practical  Banking  Questions:  Discussions. 
Evening. 

Grand  Reception  and  Ball  at  the  Shrine 
Auditorium. 

Wednesday,  October  5,  1910. 

Morning  and  Afternoon  Sessions. 

Trust  Company  Section. 

Organization  of  Secretaries. 

520 


Entertainment. 

Trip  to  Catalina  Islands,  where  a barbe- 
cue will  be  given. 

Automobile  ride  to  Pasadena. 

Evening. 

Theatre. 

Thursday,  October  6,  1910. 

Morning  and  Afternoon  Sessions. 

Savings  Bank  Section. 

Clearing-House  Section. 

Entertainment. 

Trip  to  Catalina  Islands,  where  a barbe- 
cue will  be  given. 

Automobile  ride  to  Pasadena. 

Evening. 

Theatre. 

Second  annual  dinner  of  the  Council  Club 
at  Hotel  Alexandria. 

SECOND  DAY  CONVENTION. 

Friday,  October  7,  1910. 

Convention  called  to  order  at  ten  o'clock 
a.  m.,  sharp,  by  the  president,  Lewis  E. 
Pierson. 

Invocation  by  Rev.  Charles  E.  Locke, 
pastor  First  Methodist  Church  of  Los  An- 
geles. 

Announcements. 

Reports  of  Committees. 

Action  on  amendments  to  Constitution. 

Invitation  for  next  convention. 

Addresses. 

Adjournment  at  one  o’clock. 

Afternoon  Session — Two  O'  Clock. 

Roll  Call  of  States. 

Addresses. 

Unfinished  Business. 

Resolutions. 

Report  of  Committee  on  Nominations. 

Action  on  same. 

Installation  of  officers. 

Adjournment. 

The  meeting  of  the  new  executive  council 
will  be  held  at  Choral  Hall,  The  Auditorium, 
immediately  following  the  adjournment  of 
the  convention,  should  the  convention  ad- 
journ at  a reasonable  hour;  otherwise,  at  8 
o’clock  p.  m. 

The  programme  committee,  which  com- 
prises the  executive  officers  of  the  associa- 
tion, cannot  at  this  time  announce  in  full  the 
names  of  the  distinguished  guests  who  will 
make  addresses  before  the  convention,  ex- 
cept in  the  case  of  the  able  representative 
of  the  coast,  Dr.  Benjamin  Ide  Wheeler, 
president  of  the  University  of  California, 
Berkeley,  whose  subject  wilf.be  “The  Banker 
as  a Public  Servant.” 


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SAN  ANTONIO,  TEXAS 

A PROGRESSIVE  COMMERCIAL  CENTER 
By  George  A.  Schreiner 


OF  San  Antonio  it  has  been  said  that 
in  Southwest  Texas  she  occupies  a 
position  which  once  was  that  of  Rome 
— all  roads  lead  to  her  gates.  In  addition  to 
being  the  largest  city  in  the  entire  State 
of  Texas,  San  Antonio  can  justly  claim  to 
have  the  best  future  of  any  of  them.  This 
by  reason  of  being  the  center  of  the  largest 
undeveloped  district  in  the  United  States. 
The  tributary  territory  of  the  city  com- 


GEORGE  A.  SCHREINER 
Publicity  Agent  Chamber  of  Commerce 
San  Antonio,  Texas 


prises  no  less  than  forty-one  counties  having 
a surface  extent  of  about  60,000  square 
miles.  Water  surfaces  excepted,  there  are 
in  this  tremendous  district  no  less  than  37,- 
758,744  acres  of  land,  of  which  34,809,700 
acres  are  considered  to  be  as  high  class 
farm  land  as  can  be  found  anywhere.  Of 
this  acreage,  11.22  per  cent,  is  in  cultivation, 
of  which  31,011,800  acres  are  kept  in  pastur- 
age, an  unprofitable  disposition  of  soil  in 
these  days. 

Basis  of  Presext  and  Future  Prosperity. 

The  very  fact  that  San  Antonio  is  the  big- 
gest city  in  the  State,  though  less  than 


twelve  per  cent,  of  the  soil  in  its  territory 
is  under  the  plow,  is  a strong  argument  for 
the  assertion  that  the  city  has  a fine  future. 
While  there  is  no  doubt  that  the  better  de- 
velopment of  Southwest  Texas  will  mean 
the  growth  of  the  smaller  cities  in  a perhaps 
greater  proportion  than  will  be  the  share  of 
San  Antonio,  it  is  reasonable  to  believe  that 
the  latter  will  at  all  times  retain  the  lead 
and  that  in  ten  years  from  now  she  will  have 
a population  of  a quarter  of  a million,  if 
not  more.  By  that  time  San  Antonio  will 
be  not  merely  the  distributing  center  of 
commerce  in  Southwest  Texas,  but  a great 
manufacturing  point  as  well.  The  progress 
made  in  this  direction  during  the  last  few 
years  lends  ample  substance  to  this  conclu- 
sion. 

At  the  present  time  but  little  is  manufac- 
ured  in  San  Antonio.  Nothing,  perhaps, 
could  better  illustrate  this  than  the  freight 
tonnage  of  the  railroads  leading  into  the 
city.  The  freight  movement  last  year  in 
inbound  shipments  amounted  to  approxi- 
mately 1,048,800  tons  over  all  lines,  while  the 
outbound  shipments  amounted  to  only  488,- 
000  tons.  It  will  be  seen  from  this  that  for 
every  ton  carried  out  of  the  city  two  tons 
were  carried  into  it.  This  is  not  surprising. 
San  Antonio,  though  in  one  of  the  richest 
agricultural  districts  anywhere,  imports  a 
good  share  of  her  foodstuffs.  Bexar  county, 
in  which  the  city  is  located,  has  more  uncul- 
tivated land  than  could  be  covered  by  the 
whole  State  of  Rhode  Island,  and  this  for 
no  other  reason  than  that  men  and  capital 
are  scarce. 

Need  of  Capital  and  Men. 

Men  and  capital  in  the  case  of  San  An- 
tonio, Southwest  Texas,  and  in  fact  the 
whole  State  of  Texas,  are  the  two  factors 
needed.  What  is  more,  they  are  needed  in 
an  equal  degree.  In  this  statement  there  is 
nothing  which  in  either  application  or  time 
is  new— both  of  them  have  come  together 
before  progress  could  be  recorded  anywhere. 
Southwest  Texas  has  found  out  that  men 
will  not  go  where  there  is  no  capital  and  that 
capital  will  not  go  where  there  are  no  men. 
To  overcome  this,  both  are  being  sought  at 
the  present  time. 

It  would  hardly  be  irrelevant  to  say  here 
a few  words  about  Texas  laws.  The  cry  has 
been  for  many  years  that  the  laws  made  at 
Austin  are  unduly  severe  on  capital.  In 
some  instances  this  has  been  shown  to  be 
true,  but  in  most  others  it  has  not. . Such 
laws  as  have  been  thought  to  be  inimical  to 
capital  have  not  received  a fair  interpreta- 
tion in  a majority  of  cases.  There  is  in  all 

621 


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THE  BANKERS  MAGAZINE 


Texas  no  law  that  is  hostile  to  capital,  pro- 
vided that  its  managers  do  not  invest  it  with 
a view  to  exploitation  of  the  State  and 
nothing  else.  The  investor  who  puts  his 
money  in  Texas  enterprises  has  nothing  to 
fear  and  can  count  on  large  returns  if  he 
will  but  show  a reasonable  interest  in  the 
welfare  of  the  State.  Unfortunately,  some 
have  not  done  this  and  as  a result  laws  have 
been  passed  which  would  not  have  been 
passed  otherwise.  But  in  all  this  a decided 


city  in  1718  for  political  and  military  pur- 
poses, hoping  to  retain  their  claims  on  the 
New  Philippines  by  effecting  actual  settle- 
ment and  control,  a sound  notion  of  interna- 
tional law,  which  then  for  the  first  time 
made  itself  felt.  While  the  Mexicans  tried 
to  do  a little  better,  San  Antonio  de  Bexar 
under  their  sway  amounted  to  little  more 
than  a frontier  post.  The  Texans  did  not 
get  time  to  improve  upon  the  Mexican  pro- 
gramme, and,  indeed,  it  took  many  years 


Southern  Pacific  Depot 


change  for  the  better  is  taking  place.  The 
Austin  Legislature  has  of  late  rid  itself  of 
its  “hell-roaring  Jakes,”  and  to-day  a can- 
didate for  public  office  known  to  be  a radi- 
cal on  the  question  of  capital  has  little  or 
no  chance  to  get  the  support  of  the  people. 
Many  investors  have  begun  to  realize  this 
and  in  1909  nearly  $35,000,000  of  northern 
capital  was  invested  in  Southwest  Texas 
alone,  about  $6,000,000  falling  to  the  share 
of  this  city. 

The  City's  Commercial  History. 

The  commercial  history  of  San  Antonio 
can  be  told  in  a very  few  words.  Under 
the  Spanish  and  Mexicans  the  commercial 
position  of  the  city  was  practically  nil,  and 
the  same,  to  some  extent,  is  true  of  the  short 
period  of  its  existence  under  the  flag  of  the 
Texas  Republic.  The  Spanish  founded  the 


even  after  the  annexation  of  Texas  by  the 
United  States  before  San  Antonio  gained 
some  importance  as  a commercial  point. 
For  a decade  preceding  the  Civil  War,  San 
Antonio  was  the  principal  wool  market  in 
the  United  States.  Sheep  and  goats  in 
Southwest  Texas  were  then  counted  by  the 
millions,  but  the  war,  disease  and  the  pirati- 
cal methods  of  the  reconstruction  period, 
expressed  principally  in  tariff  discrimina- 
tion, put  an  end  to  the  wool  industry  in  the 
district.  With  wool  and  mohair  no  longer 
profitable,  Southwest  Texas  turned  to  the 
raising  of  cattle,  and  for  many  years  the 
country  was  the  greatest  producer  of  cattle 
on  the  North  American  continent.  Cattle 
raising  was  the  only  industry  of  Southwest 
Texas  until  ten  and  even  five  years  ago.  To- 
day the  farmer  has  begun  to  take  the  place 
of  the  cowpuncher  and  the  ten  acres  which 


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SAN  ANTONIO,  TEXAS 


528 


formerly  were  needed  to  feed  one  steer  are 
to-day  supporting  an  entire  family.  The 
fine  climate  and  soil  of  Southwest  Texas,  the 
fact  that  artesian  water  for  irrigation  pur- 
poses can  be  found  almost  anywhere,  and 
the  fact  that  land  is  cheap,  have  all  done 
their  share  towards  settling  up  the  country. 

A Fine  Field  por  Manufacturing. 

San  Antonio  and  Southwest  Texas  have 
several  industrial  incongruities  which  sooner 
or  later  will  become  of  interest  to  the  in- 
vestor. The  territory  immediately  north- 
west of  the  city  produced  last  year  nearly 
9,000,000  pounds  of  wool  and  mohair,  all  of 
which  had  be  to  be  shipped  to  the  North  and 
East  for  conversion  into  cloth.  The  same  is 
true  of  cotton.  Though  Southwest  Texas 
sent  last  year  735,000  bales  of  cotton  to  the 


market,  there  is  not  a mill  in  the  country. 
Tlie  San  Antonio  country  raises  still  some  of 
the  best  cattle  in  the  United  States,  ships 
them  to  Fort  Worth  and  Kansas  City,  and 
then  ships  back  the  meat,  known  familiarly 
as  K.  C.  meat  in  these  parts.  There  is 
enough  economic  waste  in  the  instances 
named  to  make  it  worth  the  while  of  any 
investor  to  turn  it  into  dollars  and  cents. 
Each  steer  shipped  from  San  Antonio  to 
Fort  Worth,  Kansas  City,  St.  Louis  and 
Chicago  loses  on  an  average  four  dollars' 
worth  of  flesh,  something  which  is  an  abso- 
lute loss  to  everybody. 

Attractions  for  Tourists  and  Investors. 

For  many  years  now  San  Antonio  has 
been  looked  upon  as  a fine  winter  resort. 
The  weather  throughout  the  winter  is  the 


Alamo  National  Bank 


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f 

City  National  Bank 


524 


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SAN  ANTONIO,  TEXAS 


525 


best  that  could  be  found  in  the  United 
States.  There  is  no  snow  and  very  little  ice 
and  out-of-door  life  is  possible  on  six  days 
every  week.  The  city  has  a very  fine  water 
supply  system.  Twenty-two  artesian  wells 
of  a depth  of  1,050  feet  distribute  water  of 
rare  purity.  In  all  other  departments  of 
municipal  life  the  city  leads  in  Texas.  San 
Antonio  has  one  of  the  lowest  mortality 
rates  in  the  United  States,  the  average  rate 
being  less  than  twelve  per  1,000  inhabitants. 

It  is  doubtful  whether  there  is  another 
city  in  the  Union  which  offers  greater  at- 
tractions to  the  tourist  and  investor.  Next 
to  St.  Augustine,  Florida,  San  Antonio  is 
the  oldest  city  north  of  the  Rio  Grande. 
Spanish- American  civilization  left  its  indeli- 
ble stamp  upon  it.  In  San  Antonio  and 
the  close  vicinity  are  found  the  remains  of 
the  joldest  missions  outside  of  Mexico  and  in 
Fort  Sam  Houston  the  city  has  an  invaluable 


tourist  asset,  this  being  the  second  largest 
army  post  in  the  United  States. 

All  other  features  that  add  to  the  enjoy- 
ment and  refinement  of  life  are  to  be  met 
there.  One  of  the  features  of  San  Antonio 
is  society  with  a charm  all  its  own.  While 
there  are  cities  which  may  have  a more  cos- 
mopolitan population,  there  are  none  in 
which  the  sons  and  daughters  of  many  lands 
have  been  blended  to  a finer  degree.  In  San 
Antonio  one  meets  the  members  of  the  Latin 
and  Teutonic  races  not  as  immigrants,  but 
as  children  of  the  soil,  who,  while  preserving 
all  their  racial  characteristics,  are  nevertiie- 
less  all  that  the  American  is  claimed  to  be. 
As  an  educational  center  the  city  has  few 
superiors  for  its  size.  In  addition  to  an  ex- 
cellent public  school  system,  with  thirty-one 
schools  and  a good  high  school,  the  city  has 
nearly  forty  private  educational  institutions. 
Many  of  the  latter  are  in  great  favor  with 


4 


San  Antonio  National  Bank 


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Frost  National  Bank 


526 


Birdseye  Viewlof  the  Business  District 


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SAX  AX  TON  10,  TEXAS 


527 


the  better  classes  in  Mexico — as  a matter  of 
fact,  San  Antonio  is  looked  upon  by  Mexi- 
cans as  the  logical  and  best  place  where  one 
can  get  an  American  education. 

During  the  last  two  years  San  Antonio 
has  made  greater  strides  than  ever  before. 
The  value  of  building  permits  issued  in  1909 
reached  a total  of  $3,797,101,  the  city  occu- 
pying then  third  position  among  all  Ameri- 
can cities  in  building  operations.  This  year 
the  same  figure  or  a higher  one  will  be 
reached.  Much  of  the  city’s  present  pros- 
perity is  due  to  the  public  spirit  of  its  best 
residents  and  the  good  work  they  have  done 
in  bringing  the  name  of  San  Antonio  before 
the  American  public.  In  its  Chamber  of 
Commerce  and  Publicity  League  the  city  has 
two  institutions  the  good  services  of  which 
cannot  be  underestimated.  Both  of  them 
are  composed  of  men  who  recognize  that  a 


little  work  for  the  community  means  in  the 
end  a good  investment  for  one’s  self.  San 
Antonio’s  present  condition  and  future  out- 
look leave  little  to  be  desired. 

The  Banks. 

As  will  be  seen  from  the  accompanying 
illustrations,  San  Antonio  has  a number  of 
remarkably  fine  bank  buildings.  The  banks 
of  the  city  have  been  managed  with  due  re- 
gard for  safety  and  wise  progress,  and  have 
been  powerful  factors  in  the  development  of 
industry  and  trade.  An  idea  of  the  size  and 
importance  of  these  institutions  may  be  had 
from  the  table  given  herewith. 

San  Antonio  as  a Convention  City. 

In  the  Southwest,  San  Antonio  is  looked 
upon  as  the  convention  city  par  excellence. 
Throughout  the  year  organizations  of  all 


F.  Groos  Sc  Company  Bank 


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SAN  ANTONIO,  TEXAS 


529 


kinds  bold  their  gatherings  there;  this  prin- 
cipally because  the  city  possesses  peculiar 
attractions  for  the  convention  delegate  and 
visitor.  There  is  the  Alamo,  immortalized 
by  the  massacre  of  1836.  The  ruins  of  four 


missions  speak  of  the  days  when  the  Span- 
iard’s fierce  love  of  conquest  was  second  only 
to  his  religious  zeal.  The  ruins  of  block- 
houses bear  ample  testimony  to  the  fact  that 
the  struggle  between  the  early  white  settlers 


San  Antonio,  Texas,  Banks  and  Their  Condition .* 


Capital. 


Assets. 


Lockwood  National  Bank  $500,000.00 

Frost  National  Bank  500,000.00 

Alamo  National  Bank  500,000.00 

San  Antonio  National  Bank  500,000.00 

National  Bank  of  Commerce  300,000.00 

City  National  Bank  100,000.00 

San  Antonio  Loan  and  Trust  Co 100,000.00 

American  Bank  and  Trust  Co 100,000.00 

State  Bank  and  Trust  Co 100,000.00 

D.  Sullivan  and  Co 

D.  Oppenheimer  & Co 

F.  Groos  and  Co 


•$1,438,697.57 
4,245,029.41 
2.745,562.60 
3,751,778.40 
3,063,791.14 
743,714.22 
1,683,476.24 
452,957.14 
479,166.67 
t5, 000,000.00 
t5, 000,000.00 
t2,000, 000.00 


•Statement  of  July  1,  1910. 
tEstimated. 


Colonade,  Meager  Hotel 


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St.  Anthony  Hotel 


«nd  the  Indians  was  a very  earnest  affair, 
and  in  the  acequias  and  old  aqueducts,  lead- 
ing from  one  mission  garden  to  another,  one 


St.  Anthony  Hotel  Lobby 


beholds  the  first  effort  at  civilizing  of  the 
true  and  stable  kind.  Besides  these  there  are  a 
thousand  other  reminders  of  Spanish-Ameri- 
can  civilization.  San  Antonio  has  a Mexican 
quarter  that  differs  nowise  from  those  of 
Mexico;  it  has  architecture  that  would  be  at 
home  among  the  green  hills  of  Granada,  and 
people  in  whom  flows  intermingled  in  all 
possible  degrees  the  blood  of  Castille,  of 
Canary  Islanders,  of  Aztecs  and  that  of  the 
Teutonic  races.  San  Antonio  manages  to  be 
a first-class  American  city  with  a popula- 
tion that  is  surprisingly  un-Anglo-Saxon ; it 
is  Spanish  to  the  same  extent  that  New  Or- 
leans is  French,  and  with  that  city  it  shares 
the  distinction  of  being  Old  World  in  senti- 
ment and  yet  thoroughly  American  in  spirit 
and  progressiveness. 

Modern  San  Antonio  consists  of  the 
usual  skyscraper,  well-kept  and  well-lighted 
streets,  trolley  cars,  automobiles,  fine  depart- 
ment stores,  theaters,  and  the  finest  plazas 
anywhere.  These  little  parks  are  scattered 
all  over  the  city,  and  their  sub-tropical  vege- 
tation is  one  of  the  things  that  fascinate  the 
visitor  to  the  city,  especially  in  the  winter 
time,  when  the  greater  part  of  the  United 
States  is  snow-bound.  Then  there  is  Fort 
Sam  Houston,  LTncle  Sam's  second  largest 
garrison.  This  is  a very  complex  military* 
establishment,  consisting  of  an  infantry  post, 
artillery  post,  cavalry  post  and  department 
headquarters.  Fort  Sam  Houston  officers 


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SAN  ANTONIO,  TEXAS 


581 


are  a big  factor  in  the  city’s  social  life,  and 
there  is  hardly  an  affair  to  which  their  pres- 
ence does  not  lend  brilliancy.  To  the  an- 
nual horse  show,  and  the  carnival,  the  mili- 
tary element  adds  vim  and  dash  that  could 
not  be  dispensed  with. 

Each  year  Sun  Antonio  takes  care  of  a 


last  word  in  hotel  features  of  that  kind. 
The  service  of  the  hotel  has  become  prover- 
bial in  its  excellence,  although  the  establish- 
ment has  been  in  operation  not  quite  two 
years.  The  St.  Anthony  was  a success  from 
the  day  it  opened  its  doors.  With  the  first 
winter  tourist  season  over  the  management 


Gunter  Hotel 


tremendous  winter  tourist  and  visitor  traffic, 
especially  since  adequate  hotel  accommoda- 
tions are  now  easily  procured.  That  San 
Antonio  has  the  best  hotels  in  the  entire 
Southwest  is  a very  conservative  statement. 
One  of  them,  the  St.  Anthony,  has  been 
claimed  to  eclipse  anything  its  size  in  the 
South.  This  establishment  is  truly  metro- 
politan in  its  character,  though  not  wholly 
devoid  of  an  atmosphere  that  speaks  not 
alone  of  the  South,  but  also  of  things  Latin. 
The  lobbies,  loggias,  Roman  court  and  root 
garden  of  the  St.  Anthony  are  said  to  be  the 


decided  to  double  the  capacity  of  the  hotel, 
and  there  have  been  times  when  even  this 
proved  inadequate. 

In  the  Menger  Hotel,  San  Antonio  has  a 
hostelry  which  is  typically  Southern  in  every 
respect.  For  many  decades  the  city’s  only 
first-class  hotel,  it  still  maintains  its  posi- 
tion in  the  front.  About  a year  ago  the  en- 
tire establishment  underwent  remodelling. 
The  parlors,  patios  and  winter  garden  are 
very  attractive,  and  to  the  latter,  used 
throughout  the  year  as  an  open-air  restau- 
rant, exclusive  San  Antonio  journeys  for  its 


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One  of  San  Antonio's  Beautiful  Homes 


SIS 


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SAN  ANTONIO,  TEXAS 


53$ 


al  fresco  dinners  and  suppers.  The  Menger 
has  succeeded  admirably  in  blending  to  ad- 
vantage the  modern  with  the  old,  being  in 
fact  a true  Southern  hotel  with  all  the  com- 
forts and  refinements  of  the  twentieth  cen- 
tury. 

The  same  is  true  of  the  Gunter  Hotel,  with 
this  qualification:  In  it  may  be  found  a new 
type  of  Southern  Hotel.  Its  builders  es- 
sayed to  construct  a modern  caravansary 
suited  to  the  needs  of  the  climate.  San 
Antonio  winter  weather  is  a negligible  fea- 
ture in  hotel  construction,  for  the  reason 
that  the  temperature  is  never  low  enough  to 
make  the  heating  of  so  large  an  establish- 
ment a serious  problem.  What  the  designer 
of  the  Gunter  wanted  was  an  hotel  that 
would  be  cool  in  the  summer.  That  he  suc- 
ceeded has  been  proven  this  year.  The  hotel 
has  lobbies,  dining-rooms,  corridors  and  bed- 
rooms that  are  almost  immense  in  propor- 
tion. It  is  doubtful  whether  any  other  hotel 
in  the  country  has  an  apartment  larger  than 
the  lobby  of  the  Gunter.  While  much  space 
had  to  be  sacrificed  in  order  that  this  might 
be  accomplished,  it  has  been  found  that  it 


was  worth  while.  The  dining-room  of  the 
hotel  is  laid  out  along  the  same  lines.  Hotel 
experts  claim  that  the  Gunter  represents  the 
type  of  hotel  which  must  ultimately  become 
that  of  all  sub-tropical  climates.  Needless 
to  say  the  service  is  on  a par  with  the  other 
features  of  the  establishment. 

In  addition  to  these,  San  Antonio  has  a 
number  of  smaller  hotels  which  deserve  men- 
tion. At  the  Hot  Wells  Hotel,  an  estab- 
lishment located  on  the  outskirts  of  the  city, 
the  visitor  can  get  fine  service  and  accom- 
modation and  the  finest  anti-rheumatic  and 
anti-gout  baths  to  be  had  anywhere.  Next 
in  line  is  the  Bexar  Hotel,  now  undergoing 
complete  renovation.  In  the  Crockett,  New 
Maverick,  Angelus  and  Elite,  San  Antonio 
has  hotels  that  suit  the  visitor  who  looks  for 
good  accommodations  at  low  rates.  During 
the  last  two  years  a number  of  modern 
apartment  houses  have  gone  up.  Most  of 
them  compromise  between  the  northern 
apartment  idea  and  the  desire  for  spacious- 
ness so  much  in  evidence  throughout  the 
South  and  the  West. 


Cathedral 


Mission  Concepcion,  built  1723 


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THE  BANKERS  MAGAZINE 


San  Jose  Mission,  built  1718 


Facts  About  San  Antonio. 


Area,  exclusive  of  suburbs  (square  miles)  36 

Population  in  1900  53,321 

Population  in  1910,  estimated  115,000 

Tax  rate  per  centum  $1.42 

Assessed  valuation  in  1904  $33,386,705 

Assessed  valuation  in  1908  54,691,385 

Assessed  valuation  In  1909  61,705,385 

Assessed  valuation  In  1910  73,715,000 

Number  of  banks  13 

Bank  clearings  in  January,  1904  $22,257,274.73 

Bank  clearings  In  January,  1910  45,386,746.10 

Real  estate  transfers  In  1909  $14,217,394.41 

Value  of  building  permits,  1908  $1,943,098 

Value  of  building  permits,  1909  3,759,101 

Postoffice  receipts  In  1904  $141,176.64 

Postoffice  receipts  in  1909  243,880.53 

Bonded  indebtedness  $2,098,000 

Public  libraries,  volumes  20.000 

Area  of  parks  and  plazas  (acres)  349 

Value  of  parks  and  plazas  $1,090,920 

Value  of  public  buildings  $1,780,000 

Public  schools  32 

Private  schools  45 

Value  of  both  the  above  $4,100,000 

Number  of  pupils  in  both  15,681 

Churches  55 

Jobbing  and  retail  trade  (estimate) $36,842,837 

Steam  railroads  in  operation  7 

Building  and  projected  8 

Manufacture  in  1909  (estimate)  $17,000,000 

Value  of  street  railway  system  672.890.12 

Value  of  Fort  Sam  Houston  $3,800,000 

Expenditure  at  Fort  Sam  Houston,  1908 $2,831,000 


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LATIN  AMERICA 


PROSPEROUS  SOUTH  AMERICA 


A MOST  gratifying  growth  in  commerce 
and  steady  progress  in  nearly  every  di- 
rection in  South  American  republics  is 
disclosed  in  a review  of  the  conditions  m 
those  countries  just  prepared  by  John  Bar- 
rett, director  of  the  International  Bureau 
of  American  Republics.  Practically  every 
republic  is  spending  large  sums  of  money 
in  development  of  various  kinds,  particu- 
larly in  the  building  of  a network  of  rail- 
roads. The  notable  commercial  advance  of 
the  Argentine  Republic  in  1909  was  largely 
due  to  increased  railway  and  water  trans- 
portation facilities.  Railroad  construction 
and  agricultural  development  have  effected 
a transformation  of  the  fertile  prairies,  or 
pampas,  of  the  country  into  productive 
fields  of  cereals  and  grasses,  and  large 
areas  of  the  more  arid  plains  of  the  higher 
lands  have  been  converted  by  means  of  irri- 
gation into  rich  pasturable  tracts,  unex- 
celled in  any  part  of  the  world. 

Prosperity  in  Argentina. 

The  financial  condition  of  Argentina  in 
1909  was  most  satisfactory,  the  conversion 
fund  of  the  nation  having  increased  during 
that  period  to  the  extent  of  $30,000,000  gold. 
The  foreign  commerce  of  1909  exceeded 
that  of  1908  by  $61,128,546,  while  the  do- 
mestic commerce  was  greatly  in  excess  of 
that  of  1907  and  1908.  The  manufacturing 
industries  showed  considerable  activity  in 
1909,  regardless  of  strikes  and  a general 
scarcity  of  labor.  The  railroad  development 
was  very  great,  two  thousand  miles  of  new 
lines  having  been  completed  and  opened  to 
traffic  during  the  year.  The  revenues  for 
the  year  were  $120,791,694.  The  public  debt 
on  the  first  of  the  year  was  about  $443,205,- 
832.  This  shows  a slight  decrease  of  debt 
in  ten  years,  but  by  no  means  tells  the  full 
story  of  Argentina’s  advance  in  credit.  In 
1900  the  total  revenues  of  the  republic  were 
$64,000,000,  in  1909  they  were  nearly  $131,- 
000,000.  In  1900  the  debt  was  $447,000,000. 
It  can  thus  be  seen  that  the  debt  of  1900 


Vera  Cruz  Banking  Company,  Ltd. 

(Cl a.  Banquerm  Veracrusana,  & A.) 
VERA  CRUZ,  MEXICO 

Capital  and  8urplus  - - $550,000.00 

A General  Banking  Business  Transacted 
Collections  Promptly  Handled 


was  seven  times  as  great  as  the  annual  reve- 
nue, while  the  debt  of  1909  is  only  three  and 
two-thirds  times  the  revenue.  A consider- 
able part  of  the  debt  is  now  represented  by 
paying  improvements,  such  as  the  State 
railways,  Buenos  Ayres  port  works  and  the 
Buenos  Ayres  water  works. 

In  the  matter  of  commerce  with  Argen- 
tina, Great  Britain  has  a commanding  lead 
over  all  its  rivals,  shipping  to  the  republic 
goods  of  a value  much  greater  than  those 
from  both  the  United  States  and  Germany. 
The  United  States  remains  third  on  the  list, 
although  its  percentage  of  increase  is  great- 
er than  that  of  either  Great  Britain  or  Ger- 
many. The  railways  in  the  republic  have 
been  remarkably  profitable.  At  the  dose 
of  1909  there  were  in  operation  15,849  miles 
of  railway,  representing  a capitalization  of 
$900,000,000.  Receipts  from  operating  the 
roads  are  estimated  at  $105,576,000  and  ex- 
penses at  $62,272,000. 

Bolivia  Steadily  Advancing. 

In  Bolivia,  the  third  largest  of  South 
American  republics,  steady  advances  were 
made,  the  most  noticeable  being  the  gain  in 
foreign  commerce  of  almost  $2,000,000.  The 
balance  of  trade  was  in  favor  of  the  repub- 
lic, as  the  exports  far  exceeded  the  imports, 


iffutattmr 

Only  Weekly  Fbumcitl  Journal 
Published  In  Mexico 

COMPLETE  QUOTATIONS  OF  ALL 
BANK,  INDUSTRIAL  AND  MINING 
STOCKS 

READING  MATTER  OF  VITAL  INTEREST 
TO  ALL  INVESTORS  IN  MEXICO 

$5.00  V.  S.  Currency  per  Annum , post- 
age p*id 

JOHN  R.  SOUTHWORTH.  F.R.G.S. 
Managing  Director 

CALLE  DEL  EUSEO  . MEXICO,  D.  F. 
Cable  Addwre,  Cel-South.  P.  O.  Box  1172, 
Mexico  City 


685 


Digitized  by  t^ooQle 


536 


THE  BANKERS  MAGAZINE 


Into  Mincro 


CHIHUAHUA,  MEXICO 


Capital  - - - - $5,000,000.00 
Surplus  fund  - - 1,475,087.12 


Transacts  a General  Line 
of  Banking  Business. 

Drafts  and  Letters  of  Credit  on 
Europe,  United  States  and 
Mexico. 

Collections  on  any  part  of 
Mexico  Given  Prompt  and 
Careful  Attention. 

CORRESPONDENCE  INVITED 

New  York  Corrtsponient,  NATIONAL  PARK  BANK 


JUAN  A.  CREEL  E.  C.  CUILTY 

G— cral  Manager  Cash  far 


and  while  the  imports  fell  somewhat  short 
of  those  of  11)08,  exports,  on  the  other  hand, 
for  1909  exceeded  those  for  1908  by  $3,500,- 
000.  In  railroad  construction  noticeable 
progress  has  been  made.  The  prospect  of 
not  only  opening  new  regions  throughout 
the  Republic,  but  also  of  affording  quicker 
access  to  the  capital  by  newer  and  shorter 
lines  approaches  a most  satisfactory  settle- 
ment. The  most  noticeable  financial  fea- 
ture of  the  year  was  the  disposition  made 
of  the  loan  negotiated  at  the  close  of  1908. 
The  cash  thus  obtained  was  applied  for  im- 
mediate service  of  the  internal  debt  and  to 
help  in  the  establishment  of  the  gold  stand- 
ard. As  far  as  concerns  agriculture,  Bo- 
livia is  still  in  a backward  state.  Notwith- 
standing the  fertility  of  the  plateaus  and 
the  marvellous  richness  of  the  eastern 
slopes  the  country  is  still  so  sparsely  set- 
tled and  so  inaccessible  that  production 
barely  keeps  pace  with  consumption.  The 
great  staples  of  Bolivia — rubber  and  cacao- 
can  be  produced  in  far  greater  abundance 
than  they  are  today,  but  what  is  chiefly 
needed  is  a larger  industrial  population. 
The  debt  of  Bolivia  is  only  a little  more 
than  $3,000,000,  which,  with  the  easy  pay- 
ment already  arranged  for,  will  be  wiped 
out  in  twenty-three  and  one-half  years.  In 
commerce  the  United  States  has  displaced 
Germany  in  trade  with  Bolivia.  Germany 
lost  nearly  half  its  trade,  while  the  United 
States  gained  33  per  cent. 

Recobd  Year  for  Brazil. 

Brazil,  the  largest  of  the  South  American 
republics,  and  200,000  square  miles  larger 
than  the  United  States,  if  we  exclude 
Alaska,  shows  a remarkable  increase  of  ex- 
ports for  the  year  1909,  and  the  balance  of 
trade,  comparing  this  factor  with  that  of 
imports,  was  the  greatest  that  has  ever  oc- 
curred in  the  history  of  that  country.  In 
matters  of  finance  the  expenditures  were 
greater  than  the  revenues;  but  while  the  na- 
tional debt  was  increased  during  the  year 
much  of  this  increase  is  explained  by  the 
fact  that  the  loan  is  simply  an  investment 
in  the  national  improvements,  such  as  in- 
creased dock  facilities  and  newr  railroads. 
In  the  matter  of  imports  the  United  States 
is  third  on  the  list,  Germany  being  second 
and  Great  Britain  first. 

Activity  in  Chile. 

In  most  directions  Chile  enjoyed  a pros- 
perous year  in  1909  and  has  recovered  from 
the  disaster  of  the  earthquake  of  1906.  Fi- 
nancially 1909  was  not  so  prosperous  a 
year  as  1908.  In  1908  there  was  a net  reve- 
nue remaining  in  the  treasury  but  at  the 
close  of  1909  there  was  an  apparent  deficit 
of  $11,000,000,  which  the  Minister  of  Finance, 
by  a readjustment  of  items,  reduced  to  a 
real  deficit  of  $5,000,000.  As  all  indications 
for  1910  are  favorable  there  is  every  pros- 


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THBBB  ABB  THREE  DEPARTMENTS  OB1  THE 


Ct.  Bancarta  do  Fonento  y Bianas  Raices,  di  Mexico,  S.  A. 


Kin  imn 

This  department  buys  and 
sells  all  kinds  of  land  in  every 
part  or  the  Republio— City  or 
Country.  Houses  bought.pold 
and  constructed.  Ran  cues 
subdivided  into  smaller  ones. 
T.  M.  Omrc— , 


PUBLIC  WORKS 

This  department  does  paving 
work,  makes  surveys,  con- 
structs sewerage  systems,  etc. 
It  has  improved  the  Cities  of 
Mexioo,  Puebla,  Guadalajara, 
Durango  and  others. 

Mmauel  Blgiere,  Mtmmgmr. 


BANKING 

This  department  finances  the 
other  two  departments  and 
does  all  kinds  of  business  in 
relation  to  banking. 


Xsder  IctmylssJs,  Jf#r. 


CORRESPONDENCE  18  INVITED 


Compania  Bancaria  de  Fomento  y Blenes  Calces,  de  Mexico,  S.  A. 

MEXICO.  D.  r. 

Presides t—F.  PIMENTEL  T FAGOAGA 

1st  Tics- Pres.  P.  MACEDO  Xm4  Tlee-Pres.-LUI8  BARROBO  ARIAS 


pect  that  much  of  this  deficit  will  be  over- 
come during  the  present  year.  The  year 
was  a good  one  agriculturally.  More  than 
the  average  crops  were  obtained  and  the 
prices  advanced.  Farm  products  were  ex- 
ported to  a greater  extent  than  in  any 
previous  year.  By  the  extensive  plans  of 
irrigation  to  which  the  Chilean  Government 
has  committed  itself,  large  areas  of  agri- 
cultural land  will  be  opened  for  develop- 
ment and  even  many  tracts  hitherto  rela- 
tively sterile  will  he  noticeably  increased  in 
their  productiveness.  In  commercial  rela- 
tions the  year  1909  showed  a small  reduc- 
tion of  both  imports  and  exports  as  com- 
pared with  1908.  Imports  from  Germany 
decreased  while  those  from  the  United 
States  and  Great  Britain  increased.  The 
increase  of  railway  mileage  within  the  Re- 
public went  on  steadily  and  immigration 
was  more  popular  than  ever  before,  due  in 
a large  measure  to  the  effort  of  the  govern- 
ment to  offer  material  inducements  for  good 
workmen  in  both  the  shops  and  the  fields. 
The  deficit  for  the  year  was  $11,658,8(50.  A 
material  decrease  in  this  deficit  is  expected 
to  he  made  this  year,  owing  to  the  increased 
export  of  nitrate.  The  Government  has  done 
much  to  improve  the  sanitary  conditions  of 
the  people  during  the  year.  Many  new 
water  supply  and  sewer  systems  have  either 
been  installed  or  are  now  being  constructed, 
New  hospitals  have  been  provided,  including 
one  at  Valparaiso  expressly  for  tuberculosis 
patients,  and  careful  attention  has  been 
given  to  the  disease  of  bubonic  plague. 

Colombian  Tbade  Increasing. 

Exports  from  Colombia  increased  in  1909. 
which  is  taken  as  proof  that  agriculturally 
the  country  was  prosperous  Because,  al- 
though the  land  is  extraordinarily  rich  in 
minerals,  it  still  depends  upon  agriculture 
as  its  principal  source  of  income.  The  im- 
ports fell  below  those  of  the  preceding  year. 
The  most  noticeable  railroad  achievement 
during  the  year  was  the  establishment  of 
both  freight  and  passenger  service  between 
Girardot  and  Bogota.  This  is  the  success- 


ful culmination  of  a prolonged  effort  to 
overcome  the  isolation  of  the  capital,  which 
was  reached  up  to  this  time  only  by  a diffi- 
cult passage  on  mule  back  over  the  moun- 
tains. It  brings  Bogota  several  days  nearer 
the  rest  of  the  world  than  heretofore.  The 
Government  is  devoting  itself  energetically 
to  the  problem  of  maintaining  its  money  on 
a normal  basis  and  is  meeting  with  consid- 
erable success.  The  value  of  Colombian  for- 
eign trade  for  the  year  1909  was  $26,074,393; 
the  imports  were  $10,561,047;  the  exports 
were  $15,51 3,346,  with  a balance  of  trade  in 
favor  of  the  republic  of  $4,952,300.  The  fig- 
ures show  a decrease  in  the  foreign  trade, 
as  compared  with  1908  of  $2,438,243.  Many 
measures  are  under  consideration  by  the 
Government  for  the  development  of  the  nat- 
ural sources  of  wealth.  For  the  purpose  of 
aiding  national  enterprises  modifications 
have  been  made  in  the  customs  tariff  on  ar- 
ticles for  railway  construction,  mills,  agri- 
culture, etc.,  all  of  which  have  been  placed 
on  the  free  list.  United  States  capitalists 
are  showing  considerable  interest  in  the  ex- 
ploitation of  rubber;  in  the  operation  of 
gold,  silver,  platinum  and  other  mines;  and 
iu  the  development  of  the  agricultural  re- 
sources of  the  republic. 

Costa  Rica  Also  Prosverous. 

Costa  Rica,  the  southernmost  of  Central 
American  republics,  made  satisfactory  finan- 
cial progreess  during  1909.  The  national  reve- 
nue exceeded  that  of  1908  and  while  the  ex- 
penditures about  balanced  the  receipts,  they 
were  less  relatively  than  those  of  the  pre- 
ceding year.  A noticeable  feature  of  the 
budget  is  that  the  amount  spent  on  public 
schools  is  about  equal  to  that  for  military 
and  police.  Agriculturally,  an  improvement 
was  made  over  the  preceding  vear,  and  for- 
eign commerce  made  a net  gain,  the  balance 
of  trade  being  in  favor  of  the  republic. 
Railroad  development  went  on  steadily, 
branch  lines  being  extended  into  the  banana 
territory  near  Limon,  but  the  expected 
completion  of  the  National  Pacific  Railway 
was  delayed.  It  is  expected  that  this  will 

537 


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Banco  de  Nuevo  Leon 


MONTEREY,  IN.  U,  MEXICO 

ESTABLISHED  OCT.  1,  1892 

Capital  paid  up,  $2,000,000  Rasims,  $747,031.80  Dipislts,  $2,030,088.88 

GENERAL  BANKING  BUSINESS  TRANSACTED 


PHnelp*!  Correspondent# : — NEW  YORK.  National  Park  Bank  NaHnn&i 
Cop?er  Bank;  Dre^ne5^^an£U?Kdit  ^roimSa;*  bSSleS 

1 ^ ®®?!ner  Jfe-Pdeis  Ge#ellachaft:  PARIS,  Credit  Lyon- 
?f1#wCo,“Pto,r  National  d'Eacompte;  HAMBURG,  Deutsche  Bank  Bill- 
ale  Hamburg:,  Commera  und  Disc  on  to  Bank:  M^ADRID,  Baneo  Hia- 
pano  Americano,  Banco  de  Ca#tilla;  HABA^A,  Banco  de  la  Habana. 


RODOLFO  J.  GARCIA,  Maautr 
ARTURO  MANRIQUE,  Accountant 


AMADOR  PAZ.  Caahlar 


be  accomplished  this  year.  The  United 
States  was  the  leader  in  importing  goods 
into  Costa  Rica,  with  Great  Britain  second 
and  Germany  third. 

Cuba  Making  Progress. 

Industrially  Cuba  ranked  high  among  the 
American  republics  during  the  year  1909. 
Good  crops  characterised  the  whole  season, 
many  miles  of  fine  roads  were  opened 
throughout  the  island  and  private  and  pub- 
lic improvements  of  great  importance  were 
undertaken.  The  financial  condition  of  the 
country  is  most  satisfactory.  The  deficit 
which  was  reported  at  the  beginning  of  1909 
was  reduced.  The  sum  collected  by  the 
Government  was  practically  the  same  as  the 
estimates  called  for  but  the  expenditures  ac- 
tually fell  below  the  authorized  sum  for  the 
same,  period.  Commerce  for  the  fiscal  year 
1908-9  showed  a considerable  increase  over 
the  preceding  year,  the  balance  of  trade  re- 
maining decidedly  in  favor  of  the  Republic. 
Of  the  total  imports  the  United  States  sup- 
plied practically  50  per  cent,  Great  Britain, 
France,  Spain  and  Germany  following  in  the 
order  named.  The  value  of  exports  to  the 
United  States  was  above  $100,000,000,  al- 
most 90  per  cent,  of  the  total. 

Prosperity  Everywhere. 

The  year  1909  marked  an  epoch  in  the 
history  of  the  Dominican  Republic.  Not- 
withstanding the  fact  that  the  foreign  com- 
merce of  the  Republic  was  $1,694,659  less 
than  that  of  1908  the  country  as  a whole 
was  prosperous,  the  decline  in  the  volume 
and  value  of  foreign  trade  having  been 
largely  due  to  the  suspension  of  staple  Do- 
minican products  during  the  closing  months 
of  the  year,  inasmuch  as  shippers  preferred 
to  await  the  application  of  the  new  tariff 
which  became  operative  Jan.  1,  1910,  under 
which  the  export  tax  on  cacao,  hitherto  the 
most  important  export  product  of  the  Re- 
public, was  reduced  fifty  per  cent.  The  rev- 
enue receipts  for  the  year  amounted  to  $4,- 
593,160,  while  the  expenditures  were  $4,- 
539,322. 

In  Ecuador  it  is  realized  more  than  ever 
638 


that  reform  in  expenditure  is  necessary  be- 
fore real  progress  can  be  made.  It  is  shown, 
for  instance,  that  in  the  estimates  for  1909, 
fully  58  per  cent,  of  the  receipts  were  de- 
vote to  special  purposes,  and  it  is  proposed 
to  bring  about  reform  in  this  regard.  The 
revenues  amounted  to  $6,681,092,  while  tlie 
expenditures  were  $6,382,342.  The  imports 
amounted  to  $9,352,122  and  the  exports  to 
$12,439,400.  Great  Britain  leads  in  the  mat- 
ter of  imports,  with  the  United  States  sec- 
ond and  Germany  third. 

In  Guatemala  the  financial  condition  dur- 
ing 1909  was  encouraging,  although  the  ex- 
penditures exceeded  the  receipts  by  a con- 
siderable figure.  The  United  States  leads 
in  the  matter  of  imports,  with  Germany  sec- 
ond and  England  third. 


MERGER  OF  MEXICAN  RAIL- 
ROADS 

THE  National  Railways  of  Mexico  has 
secured  control  of  the  Pan-American 
Railroad  from  ex-United  States  Am- 
bassador to  Mexico,  David  E.  Thompson, 
and  his  associates,  and  has  also  acquired 
from  the  Mexican  Government  the  Vera 
Cruz  and  Isthmus  Railroad.  These  two  ad- 
ditions to  the  company’s  lines  mean  an  in- 
crease in  mileage  of  something  like  500 
miles.  The  exact  nature  of  the  transactions 
has  i\ot  been  made  public,  but  it  is  under- 
stood that  a statement  will  be  issued  shortly 
by  the  company. 

The  Pan-American  Railway  was  under- 
taken as  a projection  from  Geronimo,  Mexi- 
co, on  the  Tehuantepec  National  Railway 
for  a distance  of  approximately  300  miles 
to  the  southeast  and  touching  the  Guatemala 
border.  The  road  is  not  yet  completed,  but 
a considerable  part  of  it  is  now  in  operation. 
Mr.  Thompson  left  his  post  as  Ambassador 
in  the  spring  of  1909  and  shortly  after  as- 
sumed the  lead  in  the  enterprise. 

The  Mexican  Government  allows  the  road 
a subsidy  of  about  $10,000  gold  a mile.  The 
authorized  stock  is  $10,000,000,  of  which 


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LATIN  AMERICA 


539 


$9,600,000  and  also  $3,600,000  general  mort- 
gage bonds  are  owned  by  the  Pan-American 
Company  and  deposited*  under  its  collateral 
trust  six  per  cent,  bonds.  The  rest  of  the 
general  mortgage  bonds  to  the  amount  of 
$9,400,000  are  reserved  to  retire  the  out- 
standing first  mortgage  bonds. 

The  Vera  Cruz  and  Isthmus  Railroad  was 
formerly  known  as  the  Vera  Cruz  and 
Pacific  Railroad  Company  and  has  been  con- 
trolled for  many  years  by  the  Mexican  Gov- 
ernment. It  runs  from  Corboda,  on  the 
Mexican  Railway,  to  Santa  Lucretia,  about 
200  miles,  where  it  connects  with  the  Te- 
huantepec National  Railway,  also  owned  by 
the  government,  and  from  which  point  it 
connects  with  Salina  Cruz,  144  miles  away, 
on  the  Pacific.  All  of  the  $1,000,000  stock 
of  the  Vera  Cruz  and  Isthmus  Railroad  was 
owned  by  the  Mexican  Government,  which 
guarantees  its  bonds  by  indorsement. 

One  of  the  most  significant  facts  about 
the  acquisition  of  these  two  railroads  is  that 
the  system  will  now  have  an  outlet  into 
Guatemala.  But  it  does  not  mean  that  these 
lines  comprise  all  the  railroads  in  Mexico. 
The  Southern  Pacific  has  a nearly  completed 
line  on  the  Pacific  coast.  There  is  also  the 
Mexican  Northwestern  Railway,  in  which  Dr. 
F.  S.  Pearson  is  the  controlling  figure,  be- 
sides the  Kansas  City,  Mexico  and  Orient 
Railway,  with  A.  E.  S til  well  and  his  asso- 
ciates behind  it.  There  is  also  the  old  Mexi- 
can Railway,  the  longest  established  of  all, 
which  is  owned  by  English  capital,  and  the 
lines  of  which  run  from  Mexico  City  to  Vera 
Cruz. 

From  time  to  time  there  have  been  re- 
ports that  this  last  named  road  would  be 
absorbed  by  the  National  Railways,  but 
there  appeared  to  be  little  need  for  this,  in- 
asmuch as  the  National  Railways  runs  the 
Interoceanic  Railway,  which  covers  the  same 
territory. 

But  with  these  two  new  additions  the  lines 
of  the  National  Railways  are  cobwebbed 
pretty  thoroughly  over  the  map  of  Mexico. 
Their  three  entrance  points  at  the  north  are 


El  Paso,  Laredo  and  Eagle  Pass.  The  main 
strands  of  the  system  converge  at  Mexico 
City,  but  there  are  notable  offshoots  to  Du- 
rango, Matamoros,  Tampico,  Guadalajara, 
Vera  Cruz,  and  now  to  the  Pacific  at  Man- 
zanillo and  Salina  Cruz. 

Included  in  this  system  are  the  Mexican 
International  Railroad,  which  was  recently 
taken  into  the  National  Railways,  and  the 
National  Tehauntepec  Railway,  owned  by 
the  government,  but  not  a corporate  part  of 
the  National  Railways. 


MEXICO’S  PROSPERITY  CONVINC- 
INGLY TOLD  BY  BANKING 
STATUS 

THIS  month’s  thousands  of  visitors  to 
Mexico,  says  the  “Mexico  Daily  Rec- 
ord” of  September  5,  if  they  be  inter- 
ested in  the  material  welfare  and  progress 
of  the  country,  will  be  enabled  to  form  ac- 
curate estimates  of  conditions  by  casual  in- 
vestigation into  the  banking  status.  Not 
many  other  countries,  even  of  greater  popu- 
lations, are  upon  a firmer  footing,  as  the 
idly  or  busily  curious  may  learn,  if  they 
take  time  to  read  as  they  run. 

Banking  prosperity  in  Mexico  is  evidenced 
by  the  opening  of  a number  of  new  parent 
and  branch  institutions  in  the  capital  and 
outside  cities,  increase  of  capitalization  and 
scope  in  several  instances  and  building  of 
new  homes  for  divers  banks  of  the  republic. 
These  developments  more  than  offset  the 
failure  of  two  banks  in  Mexico  City  this 
year,  one  of  which  bids  fair  to  pay  its 
creditors  in  full,  and  the  withdrawal  of  one 
firm  from  business. 

Prominent  financiers  of  Mexico  City  have 
organized  the  Mexican  Banking  Co.,  which 
has  launched  a regular  banking  business  in 
all  departments,  except  that  it  will  authorize 
no  issues  of  bank  mills.  The  head  officers 
are  prominently  identified  with  the  thriving 
bank  of  Durango. 


BANCO  MERCANTIL  DE  MONTEREY 

MONTEREY,  N.  L.,  MEXICO  A Corporation 

OFFICIAL  DEPOSITORY  FOR  THE  GOVERNMENT  OF  THE  STATE  OF 

NUEVO  LEON 

Capital  Besources,  $2^00,000.00  Deserves,  $232369.49 

Manager,  MR.  J08S  L.  GARZA  Oaahler,  HR.  ENRIQUE  MIGUEL 

Accountant,  MR  RMETERIO  VELARDE 

Baya  and  Mila  domeatic  and  foreign  drafts.  Iaanoa  letters  of  credit.  Takes  charge  ef  any  eeEee- 
do«i  eatraated  to  It  on  a moderate  rate  fer  commission  and  remittance.  Raya  and 
Mila  for  aeoeunt  of  others,  government,  municipal,  banking,  and  mining  stocks  and  bonds. 

Principal  Cerreependentu— National  Pork  Bank , How  York  City;  Banco  Hiopano  Amorim one, 
Madrid,  Spain;  Credit  Lyonnmioe,  Porto . Franco;  Credit  Lyonnmioe,  London,  Mngland;  Hamburger 
FI Mela  dor  Dmtoehm  Bank,  Hamburg,  Germany. 


Digitized  by  t^ooQle 


MERCANTILE  BANKING  COMPANY,  Ltd. 

AvenMa  San  Francisoo  Ne.  12 

CITY  OF  MEXICO  

Capital,  $500,000.00  Surplus,  $100,000.00 

Members  sf  the  American  Bankers1  Association 
GEO.  J.  McCARTY,  President  K.  M.  VAN  ZANDT,  Jr.,  Vlce-Pres.  A Mgr. 

H.  C.  HEAD,  Cashier  SHUR  WELCH,  Assistant  Cashier. 

A Bewral  Banking  Business  Transacted  Foreign  Eiohange  Bought  and  Sold 
Tolographio  Transfers  Letters  of  Credit 

Unsurpassed  collection  facilities.  Correspondence  solicited.  Accounts  of  Bunks,  Bank- 
ers, Merchants  and  Individuals  solicited. 


The  Canadian  Bank  of  Commerce,  fifth 
strongest  fiduciary  institution  in  the  world, 
opened  its  doors  for  business  in  Mexico  City 
on  August  22.  Founding  of  the  Mexico 
City  branch  is  the  direct  result  of  the  de- 
mand of  extensive  and  sane  investors  for 
better  facilities  for  the  placing  of  their 
capital  in  Mexican  ventures.  J.  P.  Bell, 
late  of  Montreal,  is  manager,  and  his  assist- 
ant is  D.  Muir  head,  from  the  same  city. 
Most  of  the  office  force  is  made  up  of  ca- 
pable young  men  of  this  capital,  versed  both 
in  Spanish  and  English. 

J.  F.  Brittingham  is  president  and  Mauro 
del  Pena  is  manager  of  the  newly  organized 
investment  and  Discount  Company,  Limited, 
which  has  begun  a regular  banking  business 
in  the  city  of  Torreon  with  a paid  up  capital 
of  $500,000.  It  will  cater  chiefly  to  foreign 
interests  in  the  Laguna  domain  of  which 
Torreon  is  the  commercial  center,  many  of 
its  heavier  stockholders  being  identified  with 
the  Bank  of  Leguna,  which  has  confined  its 
operations  in  domestic  business. 

■ Capitalists  conspicuous  in  the  affairs  of 
fhe  Bank  of  Sonora  have  completed  ar- 
rangements for  the  establishment  of  a mort- 
gage bank  in  Hermosillo,  with  a capital  of 
$2,000,000.  The  institution  will  open  on  the 
first  day  of  1911.  Among  its  prime  objects 
will  he  the  encouragement  of  agricultural 
exploitation  in  the  States  of  Sonora  and 
Sinaloa.  In  the  beginning  agencies  will  he 
established  at  various  points  in  the  Yaqui, 
Mayo  and  Fuerte  River  valleys. 

Contracts  have  been  awarded  for  the 
construction  of  a new  home  for  the  Bank  of 
London  and  Mexico  in  Mexico  City,  the 
structure  of  steel  frame  and  stone  to  be  one 
of  the  finest  hank  buildings  in  the  capital. 
Excavations  extend  fifteen  feet  below  the 
street  level  and  the  edifice  will  be  four 
• stories  high.  It  will  he  completed  within 
eighteen  months. 

The  private  hanking  house  of  Hugo 
Scherer  will  soon  withdraw  from  business  in 
Mexico  City,  the  extra-judicial  liquidation 
of  the  firm's  affairs  having  been  assigned  to 
R.  V.  Busto  and  Alfred  de  Chapeaurouge. 

540 


All  liabilities  will  be  settled  in  full,  the 
withdrawal  being  only  in  accordance  with 
the  will  of  the  founder,  who  died  at  Frank- 
furt-am-Main four  months  ago.  Hugo 
Scherer  came  to  Mexico  in  1881  as  chief  ac- 
countant of  the  National  Bank  of  Mexico 
and  remained  with  that  government  institu- 
tion until  1886,  w'hen  he  established  the 
Scherer  hank,  which  developed  into  one  of 
the  wealthiest  institutions  in  Mexico. 

Bankers  of  Mexico  complain  of  a remark- 
able shortage  of  subsidiary  coin  at  this  time, 
claiming  that  appeals  to  the  monetary  com- 
mission have  not  availed  to  relieve  the  situ- 
ation. The  famine  of  chicken  feed  is  attrib- 
uted to  the  enormous  increase  in  the  volume 
of  business.  Some  of  the  private  banks  are 
paying  fancy  premiums  to  collectors  of  frac- 
tional currency. 

The  National  pawnshop  is  classed  in  Mex- 
ico almost  upon  a par  with  the  banks,  trans- 
acting a similar  business  and  handling 
money  in  almost  equal  volume.  In  July  of 
this  year  operations  of  this  government  in- 
stitution, founded  primarily  for  the  bene- 
fit of  the  poor,  totaled  $l,00i,  128.22,  Mexican 
silver,  equivalent  to  $500,564.11  in  United 
States  currency.  The  shop  made  loans  on 
39,160  pledged  articles,  valued  at  $497,234.50, 
silver,  and  there  were  35,132  articles  re- 
deemed, wrorth  $433,335-  The  pawnshop  sold 
5,103  articles  for  $120,612.72.  Stock  nowr  on 
hand  is  of  an  estimated  value  of  $2,856,- 
716.95. 


BUSINESS  CONDITIONS  IN 
ARGENTINA 

AN  American  business  man  who  is  in 
> Argentina  for  the  purpose  of  looking 
into  business  conditions  in  that  coun- 
try has  been  kind  enough  to  send  the  “New 
York  Sun”  a brief  summary  of  his  expe- 
rience and  his  observations  in  connection 
with  the  commercial  phases  of  the  Interna- 
tional Exposition  wTiich  is  a part  of  Ar- 
gentina’s celebration  of  its  hundredth  birth- 
day. His  comment  is  illuminating  and 
suggestive,  and  there  is  every  reason  to  re- 


Digitized  by  LiOOQLe 


LATIN  AMERICA 


541 


gard  it  as  accurate  and  trustworthy.  The 
article  reads  in  part  as  follows: 

The  reason  for  the  delay  in  turning  over 
the  American  exhibition  building  was  the 
necessity  for  its  enlargement  when  the 
American  Congress  made  an  appropiiation 
which  enabled  the  Government  to  be  offi- 
cially represented.  The  appropriation  was 
not  made  until  last  February.  We  have  a 
huge  exposition  palace  with  60,000  square 
feet  of  floor  space,  and  every  inch  of  it  is 
filled. 

Most  American  concerns  are  represented 
in  Argentina  by  European  houses  as  agents, 
and  I learn  from  a most  trustworthy 
source  that  these  houses  have  an  agree- 
ment or  understanding  by  which  the  sale  of 
American  merchandise  is  limited.  My  at- 
tention was  called  to  a particular  case,  that 
of  an  American  concern  formerly  repre- 
sented here  by  a British  firm.  Under  that 
arrangement  sales  averaged  about  $30,000  a 
year.  Disgusted  with  so  small  a business 
In  a field  in  which  the  Americans  believed 
they  should  do  a large  and  profitable  trade, 
they  established  an  independent  agency 
with  one  of  their  own  people  in  charge,  of 
It.  Their  sales  already  amount  to  nearly 
$1,000,000  a year. 

I am  told  that  when  the  exposition  w’as 
being  planned  a little  over  a year  ago,  a 
number  of  the  prominent  foreign  houses 
here  agreed  upon  a general  boycott  of  the* 
exposition,  alleging  that  they  could  not 
afford  to  take  part  In  It.  The  truth  is  that 
they  wanted  the  plans  for  the  exposition  to 
fail  because  they  are  afraid  of  an  invasion 
of  this  market  by  American  manufac- 
turers. If  there  is  any  way  to  get  fast 
ships  between  this  port  and  New  York,  we 
can  get  a lot  of  this  trade.  A few  days 
ago  one  of  my  friends  went  to  several  big 
stores  here  and  asked  for  different  articles. 
When  he  was  told  they  did  not  have  them, 
he  said:  “Can  you  send  to  the  United  States 
for  them  if  I give  you  an  order?”  In  every 
case  the  reply  was,  “Why,  that  would  take 
too  long:  let  us  send  to  Europe  for  them.” 
We  could  get  a great  deal  of  this  order 
business  if  there  were  fast  regular  steam- 
ship service.  Ordinarily  an  order  sent  from 
here  by  mail  to  the  United  States  would  not 
produce  the  goods  in  much  less  than  ninety 
days.  You  can  send  orders  to  Europe  by 
steamships  every  few  days,  and  some  of 
the  vessels  make  the  run  In  fifteen  days. 

England  would  lose  out  here  very  rapidly 
if  it  were  not  for  her  large  financial  in- 
vestments. English  railroads  have  in  many 
cases  their  purchasing  offices  in  England. 
Germany  is  pushing  very  hard  In  this  mar- 


ket. There  is  a German  commercial  repre- 
sentative stationed  here  at  a big  salary,  as 
salaries  go.  He  is  Independent  of  both  the 
legation  and  the  consulate.  He  Is  at  work 
all  the  time,  and  does  not  merely  spend  a 
few  weeks  in  the  place  writing  superficial 
reports. 


GENERAL  NOTES 

— Porto  Rich  is  one  of  Uncle  Sam’s  best 
customers,  according  to  Governmental  sta- 
tistical experts.  Last  year  goods  shipped 
into  the  island  from  this  country  aggregated 
about  $£8,000,000.  Porto  Rico  purchased 
as  much  from  the  United  States  as  Bolivia, 
Colombia,  Costa  Rica  and  the  Dominican 
Republic  combined,  and  eclipsed  Brazil  as 
a buyer  of  American  goods.  The  present 
year  is  declared  to  be  the  most  prosperous 
the  island  has  ever  known.  The  indications 
are  that  the  total  trade  next  year  will  reach 
$8.5,000,000  because  of  the  increased  acreage 
of  tobacco,  sugar  cane  and  fruits.  ■ 

— Waiting  only  for  minor  details  to  be 
decided  upon  in  their  plans,  two  large 
banks  of  Mexico  City  will  have  handsome 
buildings  under  construction  xvithin  the 
next  few’  weeks.  One  of  these  is  the  new 
home  of  the  Banco  de  Londres  v Mexico 
to  be  constructed  at  the  corner  of  Coliseo 
and  Avenida,  16  de  Septiembre,  adjoining 
the  principal  theatre.  The  contract  for  a 
reinforced  steel  and  concrete  foundation 
and  basement  has  been  let  to  the  construc- 
tion department  of  the  Compania  Bancario 
de  Bienes  Raices,  and  that  company  has 
nearly  completed  the  excavations  necessary. 
While  the  probable  cost  of  this  building 
will  not  be  diviulged  by  the  bank  com- 
pany at  present  on  the  ground  that  various 
changes  are  yet  to  be  made  in  the  plans, 
it  is  understood  that  it  will  be  one  of  the 
handsomest  private  structures  in  Mexico 
City,  will  have  four  or  five  stories  above 
the  basement  and  will  be  of  steel,  con- 
crete and  handsomely  finished  stone. 

The  Banco  Germanico  de  la  America  del 
Sur,  now  at  No.  7 Calle  de  Capuchinas, 
will  begin  construction  work  during  the 
month  of  October  on  a four-storv  steel  and 
stone  bank  building  at  No.  3 Calle  Cadena. 
This  building  will  adjoin  the  Banco  de 
Comereio  y Industry  at  number  5 the  same 
street,  a handsome  steel  and  stone  building 


Mexico  City  Banking  Company,  S.  A. 


AVENIDA  SAN  FRANCI8CO  No.  14 

Capital  and  Surplus  $1,000,000 

•ILLEITIMS  All  ALL  DAKIN  MATTERS  IIVEI  PRIIPT  AID  CAREFUL  ATTEITItl 


Digitized  by  UiOOQLe 


542 


THE  BANKERS  MAGAZINE 


of  the  same  type  just  completed.  The  plans 
for  the  latter  structure  have  been  for- 
warded to  the  home  office  at  Berlin  and  the 
work  will  not  be  begun  until  they  are  re- 
turned. 

— Consul  Isaac  A.  Manning,  of  Laguayrn, 
furnishes  the  following  abstract  of  bank 
balances  of  the  three  principal  banking  in- 
stitutions of  Venezuela  at  the  end  of  Au- 


gust,  1909,  compared  with  August, 

1908,  as 

published,  under 

date  of  May  15, 

1910,  by 

the  Director  of  Statistics  (bolivar= 

-$0.193) : 

Bank 

of  Venezuela. 

1909. 

1908. 

Bolivars. 

Guarantee  fund 

463,656 

343,307 

Reserve  fund  . . 

1,200,000 

1,200,000 

Circulation  

1,977,300 

1,907,310 

Cash  on  hand  . . 

5,171,030 

4,811,841 

Gold  on  hand  . . . 

2,365,921 

1,572,380 

Bank  of  Caracas. 

1909. 

1908. 

Bolivars. — — 

Guarantee  fund 

375,000 

375,000 

Reserve  fund  . . 

624,088 

597,483 

Circulation  

762,240 

788,340 

Cash  on  hand  . . 

2,581,177 

596,597 

Gold  on  hand  . . 

1,087,255 

118,845 

Bank 

of  Maracaibo. 

1909. 

1908. 

Bolivars. 

Guarantee  fund 

12,650 

9,750 

Reserve  fund  . . 

125,000 

Circulation  

820, 

1,606,330 

Cash  on  hand  .. 

793,570 

1,149,591 

Gold  on  hand  . . 

362,113 

484,487 

The  report  of  the  Banco  de  Maracaibo 
for  February,  1910,  shows  that  institution 
had  107,613  bolivars  on  deposit  subject  to 
check,  598,720  bolivars  in  loans  and  546,114 
bolivars  in  current  accounts. 

— For  July  31  the  Banco  Minero  of  Chi- 
huahua, Mexico,  reports  total  resources  of 
$25,167,606,  loans  of  $18,871,122,  a surplus 
fund  of  $1,475,193  and  deposits  of  $14,578,- 
197.  Juan  A.  Creel  is  general  manager  and 
E.  C.  Cuilty  is  cashier. 

— At  the  close  of  business  August  31  the 
Banco  Mercantil  de  Monterey,  Monterey 
N.  Leon,  Mexico,  reported  total  resources 
of  $14,414,724,  a reserve  fund  of  $251,239 
and  deposits  of  $1,988,245. 

— The  Deutsch-Sudamericanische  Bank 
(Berlin)  which  has  a branch  in  Mexico  City, 
announces  that  it  will  open  a branch  bank 


at  Torreon  September  1.  The  bank  will 
be  under  the  charge  of  Hugo  Hahn  as  act- 
ing director  and  Max  Moldenhauer  as 
apoderado.  The  announcement  has  also 
been  made  that  Theodor  Crastens  has  been 
made  apoderado  of  the  branch  in  Mexico 
City.  The  Deutsch-Sudamericanische  bank 
has  establishments  other  than  those  men- 
tioned aoove  at  Hamburg,  Buenos  Aires 
and  Valparaiso.  In  recent  years  Torreon 
has  become  an  important  banking  center, 
and  the  addition  of  a branch  of  such  a 
powerful  banking  concern  will  add  much  to 
the  financial  facilities  of  that  growing  city. 


LOS  ANGELES  CHAPTER  AMERI- 
CAN INSTITUTE  OF  BANKING 
PRODUCES  A SPLENDID 
MUSICAL  COMEDY 

THE  I, os  Angeles  Chapter  of  the  Ameri- 
can Institute  of  Banking  gave  its  an- 
nual show  September  26  to  October  1,  at 
the  Auditorium,  the  largest  theater  in  the 
city.  It  was  the  most  pretentious  affair 
ever  attempted  by  the  chapter.  A new 
musical  comedy,  “The  Maid  of  Manalay,” 
by  Harry  Girard,  of  Los  Angeles,  and  Jo- 
seph Bletheu,  manager  and  part  owner  of 
the  Seattle  Times,  was  presented  to  crowded 
houses.  These  men  also  collaborated  in  the 
production  of  “The  Alaskan,”  a successful 
musical  comedy.  Mr.  Girard  is  an  hon- 
orary member  of  the  Los  Angeles  chapter 
and  had  personal  direction  of  the  entire 
show.  He  directed  last  year’s  musical 
comedy,  “When  the  Gringo  Came,”  in  which 
the  bank  boys  scored  a big  hit. 

This  year’s  musical  comedy  was  Hawaiian 
in  character,  and  book,  lyrics  and  music 
were  up  to  the  highest  notch.  One  hun- 
dred of  the  institute  members  and  sixty 
local  girls  participated  in  the  chorus  ana 
the  caste  included  the  following  singers: 
Agnes  Cain-Brown-Girard,  Miss  Vida  Ra- 
mon, Miss  Hazel  Runge,  Miss  Helen  Sul- 
livan, Miss  Alma  Murphy,  Miss  Edith  Sal- 
yer, Miss  Sherry  Reeves,  Miss  Aline  Ran- 
dolph, Miss  Jesslyn  Van  Trump  and  T.  J. 
Flinn,  C.  F.  Seidel,  Carroll  Johnson,  Ray 
Padrick,  W.  R.  Ream,  Jr.,  Edward  Phil- 
brook,  J.  B.  Sherry  Reeves  and  Henry 
Balfour. 

The  following  members  of  the  chapter 
comprised  the  business  committees:  Busi- 
ness managers,  George  S.  Greene  and  War- 
ren Smith;  advertising,  E.  H.  C.  Hurst,  F. 
A.  Ruenitz,  E.  W.  Gale,  Jr.;  printing.  Car- 
roll  Johnson,  W.  M.  Kreim,  H.  Albert 
deWitt;  finance,  G.  S.  Greene,  W.  H.  Luts, 
Leo  S.  Chandler;  program,  W.  S.  Smith, 
J.  C.  Moodie,  H.  E.  Allen,  George  Carlisle, 
R.  T.  Van  Cleave;  social,  Leo  S.  Chandler, 
Don  W.  Carlton;  tickets,  W.  G.  Mohr. 


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PHOTOS  SV  HEMCNWAV,  MEMBER  LOS  ANGELES  A.  I.  B. 

PARTICIPANTS  IN  ° THE  MAID  OF  MANALAY”  GIVEN  BY  LOS  ANGELES 
CHAPTER  AMERICAN  INSTITUTE  OF  BANKING 


HABRY  GIRARD  RAY  PADRICK 

Composer  and  Director  of  the  Play  As  “Admiral  Att” 

AGNES  CAIN-BBOWN-GIBARD 
Prlma  Donna  as  “The  Princess  Louise*’ 

MISS  JESSLYN  VAN  TRUMP  MISS  HAZEL  RUNGE 

As  " This  ” Soprano,  as  “ The  Widow  Tarbox  *’ 

T.  F.  PLINN  CARROLL  JOHNSON 

Comedian,  as  " Timothy  Hauls*  *’  As  “ Reddy  the  Bartender  ’* 

648 


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THE  WAREHOUSE  PROBLEM  IN  NEW  YORK 

HANDLING  AND  RESHIPMENT  OF  MERCHANDISE  NOT  DESTINED 
FOR  IMMEDIATE  CONSUMPTION 


NEW  YORK  is  undeniably  the  largest 
and  busiest  port  in  America  for  the 
receipt,  storage,  transhipment  and 
distribution  of  goods.  The  shipping,  com- 
mercial, banking  and  industrial  interests  of 
the  world  appreciate  that  this  is  so. 

Large  sums  of  money  have  been  expended 
by  the  Government,  appropriations  have 
been  made  by  the  State  of  New  York  and 
the  City  of  New  York,  and  the  railroads 


pletion  of  the  Erie  Barge  Canal  and  the 
Panama  Canal. 

Recognizing  the  advantages  thus  afforded, 
the  large  manufacturing  interests  of  the 
country  have  sought  sites  for  industrial 
plants  within  what  is  termed  “The  Metro- 
politan District”  of  New  York. 

Believing  that  the  demands  of  the  ship- 
ping interests  can  best  be  protected  and  ad- 
vanced by  municipal  control  of  the  piers 


General  View  American  Dock  Stores  and  Terminal 


having  harbor  terminals  have  co-operated 
in  the  endeavor  to  meet  the  increasing  de- 
mands of  commerce  by  improving  the  dock- 
ing facilities  of  New  York  harbor. 

The  receipt  and  shipment  of  goods  from 
and  to  European,  Asiatic,  African,  Aus- 
tralian, South  and  Central  American  ports 
has  had  to  be  provided  for,  and  there  must 
also  be  proper  shipping,  storage  and  dis- 
tributing accommodations  for  the  immense 
American  coastwise,  river  and  canal  traffic, 
which  will  naturally  increase  with  the  corn- 

544 


and  docks,  the  City  of  New  York  has 
adopted  the  policy  of  gradually  acquiring 
and  managing  the  water-fronts  of  Manhat- 
tan Island. 

As  a result,  nearly  all  the  water-fronts 
of  Manhattan  Island,  along  the  East  and 
North  River,  have  been  acquired  by  the 
City,  leaving  only  a very  few  properties  of 
this  kind  in  private  hands. 

Advance  in  Water-Front  Values. 

An  examination  of  the  map  of  the  port 
will  displose  the  fact  that  the  water-fronts 


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THE  WAREHOUSE  PROBLEM  IN  NEW  YORK 


545 


Pier  3.  One  of  the  Modern  Improved  Docks  for  Ocean  Freighters 


along  the  New  Jersey  shore  have  been  ab- 
sorbed almost  entirely  by  the  railroad  in- 
terest for  terminals,  there  being,  with  very 
few  exceptions,  no  water-fronts'  available. 
Bearing  on  the  values  of  water-fronts  in 
New  York  harbor,  it  is  stated  that  the 
municipal  authorities  of  the  City  of  New 
York  recently  paid  for  a pier  on  the  North 
River,  about  700  feet  long,  a sum  equal 
to  $4,000  per  front  foot  on  the  bulkhead 
line.  Also  the  City  of  New  York  further 
paid  for  the  acquiring  of  land  under  water 
between  28th  and  39th  streets,  Brooklyn, 
a sum  equal  to  $1.10  per  square  foot,  while 
water-fronts  with  very  little  upland  at- 
tached on  the  New  Jersey  shore  near  Fort 


Lee  ferry,  opposite  125th  street.  New  York 
City,  sell  at  about  $1,500  per  foot  on  the 
bulkhead  line. 

Property  of  a similar  character  between 
Long  Island  City  opposite  Hellgate  and 
beyond  the  lighterage  limits  of  the  port, 
where  the  pierhead  line  runs  very  close  to 
the  upland  and  where  very  short  piers  only 


are  thus  available,  sells  for  $750  to  $1,000 
per  foot. 

Growth  of  the  Warehouse  System. 

Another  feature  entitled  to  the  serious 
consideration  of  those  interested  in  this 
subject  of  adequate  dock  facilities  is  the 
fact  that  ow'ing  to  the  absence  of  storage 
warehouses  directly  on  the  water-fronts  of 
Manhattan,  all  goods  arriving  at  Man- 
hattan piers  must  cither  be  carted  away 
within  a stipulated  time  or  transported  by 
burges  or  lighters  to  storage  warehouses. 

To  meet  the  requirements  of  these  con- 
ditions and  care  for  the  receipt,  storage 
and  reshipment  of  cargoes  not  destined 
for  immediate  consumption  in  Manhattan, 
great  systems  of  storage  warehouses,  for 
the  accommodation  of  the  commerce  of 
the  port,  has  been  established,  in  the 
Boroughs  of  Richmond  and  Brooklyn,  with- 
in the  “Free  lighterage  limits/*  of  the  port 
of  New  York— that  is,  the  limit  within 
which  goods  arriving  or  departing  by  rail- 
roads are  delivered  or  called  for  at  the 
same  rate  of  freight  as  goods  consigned 
to  or  from  Manhattan  Island. 

As  far  back  as  1875  the  American  Dock 
Terminal  (then  operating  as  an  exclusive 
cotton  storage  depot)  located  its  ware-* 
houses  at  Tomkins ville,  Staten  Island,  Rich- 
mond County,  and  for  twenty-five  years 
handled  un  enormous  percentage  of  the  cot- 
ton shipments  consigned  to  the  port  of  New 
York. 

The  conditions  then  began  to  change  and 
the  demand  for  accommodations  of  general 
merchandise  cargoes  increased  to  such  an 
extent  that  it  became  necessary  to  extend 


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THE  BANKERS  MAGAZINE 


Lighter  Traffic  in  One  of  the  Slips 


the  piers  and  construct  additional  ware- 
houses. 

The  property,  consisting  of  thirty  and  one- 
half  acres,  includes  the  water  rights,  or  the 
land  under  water,  and  these  riparian  rights 
were  purchased  prior  to  the  time  when  re- 
strictions were  placed  on  the  present  grants. 

With  its  direct  rail  connection  via  the 
double  track  steam  railway  (Staten  Island 
Rapid  Transit  Railway)  to  the  trunk  lines 
embracing  the  B.  & O.,  Pennsylvania,  Cen- 
tral Railroad  of  New  Jersey,  I^ehigh  Valley, 
Philadelphia  & Reading  and  D.,  L.  & W., 
the  American  Dock  and  Trust  Company 


Fibre  Store 


Water  Tank  to  Feed~Automatic  Sprinklers 
in  the  Stores 


offers  facilities  to  shippers  unequalled 
by  any  other  dock  and  warehouse  termi- 
nal in  Greater  New  York,  as  it  is  the  only 
one  having  all-rail  connections  independent 
of  float  systems,  where  also  the  advantages 
of  receipt  by  water  and  the  storage  and 
transhipment  by  rail  are  combined. 


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THE  WAREHOUSE  PROBLEM  IN  NEW  YORK 


547 


General  Merchandise  Cargo 


The  municipal  ferry  terminals  (twenty 
minutes  from  New  York)  adjoin  the  Ameri- 
can Dock  and  Terminal  Company  property 
on  Stated  Island,  providing  excellent  truck- 
ing service,  which  is  maintained  under  a 
separate  department. 

Another  great  advantage  which  the  loca- 
tion of  the  American  Dock  Terminal  offers 
is  its  frontage  on  the  deep  waters  of  the 
Bay  of  New  York  and  its  entire  freedom 
from  ice  during  the  winter,  due  to  the 
tides  in  the  Kill  von  Kull  and  the  prevail- 
ing west  winds. 

The  piers,  with  an  area  of  230,000  square 
feet,  the  warehouses  with  an  area  of  250,000 
square  feet  of  storage  space,  power  plants 
and  standard-guage  railroad  tracks  direct 
to  ship  side,  afford  everything  that  could 


be  desired  in  the  way  of  a terminal  proper- 
ty. In  addition  there  are  78,000  square 
feet  of  storage  space  under  construction. 

It  is  of  interest  to  note  that  there  is  a 
depth  of  forty  feet  on  the  pier  head  line, 
permitting  the  new  deep-draught  vessels 
proper  facilities  for  handling  their  cargoes. 

Magnitude  of  the  Business  Carried  On. 

Some  of  the  company’s  piers  are  leased 
to  importing  firms,  for  example,  practically 
all  the  nitrate  imported  into  the  port  of 
New'  York  is  handled  by  consignee  at  this 
terminal.  Probably  half  the  cargoes  ar- 
riving direct  from  China  are  also  discharged 
at  these  docks.  With  their  great  variety 
of  merchandise  they  make  an  interesting 
study  in  themselves.  At  times  a single  cargo 


In  the  Cotton  Yard 


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548 


THE  BANKERS  MAGAZINE 


Handling  Cotton  by  Trainload 


will  be  valued  at  $1,000,000  including  excry 
conceivable  article  produced  by  the  Chinese, 
Japanese,  Koreans  and  Malayans.  Also  it 
is  estimated  that  fifty  per  cent,  of  the  tea 
cargoes  imported  direct  by  steamers  from 
China,  India  and  Ceylon  via  the  Suez  Canal, 
as  well  as  half  the  hemp  shipments  from 
Manila,  have  been  discharged  at  the  Ameri- 
can Docks  during  the  past  few  years.  Two 
cargoes  alone  had  more  than  80,000  pack- 
ages of  tea  and  one  hemp  cargo  totaled 
28,000  bales,  said  to  be  the  largest  on  record 
here.  In  addition  to  these  consignments 


by  water,  the  company  receives  daily  rail 
shipments  direct  from  the  South  and  West 
without  breaking  bulk,  and  thousands  of 
bales  of  cotton  by  lighter. 

Lessening  the  Cost  of  Transportation. 

To  either  importer  or  exporter,  manufac- 
turer or  merchant,  next  to  cost  of  produc- 
tion, the  cost  of  transportation  is  the  main 
factor,  with  insurance  expense  as  a close 
second.  Therefore,  terminal  stores  which 
offer  these  facilities  at  minimum  charges 
naturally  are  in  great  demand. 


i Steamer  “ Trafalgar  'V  Discharging  the  Largest  Cargo  of  Manila  Hemp  received  in  the 

Port  of  New  York  (28 Bales) 


With  this  in  mind  the  American  Docks 
installed,  at  an  expense  of  about  $125,000, 
a complete  fire-sprinkler  system,  with  au- 
tomatic electric  alarms  and  a water-tank  of 
enormous  pressure,  operated  both  day  and 
night  by  the  company’s  independent  plant. 
In  addition  to  this,  the  City  Fire  Boat  is 
stationed  less  than  one-quarter  of  a mile 
distant. 

The  requirements  of  a large  shipping  ter- 
minal are  so  constantly  changing  that  the 
enterprise  is  a very  interesting  one.  The 
bulk  of  the  cargoes  come  by  steam  instead 
of  sail,  as  in  years  gone  by.  The  money 


now  invested  in  steamships  is  so  consider- 
ably more  that  the  owner  cannot  afford  to 
allow  them  to  remain  at  their  docks  for  in- 
definite periods,  unemployed.  On  account 
of  steam  power  being  used,  the  arrival  and 
departure  of  ships  can  be  depended  upon, 
and  warehouse  terminal  business,  therefore, 
assumes  entirely  different  conditions  from 
those  existing  in  past  years. 

Brains  and  money  must  work  together  to 
devise  the  best  that  can  be  had  in  the  way 
of  new  inventions,  especially  in  the  elec- 
trical field,  to  reduce  expenses  and  install 
economies.  The  proposed  double-deck  pier. 


Nitrate  of  Soda  Cargo  in  One  Section  of  Pier  Shed 


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THE  BANKERS  MAGAZINE 


Electric  Tieriog  Machine  for  Handling  Merchandise  in  Store 


with  the  electric  hoists  and  cranes,  over- 
head tracks,  etc.,  not  uncommon  abroad, 
greatly  facilitate  this  terminal  and  ware- 
house business. 

New  York  city  must  not  forget  that 
other  ports  along  our  coast  line  are  steadily 
demanding  larger  recognition,  on  account 
of  their  geographical  position.  Baltimore, 


for  example,  has  made  remarkable  strides 
in  this  direction — Norfolk,  Savannah  and 
Jacksonville,  with  the  Gulf  ports,  also  as- 
suming great  importance.  Business  is  so 
exacting  that  any  small  facility  denied 
shippers  at  New  York,  increases  the  op- 
portunities of  these  other  ports  to  assert 
themselves. 


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SAFE  DEPOSIT 


MANAGEMENT  OF  A SAFE  DEPOSIT  DEPART- 
MENT 

( Contributed ) 


GALVESTON’S  tidal  wave,  Baltimore’s 
big  fire  and  San  Francisco’s  earth- 
quake served  to  teach  Americans 
some  useful  lessons— especially  how  to  cope 
with  disasters,  instability  and  insecurity. 

While  the  safe  deposit  idea  originated 
many  years  ago,  for  fully  a generation  it 
was  confined  to  the  financial  centres.  To-day 
the  demand  is  such  and  the  growth  of  the 
business  so  universal,  that  practically  every 
community  large  enough  to  support  a bank 
has  security  vaults  adapted  to  the  use  of 
customers. 

As  Baltimore  is  one  of  the  best  and  most 
active  bond  towns  in  the  country,  the  safe 
deposit  box  is,  logically,  a popular  feature 
of  many  of  its  banks  and  trust  companies. 
Both  as  an  investment  and  business  pro- 
ducer it  appears  to  be  justified  by  the 
constantly  increasing  patronage  among  all 
classes. 

After  a study  of  the  local  systems  as 
well  as  those  which  prevail  in  other  cities — 
Washington  for  example — with  its  transi- 
tory population,  the  following  plan,  adopted 
by  an  old  and  conservative  Baltimore  bank 
a few  years  ago,  might  contribute  a bit 
to  the  fund  of  experience  in  this  interesting 
and  important  field  of  trust  and  responsi- 
bility. 

The  Bookkeeping. 

This  consists  of  a handy  little  register  in 
which  is  jotted  down  the  exact  time  of  ar- 
rival and  departure  of  every  customer,  vis- 
itor and  workman  who  is  not  regularly  em- 
ployed about  the  building.  Then  there  is 
a formal  gate  book  into  which  the  entries 
on  the  register,  as  they  relate  to  customers, 
are  posted.  The  gate  book  is  well  bound, 
of  fine  record  paper  and  indexed.  It  is  so 
spaced  as  to  admit  of  two  accounts  to  the 
page,  while  the  columns  for  the  year,  month, 
date  and  hour  extend  across  the  double 
page,  thus  giving  room  for  a great  many 
entries  on  a single  line.  Next  is  the  cash 
book,  and  a vault  book,  which  con- 
tains the  numbers  of  the  boxes,  their  di- 
mensions, prices  and  the  names  of  renters. 
A chart  is  also  kept  at  the  gate,  which 
shows  at  a glance  the  name  of  each  cus- 
tomer and  the  number  of  his  box.  These 
are  supplemented  by  the  card-index  system, 
which  includes  the  contract  and  the  ledger; 
into  the  latter  are  posted  the  entries  made 
in  the  cash  book. 


The  Contract. 

Naturally,  this  is  vitally  important  in 
the  event  of  any  litigation  involving  the 
institution.  It  is  printed  in  several  forms, 
and  adapted  to  individuals,  joint  tenants, 
attorneys  in  fact  and  law,  and  corporations. 
It  can  also  be  specified  that  two  or  more 
persons  shall  be  present  when  access  is 
given,  which  is  customary  in  fiduciary  trans- 
actions. The  joint  tenancy,  from  experi- 
ence, is  the  best  and  most  convenient  form. 
It  not  only  simplifies  the  clerical  work,  but 
in  the  event  of  the  death  of ‘the  customer, 
the  survivor,  who  has  control,  is  facilitated 
in  submitting  the  estate  to  the  court. 
Whereas,  if  a deputy  or  attorney  is  ap- 
pointed, the  power,  by  the  death  of  the 
principal,  is  ipso  facto  void,  which  necessi- 
tates certified  authority  from  the  court  be- 
fore access  can  be  given  to  the  proper  per- 
son. 

The  contract  card  on  its  face  cites  the 
name  and  pedigree  of  the  tenant,  residence, 
occupation,  the  date,  number  and  rental  of 
the  box,  with  space  for  special  memoranda 
in  the  way  of  instructions,  identification, 
etc.  On  the  reverse  side  are  forms  for  the 
contract  and  surrender.  This  card  is  in- 
dexed numerically  by  the  box  number,  while 
each  card  of  the  ledger,  which  is  in  a separ- 
ate file,  is  tabbed  with  the  month  in  which 
the  account  was  opened,  thus  revealing  in 
quick,  clear  order  each  expiration  and 
greatly  aiding  the  clerk  when  he  makes  out 
his  bills  each  month  for  the  ensuing  year  in 
advance. 

Ix>CK  and  Key. 

The  dual  lock  is  employed  in  this  partic- 
ular system,  with  a master  key  which  re- 
quires the  cooperation  of  the  customer’s 
key  to  gain  admission.  In  other  words, 
we  have  charge  of  the  renter’s  valuables, 
but  not  control.  The  key  rack  is  kept 
in  the  vault  proper  in  a special  safe  under 
“a  combination”  lock,  and  it  is  arranged  ac- 
cording to  the  number,  size  and  price  of  each 
box,  thus  corresponding  to  the  vault  book. 
The  number  on  the  key  given  the  renter 
does  not  correspond  with  the  actual  number 
of  the  box.  It  is  fictitious,  which  is  a pro- 
tection in  case  of  mistaken  identity,  imper- 
sonation or  a falsified  order.  An  inviolable 
rule  is  to  refuse  admission  to  any  one  not 
a party  to  the  contract,  except  on  written 
order.  Where  a customer  opens  an  account 

651 


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THE  BANKERS  MAGAZINE 


the  actual  number  of  his  box  appears  on 
the  receipt  for  rent.  This  receipt  is  an- 
other important  form  on  which  is  printed 
the  rules  and  regulations  of  the  institution, 
with  which  he  agrees  to  comply  in  his  origi- 
nal contract.  These  rules  set  forth  the  busi- 
ness hours  and  stipulate  that  the  loss  of  a 
key  and  change  of  residence  must  be 
promptly  reported  and  that  under  no  con- 
sideration must  the  box  be  left  unlocked 
so  as  to  give  any  other  party  access,  even 
for  a moment,  out  of  the  presence  of  the 
renter;  otherwise  the  system  would  be  de- 
stroyed. The  manager  has  a code  by  which 
he  can,  in  a jiffy,  recognize  the  actual  num- 
ber of  the  box  in  the  fictitious  number  on 
the  key.  In  this  way  the  customer  is  not 
taxed  with  the  memory  of  his  number  and 
a safeguard  is  imparted  to  the  system,  which 
only  extraordinary  acumen  could  penetrate. 

Other  Precautions. 

Where  two  or  more  persons  must  be 
present;  when  a box  has  been  made  subject 
to  an  order  o#f  abeyance  by  the  court;  when 
a special  box  has  been  reserved;  when  it 
is  understood  that  not  even  a written  or- 
der shall  be  honored — in  all  such  cases,  a 
little  “danger  signal”  or  warning  is  affixed 
to  the  box  to  put  the  attendant  on  his 
guard. 

Written  Orders  and  Court  Papers. 

Every  written  order,  letter,  court  certifi- 
cate or  other  memoranda  emanating  from 
the  tenant  or  his  representative,  or  which 
in  any  way  has  a bearing  on  the  transac- 
tion is  carefully  preserved  and  those  of 
importance  are  filed  in  the  safe  deposit 
vault.  The  inner  or  “day  door”  leading  to 
the  vault  is  invariably  kept  under  lock, 
which  has  a bell,  that  automatically  rings 
each  time  the  door  is  opened  and  closed. 
At  the  extreme  end  of  the  vault  is  a mirror, 
which  reflects  every  move  made  by  customer 
and  clerk  while  locking  and  unlocking  a box. 

The  Coupon  Booth. 

An  old  head  in  the  business  who  built 
up  the  safe  deposit  and  storage  department 
of  a large  institution  in  another  city  gave 
the  writer  the  benefit  of  his  experience. 
In  dealing  with  a floating  population,  he 
pointed  out  the  necessity  of  unremitting 
vigilance.  Then,  old  age,  absent-mindedness, 
carelessness,  haste,  deception,  even  ignor- 
ance, must  be  guarded  against.  For  these 
reasons  the  booth  is  one  of  the  most  im- 
portant features  in  the  whole  scheme. 

We  have  taken  the  precaution  to  number 
each  booth.  The  customer  is  at  liberty  to 
enter  any  one  that  is  vacant.  The  attend- 
ant, meantime,  notices  the  one  selected  and 
writes  it  opposite  the  name  in  the  little 
register.  As  soon  as  he  leaves,  the  booth 
and  waste-basket  are  searched.  In  this 
way  if  any  valuable  is  dropped,  thrown 


away  or  left  by  mistake,  the  rightful  owner 
can  be  located. 

Environment. 

Natural  light,  plenty  of  space,  no  dust, 
perfect  ventilation  and  quiet,  with  vault 
and  working  quarters  on  a level  with  the 
street,  characterize  the  safe  deposit  de- 
partment which  is  the  subject  of  this  arti- 
cle— all  of  which  was  carefully  thought  out. 
And  these  are  really  essentials  where  infirm 
people,  those  advanced  in  years  and  women 
are  catered  to.  ’ 

The  Vault  and  Equipment. 

It  may  interest  the  reader  to  know  that 
this  vault  is  encased  in  an  armor  of  fifty 
tons  of  steel — the  same  metal  employed 
as  the  basis  of  that  which  goes  into 
the  plates  on  the  new  warships.  It  is 
built  in  a foot  brick  compartment 

clear  of  the  building,  and  the  building  is 
fireproof.  The  vault  is  entered  through  a 
ten-ton  circular  door,  equipped  with  a 
three-clock  time  lock,  which  may  be  set  as 
many  as  seventy-two  hours  ahead  in  the 
event  of  Sundays  and  legal  holidays  falling 
together.  The  door  of  the  vault  is  covered 
with  a frame  door,  and  around  all  is  a sys- 
tem of  protection  which  sounds  an  alarm 
the  instant  any  part  of  the  building  is  at- 
tacked by  man  or  the  elements — which  will 
bring  a messenger  within  two  minutes.  This 
outside  agency  of  protection  is  further  for- 
tified by  the  vigilance  of  a night  watchman. 

Experts  from  different  parts  of  the  coun- 
try who  have  inspected  this  plant,  its  ap- 
pointments, and  routine  have  commended 
it  as  a model. 


UNIQUE  SAFETY  VAULT  BUILD- 
ING 

PROFITING  by  the  lesson  taught  in 
calamitous  events  of  other  cities,  when 
irreparable  damage  was  done  by  the 
destruction  of  records,  the  Title  Iusurance 
& Trust  Company,  of  Los  Angeles,  will 
erect  a vault  building  that  will  be  unique, 
designed  to  resist  successfully  all  the  forces 
of  man  and  nature.  In  the  suburb  of  Holly- 
wood the  company  will  erect  a fire-proof, 
burglar-proof  and  earthquake-proof  build- 
ing in  which  to  store  the  records  of  the 
company.  The  structure  will  be  made  of 
fire-proof  material  throughout,  of  the 
strongest  possible  formation,  and  although 
it  will  have  an  Egyptian  exterior  its  only 
outer  opening  will  be  a main  entrance.  The 
building,  which  will  be  really  a big  safety 
vault,  will  be  set  in  the  middle  of  a lot  300 
feet  square  which  will  isolate  it  200  feet 
from  the  nearest  building.  Except  for  some 
cataclysm  that  would  open  the  earth  directly 
under  the  site-  of  this  structure,  nothing, 
seemingly,  could  injure  it. 


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THE  NEW  PRESIDENT  OF  THE  FOURTH  NATION 
AL  BANK  OF  NEW  YORK 


JAMES  G.  CANNON 
President  Fourth  National  Bank,  New  York 


BY  the  recent  death  of  J.  Edward  Sim- 
mons, president  of  the  Fourth  Na- 
tional Bank  of  New  York,  the  former 
vice-president,  James  G.  Cannon,  becomes 
the  head  of  that  institution.  Mr.  Cannon 
had  been  vice-president  for  nearly  twenty 
years,  and  active  in  the  management  of  the 
bank.  He  began  his  banking  service  in  1876 
with  the  Fifth  Avenue  Bank,  which  has 


turned  out  so  many  bank  officers  that  it  is 
sometimes  referred  to  as  a school  for  bank- 
ers. Starting  in  as  a messenger,  Mr.  Cannon 
worked  his  way  to  the  front,  and  before  long 
his  ability  attracted  the  attention  of  the 
bank  to  whose  direction  he  has  just  been 
elected. 

Mr.  Cannon  has  made  a special  study  of 
credits,  and  perhaps  it  is  well  within  the 

653 


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THE  BANKERS  MAGAZINE 


truth  to  say  that  no  man  in  the  country 
has  given  more  attention  to  this  subject 
or  ranks  higher  as  an  authority  than  he. 
It  was  due  to  his  efforts,  very  largely,  that 
the  National  Credit  Man’s  Association  was 
organized,  of  which  he  became  president. 
His  labors  resulted  in  improving  the  whole 
system  of  extending  credits,  and  contributed 
materially  to  the  safeguarding  of  banking 
and  business  enterprises. 

He  has  likewise  made  a thorough  study 
of  clearing-house  methods,  and  his  work  on 
“Clearing  Houses”  is  regarded  as  the  stand- 
ard on  that  subject. 


Mr.  Cannon,  besides  being  president  of 
the  Fourth  National  Bank,  is  a director 
of  the  Fifth  Avenue  Bank,  the  Bankers 
Trust  Company,  United  States  Mortgage 
and  Trust  Company,  United  States  Guar- 
antee Company,  and  a trustee  of  the 
Franklin  Savings  Bank. 

The  Fourth  National  has  maintained  its 
position  among  the  representative  banks  of 
the  city.  Lately  it  has  increased  its  capital 
and  is  engaged  in  making  important  im- 
provements and  in  enlarging  the  building 
long  occupied  by  the  bank  in  the  heart  of 
the  financial  district. 


BANKING  PUBLICITY 

Conducted  by  T.  D.  MacGregor 


STORIES  OF  THRIFT 

TRUE  INCIDENTS  WHICH  CAN  BE  USED  IN  SAVINGS  BANK 

ADVERTISING 


A YOUNG  MAN  started  an  account  with 
us  in  January,  1907,  with  a deposit 
of  $5.  He  has  since  that  time  never 
failed  to  make  a deposit  of  not  less  than 
$5  each  week.  By  February  of  this  year 
he  had  an  account  of  $1,540.50.  On  March 
second  he  withdrew  $1,000,  leaving  a bal- 
ance of  $510.50.  With  this  $1,000  he  set 
himself  up  in  business  and  since  then  his 
weekly  deposits  have  been  considerably 
more  than  $5.  At  the  same  time  he  has 
preserved  a cash  asset  of  more  than  $500 
which  acts  as  a business  reserve,  and  he 
can  fall  back  on  it  whenever  a business 
reverse  may  require  it. 

A Brooklyn  man  by  consistent  and  regu- 
lar saving  had  accumulated  enough  money 
to  buy  a $3,500  house,  with  a mortgage  of 
$2,500,  and  at  the  same  time  maintained  a 
savings  account  of  not  less  than  $1,000. 
Everything  went  smoothly  for  a few  years 
with  him  and  his  family,  which  consisted  of 
his  wife,  his  wife’s  sister,  and  five  little 
children.  Adversity  set  in,  however,  and 
the  husband  died  after  a short  illness.  His 
widow  struggled  along  with  her  five  child- 
ren by  taking  in  work  wherever  she  could, 
and  by  drawing  upon  the  $1,000  savings 
account,  paying  in  addition  to  the  living 
expenses  the  interest  on  the  mortgage  and 
the  taxes  on  the  property.  Three  years  she 
kept  this  up  until  her  oldest  child  gradu- 
ated from  grammar  school  and  found  a 
position  with  a bank.  Early  this  year  there 
was  a balance  of  a little  more  than  $250 
in  the  savings  account,  and  with  this  money 
the  woman  bought  a little  candy  and  notion 


shop  near  a sehoolhouse.  She  made  an  im- 
mediate success  of  this  and  is  again  adding 
small  amounts  to  her  savings  account,  at 
the  same  time  she  is  sending  her  children 
to  school,  and  hopes  with  the  fall  to  let 
the  oldest  boy,  who  is  now  working  in  the 
bank,  take  up  a highschool  course. 

One  of  the  earliest  depositors  of  the 
Franklin  Society  was  a woman  then  about 
thirty-eight  years  old.  She  lived  on  the 
East  side  and  in  comparatively  early  life, 
her  husband  died,  leaving  her  a widow.  She 
had  no  children  and  worked  whenever  she 
could,  setting  aside  her  savings  as  she  was 
able  and  in  times  of  sickness  or  idleness 
drew  upon  the  account.  The  account  did 
not  grow  very  rapidly  but  in  spite  of  in- 
termittent withdrawals  the  balance  gradually 
increased.  She  had  always  been  a close 
friend  of  the  society,  and  had  sought  its 
advice  on  several  occasions,  thereby  coming 
into  close  touch  with  the  officers.  A few 
years  ago  she  walked  into  the  offices  of  the 
society  and  asked  to  see  its  various  officers. 
She  was  bidding  them  farewell  as  she  had 
concluded  that  her  work  was  done  and  she 
deserved  to  rest  and  to  spend  her  remaining 
days  in  leisure.  She  wanted  to  draw  the 
balance  of  her  account  to  turn  it  over  to 
the  Old  Woman’s  Home,  where  she  was 
going.  The  balance  was  $179.82.  It  was 
not  much,  but  she  was  happy  and  it  meant 
success  for  her. 

A young  man,  a clerk  in  a large  cor- 
poration and  a faithful  worker,  had  oecome 
dissatisfied  with  the  slowness  of  his  pro- 
gress. He  was  ambitious  and  knew  very 


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BANKING  PUBLICITY 


555 


well  that  his  work  was  being  done  better 
than  it  had  ever  been  done  before,  but  he 
had  outgrown  it  and  had  not  received  the 
opportunity  to  do  larger  things.  He  knew 
too  that  he  could  master  these  larger  things. 
He  came  to  me  for  advice,  and  I asked 
him  why  he  did  not  present  his  claim  to  his 
employer.  He  said  in  answer  that  he  had 
thought  this  matter  over,  but  that  he  could 
not  run  the  risk  of  failing  in  his  application, 
that  he  had  already  gone  to  his  employer  and 
asked  for  an  advance  in  position  and  in  sal- 
ary and  his  request  had  been  refused.  He 
could  not  press  his  demand  and  the  only  thing 
left  for  him  to  do  was  either  to  keep  at 
his  present  work  or  resign  his  position. 
The  latter  was  out  of  the  question,  for  he 
had  nothing  else  in  view.  The  only  advice 
T could  give  him  was  that  he  should  draw 
himself  together,  keep  at  his  work  and 
make  up  his  mind  to  set  aside  in  a savings 
account  a specified  amount  each  week  in 
the  face  of  all  possible  contingencies.  Act- 
ing upon  this  advice  he  set  to  work  with  a 
new  vigor,  made  many  personal  sacrifices, 
and  in  two  years  had  saved  up  $1,000,  at 
the  same  time  making  sure  that  his  employer 
should  know  to  the  full  extent  his  efforts 
and  the  amount  he  was  setting  aside.  It 
was  a hard  two  years  for  him  and  without 
many  outside  pleasures,  but  in  about  two 
years  his  reward  had  come.  He  had  saved 
about  $1,000  and  this  his  employer  knew. 
For  some  reason  or  other  his  employer 
changed  his  estimate  of  the  man;  he  recog- 
nized his  worth,  perhaps  because  of  his  in- 
dependence attained  through  his  savings 
pass  book,  and  voluntarily  promoted  the 
young  man  to  a responsible  position. 

The  key  note  to  saving  is  regularity  and 
continuity.  No  matter  who  the  person  is 
or  what  his  station  in  life,  a good  reward 
awaits  the  successful  saver. 

Hoping  that  these  instances  may  repre- 
sent the  material  asked  for  in  your  letter, 
I am. 

Yours  very  truly, 

HENRY  A.  THEIS. 

Second  vice-president  The  Franklin  So- 
ciety for  Home  Building  and  Savings,  New 
York. 


On  June  99,  1907,  Mary  S.  opened  ac- 
count with  the  Home  Savings  Bank  of 
Brooklyn  with  $1,  stating  at  the  time  that 
she  was  fifty-three  years  of  age  and  had  not 
saved  a cent,  and  was  fearful  that  she  would 
die  and  leave  nothing  to  bury  her  with.  She 
was  going  to  try  and  deposit  one  dollar 
per  week  regularly,  for  this  purpose.  The 
teller  immediately  became  interested  in  her 
and  suggested  that  she  take  a home  bank 
and  when  not  convenient  to  come  to  the  bank 
with  the  money  to  place  it  in  the  little  bank 
instead.  This  pleased  her  immensely,  and 


she  went  home  and  placed  the  little  bank 
on  the  mantel  shelf  and  began  systematic 
saving.  She  found  it  a constant  reminder  of 
her  promise  to  the  bank  man  and  herself,  and 
whenever  she  had  spare  change  it  went  into 
the  bank.  The  result  of  the  matter  was 
she  “got  the  habit”  and  instead  of  saving  a 
dollar  a week,  her  account  now  (July,  1910) 
shows  a balance  of  $309.09,  or  three  times 
the  amount  she  set  out  to  save.  Only  one 
withdrawal  appears,  caused  by  death  in  the 
family.  Perhaps  the  little  bank  did  it; 
perhaps  it  was  her  determination;  doubt- 
less it  was  both.  She  is  now  a thrifty 
woman,  with  enough  not  only  to  bury  her 
decently,  but  keep  her  comfortably  for  some 
time  before  that  sad  event  happens.  It  is 
one  of  the  best  cases  of  the  savings  bank 
fulfilling  its  fundamental  purpose  of  “pro- 
moting habits  of  thrift  and  industry”  that 
has  ever  come  to  my  notice. 

One  of  the  best*  cases  of  systematic  and 
persistent  saving  that  ever  came  to  my  at- 
tention was  that  of  a letter  carrier  in  a 
country  town,  whose  salary  was  about  $80 
per  month.  He  was  fortunate  in  marry- 
ing a thrifty  German  girl,  and  with  her 
help  was  able  to  live  comfortably  and  save 
$30  every  month.  The  carriers  were  paid 
off  on  the  first  and  fifteenth  and  for  several 
years  he  never  failed  to  deposit  $15  on  the 
above  dates.  The  bank  men  began  to  look 
for  him,  and  he  never  disappointed  them. 
When  his  savings  reached  about  $4,000  he 
stopped  coming  for  a time,  and  in  due 
season  he  was  riding  around  in  a modest 
automobile,  which  he  had  paid  for  from- 
other  savings  accumulated  for  the  purpose, 
but  shortly  thereafter  he  got  back  to  his 
old  pace  of  “thirty  a month.”  His  original 
fund  is  still  intact  and  whatever  extrava- 
gance he  may  be  charged  with  is  more  than 
offset  by  his  systematic  and  continuous- 
saving. 

W.  H.  KNIFFEN,  JR., 
Cashier  Home  Savings  Bank,  Brooklyn,  N.  Y. 


On  January  9,  1879,  a man  by  the  name 
of  Smith  deposited  in  this  savings  bank 
$100.  He  never  deposited  on  or  withdrew 
from  said  account  for  over  twenty-five 
years,  at  the  end  of  which  time,  or  on 
September  3,  1897,  the  date  of  the  first 
withdrawal,  the  interest  had  amounted  to 
$991.66,  and  together  with  the  original  de- 
posit of  $100  made  the  amount  standing  to 
his  credit  $391.66. 

A.  W.  TREMAIN, 

Treasurer  Oneida  County  Savings  Bank,. 

Rome,  N.  Y. 


Digitized  by  t^ooQle 


PERSONAL  ADVERTISING 

BANKERS  EMPHASIZE  THE  IMPORTANCE  OF  THE  PERSONAL 
TOUCH  SUPPLEMENTING  PUBLICITY 


THE  following  letters  were  written  by 
officers  of  banks  in  the  central  reserve 
cities,  one  in  New  York,  two  in  St. 
Louis  and  two  in  Chicago,  to  a young  bank- 
er, in  reply  to  an  inquiry  as  how  best  to 
work  to  increase  a bank's  business.  The 
young  banker  had  originally  been  employed 
in  a well  established  country  bank,  later  in 
a large  city  bank,  after  which  he  organized 
a banking  institution  in  a city  of  fairly 
good  sized  population.  Having  a personal 
acquaintance  with  the  officers  in  these  city 
banks,  excepting  New  York,  he  was  tempted 
to  seek  this  information.  These  letters  were 
written  off-hand  in  1906,  and  without  ever 
any  thought  of  being  published.  It  would 
be  our  pleasure  to  publish  the  names  of  the 
officers,  but  their  modesty  prevents.  How- 
ever, we  can  assure  our  readers  that  they 
are  of  our  foremost  bankers,  and  whose 
ability  for  building  up  large  institutions, 
without  consolidations  in  each  case,  has  been 
proved.  We  feel  very  fortunate  in  being 
able  to  secure  these  letters  for  publication. 

June  29,  1906. 

My  Dear  Mr. : 

I have  your  letter  of  the  28th  and  was 
pleased  to  hear  from  you.  I believe  the 
most  effective  way  to  secure  business  for 
your  institution  is  through  personal  solici- 
tation on  your  part.  Nearly  all  of  the  big 
accounts  we  have,  have  been  obtained 
through  personal  friendship  and  influence. 
It  is  simply  a question  of  intelligent  effort 
and  a courageous  personality. 

Mrs.  and  I leave  for  Europe  to- 

morrow evening,  and  that  reminds  me  that 
it  Is  necessary  to  follow  up  business  activity 
with  an  occasional  rest  of  from  four  to  six 
weeks  every  summer.  I think  every  active 
banker  and  business  man  ought  to  endeavor 
to  do  this  in  order  to  keep  his  physical  and 
mental  condition  up  to  a high  standard. 

We  will  be  back  in  the  middle  of  August, 
and  I hope  you  will  have  occasion  to  come 
this  way  and  visit  me. 

Very  truly  yours. 


June  29,  1906. 

My  dear  Mr. : 

Answering  your  very  kind  letter  of  June  28 
we  are  gratified  to  learn  that  you  are  in- 
terested in  our  growth.  While  our  deposits 
at  this  time  arc  abnormally  high,  our  growth 
we  believe  is  due  to  the  fact  that  it  is  being 
recognized  that  we  are  conducting  our  busi- 
ness along  very  conservative  lines,  and  a 
great  many  of  our  friends  are  interesting 
tliemselves  in  our  continued  growth. 

We  endeavor  to  solicit  our  present  cus- 
tomers to  speak  a good  word  for  us  when- 

556 


ever  possible  with  their  friends  and  in  this 
way  a great  many  new  accounts  are  added. 
We  should  be  very  glad  if  in  your  acquaint- 
ance you  happen  to  know  of  any  of  your 
banking  friends  that  we  might  visit  and 
possibly  interest  with  us.  Assuring  you  we 
very  much  appreciate  the  account  you  carry 
with  us,  and  hoping  to  have  the  pleasure  of 
a call  from  you  in  the  near  future,  we  re- 
main, 

Yours  Very  Truly, 

Cashier. 

June  29,  1906. 

My  Dear  Mr. : 

Referring  to  your  letter  of  the  28th  inst, 
I find  it  rather  difficult  to  suggest  a definite 
and  comprehensive  plan  for  increasing  the 
business  of  a financial  institution. 

We  are  now  about  to  distribute  a desk 
calendar  to  run  for  two  years  from  Sep- 
tember, 1906,  a specimen  of  which  is  here- 
with enclosed.  These  calendars,  being  is- 
sued ut  this  season,  will  be  more  certain  of 
a place  on  the  desk  of  the  recipients  than 
if  they  were  distributed  at  the  first  of  the 
year  when  so  many  calendars  are  being 
sent  out.  It  is  our  intention  to  keep  a 
list  of  persons  to  whom  we  send  these  calen- 
dars and  “follow  up”  with  a special  letter 
some  time  after  their  distribution. 

I believe  you  will  find  some  novelty  such 
as  this, — calendar,  eraser,  blotter,  etc. — a 
good  means  of  increasing  your  business. 

Wishing  your  institution  all  success,  and 
joining  you  in  hope  that  your  account  may 
soon  be  one  of  the  best  on  our  books,  I am. 
Yours  very  truly, 


June  30,  1906. 

My  Dear  Mr. : 

Replying  to  yours  of  the  28th,  regarding  the 
best  methods  of  advertising,  we  have  found 
that  a most  excellent  way  of  drawing  busi- 
ness is  to  have  circular  typewritten  letters 
carefully  prepared  and  mailed  to  tfiiose 
whom  we  desire  to  reach.  The  letters  should 
be  addressed  and  the  name  and  address 
should  be  a close  match  to  the  ink  used  in 
the  body  of  the  letter.  Most  of  the  cir- 
cular letter  concerns  are  now  able  to  furnish 
very  good  facsimile  signatures,  but  if  the 
time  can  be  spared,  it  is  much  more  effective 
to  have  a written  signature,  as  it  seems  to 
convey  a stronger  impression  and  is  more  of 
a personal  letter.  With  the  letter,  there 
should  be  enclosed  a statement  of  the  pres- 
ent condition  of  the  bank  and  such  other 
advertising  matter  as  might  suggest  itself. 

The  personal  plan  of  soliciting  business 
is  probably  the  most  successful  or  aH  plans 


Digitized  by  t^ooQle 


BANKING  PUBLICITY 


557 


that  have  ever  been  tried.  The  use  of  a 
fine  grade  of  stationery,  the  insistence  upon 
good  workmanship  in  the  printing  of  the 
circulars  and  the  mailing  of  them  under 
two-cent  postage,  cannot  be  too  strongly 
urged.  Unless  the  letters  are  sent  out  in 
good  form,  the  effect  is  largely  lost. 

Another  very  good  method  of  getting  busi- 
ness is  to  address  a letter  to  your  present 
customers,  stating  that  it  is  your  desire  to 
establish  a closer  relationship  with  them, 
enumerating  the  various  departments  in 
which  you  can  serve  them  and  asking  that 
they  suggest  to  their  friends,  the  facilities 
and  advantages  of  doing  business  with  your 
institution.  Occasionally  letters  to  your  own 
customers  will  bring  considerable  new  busi- 
ness. 

The  above,  of  course,  is  in  addition  to  such 
dignified  newspaper  advertising  as  you  may 
contract  for  from  time  to  time  during  the 
year.  The  word  “dignified”  is  used  for  the 
reason  that  there  has  been  a growing  ten- 
dency in  some  quarters  to  advertise  the 
business  of  a bank  very  much  as  a patent 
medicine  concern  exploits  its  cure-all. 

You  should  not,  of  course,  overlook  your 
directors.  If  you  are  able  to  make  them 
active  workers  for  your  banK,  it  will  accom- 
plish much. 

Another  matter  of  great  importance,  is 
the  holding  of  the  business  you  already 
have.  Courteous  treatment  every  day  in  the 
year  to  all  of  your  customers  large  and  small, 
will  create  a working  force  of  friends  for 
your  bank  that  will  out-class  every  other 
kind  of  advertising.  Count  the  number  of 
your  employees  and  should  each  of  them 
offend  only  one  customer  each  day,  it  sim- 
ply becomes  a mathematical  calculation  to 
find  out  haw  many  people,  in  the  course  of 
a year,  are  enrolled  in  the  list  of  those 
who  are  inclined  to  speak  unkindly  of  your 
bank  and  its  management.  Courteous 
treatment,  intelligent  attention  to  the  wants 
of  your  customers  and  a little  kindly  con- 
sideration of  the  feelings  of  the  other  fel- 
low when  you  are  obliged  to  say  “No”  to 
a request  of  any  kind,  will  keep  the  relations 
of  a bank  to  its  depositors  on  a friendly 
basis  and  will  surely  result  in  the  mutual 
benefit  of  both.  Always  remember  that 
“No”,  as  cold  and  severe  as  it  .sounds  to 
the  man  who  asks  the  favor,  can  be  divested 
of  much  of  its  sting  if  a little  thought  and 
patience  is  exercised.  State  firmly,  but 
kindly,  your  reasons  for  not  being  able  to 
grant  the  request,  reason  with  him  a little, 
and  nine  times  out  of  ten,  the  depositor  will 
go  away  almost  as  pleased  as  if  he  had  been 
granted  the  loan  he  asked  for  or  other  favor 
he  was  pressing. 

Keep  your  employees  enthusiastic  over  the 
growth  of  your  bank.  Inspire  them  with 
a seal  to  please  the  customers.  See  that 
your  facilities  are  up  to  date  and  that  your 
people  do  not  have  to  wait  unreasonably 

5 


long  in  transacting  their  business  with  your 
institution. 

'The  above  impress  me  as  general  essen- 
tials for  the  holding  of  present  customers 
and  the  getting  of  new  business. 

With  kiudest  regards,  I am, 

Yours  very  truly. 


July  11,  1906. 

My  Dear  Mr. : 

Your  letter  of  the  28th  ultimo  came  duly 
to  hand,  and  we  held  it  over  a few  days. 
More  than  once  we  took  it  up  with  the  in- 
tention of  replying,  but  it  is  difficult  to 
know  just  what  to  say  in  a case  like  this. 
The  condition  under  which  banking  business 

is  conducted  in  a city  the  size  of  

varies  so  much  from  those  which  prevail 
in  a larger  city,  that  one  naturally  hesitates 
to  give  specific  advice,  and  so  any  remarks 
we  may  make  must  be  general. 

We  notice  that  you  have  a fine  and  at- 
tractive building  and  an  influential  set  of 
directors,  and  we  think  you  will  have  to 
lean  largely  on  them  when  It  comes  right 
down  to  securing  the  business.  Your  state- 
ments and  other  items  we  have  seen  indi- 
cate that  you  have  the  right  idea  of  adver- 
tising your,  bank  and  setting  forth  its  fa- 
cilities, and  if  you  keep  well  before  the 
public,  of  course,  it  will  make  it  easy  for 
your  directors  to  swing  business  your  way. 

We  fear  that  what  we  have  said  will  not 
help  you  very  much  because  you  know  every 
banker  looks  out  on  the  field  from  the 
standpoint  of  his  own  personal  experience, 
and  we  might  say  to  you  that  the  business 
of  this  bank  has  not  been  built  up  by  fol- 
lowing any  specific  methods,  but  just  by 
watching  carefully  and  taking  advantage  of 
every  opportunity  that  presented  itself,  and 
in  general,  we  think  this  is  the  course  you 
will  have  to  pursue. 

Yours  truly, 

, Cashier. 

TWO  BOOKS  FOR  ADVERTISERS 

HE  SCIENCE  OF  ADVERTISING” 
X is  the  title  of  a valuable  little  book 
by  Edwin  Balmer  with  the  counsel 
of  Thomas  Balmer,  just  published  by  Duf- 
field  & Company,  New  York.  The  articles 
making  up  the  text  matter  of  this  book  ap- 
peared first  in  the  “System”  magazine  where 
they  attracted  favorable  notice.  An  idea 
of  the  scope  of  the  book  can  be  obtained 
from  this  paragraph  of  the  introduction: 
“We  make  an  estimated  expenditure  of 
one  billion  dollars  annually  for  the  various 
forms  of  advertising;  but  few  of  us  take 
the  trouble  to  follow  the  movement  of  this 
sum  as  an  industrial  force;  fewer  of  us 
appreciate  any  substantial  part  of  the  eco- 
nomic action  of  this  tremendous  amount 


Digitized  by  t^ooQle 


558 


THE  BANKERS  MAGAZINE 


spent  for  advertising  and  still  fewer  com- 
prehend the  final  social  result  of  our  modern 
advertising.” 

The  book  is  an  interesting  while  somewhat 
academic  discussion  of  the  broader  effects 
of  advertising.  Bound  in  boards,  price  75 
cents. 

“Astir,”  is  the  rather  unusual  title  of  a 
book  written  by  John  Adams  Thayer,  being 
the  life-story  of  that  well-known  publisher 
written  by  himself.  Mr.  Thayer,  who  is  best 
known  in  the  advertising  and  publishing 
field  on  account  of  his  former  connection  with 
“Everybody’s”  magazine  has  written  in  a 
most  entertaining  manner  concerning  the 
struggles  and  successes  of  a busy  life.  The 
sidelights  which  he  throws  on  some  of  the 
best  known  publishers  and  publications  are 
interesting  to  say  the  least.  The  book  is 
written  in  a modest  and  unassuming  style. 
To  anyone  at  all  interested  in  publicity  mat- 
ters it  is  as  interesting  as  a romance — the 
romance  of  real  achievement.  Boston,  Small, 
Maynard  & Co.  Cloth  bound,  price  $1.25. 

BACKING  UP  ADVERTISING 

The  Banker  Must  Do  Something  to  Make  it 
Most  Effective 

AT  the  recent  meeting  of  the  Wash- 
ington Bankers’  Association  at  Seat- 
tle, James  K.  Lynch,  vice-president 
of  the  First  National  Bank  of  San  Fran- 
cisco, delivered  an  address  in  which  he  made 
these  remarks  on  bank  advertising: 

Of  course  we  are  all  advertising;  the 
bank’s  sign  is  an  advertisement;  banks 
locate  on  the  most  prominent  corners  for 
sake  of  the  advertisement  and  nowadays 
even  the  most  staid,  sober  and  conserva- 
tive of  banks  publish  cards  in  which  they 
mention  their  capital  and  surplus  together 
with  the  names  of  their  officers  and  direc- 
tors. 

Professional  advertising  men  unite  in 
saying  that  these  cards  are  very  nearly, 
if  not  quite,  valueless  and  I am  rather  dis- 
posed to  agree  with  them.  On  the  other 
hand,  the  kind  of  stuff  turned  out  by  the 
professionals  is  sometimes  calculated  to 
make  the  man  who  has  money  take  to  the 
woods  and  hide  his  wealth  in  a hollow  tree. 
Evidently,  there  is  much  yet  to  be  learned 
on  the  subject  of  bank  advertising.  My 
own  opinion  is  that  the  art  will  have  to  be 
developed  from  within  the  bank  by  men 
who  understand  banking  and  who  know 
how  to  express  themselves  clearly  in  terms 
that  can  be  generally  understood. 

We  are  apt  to  forget  that  banking  is 
a highly  specialized  business  and  that  its 
technical  terms  have  no  meaning  to  the 
average  mnn.  Mr.  Wilson  says  that  when 
he  has  tried  to  get  an  explanation  of  terms 
used  in  the  business  from  some  of  his  bank- 
ing friends  he  has  been  able  to  understand 
them  and  I am  convinced  that  a bank  bal- 
ance sheet  is  meaningless  to  more  than  fifty 
per  cent,  of  the  community.  For  Instance,  I 


believe  that  many  people  consider  the  pub- 
lished statement  of  a bank's  deposits  to  rep- 
resent actual  cash  in  its  vaults  which  it 
could  loan  if  it  were  only  so  disposed  while 
the  obligation  to  pay  all  its  deposits  In  cash 
on  demand  is  not  only  recognized  by  the 
same  people  but  insisted  on.  How  any  one 
can  suppose  these  two  diametrically  oppo- 
site conditions  to  exist  at  the  same  time. 
Is  a paradox  which  I will  not  attempt  to 
explain. 

One  of  the  banks  in  Seattle  has  evidently 
realized  the  necessity  of  reaching  the  pop- 
ular understanding  and  has  published  a 
statement  in  which  each  item  is  explained, 
and  its  significance  pointed  out  In  every  day 
terms. 

Probably  all  advertising,  from  the  stere- 
otyped card  of  the  old  time  banker,  to  the 
heart  to  heart  prattle  of  the  up-to-date  ad 
writer,  does  some  good,  reaches  some 
people,  ot  at  least  serves  to  keep  the  name 
of  the  bank  before  the  public.  But  nothing 
can  take  the  place  of  personal  contact.  The 
banker  has  got  to  get  outside  the  bank  and 
meet  the  people  on  even  terms,  divested  of 
all  the  dignity  conferred  by  mahogany, 
plate  glass  and  bronze.  Within  the  bank 
he  must  be  accessible  even  if  he  has  to 
stand  out  on  the  floor,  where  he  Is  exposed 
to  the  attacks  of  advertising  solicitors,  book 
agents  and  charity  workers,  in  order  to  be- 
come so.  From  the  president  down  to  the 
last  office  boy  every  one  In  the  service  of 
the  bank  must  realize  that  It  Is  his  busi- 
ness to  make  the  bank  popular  In  the  best 
sense  of  the  word;  to  receive  every  cus- 
tomer with  courtesy  and  to  send  him  away 
satisfied.  This  does  not  by  any  means  Imply 
that  every  favor  asked  for  is  to  be  granted 
or  every  loan  applied  for  is  to  be  made  and 
it  is  one  of  the  trials  of  our  business  that 
much  of  the  time  we  have  to  say  no  when 
we  would  personally  prefer  to  say  yes.  But 
we  can  at  least  say  no  in  such  a manner 
as  to  convince  our  customer  that  we  take 
an  interest  In  him  and  that  we  would  be 
disposed  to  help  him  If  we  could.  In  justice 
to  the  institutions  we  represent. 


SAPULPA  ELECTRIC  CO.  SOLD 

THE  Sapulpa  Electric  Company,  which 
operates  the  central  station  business  at 
Sapulpa,  Oklahoma,  has  been  purchased 
by  II.  M.  Byllesby  & Co.  of  Chicago,  which 
firm  will  hereafter  operate  and  manage  the 
property.  Aecording  to  the  Federal  cen- 
sus, Sapulpa  has  a population  of  8,383,  rep- 
resenting a gain  of  nearly  100  per  cent,  since 
the  State  census  was  taken  in  1907.  The 
electric  lighting  and  power  system  at  Sapul- 
pa is  new,  but  in  the  past  has  been  able  to 
serve  only  about  one-half  of  the  immediate 
demands.  Byllesby  & Co.  will  proceed  at 
once  to  install  a 500  kw.  generating  unit, 
which  will  more  than  double  the  capacity  at 
the  station.  Located  in  the  heart  of  the  oil 
and  gas  producing  fields  of  Oklahoma^  a 
rapid  and  healthy  growth  in  the  population 
of  Sapulpa  is  secured. 


Digitized  by  t^ooQle 


Old  Colony  Trust  Co. 

BOSTON,  MASS. 


Capital  and  Surplus  - - $12,500,000 
Deposits  ....  65,000,000 


OFFICERS 

T.  JEFFERSON  COOLIDGE,  JR.,  Chairman  Executive  Committee 
CORDON  ABBOTT,  Chairman  Board  of  Directo-s 

FRANCIS  R.  HART,  Vice-Chairman  Board  of  Directors 
PHILIP  STOCKTON,  President 

WALLACE  B.  DONHAM,  Vice-President 
J.  R.  WAKEFIELD,  Vice-President 

FREDERIC  G.  POUSLAND,  Treasurer 
E.  ELMER  FOYE,  Manager  Credit  Department 
GEORGE  W.  GRANT,  Cashier 

CHESTER  B.  HUMPHREY,  Secretary 

JOSEPH  G.  STEARNS,  Assistant  Secretary 
F.  M.  HOLMES,  Trust  Officer 

F.  M.  LAMSON,  Manager  Temple  Place  Office 


Charles  F.  Adams.  2d 
Oliver  Ames 
F.  Lothrop  Ames 
C.  W.  Amory 
William  Amory 
Charles  F.  Ayer 
John  8.  Bartlett 
Samuel  Carr 
B.  P.  Cheney 
T.  Jefferson  Coolldgc 
Charles  E.  Cottlng 
Alvah  Crocker 
Philip  Y.  DeNormandle 
Philip  Dexter 
George  A.  Draper 
Frederic  C.  Dumalne 
William  Endlcott.  Jr. 


DIRECTORS 

Wllmot  R.  Evans 
Frederick  P.  Fish 
Reginald  Foster 
George  P.  Gardner 
Edwin  Farnham  Greene 
Robert  F.  Herrick 
Henry  S.  Howe 
Walter  Hunnewell 
Henry  C.  Jackson 
George  E.  Keith 
Gardiner  M.  Dane 
Thomas  L.  Livermore 
Arthur  Lyman 
Charles  S.  Mellen 
Lawrence  Minot 
Maxwell  Norman 
Richard  Olney 


Robert  T.  Paine.  2d 
Henry  Parkman 
Andrew  W.  Preston 
Richard  8.  Russell 
Philip  L.  Saltonstall 
Herbert  M.  Sears 
Quincy  A.  Shaw 
Howard  Stockton 
Charles  A.  Stone 
Galen  L.  Stone 
Nathaniel  Thayer 
Lucius  Tuttle 
H.  O.  Underwood 
Eliot  Wadsworth 
Stephen  M.  Weld 
Sidney  W.  Winslow 
Charles  W.  Whittier 


The  OLD  COLONY  TRUST  COMPANY  is  in  every  sense 
of  the  word  an  independent  trust  company,  interested  only  in 
the  welfare  of  its  depositors  and  its  stockholders,  and  the 
development  of  New  England’s  business  interests. 

Resources  in  excess  of  $75,000,000  make  this  Company 
one  of  the  largest  and  strongest  financial  institutions  in  the 
country,  and  insure  to  every  depositor,  large  or  small,  absolute 
security  combined  with  the  highest  type  of  banking  service. 


Digitized  by  i^ooQle 


BANKS 

i 


DISICNED  BUILT-  REMODELED 
DECORATED  EQUIPPED  BY  THE 
HOCCSON  BUILDING  METHOD 


ABOOK  that  covers  the  subject  of 
bank  building  from  the  view-point 
of  the  bank.  It  contains  definite 
information  of  value  to  any  bank 
which  contemplates  a building  or  remod- 
eling operation.  Some  of  the  specific  sub- 
jects treated  are : 

The  Building  Appro-  Supervision 
priation  Decorations  and 

Architectural  Plans  Equipment 
Materials  Remodeling 

Changes  in  Plans 

The  Hoggson  Single  Contract  Method  of 
Bank  Building  is  fully  described,  with 
140  illustrations  of  bank  interiors  and 
exteriors  executed  by  us. 

This  book  will  be  sent  on  request  to  any 
bank  interested  in  the  subject  it  covers. 


We  Build  from 
Coast  to  Coast 


HOGGSON  BROTHERS 

7 East  44th  St.,  New  York 


THE  HALL  MONTHLY  DIARIES 


A PAGE  FOR  EACH  DAY  A BOOK  FOR  EACH  MONTH 

A High  Grade  Advertising  &(pvelty  used  by  many  Banks  and  Trust  Com- 
panies and  greatly  appreciated  by  business  and  professional  men.  Size  of  each  book 
2H  by  4 H inches.  12  Books  to  set,  neatly  bound  in  leatherette  and  packed  in  box. 
Samples  and  Prices  upon  application.  Kindly  state  quantity  you  could  use. 

THE  J.  C.  HALL  COMPANY 

BANK  STATIONERS  PROVIDENCE,  R.  I. 

Orders  for  1911  must  be  placed  now  Delivery  to  be  made  in  December 


Digitized  by  LjOOQle 


MODERN  FINANCIAL  INSTITUTIONS 

AND  THEIR  EQUIPMENT 


SPLENDID  NEW  HOME  OF  THE  SECOND 
NATIONAL  BANK  OF  PITTSBURGH 


DIGNIFIED  ill  its  simple  lines  and 
chaste  in  its  architectural  harmony, 
the  new  building  of  the  Second  Na- 
tional Bank  of  Pittsburgh,  standing  at  the 
corner  of  Liberty  avenue  and  Ninth  street, 
is  typical  of  the  great  strength  and  solidity 
inherent  in  the  institution  it  shelters. 

Built  of  light  gray  granite  quarried  at 
Hallowell,  Maine,  with  basement  and  sub- 
basement of  reinforced  concrete,  the  mas- 
sive structure  is  so  constructed  as  to  be 
sufficiently  strong  to  withstand  the  water 
pressure,  in  case  the  high  water  should  ever 
reach  the  level  of  the  curb  at  the  corner  of 
Ninth  street.  The  walls  and  floors  are 
waterproofed  both  inside  and  out,  and  in 
addition  there  is  a system  of  drainage,  by 
which  any  water  that  might  possibly  find 
its  way  from  the  outer  layer  of  the  water- 
proofing would  be  led  off  before  reaching 
the  inner  layer.  It  covers  a lot  36.8x110, 
is  178  feet  high  from  the  bottom  of  the 
foundation  to  the  top  of  the  roof,  and  rises 
145  feet  above  the  pavement. 

The  Second  National  Bank  occupies  the 
basement,  sub-basement,  first,  second  and 
third  floors,  with  the  exception  of  two  of- 
fices situated  on  the  latter  floor.  A swift 
electric  elevator,  automatic  in  its  mechan- 
ism, is  provided  for  the  especial  use  of  the 
bank;  outside  in  the  main  corridors  are  the 
other  passenger  elevators. 


Two  Enormous  Strongboxes. 

Access  to  the  vaults  is  by  means  of  a 
private  staircase  leading  from  the  banking 
room  only.  Situated  in  the  basement  are 
the  two  enormous  armor  plate  vaults,  each 
fitted  with  two  time  locks  and  a combina- 
tion lock.  The  lining  of  the  vaults  is  of 
chrome  steel,  and  they  are  separated  by  a 
grill.  One  of  the  vaults  is  for  the  bank's 
papers,  the  other  for  the  cash.  The  book 
vaults  are  located  in  the  basement,  and 
there  are  two  additional  book  vaults  in  the 
sub-hasement.  A locker  room,  toilet  and 
bathroom  for  the  bank’s  employees  are  also 
located  in  the  basement. 

Main  Banking  Room. 

The  bank’s  main  floor,  entered  directly 
from  the  street,  is  most  artistic.  With  the 
exception  of  the  frame  work  of  the  plate 
glass  doorways,  the  desks  of  the  directors 
and  the  settees  for  the  customers,  not  a 
particle  of  woodwork  is  to  be  seen  on  this 
floor.  The  Botticino  marble,  of  a pecu- 
liarly soft,  creamy  tint,  of  which  the  first 
floor  is  built,  was  quarried  in  Italy  espe- 
cially for  this  building.  This,  in  combina- 
tion with  gilt,  bronze  and  polished  plate 
glass  of  unusual  thickness,  enters  into  the 
furnishing  of  the  large  banking  room, 
which  occupies  the  entire  space,  with  the 
exception  of  the  entrance  hall  at  the  Ninth 
street  side.  Huge  electroliers  of  gilt  bronze 
hanging  from  massive  linked  chains  and  fit- 
ted with  frosted  glass  bulbs,  afford  light, 
while  the  side  lights,  in  similar  brackets, 
diffuse  the  light  in  a pleasing  manner. 

Simplicity  in  Decoration. 

Then*  is  no  attempt  at  decoration  other 
than  the  graceful  lines  afforded  by  the  pan- 
elled marble,  and  the  pure  Greek  outlines 
of  the  columns  of  the  balustrade  separating 
the  desks  of  the  directors  from  the  main 
banking  room.  Behind  the  counters  there 
is  a staircase  leading  to  the  mezzanine  floor, 
where  is  situated  the  bank’s  private  tele- 
phone exchange. 

The  second  story  contains  the  rooms  for 
the  correspondence  clerks  and  general  book- 
keepers, also  a large  filing  room,  small  of- 
fices for  the  clerk  in  charge  of  the  filing 
room,  and  a room  for  the  storage  of  papers. 

On  the  third  floor  there  is  a spacious  di- 
rectors’ room,  occupying  the  front  of  the 
building.  The  mural  decoration  of  this 

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room  is  exceptionally  pleasing.  Old  ivory 
is  combined  with  a dull  green,  with  a touch 
of  gold  added  to  relieve  what  might  other- 
wise be  monotoned.  For  a border  the  Greek 
key  design  is  used,  and  a wainscoting  of 
unpanelled  specimen  mahogany  adds  to  the 
room’s  dignity.  The  furniture  consists  of  a 
massive  table  of  carved  mahogany  and 


— all  fully  equipped  with  the  latest  appli- 
ances for  the  preparation  and  serving  of 
food. 

The  fourth  floor  and  those  above  are  di- 
vided into  offices.  The  woodwork  throughout 
the  building  is  of  oak,  excepting  in  the 
banking  room,  the  officers’  dining  room,  in 
all  of  which  latter  is  of  mahogany.  The 


M«iin  Corridor,  looking  towards  the  Front  Entrance 


chairs  upholstered  in  green  leather,  with 
mahogany  frames. 

Comfort  Provided  For. 

Behind  the  directors*  room  is  the  dining 
room  for  the  officers  of  the  bank,  which  ad- 
joins the  dining  room  for  the  employees. 
Adequately  lighted  from  windows  facing 
Ninth  street,  the  rooms  are  cozily  furnished 
in  mahogany,  that  for  the  officers  having, 
besides  a massive  round  mahogany  table,  a 
buffet,  serving  table  and  china  closet  of 
carved  mahogany.  The  linen  and  china- 
ware  and  silver  are  marked  with  the  bank’s 
monogram.  Across  the  hall  is  the  kitchen, 
cold  storage  room,  pantry  and  serving  room 


entrance  vestibule  and  corridor  on  the  first 
floor  are  lined  to  the  ceiling  with  Pentelicon 
marble,  and  all  the  corridors  and  toilet 
rooms  are  wainscoted  with  the  same  mar- 
ble. The  floors  of  the  corridors  and  toilets 
are  of  Tennessee  marble. 

The  mechanical  equipment  consists  of 
three  100  horse-power  boilers,  which  are 
equipped  with  mechanical  stokers.  Electric 
current  is  generated  by  means  of  two  en- 
gines of  200  indicated  horse-power,  direct 
connected  to  two  generators. 

In  order  to  maintain  comfortable  condi- 
tions at  all  times  in  the  portion  of  the 
building  occupied  by  the  bank,  a system  of 
heating  and  ventilation  has  been  installed 


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HENRY  C.  BUGHMAN 
President 


THOMAS  W.  WELSH,  JR. 
Vice-President 


JAMES  M.  YOUNG  BROWN  A.  PATTERSON 

Csshier  Aset.  Csshier 

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Transit  and  Mailing:  Departments 


by  means  of  which  fresh  air  is  brought  in 
from  the  exterior,  and  after  passing  through 
an  air  washing  device  capable  of  removing 
ninety-eight  per  cent,  of  the  dirt,  is  passed 
over  tempering  coils  and  discharged  by 
means  of  a fan  into  the  various  rooms  to 
be  ventilated.  The  foul  air  is  exhausted 
from  these  rooms  by  means  of  a second  fan, 
and  there  is  a third  fan  which  exhausts  the 
hot  air  from  the  engine  and  boiler  rooms. 
The  toilet  rooms  and  kitchen  Are  ventilated 
by  means  of  a small  fan  located  in  the 
eleventh  story.  There  is  a refrigerating 
plant  by  means  of  which  drinking  water  is 
supplied  to  all  parts  of  the  building.  A 
vacuum  cleaning  system  has  been  installed 
with  outlets  at  three  points  in  each  cor- 
ridor on  each  floor  and  in  the  banking 
room. 

Ladies'  Department. 

Situated  on  the  first  floor,  near  the  Ninth 
street  entrance,  is  the  reception  room  that 
has  been  provided  for  women  customers  of 


the  bank.  The  dainty  little  apartment  is 
furnished  in  mahogany,  with  a writing  table 
of  Pompeiian  design,  a private  telephone,  a 
toilet  room  with  maid  service,  and  every 
convenience  that  could  be  devised  for  the 
comfort  of  women  visitors.  An  Oriental 
rug  in  w-arm  colorings  covers  the  floor,  and 
the  window's  are  screened  w'ith  green  silk. 

Historical. 

The  Second  National  Bank  of  Pittsburgh 
w'as  organized  in  the  year  1863,  with  a capi- 
tal of  $300,000.  Its  charter  number,  252, 
was  granted  shortly  after  the  National  Bank 
Act  went  into  effect.  By  easy  stages,  to- 
tally devoid  of  anything  spectacular,  the 
business  was  developed  and  brought  to  its 
present  satisfactory  state. 

Nine  years  ago,  in  November,  3000  shares 
of  new  stock  were  issued,  thereby  increasing 
the  capital  to  $600,000.  On  November  1, 
1905,  in  order  to  take  care  of  the  bank’s 
increasing  business,  the  capital  was  further 


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increased  to  $1,800,000  by  the  declaration  of 
a 200  per  cent,  dividend  from  the  surplus. 
To  date  the  bank  has  paid  its  stockholders 
dividends  of  $3,672,000;  the  present  rate  is 
two  and  one-half  per  cent,  quarterly. 

As  a representative  for  out-of-town  banks, 
the  Second  National  justly  claims  to  be 


WILLIAM  McCONWAY 
Vice-President 


the  pioneer  in  Pittsburgh.  It  is  carrying, 
at  present,  the  accounts  of  about  375  banks 
located  in  Western  Pennsylvania,  Ohio  and 
West  Virginia.  A large  number  of  these 
accounts  have  been  cared  for  while  this 
country  was  passing  through  the  severe  pan- 
ics of  1873,  1893  and  1907. 

At  the  close  of  business  September  1, 
1910,  the  Second  National  Bank  of  Pitts- 
burgh reported  as  follows: 

Resources. 


Loans  and  discounts  $7,324,286.74 

Investment  securities  4,006,271.98 

United  States  bonds  1,050,000.00 

Premiums  39,643.75 

Banking  house  882,016.49 

Other  real  estate  256,918.75 

United  States  Treasurer 45,000.00 

Cash  and  due  from  banks 4,279,273.19 


$17, 8S3, 410.81 

Liabilities. 


Capital  stock  $1,800,000.00 

Surplus  2,000,000.00 

Undivided  profits  206,670.78 

Circulation  895,100.00 

Deposits  12,981,640.00 


$17,883,410.81 


This  excellent  statement  speaks  for  itself 
and  needs  no  further  comment. 

Personnel. 

Of  the  officers  of  the  Second  National 
Bank  much  might  be  said  in  praise  of  their 
zeal  and  loyalty  to  the  institution  they 
serve — much  that  cannot  be  set  down  here. 
They  are:  Henry  C.  Bughman,  president; 
William  McConway,  vice-president;  Thomas 
W.  Welsh,  Jr.,  second  vice-president;  James 
M.  Young,  cashier;  Brown  A.  Patterson, 
assistant  cashier. 

Henry  C.  Bughman  was  elected  presi- 
dent in  January,  1906,  to  succeed  the  late 
James  H.  Willock.  His  father- was  one  of 
the  bank’s  incorporators  and  first  directors. 

William  McConway,  vice-president,  is 
president  of  the  McConway  & Torley  Co. 
and  is  in  point  of  service,  the  oldest  direc- 
tor now  connected  with  the  bank. 

Thomas  W.  Welsh,  Jr.,  entered  the  bank 
in  1876,  was  elected  cashier  in  1888  and 
promoted  to  the  second  vice-presidency  Oc- 
tober 1,  1904.  He  .s  at  present  one  of  the 
active  executive  officials. 

James  M.  Young,  the  cashier,  has  been 
with  the  Second  National  Bank  for  twenty- 
five  years  and  was  promoted  to  his  present 
position  October  1,  1904. 

Brown  A.  Patterson,  also  an  old  employee 
of  the  bank,  was  elected  assistant  cashier  in 


Entrance  to  Public  Elevators 


1904.  He  claims  a wide  acquaintance  among 
Pennsylvania  bankers. 

Now  that  the  Second  National  Bank  of 
Pittsburgh  is  comfortably  housed  in  the 
splendid  building  illustrated  herewith,  the 
officers,  knowing  full  well  the  bank’s  facili- 
ties for  handling  a large  volume  of  business, 
confidently  expect  to  see  a marked  increase 
of  deposits  before  another  official  report  is 
issued. 


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UNION  TRUST  COMPANY  OF  NEW  JERSEY, 
JERSEY  CITY,  N.  J.,  COMPLETES  A MODERN 
BANK  AND  OFFICE  BUILDING 


Photos  by  Oliver  Lippincott,  New  York 


ONE  year  ago  the  United  States  Govern-  that  is  distinctly  unique  in  that  it  permits 

inent  purchased  by  condemnation  and  the  outside  public  to  become  part  owners 

otherwise  all  the  property  on  the  East  on  a co-operative  basis.  As  trustee  to  the 

side  of  Washington  street,  Jersey  City,  ly-  unit  holders  the  Union  Trust  Company  holds 

ing  between  Montgomery  and  York  streets,  title  to  the  property  and  is  charged  with  the 

preparatory  to  erecting  a Federal  building  operation  and  maintenance  of  the  build- 

covering  the  entire  block.  This  action  forced  ing.  This  plan  has  been  most  successful 


New  Bank  and  Office  Building  Erected  by  the  Union  Trust  Company  of  New  Jersey, 

Jersey  City,  N.  J. 


the  Union  Trust  Company  of  New  Jersey 
to  seek  a new  location.  A very  desirable 
site  was  purchased  across  the  street  from 
the  old  home  and  the  directors  proceeded 
to  organize  themselves  into  the  Proprietors* 
Company  of  New  Jersey,  which  company 
has  built  the  handsome  bank  and  office  build- 
ing that  stands  completed  at  Montgomery 
and  Washington  streets,  Jersey  City,  New 
Jersey. 

This  building  has  been  erected  on  a plan 


to  date  and  there  is  every  indication  that 
the  investment  will  return  over  six  per  cent 
net. 

Entrance  to  the  banking  rooms,  located 
on  the  ground  floor,  may  be  had  through 
the  main  doors  of  the  building,  which  open 
into  a large  marble  vestibule  and  corridor 
paneled  with  Sienna  marble. 

Almost  the  entire  sixth  floor  is  taken  up 
with  the  large  court  rooms  of  the  Court 
of  Chancery,  State  of  New  Jersey,  and 


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the  seventh  floor  is  occupied  by  the  Down- 
town Club  of  Jersey  City,  a lunch  club  with 
a restricted  membership,  representing  the 
largest  business  interests  in  the  city.  The 
Bankruptcy  Court  is  likewise  a tenant. 

It  would  be  difficult  indeed  to  improve 
upon  the  interior  arrangement  of  the  bank- 
ing rooms;  they  are  furnished  with  the 


has  been  installed  in  the  various  cages  and 
departments  where  the  real  work  is  carried 
on,  an  item  that  insures  to  customers 
prompt,  careful  attention  to  all  business 
of  a banking  or  trust  nature. 

Those  who  planned  this  building  have 
given  special  attention  to  the  vaults  and  in 
this  respect  the  Union  Trust  Company  has 


SAMUEL  LUDLOW.  JR„ 
President 


best  of  everything,  have  an  abundance  ot 
light  and  ample  space  for  the  accommoda- 
tion of  patrons  and  for  future  growth. 
Three  handsome  marble  columns  support 
the  roof  of  the  main  banking  room  which 
is  finished  in  w’hite  oak,  solid  bronze  and 
breche  violetta  marble.  In  a mezzanine 
gallery  overlooking  the  bank  there  are  three 
comfortable  corporation  rooms  available  for 
the  use  of  corporations  for  their  annual  and 
other  meetings.  The  directors  also  have  a 
room,  furnished  in  flemish  oak  and  equipped 
w’ith  a private  toilet  and  lavatory  on  the 
mezzanine  floor.  A sensibly  furnished  ladies’ 
room  is  a feature  of  the  lower  floor. 

Only  the  most  modern  banking  equipment 


gone  to  unusual  expense  to  secure  vaults 
of  the  latest  and  most  approved  design. 
They  have  in  adition  to  the  book  vault  and 
securities  vault,  a mob-proof  safe  deposit 
vault  which  is  certified  under  affadivit  to 
be  the  strongest  in  every  particular  that  the 
Remington  and  Sherman  Company  have 
ever  built.  It  is  of  the  round  door  type, 
door  and  vestibule  weighing  thirty-seven 
tons,  is  provided  with  twenty-four  steel 
bolts  and  additionally  protected  by  the  elec- 
trical contact  system.  In  the  event  of  an 
attack  during  the  day  or  night  an  alarm 
would  be  automatically  sounded  both  in- 
side and  outside  the  banking  rooms. 

The  vault  is  constructed  of  heavy  laml- 


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Officers’  Room 


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THE  BANKERS  MAGAZINE 


nated  chrome  steel,  in  both  inside  and  out- 
side cladding,  while  concrete,  railroad  iron 
and  carborundum  rm  the  other  principal 
construction  materials.  It  is  estimated  that 
one  man  equipped  with  the  most  modern 
safe  breaking  tools  would  have  to  work  con- 
tinuously day  and  night  for  weeks  to  gain 
access  to  the  interior  compartment.  The 


JAMES  G.  HASKING 
Vice-President  and  Treasurer 


emergency  door,  which  is  a facsimile  on  a 
smaller  scale  of  the  main  door,  is  as  sub- 
stantially equipped  as  the  main  door,  and 
will  permit  of  entrance  to  the  vault  at  all 
times  even  in  the  event  of  trouble  with 
mechanism  of  the  main  lock.  This  immense 
strong-box  has  accommodations  for  fifteen 
hundred  private  safe  deposit  boxes,  as  well 
as  the  bank’s  securities.  Several  large,  well- 
ventilated  and  well-equipped  private  cou- 
pon booths  are  near  by  for  the  use  of 
customers. 

The  Union  Trust  Company  of  New  Jer- 
sey was  organized  and  opened  for  business 
on  the  first  day  of  July,  1907.  At  the  time 
of  organization,  it  took  over  from  the 
Second  National  Bank  of  Jersey  City,  which 
was  winding  up  its  affairs,  all  of  its  de- 
posit liabilities  and  began  business  with 
$500,000  capita],  $195,000  surplus  and  a 


little  over  $1,000,000  deposits.  Since  that 
time,  the  deposits  have  increased  over  dou- 
ble their  original  amount,  until  now  the 
assets  of  the  company  amount  to  over  $3,- 
000,000. 

During  the  late  panic,  the  Union  Trust 
Company  maintained  a record  that  has  been 
commented  upon  favorably  by  the  most 
representative  bankers  of  the  country.  Dur- 
ing the  panic  they  were  not  obliged  to  call 
one  loan;  cashed  every  check  presented 
without  question  in  any  denomination  of 
bills  required  and  at  the  same  time  mainr 
tained  in  their  vaults  alone  cash  to  an 
amount  more  than  equal  to  the  full  legal 
amount  of  fifteen  per  cent,  reserve  re- 
quired by  the  laws  of  the  State  of  New 
Jersey. 

Samuel  Ludlow,  Jr.,  president,  is  a man  of 


J.  J.  GORMAN 
Vice-President 


wide  banking  experience,  having  received  Ms 
education  in  the  banking  business  during  eigh- 
teen years*  service  with  the  Fourth  National 
Bank  of  New  York  and  as  assistant  cashier 
of  the  National  Shoe  and  Leather  Bank  of 
New  York.  He  was  the  organizer  and 
president  for  the  first  two  years  of  the 
New  York  Chapter,  American  Institute  of 
Banking  and  was  at  one  time  vice-president 
of  the  National  Association  of  the  Institute. 


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He  is  a director  in  the  First  National 
Bank  of  Montclair,  and  the  Broad  & Mar- 
ket National  Bank,  of  Newark,  treasurer 
of  the  Downtown  Club  of  Jersey  City,  vice- 
president  of  the  University  of  the  State  of 
New  Jersey  and  president  of  the  Proprie- 
tors* Company  of  New  Jersey,  the  operat- 
ing company  of  the  new  Union  Trust  Com- 
pany building. 

John  J.  Gorman,  the  first  vice-president, 
is  vice-president  of  the  Manhattan  Elec- 
trical Supply  Company,  and  a prominent 
citizen  of  Jersey  City.  He  is  closely  iden- 
tified with  the  interests  of  the  city. 

Joseph  E.  Bernstein,  the  second  vice-pres- 
ident, is  recognized  as  the  largest  and  one 
of  the  most  progressive  merchants  in  Jer- 
sey City.  He  is  president  of  the  Furst 
Company,  the  largest  department  store  of 


JOSEPH  E.  BERNSTEIN 
Vice-President 


the  city,  as  well  as  the  Bernstein  Company, 
the  largest  clothing  establishment  He  has 
been  prominent  in  every  movement  for  the 
civic  upliftment  of  Jersey  City  and  has 
done  much  to  advance  its  interests. 

James  G.  Hashing,  the  third  vice-presi- 
dent and  treasurer,  is  one  of  the  most  highly 
respected  banking  officials  in  the  city.  He  has 


been  an  officer  of  the  Bank  of  Jersey  City, 
cashier  of  the  Second  National  Bank  of  Jer- 
sey City  and  of  the  Union  Trust  Company 
of  New  Jersey  covering  a period  of  fifty 


GEORGE  E.  BAILEY 
Secretary 


years.  He  is  now  president  of  the  Jer- 
sey City  Sinking  Fund  Commission. 

George  E.  Bailey,  the  secretary,  is  rep- 
resentative of  the  younger  business  men  of 
the  city.  He  received  his  education  in  the 
security  business,  serving  many  years  with 
prominent  brokerage  houses  in  New  York 
and  since  assuming  the  secretaryship  of  the 
Union  Trust  Company  has  made  many 
friends  for  the  company. 

The  last  statement  of  the  Union  Trust 
Company  of  New  Jersey  indicated  a capi- 
tal of  $500,000;  surplus  of  $183,000;  and  de- 
posits of  $2,260,000. 

The  future  prospects  of  this  company 
seem  to  be  most  brilliant.  There  is  per- 
haps no  bank  in  the  State  of  New  Jersey 
that  has  such  opportunity  for  growth  as 
has  this  institution.  With  the  prestige  al- 
ready gained,  coupled  with  that  which  will 
come  to  it  by  reason  of  its  location  and 
magnificent  equipment,  its  business  should 
double  and  triple  before  the  close  of  anothei 
year. 


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PALATIAL  HOME  OF  THE  SOUTH  TEXAS 
NATIONAL  BANK  OF  HOUSTON 


Opened  to  the  Public  April  4,  1911 


OUIET,  dignified  and  withal  particular- 
ly striking  in  appearance,  the  new 
home  of  the  South  Texas  National 
Bank  of  Houston  constitutes  a notable  ad- 
dition to  the  beautiful  bank  buildings  of 
the  South.  It  was  designed  by  C.  D.  Hill 
& Co.  of  Dallas,  Texas,  and  was  completed 
about  five  months  ago. 

The  style  of  architecture  introduced  is  a 
composite  combination  of  the  Grecian  Cor- 
inthian, admirably  brought  out  in  the  gen- 
eral design.  A wide  portico,  supported  by 
four  massive  marble  columns,  extends  for 
almost  the  entire  front  of  the  building  fac- 
ing Main  street.  This  front  is  over  forty- 

574 


five  feet  and  the  structure  has  a depth  of 
125  feet,  with  a twelve-foot  court  in  the 
rear. 

Above  a polished  Vermont  granite  base 
about  three  feet  high,  the  entire  front,  in- 
cluding cornice,  column  caps  and  all  orna- 
ments, is  of  the  finest  grade  of  gray-white 
Georgia  marble.  The  columns  supporting 
the  main  pediment  are  of  solid  marble, 
twenty-eight  inches  in  diameter  at  the  base 
and  about  twenty-two  feet  long,  exclusive 
of  base  and  caps.  Probably  the  most  ex- 
pensive feature  of  the  front  in  proportion 
is  the  main  spandrel  in  the  front  gable, 
after  the  old  classic  design,  the  cornucopia. 


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THE  BANKERS  MAGAZINE 


representing  the  horn  of  plenty.  This  is 
carved  from  solid  marble. 

Ixteuior  Arrangements. 

The  main  entrance  to  the  public  space  is 
through  two  sets  of  heavy  bronze-plated  ma- 
hogany doors.  The  outer  mahogany  door 
may  be  slid  back  into  pockets  on  either 
side,  allowing  the  inner  glass  doors  to  be 
used  for  general  purposes  during  the  day. 

On  entering  the  building  to  the  right  of 


CHAS.  DILLINGHAM 
President 


the  main  entrance  occurs  the  main  marble 
stairs  leading  from  a corresponding  outside 
entrance  directly  to  the  second  floor.  The 
stair  entrance  is  provided  with  a door  lead- 
ing from  the  banking  room  also. 

To  the  left  of  the  main  entrance  occurs  a 
flight  of  ganite  stairs  protected  with  a 
bronze  railing  leading  to  the  basement. 

Entering  the  main  public  space  or  lobby, 
one  is  surrounded  on  either  side  with  offices 
and  cages,  the  cages  numl>ering  nine  in  all. 

Beginning  on  the  left,  a very  attractive 
and  convenient  ladies'  waiting  room  has 
been  provided,  equipped  with  handsome  fur- 
niture, telephone  booths  and  conveniences 
for  special  use  by  the  lady  patrons  of  the 
bank.  The  furnishings  here  are  rich, 
classic  in  design.  The  upholsterings  and 
hangings  are  of  gray  green  silk  rep,  while 


the  furniture'  is  of  imported  mahogany  and1 
beautifully  carved. 

Next  on  the  left  occurs  private  consul- 
tation room,  open  offices,  counters,  cages, 
bookkeepers’  counters.  Opposite  the  safe 
deposit  vaults  coupon  booths  have  been  ar- 
ranged. 

The  Vaults. 

The  new  fire  and  burglar-proof  vaults 
which  have  been  installed  were  designed  by 
the  expert  engineer  of  the  Herring-Hali- 
Marvin  Safe  Company  at  Hamilton,  Ohio, 
and  under  the  supervision  of  the  architects 
of  the  general  building.  The  vaults  embody 
many  new  features,  and  they  are  conven- 
iently situated,  beautifully  decorated  and 
designed. 

The  four  vaults  on  the  banking  room 
floor  measure  twenty  feet  square  and  weigh 
approximately  300,000  pounds.  The  safe 
deposit  or  public  vault  is  over  sixteen  feet 
long  and  six  feet  wide  and  more  than  one 
inch  thick  of  drill-proof  plates.  It  is  fitted 
with  600  strong  small  boxes  for  the  use  of 
the  customers  of  the  bank.  In  the  rear  of 
the  vault  a compartment  or  storage  room 
is  set  apart  and  enclosed  by  a nickel-plated 
partition,  back  of  which  valuable  and  more 
bulky  articles  are  kept  secure  for  the  de- 
positor. The  compartments  and  storage 
room  of  this  vault  are  devoted  to  the  exclu- 
sive use  of  the  bank’s  patrons. 

There  will  be  a custodian  in  constant 
charge  at  all  times  during  banking  hours  to 
receive  visitors  to  this  department.  This 
vault  is  made  secure  by  two  sets  of  doors 
(outer  and  inner).  The  inside  doors  are 
heavy  and  drill  proof,  as  are  also  the  mas- 
sive yet  beautiful  outside  doors  and  vault 
proper. 

The  money  and  securities  vault  of  the 
bank  has  received  greater  attention  from  a 
standpoint  of  security  than  is  usual  for  the 
work  of  this  character.  The  outside  door 
to  this  vault  is  ten  inches  thick.  There  are 
placed  in  addition  heavy  inside  doors. 
There  is  altogether  a separate  vault  placed 
on  the  inside,  the  walls  of  which  are  nearly 
two  inches  thick. 

Entrance  to  this  vault  is  prevented  by  a 
door  fully  six  and  one-half  inches  thick  of 
solid  drill-proof  material.  On  the  interior 
of  this  vault  the  cash  and  securities  of  the 
bank  are  kept.  This  safe  is  large  and  com- 
modious and  weighs  20,000  pounds.  Into 
chests  inside  this  safe  the  cash  is  placed 
each  day  after  banking  hours. 

To  give  an  idea  of  this  security  it  may 
be  said  that  each  of  the  four  compartments 
have  to  be  entered  each  day  to  reach  the 
cash  and  securities  for  the  day’s  business, 
and  to  place  this  vault  at  the  command  of 
the  officers  and  clerks  it  will  be  necessary 
to  operate  twenty  combination  locks  in  this 
vault  alone.  This  vault  is  also  fitted  with 
numerous  storage  chests  for  silver. 

Besides  the  vaults  already  described 


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J.  E.  Me  ASH  AN 
(Active)  Vice-President 


B.  D.  HARRIS 
Cashier 


c.  a.  McKinney 
Assistant  Cashier 


C.  F.  SCHULTZ 
Assistant  Cashier 


577 


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Google 


Director’s  Meeting  Room 


A Cozy  Resting  Place  on  the  Mezzanine  Floor 
THE  SOUTH  TEXAS  NATIONAL  BANK  OF  HOUSTON 


Digitized  by 


Google 


MODERN  FINANCIAL  INSTITUTIONS 


579 


there  are  others  for  books  and  storage,  and 
they,  too,  have  been  made  absolutely  fire- 
proof. 

Further  back  on  the  left  is  the  private 
office  of  the  active  vice-president  To  the 
right  the  private  offices  of  the  cashier  and 
assistant  cashiers  occur,  with  private  tele- 
phone booths  and  toilets.  Back  of  these 
offices  are  cages,  and  still  further  back  a 
large  working  department  of  the  bank  is 
located.  From  this  space  a rear  stair 
leads  to  the  basement  and  second  floor. 

The  entire  interior  of  the  banking  room 
is  open  to  the  arched  roof  in  the  center, 
extending  almost  the  entire  length  of  the 
building.  It  is  about  forty-five  feet  above 
the  floor  level  and  arranged  in  two  stories 
around  the  four  sides. 

In  the  near  spandrel  of  the  vaulted  ceil- 
ing a beautiful  art  glass  panel  has  been 
provided  with  a splendid  likeness  worked 
in  art  glass  of  General  Sam  Houston,  the 
liberator  of  Texas  and  first  president  of  the 
new  Republic.  In  the  spandrel  at  the  other 
end  of  the  vaulted  ceiling  the  State  seal  is 
represented. 

The  main  ceiling  is  supported  by  ten 
highly  polished  Scagliola  columns,  which 
match  perfectly  the  Breche  Fleuri  trim- 
ming marble  used  on  the  first  floor.  These 
columns  also  support  the  gallery  floor.  A 
rich  solid  bronze  railing  surrounds  the  well 
hole  at  the  balcony  floor,  the  design  of  which 
is  in  keeping  with  the  bronze  grille  work  of 
the  bank  fixtures.  The  whole  interior  is 
decorated  and  enriched  in  soft  coloring  and 
gold  leaf. 

All  of  the  minor  details,  such  as  lighting, 
fixtures,  teller  cages,  furniture  and  mantels, 
were  especially  designed  to  harmonize 
throughout  with  the  style  introduced. 

All  of  the  banking  room,  including  all 
fixtures,  cages  and  all  of  the  necessary 
equipment,  is  as  nearly  perfect  and  up  to 
date  as  modern  designers  and  mechanics 
are  able  to  produce.  All  of  the  woodwork 
in  connection  with  the  private  offices,  in- 
terior finish  throughout  and  wainscoting, 
is  of  imported  inlaid  mahogany,  highly 
polished. 

On  the  second  floor,  in  the  front,  offices 
have  been  provided  for  the  attorneys  of  the 
bank,  neatly  finished  and  decorated. 

The  directors*  room  is  located  in  the  rear 
on  the  second  floqr,  facing  the  court.  This 
room  is  finished  in  San  Domingo  mahogany, 
inlaid  in  simple  design.  The  large  Rook- 
wood  tile  mantel,  the  handsome  paneling 
over  the  same,  adjoining  book  cases,  elabo- 
rate electric  fixtures,  special  decoratings 
and  hangings,  make  the  room  very  attract- 
ive. The  directors’  table  is  of  unusual  size, 
being  four  and  one-half  feet  wide  and  six- 
teen feet  long,  of  solid  mahogany. 

Growth  and  Organization. 

The  South  Texas  National  Bank  opened 
for  business  July  14,  1890,  with  a paidup 


capital  of  $500,000,  at  that  time  the  largest 
capitalization  of  any  bank  in  Houston  or 
the  State  of  Texas.  It  has  paid  consecu- 
tive semi-annual  dividends  on  this  capital 
from  the  beginning,  returning  to  its  stock- 
holders more  than  a million  dollars  in  net 
earnings. 

The  management  of  the  bank  has  at  all 
times  been  conservative  in  its  position,  and 
strong  under  all  the  varying  conditions  of 
business,  in  consequence  of  which  it  has 
always  been  in  a position  to  extend  de- 
pendable and  satisfactory  banking  service 
to  the  public  and  has  correspondingly  been 
a valuable  factor  in  the  upbuilding  and  de- 
velopment of  the  commercial  business  of  this 
city  and  the  State. 

The  business  of  the  bank  has  always  been 
confined  to  commercial  banking  in  a strict 
sense,  and  in  serving  those  interests  it  has 
been  recognized  as  an  institution  conducted 
along  legitimate  lines  for  the  service  of 
the  general  public,  not  promoting  any 
special  interests.  Its  deposits  have  been  ac- 
quired by  natural  growth  and  not  through 
the  consolidation  or  absorption  of  any  other 
institution,  and  are  at  this  time  in  excess 
of  $4,000,000.  With  an  earned  surplus  of 
$350,000,  the  bank  has  at  the  present  time 
a working  capital  of  $850,000. 

Personnel. 

Chas.  Dillingham,  president  of  the  bank, 
came  to  Texas  in  1885  from  New  Orleans, 
and  has  been  connected  with  the  bank  since 
its  organization.  He  has  served  on  the 
board  of  directors  of  numerous  business  cor- 
porations and  other  organizations  in  this 
city,  and  was  also  receiver  of  the  H.  & T.  C. 
and  other  railways,  and  the  Houston  Oil 
Company  of  Texas. 

H.  Bras  hear,  vice-president,  has  lived  in 
Houston  about  seventy-one  years,  perhaps 
longer  than  any  other  citizen.  He  is  a re- 
tired capitalist  and  a large  owner  of  real 
estate. 

O.  T.  Holt,  vice-president,  has  been  an 
attorney  in  active  practice  in  Houston  for 
over  thirty  years.  He  was  for  many  years 
national  committeeman  from  Texas  and  has 
served  as  mayor  of  Houston. 

J.  E.  McAshan,  active  vice-president, 
began  his  banking  career  in  Houston  in 
1872.  He  engaged  in  the  organization  of  the 
South  Texas  National  Bank,  and  with  him 
of  its  present  officers  were  associated  Messrs. 
Dillingham,  Brashear,  Holt  and  Schultz. 
Mr.  McAshan  was  the  first  cashier  of  the 
bank  and  filled  that  office  from  1890  to 
1908;  during  those  years  he  was  the  man- 
aging officer  of  the  bank.  He  has  acted  as 
president  of  the  Texas  Bankers’  Association, 
and  in  time  of  service  is  believed  to  be  the 
dean  of  Texas  bankers.  Mr.  McAshan  is 
also  president  of  the  Merchants  & Planters 
Oil  Company  of  Houston,  and  vice-president 
of  the  board  of  trustees  of  the  Wm.  M.  Rice 


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THE  BANKERS  MAGAZINE 


Institute  for  the  Advancement  of  Litera- 
ture, Science  and  Art,  an  educational  in- 
stitution established  with  an  endowment  of 
several  millions  of  dollars  by  the  will  of 
the  late  William  Marsh  Rice. 

B.  D.  Harris,  the  present  cashier  of  the 
bank,  began  his  banking  career  in  1887  with 
the  American  National  Bank  of  Dallas,  now 
the  American  Exchange  National  Bank  of 
Dallas  and  was  subsequently  cashier  of  the 
City  National  Bank  of  Dallas  and  the 
Commercial  National  Bank  of  Houston, 
•coming  from  the  latter  institution  to  the 
•South  Texas  National  as  cashier  in  the 
spring  of  1908. 

C.  F.  Schultz,  assistant  cashier,  has  been 
-connected  with  the  bank  since  organization, 
-and  C.  A.  McKinney,  assistant  cashier,  since 
1895,  during  which  time  they  have  had  ex- 
tensive experience  in  all  departments  and 
■have  been  in  close  touch  with  local  con- 
ditions. 


FULTON  SAVINGS  BANK  OF  FUL- 
TON, NEW  YORK 

THE  design  which  has  been  accepted  for 
the  new'  home  of  the  Fulton  Savings 
Bank  of  Fulton,  N.  Y.,  promises  some- 
thing unusual  in  bank  architecture. 

While  it  is  designed  primarily  as  an  in- 
dividual bank  building,  and  will  have  the 
general  appearance  of  one,  an  office  floor 
has  been  provided.  The  exterior  of  the 
building  will  be  of  brick,  with  wide  raked 
out  joints  and  laid  up  in  rustications  to 
the  underside  of  a richly  designed  entab- 
lature. 

Pylons  on  either  side  of  the  entrance  ter- 
minate a handsome  cornice,  from  which 
springs  a rather  flat  pediment.  The  entab- 
lature with  its  frieze  of  triglyphs  and  discs 
and  its  cornice  with  modillions,  returns  on 
either  side  and  at  the  rear  the  treatment  of 
the  front  is  recalled.  The  whole  is  crowned 
with  a handsome  cheneau  or  cresting  which, 
together  with  the  roof,  will  be  of  metal;  the 
latter  is  accented  w'ith  ribs  and  small  ven- 
tilating dormers. 

A spacious  vestibule  gives  easy  access  to 
both  stairs  leading  to  the  offices  above,  and 
to  the  banking  room.  On  entering  the  latter 
one  w'ill  be  at  once  charmed  with  the  general 
quiet  and  restful  tones  which  greet  the  eye; 
the  predominating  color  being  a soft  greyish 
green.  This  together  with  the  counter  screen, 
which  is  to  be  quartered  oak  with  a base  of 
verdi-antique  marble,  will  form  a combina- 
tion of  color,  perfect  in  harmony. 

The  floor  of  the  public  space  is  of  marble 
terrazzo  with  a mosaic  border. 

The  counter  screen  is  so  planned  as  to  be 
of  the  greatest  possible  convenience  to 
customers,  and  at  the  same  time  to  those 
whose  duties  require  their  presence  behind 
the  screen. 

The  treasurer’s  office,  while  being  more  or 


less  secluded,  is  in  such  a position  as  to  give 
access  at  all  times  to  both  the  public  space 
and  the  working  space. 

The  president’s  private  oflice  is  also  on 
this  floor. 

Special  care  has  been  given  to  the  vault 
equipment,  which  is  the  most  modern  that 
can  be  bought.  The  walls  are  constructed  of 
concrete  w'ith  five  ply  laminated  steel  bars 
embedded  in  same,  and  the  door  to  the 
vault  is  an  innovation  in  itself,  being  differ- 
ent from  anything  of  the  kind  in  this  part 
of  the  State. 

The  directors’  room  is  placed  on  the  office 
floor,  and  will  be  a pleasant  room  in  w'hich 
to  transact  business. 

The  balance  of  the  second  story  is  given 
up  to  attorneys'  offices,  and  a library  with  a 
fire-proof  vault — for  the  storage  of  import- 
ant documents. 

The  building,  which  is  being  designed,  built 
and  equipped  under  the  single  contract  of 
Hoggson  Brothers  of  New  York,  promises  to 
be  an  ornament  to  the  town  of  Fulton,  N. 
Y.,  and  to  reflect  great  credit  on  both  the 
building  committee,  the  designers  and  the 
builders.  Cross  & Cross  of  New  York  city 
are  the  architects. 


GERMLESS  PAPER  MONEY 

THE  officials  of  a bank  at  Spokane  have 
hit  upon  a plan  for  keeping  paper 
money  free  from  germs.  They  are  mix- 
ing carbolic  acid  with  the  ink  they  use  in 
signing  new'  bills.  They  make  the  positive 
assertion  that  no  germ  wil  remain  on  a bank 
note  that  carries  with  it  the  pervasive  and 
persuasive  odor  of  carbolic  acid. 

The  bacteriologists  are  yet  to  be  heard 
from  as  to  the  efficacy  of  the  Spokane 
method.  Waiving  the  question  as  to  whether 
it  will  do  all  its  discoverers  claim  for  it, 
there  arises  the  greater  question  as  to 
whetlier  the  public  will  take  kindly  to  acid- 
flavored  currency.  There  is  reason  to  be- 
lieve that  most  people  would  prefer  to  take 
their  chances  with  the  germs. 

It  was  announced  some  time  ago  that  the 
United  States  Treasury  Department  had 
discovered  a method  of  washing  paper 
money,  and  thus  relieving  it  of  accumulated 
dirt  and  germs.  The  laundering  process, 
however,  w'ould  not  solve  the  problem.  Ob- 
viously, much  of  the  money  in  circulation  is 
in  such  a dilapidated  condition  that  the 
government  laundry  could  not  handle  it. 
Then,  bills  once  washed  would  quickly  ac- 
cumulate a new  stock  of  germs. — LouisviU* 
Courier- Journal. 


Digitized  by  t^ooQle 


BANKING  AND  FINANCIAL  NOTES 


NEW  YORK  CITY 

— A fine  showing  is  made  by  the  Nassau 
Bank  in  its  statement  of  condition  as  of 
September  1.  The  report  shows  loans  and 
discounts  amounting  to  $6,937,429;  surplus 
and  profits,  $538,210;  deposits,  $9,078,297, 
and  total  resources,  $10,138,312. 

— Between  June  30  and  August  31  the 
deposits  of  the  Bankers’  Trust  Company 
increased  from  $68,408,333.46  to  $72,142,- 
504.90. 

— The  Guaranty  Trust  Company  has  de- 
cided to  retire  the  2,437  shares  "of  Fifth 
Avenue  Trust  Company  stock  which  it  ac- 
quired last  January,  when  the  merger  of 
the  Fifth  Avenue  and  the  Morton  Trust 
Companies  with  the  Guaranty  was  effected. 
Of  the  Fifth  Avenue’s  capital  of  $1,000,000, 
the  2,437  shares  referred  to  were  owned  by 
the  Morton  Trust.  The  arrangements  un- 
der which  the  merger  was  carried  out  pro- 
vided for  the  issuance  of  $1,500,000  of 
Guaranty  stock  in  exchange  for  the  $2,000,- 
000  capital  of  the  Morton  and  $500,000  of 
Guaranty  stock  for  the  $1,000,000  capital 
of  the  Fifth  Avenue.  The  capital  of  the 
Guaranty  was  increased  to  $5,000,000;  in 
canceling  the  Fifth  Avenue  stock  the  Guar- 
anty will  issue  1*218*4  shares  of  its  own 
stock.  The  latter  is  now  offered  to  Guar- 


Bronze  and  Iron  Work  for  Banks 


Cast  Bronze  Signs  and  Tablets 

BRONZE  COUNTER  SCREENS 
Wire  Mesh  Enoieeures 

To  Special  Dcxxgn 

JNO.  WILLIAMS  INC.  Bronze  Foundry, 

256  Went  27th  8treet.  New  York,  publishes  the 
Magacln  * “American  Art  *n  Bronze  and  Jnm .**  11- 
lustrariug  Bank  Counter  Screens,  Tablets,  Sign®, 
etc.  Copies  free  to  Bankers. 

**  Tour  Architect  knows  Jno.  William n Inc.** 


Ovfisti  /*»»>  dm* 


Merchants  National  Bank 

RICHMOND,  VA. 

Capital  9200.000 

Surplus  and  Profits,  920,000 

This  bank  is  the  largest  depository  for 
banks  between  Baltimore  and  New  Orl- 
eans. It  Is  Virginia's  most  successful 
National  Bank.  It  has  the  best  facilities 
for  handling  items  on  the  Virginias  and 
Carolinas.  Collections  carefully  routed. 

Correspondence  Solicited 


anty  shareholders  at  $800  per  share.  At 
the  close  of  business  August  31  the  Guar- 
anty reported  deposits  of  $127,684,066. 

— P.  R.  G.  Sjostrom  has  taken  charge  as 
president  of  the  Hungarian-American  Bank 
of  New  York.  Mr.  Sjostrom  is  treasurer 
of  the  United  States  Worsted  Company,  a 
six  million  dollar  corporation,  and  identi- 
fied with  seven  otlier  important  textile  cor- 
porations. The  change  in  the  presidency 
of  the  hank  is  due  to  the  withdrawal  of 
W.  E.  Holloway,  who  accepted  the  vice- 
presidency of  the  Northern  Bank  of  New 
York.  The  new  management  of  the  bank 
intends  in  the  near  future  to  increase  the 
institution’s  capital  to  $1,000,000.  Eugene 
Boross,  the  founder  of  the  hank,  remains 
the  active  vice-president  of  the  institution 
under  the  new  arrangement. 

— The  National  Bank  of  Commerce  re- 
ports surplus  and  undivided  profits  of  $16,- 
497,376,  deposits  of  $169,716,698,  and  total 
resources  of  $224,183,574. 

— In  our  June  issue  mention  was  made  of 
the  third  anniversary  statement  of  the  Fi- 
delity Trust  Company.  According  to  its 
latest  statement,  this  progressive  institution 
is  more  than  holding  its  own.  Deposits  are 
now  about  $7,000,000,  and  there  are  total 
resources  of  over  $8,500,000.  The  company 

583 


Digitized  by  t^ooQle 


BINDERS 

AND 

BLANKS 

OF  UNIFORM  EXCELLENCE 


FOR  ALL  DEPARTMENTS  OF  BANK  ACCOUNTING 


BAKER -VAWTER  COMPANY 

CHICAGO  HOLYOKE,  MASS. 


has  recently  been  designated  as  a depository 
for  the  general  funds  of  the  State  of  New 
York. 

— The  Century  Bank  has  opened  a new 
branch  at  Third  avenue  and  Forty-seventh 
street,  which  is  in  charge  of  Arthur  T. 
Strong  as  manager.  This  is  the  second 
branch  to  be  operated  by  this  progressive 
institution,  the  uptown  branch  being  at 
Broadway  and  104th  street.  The  main  of- 
fice is  at  Fifth  avenue  and  Twentieth  street. 
An  inspection  of  the  new  branch  has  shown 
it  to  be  fully  equipped  for  the  handling  of 
all  commercial  business.  The  officers  are: 
II.  L.  Crawford,  president;  Henry  Dimse 
and  Arthur  H.  Dayton,  vice-presidents;  C. 
Stanley  Mitchell,  cashier,  and  William  D. 
Pike,  assistant  cashier. 

— Comparison  of  the  June  JO  and  Sep- 
tember 1st  statements  of  the  Market  and 
Fulton  National  Bank  discloses  a gain  in 
cverv  item.  Deposits  have  climbed  from 
$10,i  23,951  to  $10,486,125. 

— From  the  last  day  of  June  to  the  first 
day  of  September  the  deposits  of  the  Mer- 
chants National  Bank  were  increased  by 
$1,020,855. 

— For  the  accommodation  of  the  patrons 
of  its  branch  at  Broadway  and  Forty-fifth 
street,  the  Greenwich  Bank  of  this  city  has 
extended  the  banking  hours  of  that  branch, 
and  it  will  hereafter  remain  open  until 
midnight  of  each  business  day.  This  is 


BANK.  PICTURES 

Large  portraits  of  past  officers,  etc., 
made  from  any  good  photograph.  Splen- 
did for  directors’  room  or  bank  offices. 
Write  fr  particulars. 

Oliver  Lippincott,  Photographer  of  Men 

Singer  Bldg.,  149  B’way,  New  York 
References— The  Rankers  Magazine 


done  to  meet  the  requirements  of  those 
whose  business  extends  into  a late  hour  of 
the  night,  the  numerous  hotels  and  theaters 
which  are  located  in  the  neighborhood  being 
especially  benefited  through  the  movement 
The  new  policy  will  also  give  an  opportuni- 
ty for  the  purchase  of  foreign  drafts  on  all 
parts  of  the  world  and  drafts  for  use  in  all 
parts  of  the  country,  after  the  post  office 
and  express  companies  are  closed  for  the 
day.  The  Greenwich  Bank  is  one  of  the 
oldest  banking  institutions  in  the  city.  It 
was  establislied  in  1830,  and  has  its  head- 
quarters in  old  Greenwich  Village,  at  402 
Hudson  street.  Under  the  new  call  of  Au- 
gust 31  it  reported  combined  capital  and 
surplus  of  $1 ,332,9 1 9 ($500,000  represent- 
ing capital),  deposits  of  $9,719,941,  and 
total  resources  of  $11,209,542. 

— The  Coal  and  Iron  National  Bank  re- 
ports total  resources  of  $8,738,893,  loans 
and  discounts  of  $4,799,017,  and  deposits 
of  $6,932,130.  These  figures  represent  sub- 
stantial gains  over  those  reported  June  30. 

— In  comparison  with  its  previous  state- 
ment, the  Hanover  National  Bank  makes 
a splendid  showing.  It  reports  loans  and 
discounts  of  $61,084,239,  a surplus  fund  of 
$11,500,000,  and  deposits  of  $105,082,182. 
Two  months  ago  the  total  deposits  were 
reported  to  be  $102,893,863. 

— The  Madison  Trust  Company,  Fifth 
avenue  and  Sixtieth  street,  is  the  new  name 
of  the  institution  known  heretofore  as  the 
Van  Norden  Trust  Company.  The  stock 
control  is  entirely  new,  and  the  policy  of 
the  new  management  will  be  to  maintain 
a representative,  conservative  and  inde- 
pendent uptown  trust  company.  The  capi- 
tal of  the  Madison  Trust  Company  is  $1,- 
000,000,  and  the  total  resources  exceed  $8,- 
000,000.  The  officers  are:  Watkins  Crockett, 
president;  Bradley  Martin,  Jr.,  vice-presi- 
dent and  treasurer;  William  W.  Robinson, 
secretary;  Charles  A.  Fisher,  assistant  sec- 


58  I 


Digitized  by  L^OOQle 


Diamond 

PITTSBURGH 


PITTSBURGH 


National  Bank 

PITTSBURGH,  PA.‘ 


OFFICERS 


DIHECTORS 


WILLIAM  PRISE 

President 

D.  6.  WILLS 

Cashier 

W.  0.  PHILLIPS 

Assistant  Cashier 

Bankers 
should  seek 
STRENGTH 

when  selecting 
a Reserve  Agent 
or 

Correspondent 


W.  B.  RODGERS 

Attorney  -at.  Law 

J.  P.  MoKIHNEY 

Treasurer 
McKinney  Mfg.  Co. 

A.  6.  BARNETT 

Retired  Iron  ManuTr 

J.  D.  CALLERY 

President 

Pittsburgh  Railwys  Co. 

JOHN  W.  ROBINSON 

Capitalist 

0.  C.  WILLS 

Cashier 

A.  M.  STEWART 

Jaw.  Stewart  <&  Co. 
BQllding  Contractors 

A.  C.  WETTEN6EL 

Investment  Broker 

S.  A.  PICKERING 

Merchant 

W.  0.  ROCK 

Secretary  Thompson- 
Connellsviile  Coke  Co. 

E.  E.  SLICK 

Chief  Mec.  Engr., 
Carnegie  Steel  Co. 

WILLIAM  PRICE 

President 


Capital $600,000.00 

Surplus  and  Undivided  Profits,  $1,674,553.31 


STATEMENT  AT  CLOSE  OF 
RESOURCES 

Loans  and  Investments $4,395,999.80 

Overdrafts  263.20 

United  States  Bonds  306,093.75 

Banking  House  1,025,407.51 

Interest  Earned  14,291.88 

Due  from  Res.  Agts.$876, 112.50 
Due  from  banks...  571,512.91 
Due  from  U.S.Treas.  55,000.00 
Cash  in  Vault. 569,400.64  2,072,026.06 

$7,813,082.19 


BCSINE88  SEPT.  1,  1»10 
LIABILITIES. 

Capital  Stock  $600,000.00 

Surplus  and  Undivided  Profits  1,674,563.31 
Reserved  for  Int.  and  Taxes.  13,808.56 

Circulation  298,500.00 

DEPOSITS  5,226,220.32 


$7,813,082.19 


PITTSBURGH 


Accounts  of  Banks,  Bankers,  Cor- 
porations, Finns  and  Individuals 
cordially  invited Write 


PITTSBURGH 


585 


Digitized  by  LiOOQle 


MARWICK  MITCHELL  & CO. 

CHARTERED  ACCOUNTANTS 

79  WALL  STREET,  NEW  YORK 


NEW  YORK 
PHILADELPHIA 
WASHINGTON 
NEW  ORLEANS 


PITTSBURG 
CHICAGO 
MILWAUKEE 
KANSAS  CITY 


ST.  JOSEPH 
ST.  PAUL 
MINNEAPOLIS 
SPOKANE 


MONTREAL 

WINNIPEG 


GLASGOW 

LONDON 


retary  and  assistant  treasurer;  George  H. 
Bartholomew,  trust  officer. 

— L.  F.  Voshurgh,  the  man  who  plans  the 
special  bankers’  convention  trains,  has  been 
appointed  general  passenger  agent  of  the 
New  York  Central,  West  Shore  and  Bos- 
ton & Albany  Railroads.  This  will  prove 


L.  F.  VOSBURGH 
General  Passenger  Agent  New  York 
Central  Lines 


welcome  news  to  his  many  friends,  though 
it  will  in  no  way  surprise  those  who  have 
followed  his  career  and  know  his  ability. 
Mr.  Yosburgh  entered  railroad  service 

:*S(» 


in  1893  as  assistant  night  ticket  clerk  of 
the  Lake  Shore  & Michigan  Southern  Rail- 
way (one  of  the  New  York  Central  Lines)^ 
After  serving  in  that  capacity  for  two 
years  he  wras  promoted  to  the  position  of 
assistant  ticket  agent  at  the  La  Salle  Street 
Station  of  the  Lake  Shore  Road.  His 
marked  ability  and  amiable  disposition  pe- 
culiarly qualifying  him  for  dealing  with  the 
public,  led  to  his  rapid  advancement.  In- 
1897  he  was  appointed  city  passenger  agent 
of  the  Lake  Shore  & Michigan  Southern 
and  in  1903  further  promoted  to  the  posi- 
tion of  general  western  passenger  agent,  in 
which  position  he  had  immediate  jurisdic- 
tion of  the  very  large  volume  of  passenger 
business  out  of  Chicago.  In  1906  he  w*as 
made  general  eastern  passenger  agent  of 
the  New*  York  Central  Lines  in  New*  York, 
and  during  his  tenure  of  office  made  a very 
large  acquaintance  among  New  York’s  busi- 
ness men,  numbering  among  his  friends 
many  prominent  bankers,  commercial, 
theatrical  and  hotel  people.  On  February 
1 of  this  year  he  was  appointed  assistant 
general  passenger  agent,  from  w'hich  posi- 
tion he  has  just  been  promoted.  He  is  one 
of  the  most  popular  railroad  officials  in  the 
country  and  in  his  new'  and  wider  field  will 
undoubtedly  attain  continued  success. 

— The  Liberty  National  has  at  the  present 
time  aggregate  resources  of  $30,176,743  and 
deposits  of  $26,183,588.  It  has  a surplus 
of  $2,000,000  and  capital  of  $1,000,000. 

— Under  the  new  regime  inaugurated  by 
its  president,  the  American  Exchange  Na- 
tional Bank  reports  total  deposits  of  $44,- 
498,859.  The  entire  report  if  analyzed  one 
statement  at  a time,  will  show  that  this 
institution  is  prospering.  Loans  and  dis- 
counts have  reached  $26,782,390. 

— A reorganization  of  the  Brooklyn  Bank 
of  Brooklyn  Borough  has  occurred.  Charles 
B.  Hobbs  has  been  elected  president  to  suc- 
ceed Daniel  Underhill  resigned,  and  George 
A.  Vaughan  has  been  made  an  additional 
vice-president.  Mr.  Hobbs  is  a member 


Digitized  by  t^ooQle 


BANKING  AND  FINANCIAL  NOTES 


587 


of  the  New  York  law  firm  of  Gifford, 
Hobbs  & Beard,  and  Mr.  Vaughan  is  see- 
retan"  and  treasurer  of  the  Island  Cities 
Real  Estate  Co.  The  latter  organization, 
aeeording  to  the  Brooklyn  “Eagle,”  was  or- 
ganized in  1909  to  take  over  the  collateral 
of  the  Gow  estate,  and  is  now  in  absolute 
control  of  the  bank.  The  following  are  re- 
ported to  have  retired  from  the  bank’s 
directorate  to  make  way  for  the  new  inter- 
ests: Otto  Wissntr,  who  is  said  to  retain 
his  stock  holdings  in  the  bank;  Frank  H. 
Tyler,  John  F.  Gavin,  Jeremiah  G.  Tuthill 
and  Ludwig  Nissen. 

— Frederic  W.  Allen  has  been  chosen  a 
vice-president  of  the  Mechanics  & Metals 
National  Bank  to  succeed  Charles  H.  Sabin, 
who  resigned  recently  to  become  vice-presi- 
dent of  the  Guaranty  Trust  Company.  Mr. 
Allen,  who  is,  or  has  been,  secretary  of  the 
Simmons  Hardware  Company  of  St.  Louis, 
will  come  to  New  York  about  the  first  of 
November.  He  will  become  associated  with 
a bank  that  is  enjoying  prosperity  to  the 
highest  degree.  On  September  1,  the  Me- 
chanics & Metals  National  reported  de- 
posits of  $64,714,321.  The  surplus  fund  is 
now  $6,000,000. 

— At  the  close  of  business  September  1 
the  Garfield  National  reported  deposits  of 
$9,224,820,  a surplus  of  $1,000,000  and  total 
resources  of  $11,820,474. 

— Joseph  B.  Reichmann,  who  accepted 
the  presidency  of  the  Carnegie  Trust  Com- 
pany last  December,  has  resigned  and  will 


THE 

GARFIELD 
NATIONAL  BANK 

Fifth  Avenue  Building 

Corner  Fifth  Ave.  and  Twenty-Third  Street 

NEW  YORK 


CAPITAL 

$1,000,000 


SURPLUS 

$1,000,000 


OFFICERS 
RUEL  W.  POOR.  President 

JAMES  McCUTCHEON,  Vice-Pres. 
WILLIAM  L.  DOUGLASS.  Cashier 
ARTHUR  W.  SNOW,  Asat.  Caah. 

DIRECTORS 

famiw  McCnteheon  Samuel  Adame 
Charles  T.  Wills  William  H.  Gelahenea 
Ruel  W.  Poor  Morgan  J.  O'Brien 

Thomas  D.  Adams 


SAVOY  TRUST 
COMPANY 

(Formerly  the  Italian- American  Truat  Co.) 

520  BROADWAY  - NEW  YORK 


Capital  - $500,000.00 


This  company  has  a thoroughly  equipped 
Foreign  Department,  under  the  personal 
supervision  of  an  officer  of  the  bank.  We 
transact  a general  banking  business,  and 
have  the  best  facilities  for  collecting 
checks — domestic  or  foreign. 


ACCOUNTS  OF  BANKS  SOLICITED. 


EMANUEL  GERLI,  - - President 

C.  PIT  A,  - Vice-President 

T.  K. 8AND8,  - - Vice-President 

ARTHUR  DAT,  - - Vice-President 

ARTHUR  BA  UR,  Secretary  and  Treasurer 


be  succeeded  by  Joseph  T.  Howell,  president 
of  the  Fourth  National  Bank  of  Nashville* 
Tennessee.  Mr.  Reichmann,  who  is  a mer- 
chant and  manufacturer,  accepted  the  presi- 
dency last  year  with  the  understanding  that 
his  resignation  be  accepted  when  a con- 
servative man  had  been  found.  He  will, 
however,  retain  his  place  on  the  board  of 
directors  and  upon  the  executive  committee 
of  the  Carnegie  Trust  Company.  Mr.  Howell 
has  been  connected  with  the  Fourth  Na- 
tional Bank  of  Nashville  for  thirty  years. 
He  began  as  a “runner”  for  the  bank  and 
rose  to  the  presidency  through  all  of  the 
intervening  posts.  Under  his  guidance  it 
became  one  of  the  very  prominent  banks 
of  Nashville.  He  will  be  at  his  desk  in 
New  York  by  October  15. 

— Win.  E.  Colt,  Jr.,  Douglas  R.  Haw- 
thorne and  Lorenzo  M.  Picatia,  native  New 
Yorkers,  have  formed  a partnership  under 
the  firm  name  of  Colt,  Hartshorne  & Picatia* 
for  the  purpose  of  engaging  in  the  bond 
brokerage  business  at  No.  64  Wall  street. 
Mr.  Colt  was  for  twelve  years  with  Charles 
Head  and  Company  and  for  ten  years  with 
Spencer  Trask  and  Company,  part  of  the 
time  as  cashier.  Mr.  Hartshorne  spent  five 
years  with  the  firm  of  Hartshorne,  Bogert 
& Battelie  as  cashier,  manager  and  bond 
man.  Mr.  Picatia  has  had  seven  years’  ex- 
perience with  P’isk  and  Robinson,  as  a 
practical  bond  man  and  assistant  cashier. 


— At  a recent  meeting  of  the  directors  of 
the  Mercantile  Trust  Company,  Harold  B. 
Thorne,  former  treasurer  of  the  company*. 


Digitized  by  LiOOQle 


Capital  - $6,000,000 
Surplus  - $6,000,000 


Depository  of  the 
United  States,  State 
and  City  of  New  York 


The  Mechanics  and  Metals  National  Bank 


OF  THE  CITY  OF  NEW  YORK 


GATE8  W.  McGAKRAH,  President. 
ALEXANDER  E.  ORR,  Vice-President 
NICHOLAS  F.  PALMER,  Vice-President. 
ANDREW  A.  KNOWLES,  Vice-President. 
FRANK  O.  ROB,  Vice-President. 


WALTER  F.  ALBERTSEN,  Vlce-Pres. 
JOSEPH  S.  HOUSE,  Cashier. 

ROBERT  U.  GRAFF,  Asst.  Cashier. 
JOHN  ROBINSON,  Asst.  Cashier. 
CHARLES  E.  MILLER,  Asst.  Cashier. 


was  elected  vice-president.  George  W.  Ben- 
ton, former  assistant  treasurer,  now  suc- 
ceeds Mr.  Thorne  as  treasurer  and  Harry 
N.  Dunham  becomes  the  assistant  treasurer. 

— At  a special  meeting  of  the  board  of 
directors  of  the  Hungarian-American  Bank, 
3 2 Broadway,  held  September  23,  the  follow- 
ing gentlemen  prominent  in  financial  circles 
of  New  York  City  were  unanimously  elected 
directors: 

Samuel  S.  Koenig,  secretary  New  York 
State;  Charles  M.  Chester,  treasurer  Man- 
ning, Maxwell  & Moore;  Arnold  Somlyo, 
manger  Baldwin  Piano  Works;  Benjamin 
Guggenheim,  capitalist;  Lloyd  G.  McCrum, 
of  McCrum  & Howell,  manufacturers  of 
vacuum  cleaners  and  boilers. 

Alexander  Cseri,  formerly  one  of  the 
managers  of  the  Central  Credit  Bank,  of 
Budapest,  arrived  here  on  Wednesday  on 
the  Prince  Friedrich  der  Grosse,  and  has 
been  elected  assistant  cashier  of  the  bank. 

The  Hungarian-American  bank  was  es^ 
tablished  four  years  ago,  and  is  controlled 
at  the  present  time  by  two  of  the  leading 
financial  institutions  of  Europe,  one  of  which 
controls  about  680  savings  banks,  and  which 
together  have  a capital  and  surplus  of  $35,- 
000,000  and  deposits  of  about  $300,000,000. 

The  bank  is  shortly  to  increase  its  capital 
and  in  many  other  ways  continue  to 


RUDOLPH  GUENTHER 

Financial  Advertising 

IIS  Broadway  ’Phone  490  Cortlaadt 

Efficient  Publicity  Service  for  finan- 
cial firms  of  highest  character.  We 
would  be  pleased  toconsult  with  you. 
Advertisers  Pocket  Guide  on  request. 


strengthen  its  place  among  the  city’s  finan- 
cial institutions. 

—At  a meeting  of  the  board  of  directors 
of  the  United  States  Mortgage  and  Trust 
Company  held  September  33,  Frank  J. 
Parsons,  heretofore  secretary,  was  elected 
vice-president,  and  Alexander  Phillips,  sub- 
manager of  the  London  Branch  of  Societe 
General  de  Credit  Industrial  et  Commercial, 
Paris,  was  elected  secretary.  Mr.  Phillips 
will  have  charge  of  the  foreign  exchange 
department. 

— Exceptionally  good  is  the  September  1 
statement  of  the  Importers  and  Traders 
National  Bank.  This  solid  old  institution, 
has  apparently  not  minded  the  demands  of 
its  western  correspondents  for  crop-moving 
funds.  It  reports  $25,769,384  of  deposits 
and  $25,229,100  of  loans  and  discounts.  The 
present  surplus  is  $6,000,000,  and  the  re- 
sources will  total  $34,933,600. 

NEW  ENGLAND  STATES 

— The  annual  outing  and  dinner  of  the 
National  Bank  Cashiers’  Association  of 
Massachusetts  was  held  at  Fitchburg,  Mass., 
Friday.  September  9.  It  was  also  Ladies’ 
Day.  Headquarters  were  established  at  the 
G.  A.  R.  Hall,  131  Main  street,  Fitchburg 
Safe  Deposit  and  Trust  Company  building. 
The  program  included  a trolley  ride  at  11.15 
a.  m.  to  Lake  Wachusett,  at  the  foot  of 
the  mountain,  with  dinner  at  Whalom  Inn 
at  1 p.  m.  There  was  a good  attendance 
of  members  and  friends.  Caleb  L.  Brigham, 
cashier  of  the  Hudson  National  of  Hudson, 
Mass.,  is  president  of  the  association. 

— Herbert  Wellington,  a well-known  New 
York  banker,  has  been  elected  a director 
and  active  vice-president  of  the  Interna- 
tional Trust  Company  of  Boston,  and  has 
entered  upon  his  new  duties.  For  the  past 
year  Mr.  Wellington  has  been  treasurer 
of  the  Franklin  Trust  Company  of  Brook- 


5S8 


Digitized  by  t^ooQle 


**!%& Tinted  Settle ^ 

lAiig  Roblem 


You  have  just  time  to  provide 
the  kiud  of  artificial  light  that 
will  enable  your  working  corps  to 
do  its  best  work  during  the  long,  dark  days  that  will  soon  be  upon  us. 


with  General  Electric 


properly  installed,  you  can  flood 
your  bank  with  an  improved  qual- 
ity and  increased  quantity  of  light 
that  will  add  materially  to  the 
attractiveness  of  your  bank,  the 
pleasure  of  your  clients  and  the 
result  - getting  efficiency  of  the 
“ force  behind  the  windows.” 

G-E  MAZDA  Lamps  give  nearly 
three  times  as  much  light  as  the  old 
style  carbon  filament  electric  bulbs 
without  requiring  any  additional 
electric  current. 

Our  Illuminating  Engineers 
Will  Advise  You 

Upon  request  our  illuminating 
experts  will  recommend  the  kind 
and  type  of  lamp  or  lamps  best 
suited  to  your  bank’s  particular  re- 
quirements. Their  sole  object  in 
suggesting  the  use  of  one  or  more 
types  of  lamps  is  to  insure  your  se- 
lection of  the  kind  of  lighting  best 
adapted  to  your  needs. 


Mazda 

Lamps 

You  may  be  assured  at  all  times 
that  their  advice  will  be  entirely 
impartial  and  unprejudiced.  As  the 
General  Electric  Company  manu- 
factures a complete  line  of  the  most 
modern  types  of  both  arc  and  incan- 
descent lamps,  we  have  absolutely 
no  object  in  forcing  any  one  type 
of  lamp  above  another. 

You  will  place  yourself  under  no 
obligation  by  asking  for  this  light- 
ing advice  — and  you  may  find  it 
worth  many  dollars  a year. 

Simply  ask  us  how  the  lighting 
of  your  bank  can  be  improved. 
When  you  write,  ask  for  the  book- 
let entitled,  “Dawn  of  a New  Era 
in  Lighting” — it  contains  much  in- 
formation of  decided  interest  to  all 
interested  in  modem  and  economi- 
cal electric  lighting. 


General  Electric  Company 

Dtpt.  133  Schenectady,  &C  Y. 

2740  •' 


689 


t 


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T If  you  are  in  the  market  for  new  BANK 
FIXTURES  and  FURNITURE  it  will  be  very  much 
to  your  advantage  to  get  our  ideas.  The 
name  ANDREWS  stands  for  all  that  is  modem 
in  every  detail  of  office  equipment,  and  the 
ANDREWS  produce  has  been  the  standard  for 
nearly  hall  a century. 

If  We  make  only  the  best  that  skill  and  un- 
equalled manufacturing  facilities  can  pro- 
duce, and  charge  you  only  a fair  price  for  it. 
If  One  of  our  experienced  traveling  men  will 
be  glad  to  call  on  you  at  your  convenience. 
Illustrated  Besklet  Upsu  Request 

THE  A.  H.  ANDREWS  CO. 

17-4-176  Wabash  Ave.  CHICAGO  1161-1175  Broadway,  NEW  YORK 


lyn,  N.  Y.  For  twenty  years  previous  to 
that  time  he  was  connected  with  the  Far- 
mers Loan  & Trust  Company  of  New  York. 

— The  Chittenden  County  Trust  Company 
of  Burlington,  Vt.,  has  since  its  inception 
had  the  most  rapid  growth  of  any  bank 
ever  organized  in  the  State.  Opened  for 
business  late  in  1906,  its  deposits  now  total 
over  $900,000  and  it  has  an  earned  surplus 
of  $12,000,  with  capital  of  $50,000.  It  has 
its  own  bank  building,  an  attractive  struct- 
ure well  equipped  for  carrying  on  its  grow- 
ing business.  Its  officers  are:  E.  J.  Booth, 
president;  J.  J.  Flynn,  vice-president;  E.  D. 
Worthen,  treasurer;  Harrie  V.  Hall,  assis- 
tant treasurer.  President  Booth  is  manager 
of  the  big  Booth  Lumber  Company,  of  Bur- 
lington, and  Mr.  Worthen,  the  efficient 
treasurer,  was  formerly  treasurer  of  the 
Franklin  County  Savings  Bank  and  Trust 
Company  of  St.  Albans. 

— The  Keene  National  Bank  of  Keene,  N. 
IL,  occupies  a conspicuous  position  among 
the  banks  of  the  Granite  State.  Organized 
qs  a State  bank  in  1855,  it  has  now  reached 
a point  ^'here  it  has  a surplus  of  $185,000 


Qttp  Albany 
(Frnat  CHompany 

ALBANY,  N.  Y. 

ACTIVE end Reserve  eAocoemt* 
ere  solicited  end  interest  poid 
on  doily  bolonces.  €Desianoied 
depository  for  reserve  of  Neve 
York  Stole  <Bsnks  end  Trust 
Csmponies  : : s : t t t 

Capital  and  Surplus,  $725,000 


against  its  $200,000  capital,  and  deposits  of 
over  $1,000,000.  Dividends  of  ten  per  cent, 
have  been  paid  regularly  and  last  year 
eleven  per  cent,  was  declared.  The  bank 
has  a savings  department  and  its  accounts 
number  6,000.  Tlie  president  of  the  Keene 
National  is  G.  A.  Litchfield,  president  of 
the  Spencer  Hardware  Company.  The  cash- 
ier is  W.  L.  Mason,  who  has  been  with  the 
bank  twenty-seven  years  and  cashier  for 
fifteen  years.  The  other  directors  are  H 
A.  Woodward,  C.  J.  Woodward,  J.  E.  Al- 
len and  Elisha  F.  Lane. 


EASTERN  STATES 

— John  D.  Brown  has  been  elected  to  suc- 
ceed his  father,  the  late  Major  A.  M. 
Brown,  as  president  of  the  Anchor  Savings 
Bank  of  Pittsburgh.  The  new  president 
has  heretofore  officiated  as  vice-president, 
in  which  post  he  is  replaced  by  R.  J. 
Stoney,  Jr. 

— The  Mellon  National  Bank  of  Pitts- 
burgh reports  loans  and  discounts  of  $24,- 
623,521,  a surplus  of  $3,100,000  and  total 
resources  of  $46,427,345.  Deposits  have 
reached  the  high  figure  of  $36,158,971. 

— For  September  1 the  First  National 
Bank  of  Pittsburgh  reports  $12,825,521  of 
loans  and  discounts,  $2,184,780  of  surplus 
and  profits,  and  $22,430,250  of  deposits. 

— Again  does  the  Peoples’  National 
Bank  of  Pittsburgh  come  forward  with  a 
remarkable  statement  of  condition.  Cap- 
italized for  a million  dollars,  it  maintains 
a like  amount  of  surplus,  carries  loans  and 
investments  of  $11,697,699,  and  has  at  the 
present  time  deposits  of  $12,899,935. 

— A thoroughly  creditable  statement 
comes  from  the  Second  National  Bank  of 
Pittsburgh.  Strength  and  solidity  are  shown 
in  every  item.  The  liabilities  are  distributed 
as  follows:  Capital,  $1,800,000;  surplus* 


1 


690 


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i 


Whole  Sections  of  Records 

brought  to  your  elbow  quickly  and 
noiselessly  with 

BERGER’S 

STEEL  VAULT  OMNIBUS 

Light  as  wood,  strong  as  steel 
Our  prices  will  interest  you 
A card  will  bring  them 

The  Berger  Mfg.  Co.,  Canton,  0. 

BRANCHES 

New  York,  N.  Y.  Atlanta,  Ga.  Kansas  City,  Mo. 

Boston,  Mass.  Chicago,  Dl.  Minneapolis,  Minn. 

Philadelphia,  Pa.  8L  Louis,  Mo.  San  Francisco,  Cal. 


$2,000,000 ; undivided  profits,  $206,670;  cir-  and  deposits  of  $31,439,096.  These  figures 
culation,  $895,100;  deposits,  $12,981,640.  indicate  continued  strength  and  prosperity. 


— That  solid  institution,  the  Bank  of 
Pittsburgh,  X.  A.,  reports  prosperity  and 
offers  in  evidence  a statement  of  condi- 
tion, made  September  1.  On  that  date  the 
bank’s  deposits  totaled  $17,272,114  and  its 
surplus  and  undivided  profits  fund  amounted 
to  $3,065,478. 

— The  proposition  to  increase  the  capital 
of  the  Central  National  Bank  of  Philadel- 
phia from  $750,000  to  $1,000,000  has  been 
unanimously  approved  by  the  stockholders. 
The  new  issue  is  offered  pro  rata  to  the 
present  shareholders  at  $100  per  share,  the 
privilege  to  subscribe  expiring  October  4. 

— This  call  the  oldest  bank  in  the  United 
States,  the  Bank  of  North  America,  N.  A., 
of  Philadelphia,  reports  deposits  of  $13,713,- 
887,  surplus  and  undivided  profits  of  $2,- 
599,213  and  loans  and  discounts  of  $12,- 
262,300.  There  has  been  a slight  reduction 
in  deposits,  due  to  the  demands  of  the 
western  banks  for  crop-moving  funds.  As 
a whole,  this  latest  statement  is  an  ex- 
cellent one. 

— In  our  June  issue  reference  was  made 
to  the  ten-year  record  of  the  Franklin  Na- 
tional Bank  of  Philadelphia.  In  a state- 
ment published  September  1,  it  is  shown 
that  this  institution  has  total  resources  of 
$35,692,715,  surplus  and  profits  of  $2,711,419, 


ATLANTIC  NATIONAL  BANK 

PniV'tlcn  .;r.  R.  I 


— A special  meeting  of  the  Republican 
Trust  Company  of  Philadelphia  will  be 
held  on  Nov.  15,  to  consider  increasing  its 
capital  from  $200,000  to  $300,000  by  the 
issuance  of  2,000  shares  at  par  value  of  $50 
a share. 


— The  report  of  the  Second  National 
Bank  of  Cooperstown,  N.  Y.,  places 
the  capital  at  $150,000,  the  surplus  at 
$160,000,  the  deposits  at  $1,428,498  and  the 
loans  and  discounts  at  $359,988.  There 
was,  on  September  1,  a lawful  money  re- 
serve of  $121,055  in  the  bank. 

— Between  calls  deposits  of  the  Com  Ex- 
change National  Bank  of  Philadelphia  have 
gone  from  $19,103,221  to  $20,505,543.  Ac- 
cording to  the  bank’s  statement  for  Sep- 
tember 1,  loans  have  been  expanded  until 
they  now  represent  $15,610,534  of  the  re- 
sources. 

— The  Fourth  Street  National  Bank  of 
Philadelphia,  always  conservative,  reports 
loans  and  discounts  of  $36,368,884,  surplus 
and  net  profits  of  $6,387,499,  deposits  of 
$49,547,212,  and  total  resources  of  $61,890,- 
412. 


— A number  of  prominent  New  Yorkers 
are  interested  in  a new  bank  at  Madison, 
N.  J.,  to  be  known  as  the  Madison  Trust 
Company.  A charter  has  been  granted. 
The  bank  has  a capital  stock  of  $100,000, 
and  starts  with  a surplus  of  $100,000.  The 
officers  are  to  be:  President,  Edgar  H. 
Towar;  .vice-president,  James  H.  McGraw? 
secretary  and  treasurer,  Theodore  B.  Mor- 
ris. Mr.  Towar  is  a retired  banker,  Mr. 
McGraw  is  of  the  McGraw  Publishing 
Company,  and  Mr.  Morris  is  of  the  firm  of 
Morris  & Holden,  bankers,  of  New  York. 

Other  incorporators  are:  Alfred  G.  Evans 
of  Arnold,  Constable  & Company;  John  W. 
Skeele  of  the  Lehigh  Valley  Coal  Com- 


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THE  BANKERS  MAGAZINE 


| ESTABLISHED  1865  I 

National  Bank 
of  Virginia 

RICHMOND,  VA. 

Capital  ....  $1,200,000.00 

Surplus  ....  600,000.00 

Deposits  OVER  EIGHT  MILLION  DOLLARS 

WM.  M.  HABLISTON,  President 
JOHN  SKELTON  WILLIAMS.  Vlce-Pres. 
WILLIAM  T.  HEED,  Vice-Pres. 

W.  MEADE  ADDISON,  Cashier 
O.  S.  MORTON,  Asst.  Cashier 
H.  A.  WILLIAMS,  Asst.  Cashier 
JOHN  TYLER,  Asst.  Cashier 
W.  H.  SLAUGHTER,  Asst.  Cashier 
JAMES  M.  BALL,  Asst.  Cashier 

Accounts  of  Banks,  Bankers,  Corporations, 
Firms  and  Individuals  solicited  on  favorable 
terms.  Correspondence  invited. 

LARGEST  CAPITAL 
of  Any  Bank  in  Virginia 


pany;  T.  Towar  Bates  of  Shoemaker,  Bates 
tk  Company;  Charles  W.  Harkness  of  the 
Standard  Oil  Company;  Charles  Scribner 
of  Charles  Scribner’s  Sons;  Albert  H.  Wig-, 
gin  of  the  Chase  National  Bank  of  New 
York;  Major  A.  White,  president  of  the 
City  of  New  York  Insurance  Company;  A. 
Filmore  Hyde,  a retired  banker;  J.  J.  C. 
Humbert  and  Henry  Feuchtwanger,  bank- 
ers; Peter  H.  B.  Frelinghuysen  and  Ed- 
ward P.  Meany,  lawyers. 

— Organized  sixty  years  ago,  the  Marine 
National  Bank  of  Buffalo  has  achieved  suc- 
cess to  a marked  degree.  The  original 
capitalization  was  $170, 000;  to-day  it  is  $2,- 
000,000.  Profits  on  August  27,  1850,  were 
$571 — on  August  15,  1910,  they  were  $1,- 
258,892.  Deposits  have  jumped  from  $7,521 
to  over  twenty-three  million  dollars. 

— Interesting  indeed  is  the  official  state- 
ment of  the  First  National  Bank  of  Phil- 
adelphia, the  first  it  has  made  since  taking 
over  the  Merchants’  National  Bank.  Cap- 
italized for  $1,500,000,  it  reports  surplus  and 
undivided  profits  of  $1,563,416  and  deposits 
of  $23,799,303. 

— On  September  1,  the  Girard  National 
Bank  of  Philadelphia  reported  deposits  of 
$36,251,702,  and  a surplus  and  net  profits 
of  $4,818,789.  These  figures  represent  sub- 


stantial gains  over  the  statement  of  June 
30. 

— M.  F.  Dirnberger,  Jr.,  an  attorney,  has 
been  elected  a director  of  the  Union  Stock 
Yards  Bank  of  Buffalo,  N.  Y.  Mr.  Dirn- 
berger succeeds  L.  G.  Burr  us,  who  recently 
resigned.  President  John  F.  Kloepfer,  of 
the  Union  Stock  Yards  Bank,  says  that 
the  business  of  the  institution  is  increasing 
rapidly  since  the  bank  changed  its  location 
a few  weeks  ago. 

— The  Bank  of  Buffalo  (X.  Y.)  with  a 
capital  of  $500,000,  and  a like  amount  of 
surplus,  reports  profits  of  $231,712  and  de- 
posits of  $8,787,989.  It  is  carrying  $5,534,- 
985  of  loans  at  the  present  time.  Elliott 
C.  McDougal  is  president;  Laurence  D. 
Rumsey,  vice-president;  John  L.  Daniels, 
cashier  and  Ralph  Crov  assistant  cashier. 


— A splendid  statement  comes  to  us 
from  the  Lincoln  National  Bank  of  Roches- 
ter, N.  Y.  This  institution,  conservatively 
managed,  reports  a surplus  of  $1,000,000, 
undivided  profits  of  $407,689,  deposits  of 
$11,383,813,  and  total  resources  of  $14,633,- 
503. 

— The  National  Commercial  Bank  of  Al- 
bany, N.  Y.,  at  the  close  of  business  Sep- 
tember 1 makes  the  following  gratifying 
report;  Loans  and  discounts,  $8,636,246.15; 
U.  S.  and  other  bonds,  $4,170,923,55;  cash 
and  due  from  banks,  $10,176,944.38;  total 
resources,  $23,234,114.08.  The  capital  is 
$1,000,000,  surplus  and  profits  $1,710,117.63, 
while  deposits  aggregate  $19,535,396.45. 

— Established  in  1891,  the  Commercial 
National  Bank  of  Syracuse,  N.  Y.,  offers  Its 
depositors  the  security  that  lies  back  of  a 
capital,  surplus  and  undivided  profits  of 
$800,714.  It  reports  deposits  of  $2,179,898. 

— North  and  Company,  bankers  of  Una- 
dilla,  N.  Y.,  have  advised  their  depositors 
that,  beginning  with  January  1,  1911,  they 
will  invest  less  in  notes  and  more  in  bonds — 
safety  of  principal  being  preferable  to 
high  interest  income.  At  the  close  of  busi- 
ness September  1,  they  were  carrying 
$148,732  of  loans  and  discounts.  They  also 


SITUATION  WANTED 

SITUATION  wanted  by  man  having  had 18  years 
experience  in  the  banking  business;  knows  the 
inside  workings  of  a bank,  having  been  auditor  for 
large  banking  institution  in  Chicago,  which  has 
now  gone  out  of  business.  Capable  of  taking  the 
position  of  Cashier,  Assistant  Cashier  or  Auditor. 
Can  give  rood  references  and  have  some  capital  to 
invest.  Address  X.  care  BANKERS  MAGAZINE, 
253  Broadway,  New  York  City. 


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BANKING  AND  FINANCIAL  NOTES 


59S 


reported  a surplus  of  $21,000,  a reserve  of 
$30,000  and  deposits  of  $464,666. 

— September,  1910,  marks  the  end  of  the 
seventh  year  the  present  officers  of  the 
Diamond  National  Bank  have  had  that  in- 
stitution under  their  guidance  and  it  is 
interesting  and  gratifying  to  note  the  re- 
markable record  the  bank  has  had  during 
that  period.  A comparison  of  figures  is 
appended : 

Sept.,  1903.  Sept.,  1910. 
Loans  & discounts. $2,797, 215.67  $4,396,263.00 


U.  S.  bonds  203,281.30  305,093.76 

Banking  house  ....  176,641.23  1,025.407.51 

Cash  and  due  from 

banks  687.044.64  2,086,317.93 


3,764,182.84  7,S13,082.19 

Capital  500,000.00  600,000.00 

Surplus  and  profits  1,294,815.99  1,674.553.31 

Circulation  200.000.00  298.500.00 

Deposits  1.769,366.85  5.240,028.88 


3,764.182.84  7.S13.082.19 

These  figures  speak  for  themselves  and  it 
will  be  remembered  that  the  Diamond 
Savings  Bank,  organized  at  about  the  be- 
ginning of  the  period,  has  now  over  a mil- 
lion and  a half  in  assets,  the  splendid  Dia- 
mond Bank  Building,  admitted  to  occupy 
one  of  the  best  corners  for  commercial 
business  in  the  city,  was  erected  by  the 
present  administration  and  dividends  of 
$788,000  were  paid  to  shareholders  in  the 
seven  years. 

The  bank  is  a strictly  commercial  one, 
having  a well  balanced  business  consisting 
of  fifty  per  cent,  local  deposits  and  fifty 
per  cent,  bankers’  balances. 

William  Price,  the  president,  who  occupies 
the  same  position  with  the  Diamond  Savings 
Bank,  was  vice-president  previous  to  be- 
coming the  head  of  both  banks.  He  is  a 
native  Pittsburgher  of  the  self-made  type 
and  his  success  as  a banker  was  presaged 
by  his  building  up  one  of  the  best  known 
retail  mercantile  establishments  in  Greater 
Pittsburgh. 

D.  C.  Wills,  the  cashier,  has  spent  his 
life  in  the  banking  business  beginning  in 
the  Mechanics  National  Bank  of  Pittsburgh 
twenty-two  years  ago.  He  is  well-known 
as  an  American  Institute  of  Banking  man, 
having  been  the  first  president  of  Pittsburgh 
Chapter.  He  has  been  active,  too,  in  the 
Hankers’  Association  of  Pennsylvania,  being 
now  chairman  of  Group  VIII. 

W.  O.  Phillips,  assistant  cashier,  is  one 
of  the  popular  younger  bankers  of  Pitts- 
burgh. He  lias  risen  from  the  ranks  in 
his  own  bank,  being  in  his  fourteenth  year 
of  sendee  and  combines  with  his  ability 


as  a bank  official  a pleasing  personality 
and  a wide  acquaintanceship. 

Tlie  black  diamond  with  white  letters  is 
known  all  over  the  country  as  the  trade- 


Home  of  the  Diamond  National  Bank  of 
Pittsburgh 


mark  of  this  progressive  bank  and  the  aim 
of  the  officers  and  directors  is  that  this 
“trade-mark'’  shall  stand  for  both  progres- 
siveness and  conservatism  in  banking. 

The  directors,  which  follow,  give  the  bank 
the  benefit  of  their  diversified  business  ex- 
perience and  to  their  interest  and  dose  at- 
tention to  the  bank’s  affairs  is  largely  due 
the  present  satisfactory  condition.  W.  B. 
Rodgers,  ,1.  P.  McKinney,  A.  G.  Barnett, 
J.  D.  Cnlle rv,  John  W.  Robinson,  D.  C. 
Wills,  A.  M.  Stewart,  A.  C.  Wettengel,  S. 
A.  Pickering,  W.  G.  Itoek,  K.  E.  Slick  and 
William  Price. 

— The  National  Exchange  Bank  of  Bal- 
timore, Md.,  reports  at  close  of  business 
September  1,  1910,  loans  and  discounts, 
$3,907,538;  due  from  banks,  $181,182;  cash 
and  due  from  reserve  agents,  $1,136,385; 
capital  stock,  $1,000,000;  surplus  and  un- 
divided profits,  $711,113;  deposits,  $4,536,- 
862;  total  resources,  $7,511,376.  Officers: 
Waldo  Newcomer,  president;  Summerfield 
Baldwin,  vice-president;  R.  Vinton  Lans- 


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THE  BANKERS  MAGAZINE 


dale,  cashier,  and  Clinton  G.  Morgan,  as- 
sistant cashier. 

— The  Albany  Trust  Company  of  Al- 
bany, N.  Y.,  reports  $6,499,980  of  deposits 
and  total  resources  of  $7,223,728. 

— Between  the  Comptroller’s  calls,  the 
First  National  Bank  of  Hoboken,  N.  J.. 
made  gains  in  several  of  the  items  on  its 
report  of  condition.  Deposits  are  now  $2,- 
984,715,  and  the  resources  will  total  $4,- 
046,513. 

— Pittsburgh’s  banks  are  very  prosperous 
just  at  this  time,  if  bank  statements  can  be 
depended  upon  to  tell  the  story.  Especially 
noteworthy  is  the  September  first  statement 
from  the  Lincoln  National  Bank.  It  shows 
loans  and  discounts  of  $2,593,415,  a capital 
of  $500,000,  a surplus  of  $700,000,  undi- 
vided profits  of  $170,106,  deposits  of  $4,- 
315,920. 


— An  exceptionally  strong,  well-balanced 
statement  comes  from  the  First  National 
Bank  of  Baltimore,  Md.  Against  $4,503,947 
of  loans  and  discounts  there  are  $6,387,757 
of  deposits;  and  against  the  $492,050  of 
lawful  money  reserve,  there  is  a surplus 
fund  of  $150,000  and  a capital  of  $1,000,000. 


SOUTHERN  STATES 

— Upon  the  occasion  of  its  fortieth  anni- 
versary, which  has  just  been  reached,  the 
National  Bank  of  Commerce  of  Norfolk, 
Ya.,  issues  a comparative  statement  to 
show  its  upbuilding  during  the  four  de- 
cades. From  resources  of  $50,000  in  1870, 
the  amount  advanced  to  $224,367  in  1880, 
$404,152  in  1890,  $1,412,626  in  1900,  $2,565,- 
133  in  1902,  $5,956,297  in  1906  and  $7,629,- 
970  on  June  30,  1910.  The  bank  has  a capi- 
tal stock  paid  in  of  $1,000,000;  surplus  and 
undivided  profits  of  $656,225  and  deposits 


A NOTABLE  BOOK 

The  Economic  Causes  of 
Great  Fortunes 

By  ANNA  YOUNGMAN 


This  la  a thorough  study  of  this  Important  subject.  Miss  Young- 
man,  who  is  connected  with  the  department  of  economics  at 
Wellesley  College,  has  given  her  subject  careful  study  and  close 
research.  Her  book  will  be  read  with  Interest  and  profit  by  all 
students  of  economic  subjects. 

The  New  York  “Times”  said  editorially:  “There  Is  noth- 
ing feminine  about  this  book.  Dr.  Youngman  may  take 
her  seat  beside  Ida  Tarbell,  who  knows  how  to  impress 
herself  upon  her  times  even  without  voting.” 

“The  Nation”,  May  12,  1910,  said:  “Marked  by  intellectu- 
al balance  in  discussion  and  judicial  care  in  the  state- 
ment of  facts.” 

The  book  is  Issued  in  attractive  and  readable  form,  making  a 
volume  of  200  pages,  bound  in  red  cloth,  with  title  in  gold.  The 
price  is  $1.50  net. 


The  Bankers  Publishing  Company 

253  Broadway,  New  York 


Digitized  by  CjOOQle 


Capital,  $1,000,000.00  Earned  Surplus,  $1,000,000.00 


JOHN  B.  PURCELL 
President 


JOHN  M.  MILLER,  JR. 
Vice-Pres.  and  Cashier 


FREDERICK  E.  NOLTINQ,  2nd  Vice-President 

CHA8.  R.  BURNETT > 

J.  C.  JOPLIN  I Assistant 

W.  P.  SHELTON  r Cashier* 

ALEX.  F.  RYLAND 


BILL  OF 
LADING  DRAFTS 
ON  RICHMOND  A SPECIALTY 


Strong  In  i"ooouroes,  conservative 
In  management,  progressive  In  polloy 

OF  RICHMOND,  VIRGINIA 


(under  the  June  call)  of  $1,701,310.  Its  of- 
ficers are:  Nathaniel  Beaman,  president; 
Tazewell  Taylor,  vice-president;  Hugh  M. 
Kerr,  cashier,  and  M.  C.  Ferebee  and  R.  S. 
Cohoon,  assistant  cashiers. 


— The  September,  1910,  edition  of  The 
Bankers'  Directory  inadvertently  listed 
the  Jefferson  County  Savings  Bank  of  Bir- 
mingham, Ala.,  with  a capital  of  $20,000. 


Jefferson  County  Savinas  Bank, 
Birmingham,  Alabama 


This  bank  has  a paid-up  capital  stock  of 
$200,000,  and  on  September  1 reported  de- 
posits of  $1,408,774.  C.  F.  Enslen  is  chair- 
man; E.  F.  Enslen,  president;  Charles  E. 
Thomas,  vice-president;  William  C.  Sterrett, 
cashier,  and  W.  D.  Enslen,  assistant  cashier. 


— On  the  first  day  of  September  the  Peo- 
ple’s National  Bank  of  Lynchburg,  Va.,  re- 
ported deposits  of  $1,166,511,  a surplus  of 


$400,000 — $100,000  more  than  the  capital — 
and  total  assets  of  $2,400,000. 

— Stockholders  of  the  American  National 
of  Lynchburg,  Va.,  have  decided  to  increase 
the  capital  stock  from  $150,000  to  $300,000. 

— The  First  National  Bank  of  Richmond, 
Va.,  reports  September  1,  1910,  loans  and 
discounts,  $6,792,645;  cash  and  due  from 
banks,  $1,772,492;  capital,  $1,000,000;  sur- 
plus fund,  $1,000,000;  undivided  profits, 
$44,954;  circulation,  $956,180;  total  deposits, 
$5,975,295;  total  resources,  $9,599,745.  John 
B.  Purcell  is  president;  John  M.  Miller,  Jr., 
vice-president  and  cashier;  Frederick  E. 
Nolting,  vice-president;  Charles  R.  Burnett, 
J.  C.  Joplin,  W.  P.  Shelton  and  Alexander 
F.  Ryland  are  the  assistant  cashiers. 

— Organized  in  1865  the  Planters  National 
Bank  of  Richmond,  Va.,  has  justly  earned 
its  right  to  be  called  a leading  southern 
bank.  It  recently  reported  deposits  of  $4,- 
764,942,  surplus  and  profits  of  $1,264,353. 
This  item  contrasts  favorably  with  the  $300,- 
000  of  capital  reported.  Total  resources  on 
September  1 were  $6,745,939. 

— The  American  National  Bank  of  Rich- 
mond, Va.,  rendered  a very  commendable 
statement  at  the  last  official  call.  It  reports 
resources  of  $4,856,187,  surplus  and  profits 
of  $325,455,  and  deposits  of  $3,436,227.  In 
the  time  that  has  elapsed  since  the  June  30 
statement  was  issued,  the  American  Na- 
tional has  brought  its  surplus  and  profits  up 
to  $325,455. 

— The  new  Colonial  Bank  and  Trust  Com- 
pany of  Roanoke,  Va.,  has  elected  the  fol- 
lowing directors:  T.  H.  Cooper,  J.  C.  Cas- 
sell, E.  W.  Mollohan,  S.  M.  Smith,  L.  N. 
Buford,  George  F.  Randolph,  H.  D.  Guy, 
Hon.  Daniel  N.  Morgan,  ex-Treasurer  of 
the  United  States;  Hon.  E.  L.  Long,  Joseph 
M.  Sanders,  J.  C.  Strickland,  J.  S.  Marstei- 

595 


Digitized  by  L^OOQle 


5 96 


THE  BANKERS  MAGAZINE 


AMERICAN 

NATIONAL  DANK 

RICHMOND,  VIRGINIA 


(Organized  Nov.  1,  1899) 

Capital,  - - - $500,000.00 
Surplus  and  Profits,  300,000.00 

Located  in  the  capital  and  metrop- 
olis of  the  state  and  fully  equipped 
in  every  respect  for  prompt  and 
efficient  service,  this  bank  seeks  the 
Richmond  and  Virginia  business  of 
Banks,  Firms,  Corporations  and  In- 
dividuals everywhere. 

The  large  number  of  this  institu- 
tion's present  correspondents  and  de- 
positors is  ample  proof  -of  the  satis- 
factory service  rendered. 


UNITED  STATES  AND  STATE  DEPOSITORY 


lcr,  I^awrence  S.  Davis,  R.  H.  Angell  and 
Edw.  W.  Tinsley. 

Officers:  T.  H.  Cooper,  president;  J.  C. 
Cassell,  vice-president;  E.  W.  Mollohan, 
vice-president;  S.  M.  Smith,  vice-president; 
E.  W.  Tinsley,  treasurer;  George  N.  Dicki- 
son,  assistant  treasurer;  H.  H.  Dean,  secre- 
tary; J.  T.  Davenport,  assistant  secretary. 

— For  September  1,  the  Greensboro  (N. 
C.)  Loan  and  Trust  Company,  capitalized 
for  $200,000,  reports  deposits  of  $1,130,282. 
The  directorate  is  an  exceptionally  strong 
one  and  business  is  good. 

• — The  First  National  Bank  of  Birming- 
ham, Ala.,  reports  September  1,  1910,  loans 
and  discounts,  $7,196,752;  total  cash,  $2,921,- 
337;  capital  stock,  $1,000,000;  surplus  and 
profits,  $916,584;  circulation,  $983,800;  total 
deposits,  $8,726,909;  total  resources,  $11,627,- 
293.  W.  P.  C.  Harding  is  president;  J.  H. 
Woodward  and  J.  H.  Barr,  vice-presidents; 
Thomas  Hopkins,  cashier,  and  F.  S.  Foster 
and  Thomas  Bowron,  assistant  cashiers,  and 
J.  E.  Ozburn,  secretary  savings  department. 

* — By  practising  courtesy  and  conserva- 
tism the  National  Bank  of  Brunswick  (Ga.) 
has  built  up  a prosperous  business.  It  is 
capitalized  for  $150,000,  has  surplus  and 
profits  of  $130,247,  a circulation  of  $148,560, 
and  deposits  of  $596,135. 

-One  of  the  best  statements  ever  pub- 
lished by  the  First  National  Bank  of  Shreve- 
port, La.,  is  this  last  one  dated  September 
first.  The  deposits  are  now  $2,261,474,  the 


surplus  is  $200,000  and  the  resources  amount 
to  $3,492,366. 

— The  Florida  Trust  Company  has  been 
organized  in  Jacksonville,  Fla.,  with  a capi- 
tal of  $600,000,  for  the  purpose  of  doing  an 
exclusive  trust  business.  The  concern  is 
backed  by  substantial  interests  all  over  the 
State  and  in  the  Northeast  and  West,  and 
its  success  appears  to  be  assured  from  the 
start.  The  following  officers  have  been 
chosen  for  the  coming  year: 

President,  Claude  H.  Barnes,  of  the 
Barnes,  Jesup  Company,  Jacksonville;  first 
vice-president,  O.  H.  L.  Wernicke,  president 
Macey  Company,  Grand  Rapids,  Mich.;  sec- 
ond vice-president,  M.  M.  Smith,  president 
People’s  Bank,  Sanford;  third  vice-presi- 
dent, E.  G.  Phinney,  president  T.  G.  Phin- 
ney  Lumber  Company,  Jacksonville;  fourth 
vice-president,  J.  E.  Stillman,  president 
Pensacola  Investment  Company,  Pensacola; 
secretary  and  trust  officer,  L.  B.  C.  Delaney, 
Washington,  D.  C. 

— The  Continental  Bank  and  Trust  Com- 
pany of  Shreveport,  La.,  “the  only  bank  in 
Shreveport  owning  its  own  home,”  has  pub- 
lished a record  of  remarkable  growth.  Be- 


Continental  Bank  and  Trust  Company 
Building.  Shreveport.  La. 


ginning  September  1,  1908,  the  deposits  have 
grown  from  $514,970  to  $801,841  last  year,  to 
$1,176,833  this  year.  L.  E.  Thomas  is  presi- 
dent; L.  M.  Howard,  vice-president;  J.  C. 
Triehel,  cashier,  and  J.  I).  Youngblood,  as- 
sistant cashier. 

—On  September  1 the  First  National  Bank 
of  Meridian,  Miss.,  rendered  a very  grati- 
fying report  of  condition.  The  principal 
items  were:  Loans  and  discounts,  $1,222,- 
0G7 ; cash  in  vault  and  elsewhere,  $424,338; 


Digitized  by  VjOOQle 


BANKING  AND  FINANCIAL  NOTES 


597 


capital  stock,  $260,000;  surplus,  $170,000; 
undivided  profits,  $27,556;  deposits,  $1,425,- 
128. 

— John  T.  McCarthy,  who  has  been  en- 
gaged in  the  banking  business  in  Texas  for 
twenty-seven  years,  formerly  cashier  of  the 
Meehants  National  Bank  of  Houston,  Texas, 
and  of  the  Texas  Bank  and  Trust  Company 
of  Galveston,  has  determined  to  enter  the 


j.  t.  McCarthy 

Formerly  Cashier  Merchants’  National  Bank, 
Houston,  Texas 

investment  field.  Mr.  McCarthy  is  peculiar- 
ly fitted  for  the  business  in  which  he  is 
about  to  engage  by  reason  of  his  long  expe- 
rience and  training  in  the  banking  business, 
in  which  lie  established  an  enviable  reputa- 
tion as  a man  of  good  judgment  and  for  a 
thorough  mastery  of  details  and  credits.  He 
will  specialize  in  dividend  paying  stocks, 
adding  to  his  list  from  time  to  time  desir- 
able and  seasoned  securities  from  other 
points.  Special  attention  will  be  paid  bv 
Mr.  McCarthy  to  the  foreign  exchange  busi- 
ness. Mr.  McCarthy’s  offices  are  located  at 
712  Chronicle  Building,  Houston,  Texas. 

— The  First  National  of  Houston  reports 
as  follows  at  the  close  of  business,  Septem- 
ber li  Ix>ans  and  discounts,  $1,798,426.91; 
lT.  S.  and  other  bonds  and  securities,  $1,100,- 
348;  cash  and  due  from  banks,  $2,476,595.58; 


ASK  YOUR 

STATIONER 

FOR 

BANKERS 

LINEN 

AND  BANKERS  LINEN 
BOND 

Made  in  flat  papers,  Typewriter 
papers  and  envelopes 

They  ore  fully  appreciated  by 
the  discriminating  banker  de- 
siring high  grade,  serviceable 
paper  for  correspondence  and 
typewriter  purposes.  . . . 

SOLS  AGENTS 

F.  W.  ANDERSON  & CO. 

34  BEEKMAN  STREET,  NEW  YORK 


total  resources,  $9,060,370.49.  The  capital  is 
$1,000,000;  surplus  and  profits,  $336,610.46; 
deposits,  $6,421,938.03. 

— The  Citizens  Bank  of  Louisiana,  of  New 
Orleans,  which  began  business  in  1836,  is 
being  reorganized  under  the  name  of  the 
Citizens  Bank  and  Trust  Company. 

— John  L.  Wortham  of  Dallas  has  been 
elected  a vice-president  of  the  Texas  Trust 
Company  of  Dallas,  Texas. 

— The  Commercial  National  Bank  of 
Houston,  Texas,  reports  as  follows  in  its 
statement  made  at  the  close  of  business,  Sep- 
tember Is  Loans  and  discounts,  $2,688,360; 
cash  on  hand  and  with  other  banks,  $1,967,- 
867;  surplus,  $500,000;  deposits,  $3,855,161. 
This  statement  shows  improvement  over  the 
preceding  one. 

— The  resources,  stability  and  rapid  growth 
of  the  Memphis  banks  are  reflected  in  the 
following  figures: 

The  total  resources  of  all  the  banks  for 
June  30,  1910,  were  $45,308,867.28,  as  com- 
pared with  $41,583,608.55  for  June  30,  1909, 
denoting  a net  increase  of  $3,725,258.73. 

The  total  loans  were  $27,278,835.89  on 


Digitized  by  t^ooQle 


Capital.  • • $2,500,000.00 

FIRST 

00  COUNTS  SOLICITEO. 

Surplus  & Profits,  1,250,000.00 

NATlONi. 

BANK 

CORRESPONDENCE  INVITED. 

Deposits,  • • 27,000,000.00 

COLLECTIONS  k SPECIALTY. 

| Cleveland,  Ohio 

June  30,  1910,  as  against  the  same  previous 
year  of  $24,536,186.67,  showing  an  increase 
of  $2,742,199.22. 

The  aggregate  deposits  on  June  30,  19 JO, 
amounted  to  $33,8.50,999.72,  and  on  June  30, 
1909,  was  $31 ,535,1 79.49,  showing  an  in- 
crease of  $2,135,820.23. 

During  this  period  the  Memphis  banks 
have  invested,  in  the  past  twelve  months, 
$503,764.81  in  bank  buildings  and  reed  estate. 
Two  semi-annual  dividends  have  been  paid 
during  the  past  twelve  months,  and  in  addi- 
tion thereto  certain  banks  have  paid  since 
January  1,  1910,  a dividend  of  one  per  cent, 
per  month,  amounting  to  about  $100,000. 

— The  Merchants  and  Planters  National 
Bank  of  Sherman,  Texas,  a United  States 
depositary,  reports  resources  of  $2,970,415, 
surplus  and  undivided  profits  of  $201,634, 
and  deposits  of  $1,628,280. 


MIDDLE  STATES 

— Leading  all  the  Chicago  banks,  accord- 
ing to  deposits,  the  Continental  and  Com- 
mercial National  Bank  reports  as  follows: 

Loans  and  discounts,  $114,107,105;  cash 
and  due  from  banks,  $61,311,662. 

The  capital  stock  of  the  institution  is  $20,- 
000,000*  surplus  and  undivided  profits, 
$9,622,31 8 ; deposits,  $160,005,204;  total  re- 
sources, $197,717,659.  The  statement  of  the 
condition  of  the  Continental  and  Commercial 
Trust  and  Savings  Bank,  the  capital  stock 
of  which  is  owned  by  stockholders  of  the 
Continental  and  Commercial  National  Bank 
of  Chicago,  at  the  commencement  of  busi- 
ness on  September  2,  was  as  follows:  Time 
loans,  $5,127,919;  cash  and  due  from  banks, 
$4,443,561. 

The  capital  of  the  institution  is  $3,000,000; 
surplus  and  undivided  profits,  $3,533,091 ; 
deposits,  $14,959,686;  total  resources,  $18,- 
492,777. 


A No.  1 Adding  Machino  Rolls 

LlntleM  Full  Yardage  Quality  Guaranteed 

2 6-16"  Holla  per  100 $6.60 

3 16-93"  Rolls  per  100 8.00 

Plain  or  Ruled. 

Aak  for  samples  and  prices  on  other  widths 
Lineing  Paper  Co.,  Box  166,  Lineing,  Mich. 


598 


— Improvements  are  shown  in  several  im- 
portant items  of  the  Merchants’  Loan  and 
Trust  Company  of  Chicago  statement  as  of 
September  1,  compared  with  the  preceding 
statement,  in  response  to  the  Comptroller’s 
call.  Loans  and  discounts,  which  at  the 
time  of  the  preceding  statement  were  $31,- 
921,727,  in  the  latest  statement  were  $32,037,- 
425,  an  expansion  of  $115,697.  Surplus  and 
undivided  profits,  which  at  the  commence- 
ment of  business  on  July  1 last  were  $5,813,- 
218,  at  the  commencement  of  business  on 
September  2 were  $5,840,078,  an  increase  of 
$26,860.  Cash  and  due  from  banks  in  the 
latest  statement  were  $21,346,680. 

The  capital  stock  of  the  Merchants’  Loan 
and  Trust  Company  is  $3,000,000;  deposits, 
$53,508,669;  total  resources,  $62,451,392. 

— The  National  Bank  of  the  Republic  of 
Chicago,  in  its  latest  statement  as  of  Sep- 
tember 1,  again  shows  creditable  gains  in 
several  important  items,  compared  with  the 
preceding  statement.  The  total  resources  of 
the  bank  in  its  latest  statement  are  $27,728,- 
381,  an  increase  of  $918,620  since  June. 

Other  items  in  the  latest  statement  are  as 
follows:  Loans,  $16,079,457;  cash  and  ex- 
change, $9,681,900;  capital,  $2,000,000;  sur- 
plus and  profits,  $1,214,617 ; deposits,  $21,- 
757,263. 

— William  L.  Moyer,  who  was  formerly 
prominent  in  New  York  banking  circles,  has 
been  elected  a vice-president  of  the  La  Salle 
Street  National  Bank  of  Chicago,  which  be- 
gan business  last  May.  Mr.  Moyer  had  been 
president  of  the  National  Shoe  and  Leather 
Bank  of  New  York,  which  consolidated  in 
1906  with  the  Metropolitan  Bank.  On  Sep- 
tember 1 the  La  Salle  Street  National  Bank 
reported  deposits  of  $2,2 77,709.  It  has  sur- 
plus and  undivided  profits  of  $257,586. 

—Chicago’s  new  Standard  Trust  and  Sav- 
ings Bank,  organised  by  Charles  S.  Castle, 
who  is  its  president,  has  begun  business  at 
157  La  Salle  street  The  new  institution 
starts  with  $1,000,000  capital  and  &50,000 
surplus.  Mr.  Castle  resigned  in  June  as  act- 
ing cashier  of  the  Continental  National  Bank 
of  Chicago,  to  undertake  the  organisation  of 
the  new  banking  venture.  Prior  to  the  ar- 
rangements a year  ago,  under  which  the  in- 
terests of  the  Continental  and  the  American 
Trust  and  Savings  Bank  became  unified,  he 
was  cashier  of  the  latter.  In  the  manage- 
ment of  the  Standard  Trust  and  Savings 


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The  Question  of  GOLD 
PRODUCTION  Simplified 

for  the  Business  Man 


All  important  aspects  of  the  recent  increased 
Production  of  Gold  and  the  Future  of  Prices 
are  discussed  in  a new  book  published  by 
THE  BANKERS  PUBLISHING  CO . 


GOLD  PRODUCTION  AND  FUTURE  PRICES 

by 

Harrison  H.  Brace,  LL.M. 


The  whole  subject  is  presented  in  a remarkably 
lucid  manner. — Omaha  World-Herald. 

The  book  is  a careful  study  of  the  theme  at  hand. 
It  presents  in  a condensed  form  a great  mass  of 
data  which  must  prove  of  value  to  the  student  of 
prices. — St  Paul  Pioneer  Press. 


Beautifully  Printed  — Price  $1.50  net 

PUBLISHED  BY 

THE  HANKERS  PUBLISHING  CO. 

253  Broadway,  New  York 


699 


Digitized  by 


600 


THE  BANKERS  MAGAZINE 


The 


Berlitz  School 

of 

Languages 

MADISON  SQj,  1122  BROADWAY 

Harlem  Brancfc,  343  Lenox  Are., 
above  127th  St. 

Brooklyn  Branch,  218  Livingston  St. 
Branch©*  in  over  260  leading  cities 
Summer  School  Asbury  Park,  N,  J. 

Hotel  Tourainc  Annex 
Fifth  At.  near  Grand 

Teacher*  Bent  all  points  within  60  miles 
Day  and  Evening  Lessons,  in  Classes  or 
Privately,  at  School  or  at  Residence. 


AWARDS 


Paris  Exposition, 

1900. 

Lille 

1902, 

ZURICH 

1902, 

8t.  Louie  “ 

1904, 

Liege  “ 

1905, 

London  “ 

1908, 

2 Gold  Medals 
Gold  Mbdal 
gold  mbdal 
Grand  prize 
grand  prize 
Grand  prize 


Bank,  Mr.  Castle  is  associated  with  W.  F. 
Van  Buskirk  as  vice-president  and  J.  M. 
Miles  as  cashier.  Mr.  Miles  was  elected  to 
the  cashiership  recently,  resigning  as  as- 
sistant hank  examiner  of  the  Chicago  Clear- 
ing House  Association  to  enter  the  new  con- 
cern. 

— Final  details  have  been  completed  for 
the  organization  of  a new  State  bank  in 
Chicago,  capitalized  at  $1,000,000,  and  known 
as  the  Cosmopolitan  Bank  of  Chicago.  The 
new  bank  has  been  organized  out  of  the  Cos- 
mopolitan Bank  of  Chicago,  a private  insti- 
tution which  for  a year  has  occupied  quar- 
ters at  155  Washington  st.  It  is  capitalized 
for  $1,000,000  and  has  a surplus  of  $250,000. 
There  will  be  no  immediate  change  of  of- 
ficers. 

— The  three  big  items  in  the  September 
first  statement  of  the  Corn  Exchange  Bank 
of  Chicago  were:  Loans,  $40,435,863 ; depos- 
its, $58,602,313;  surplus,  $1,000,000. 

— It  was  on  the  seventeenth  day  of 
January,  1903,  that  the  Granite  City 
(111.)  National  Bank  opened  for  busi- 
ness. At  closing  time  this  institution 
reported  resources  of  $75,768.18.  Each 
September  the  bank  has  rendered  a special 
report  and  each  report  has  shown  a 
gratifying  growth  over  the  preceding  one. 
The  figures  speak  for  themselves:  Resources, 
in  1903,  $270,610.70;  in  1904,  $357,192.11;  in 
1905,  $462,448.84;  in  1906,  $469,193.65;  in 
1907,  $577,242.65;  in  1908,  $556,936.43;  in 
1909,  $607,480.05;  in  1910,  $876,143.63.  The 


Granite  City  National  recently  reported  de- 
posits of  $728,630.21.  It  has  a surplus  of 
$48,000.  George  W.  Niedrueghaus  is  presi- 
dent ; F.  Kohl  and  C.  F.  Stelzel  are  the  vice- 
presidents;  D.  J.  Murphy  is  cashier  and  C. 
E.  Ashley  is  the  assistant  cashier. 

— Some  idea  of  the  steady  growth  enjoyed 
by  the  Union  Trust  Company  of  Chicago  may 
be  seen  by  an  examination  of  the  following 
facts:  Growth  of  deposits,  as  reported  Jan- 
uary 1,  for  the  past  ten  years:  1901,  $4382,- 
686.43;  1902,  $6,195,335.0*9;  1903,  $7,275,685.- 
17;  1904.  8370,501.21;  1905,  $10,307,516.96; 
1906,  $11337,955.23;  1907,  $12,707,693.09; 
1908,  $10,435,388.04;  1909,  $12388365.90; 

1910,  $1 4,450304.79.  On  September  1,  1910, 
they  had  gone  up  to  $15,310,114. 

— The  sale  of  the  assets  of  the  Prairie 
National  Bank  of  Chicago  to  the  Western 
Trust  and  Savings  Bank  of  Chicago,  gives 
the  latter  an  enlarged  volume  of  deposits 
and  a strength  that  is  very  gratifying. 

The  Prairie  National  Bank  has  a capital 
stock  of  $250,000.  This  will  be  purchased 
by  an  issue  of  $250,000  new  stock  by  the 
Western  Trust  and  Savings  Bank.  For  those 
stockholders  of  the  Prairie  National  Bank 
who  desire  stock,  the  exchange  will  be  an 
even  one. 

The  deposits  of  the  Prairie  National  Bank 
were,  at  the  date  of  the  last  national  bank 
call,  $1,905,106.  The  Western  Trust  and 
Savings  Bank  will,  with  the  completion  of 
the  deal,  have  $1,250,000  capital  and  over 
$10,500,000  deposits,  making  a very  strong 
institution. 

Joseph  E.  Otis  is  president  of  the  West- 
ern Trust  and  Savings  Bank.  The  institu- 
tion has  recently  shown  a very  marked 
growth,  culminating  in  the  taking  over  of 
the  Prairie  National  Bank,  as  above.  It  was 
quite  lately  admitted  to  the  Clearing  House, 

Harry  R.  Moore,  vice-president  of  the 
Prairie  National  Bank,  is  expected  to  be 
cashier  of  the  Western  Trust  and  Savings 
Bank,  to  succeed  W.  C.  Cook,  who  will  be 
promoted  to  a vice-presidency. 

— Hon.  George  E.  Roberts  will  succeed 
A.  Piatt  Andrew,  now  Assistant  Secretary  of 
the  Treasury,  as  Director  of  the  Mint.  Mr. 
Roberts  was  Director  of  the  Mint  for  a 
number  of  years  under  the  McKinley  and 
Roosevelt  administrations.  In  the  McKinley- 
Bryan  campaign  he  made  many  speeches  on 
the  money  question. 

A couple  of  years  ago  Mr.  Roberts  re- 
signed to  become  president  of  the  Commer- 
cial National  Bank  of  Chicago. 

— The  Merchants  National  Bank  of  St. 
Paul  reports  as  follows  at  the  close  of  busi- 
ness of  September  1:  Loans  and  discounts, 
$6,926,387.28;  U.  S.  and  other  bonds,  $1,237,- 
925;  cash  and  due  from  banks,  $3,025,117.49; 


Digitized  by  t^ooQle 


BANKING  AND  FINANCIAL  NOTES 


601 


total  resources,  $11,379,429.77.  The  capital 
is  $1,000,000;  surplus  and  profits,  $850,474.- 
60;  deposits,  $8,528,955.11. 

— L.  A.  Goddard,  president  of  the  State 
Bank  of  Chicago,  lias  been  elected  president 
of  the  Chicago  Clearing-House  Association. 
F.  H.  Itawson,  president  of  the  Union  Trust 
Co.,  was  elected  vice-president. 

— For  September  1 the  First  National 
Bank  of  Chicago  reports  loans  of  $78,519,783 
and  deposits  of  $109,637,540.  It  is  the  second 
largest  bank  in  the  city. 

— The  Old  Detroit  National  of  Detroit, 
Mich.,  makes  the  following  flattering  state- 
ment at  the  close  of  business  September  1 : 
Loans  and  discounts,  $ll,409,59t9.33;  U.  S. 
and  other  bonds  and  securities,  $2,352,717.50; 
cash  and  due  from  banks,  $4,627,139.66 ; total 
resources,  $18,457,011.47.  The  capital  is  $2,- 
000,000;  surplus  and  profits,  $898,776,04;  de- 
posits, $14,448,235.43. 

— A commendable  report  comes  from  the 
Wisconsin  National  Bank  of  Milwaukee. 
This  institution  is  capitalized  for  $2,000,000, 
has  a surplus  of  $1,000,000  and  deposits  of 
$17,205,003. 


— As  usual,  the  Des  Moines  National 
Bank  renders  a satisfactory  statement  of 
condition.  The  principal  items  of  this 
latest  one  are:  Loans,  $3,947,905;  surplus, 
$65,000;  undivided  profits,  $17,030;  deposits, 
$4,417,727. 

— The  National  Bank  of  Commerce,  St. 
Louis,  in  its  statement  as  of  September  1,  in 
response  to  the  Comptroller,  makes  a highly 
creditable  showing.  Cash,  due  from  banks 
and  exchange,  $19,715,927;  loans  aud  dis- 
counts, $47,350,979.  The  capital  of  the  bank 
is  $10,000,000;  surplus  and  profits,  $8,428,- 
868;  deposits,  $54,864,414;  total  resources, 
$82,485,354. 

— The  statement  of  the  Mechanics- Ameri- 
can National  Bank  of  St.  Louis,  as  of  Sep- 
tember 1,  shows  that  the  bank  is  in  a good 
strong  position  to  meet  the  demands  which 
are  made  upon  it  by  its  interior  correspond- 
ents at  this  season  of  the  year.  The  indi- 
vidual, bank  and  government  deposits  ag- 
gregate $29,256,481,  while  the  loans  and 
discounts  are  but  $17,954,230,  and  the  cash 
with  banks  and  in  vault  is  $14,191,692.  With 
capital  of  $2,000,000;  surplus  and  profits, 
$2, 941,91 9,  and  total  resources  of  $36,194,800, 
the  bank  is  ready  to  furnish  every  proper 


Banking  by  Mail  Booklet 


" The  Reasonableness  of  Banking  by  Mail " is  the  name 
of  a new  booklet  which  we  have  just  written  and  published 
for  widespread  distribution  by  banks  and  trust  companies 
in  advertising  for  savings  and  other  accounts  by  mail. 

It  is  a logical  presentation  of  the  banking  by  mail  pro- 
position, showing  conclusively  why  it  is  safe,  convenient 
and  profitable  to  bank  by  mail. 

The  booklet  is  of  a size  suitable  for  enclosing  in  a regular 
No.  6 envelope.  It  contains  several  pages  for  the  special 
advertising  of  the  institution  using  it. 

Send  for  Sample  Booklet  and  Prices. 


THE  BANKERS  PUBLISHING  CO. 

28 3 Broadway  - - New  York 


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THE  BANKERS  MAGAZINE 


banking  facility  to  those  who  are  contem- 
plating opening  a new  account  in  St.  Louis. 
The  officers  are:  Walter  Hill,  president; 
Jackson  Johnson,  L.  A.  Battaile  and  Ephron 
Catlin,  vice-presidents;  J.  S.  Calfee,  cashier; 
G.  M.  Trumbo,  C.  L.  Allen,  P.  H.  Miller  and 
C.  L.  Boye,  assistant  cashiers. 

— Not  a dollar  of  overdrafts  Is  to  be  found 
in  the  September  first  statement  of  the  Mer- 
cantile Trust  Company  of  St.  Louis.  De- 
posits of  $5,747,623  are  reported.  The  total 
resources  are  $8,417,926. 

— We  have  received  a September  first 
statement  from  the  National  Bank  of  Com- 
merce, Kansas  Cty,  Mo.  It  shows,  as  plain- 
ly as  figures  can,  that  this  institution  is  in  a 
very  prosperous  condition.  It  is  carrying 
loans  of  $11,543,785,  has  surplus  and  undi- 
vided profits  of  $559,226  and  deposits  of 
$19,272,621. 

— For  September  1 the  National  Stock 
Yards  National  Bank  of  National  Stock 
Yards,  111.,  reports  as  follows:  Loans  and 
discounts,  $3,042,104;  capital,  $350,000;  sur- 
plus, $150,000;  undivided  profits,  $66,857 ; 
deposits,  $3,428,001. 


— Deposits  of  the  First  National  Bank  of 
Fort  Wayne,  Ind.,  were  $3,623,403  on  Sep- 
tember 1.  On  that  date  it  also  reported  a 
surplus  of  $200,000  and  loans  of  $2,805,457. 

— The  First  National  Bank  of  Louisville, 
Ky.,  has  a creditable  showing  to  make  in  its 
report  as  of  September  1.  Loans  and  dis- 
counts amount  to  $1,808,425;  cash  and  due 
from  other  banks,  $590,435;  capital,  $500,- 
000;  surplus  and  undivided  profits,  $239,555; 
deposits,  $2,176,412,  and  total  resources, 
$3,939,318. 

— To  the  end  that  the  business  of  the 
American  National  Bank  and  the  business 
of  the  Fletcher  National  Bank  be  consoli- 
dated, the  Fletcher  American  National  Bank 
of  Indianapolis  has  been  organized  with  a 
capital  of  $2,000,000  and  a surplus  of  $1,009,- 
000.  The  consolidation  became  effective 
at  the  close  of  business  September  3,  1910. 
The  officers  of  the  new  bank  include  all 
those  of  the  old  bank,  as  follows:  John 
Perrin,  chairman  of  the  board;  Stoughton 
A,  Fletcher,  president;  Evans  Woollen, 
vice-president  and  counsel ; William  A. 
Hughes,  vice-president;  Charles  Latham, 
vice-president;  Harry  A.  Schlotzhauer, 


NEW  BOOKLET 

For  Commercial  Ilaliks 


“Your  Credit  and  a Checking  Account”  is  a brand  new 
booklet  we  have  issued  for  the  use  of  commercial  banks  or  for 
the  banking  departments  of  trust  companies.  The  scope  of  this 


attractively  printed  sixteen -page 
titles,  which  are: 

HAVE  YOU  A SURPLUS? 

WHAT  CREDIT  IS. 

A MAN  WHO  HAD  A PLAN. 
CREDIT  PLUS  CASH. 

HOW  THE  BANK  HELPS. 

THE  FIRST  CONSIDERATION. 

Send  for  » Sample  Copy  and 


booklet  is  indicated  by  its  sub- 


THE  CHECKING  PRIVILEGE. 

A RECORD  AND  A RECEIPT. 

WE  KEEP  YOUR  BOOKS  GRATIS. 
AN  AID  TO  ECONOMY. 

WOMEN  AND  THE  BANK. 

WILL  YOU  LET  US  HELP  YOU? 

ce  Schedule  of  this  Booklet  Now 


The  Bankers  Publishing  Co.  251  Y 


Digitized  by  t^ooQle 


THE  BANKER  IN  LITERATURE 

By  JOHNSON  BRIGHAM 

Librarian  Iowa  State  Library 

THIS  work  appears  in  three  parts,  namely:  I.  Historical  Side  Lights;  II. 
Bankers  as  Creators  of  Literature;  III.  Notable  Bankers  in  Fiction.  In 
Part  II.  appear  biographical  sketches  of  the  following  banker-authors: 
William  Roscoe,  Samuel  Rogers,  David  Ricardo,  Charles  Sprague,  George  Grote, 
Sir  John  W.  Lubbock,  Walter  Bagehot,  Fitz-Greene  Halleck,  Edmund  Clarence 
Stedman,  Thomas  Hodgkin,  Edward  Noyes  Westcott,  Wm.  Barnes  Rhodes, 
Bernard  Barton,  John  Law. 

In  Part  III.  the  author  discusses  the  subject,  “Notable  Bankers  in  Fiction/' 
under  the  following  heads:  Balzac's  Bankers,  Dickens's  Bankers,  Thackeray's 

Bankers,  Charles  Reade's  “Story  of  an  Old  Bank/'  John  Law  in  “The  Mississippi 
Bubble/'  A Meredith  Creation,  Westcott's  “David  Harum,"  The  Rothschilds  in 
Literature,  Ibsen's  “Helmer*'  (A  Doll's  House),  Mrs.  Ward's  Country  Banker, 
Paul  Leicester  Ford's  “Mr.  Blodgett,"  Stockton's  “J.  Weatherby  Stull,"  Thomas 
Nelson  Page's  “Norman  Wentworth,"  F.  Hopkinson  Smith's  “Peter,"  Kenneth 
Grahame. 

The  book  concludes  with  a chapter  on  “The  Ideal  Banker." 

Altogether  this  unusual  work  is  one  of  the  most  genuine  interest  to  every 
banker.  Adapted  best  to  his  leisure  hours,  it  yet  contains  practically  helpful 
material,  and  will  not  be  quickly  laid  aside  by  any  bank  man  who  takes  it  up. 
It  is  an  ideal  vacation  or  holiday  gift  book  for  a banker. 

250  pages,  17  plates  and  reproductions  from  old  prints.  Uniquely  bound 

Price,  $2.00  net,  postage  14  cents 

The  first  sheets  from  the  original  type  will  be  bound  in  a limited  numbered 
and  registered  de  luxe  edition.  Particulars  on  application. 


THE  BANKERS  PUBLISHING  CO.,  PUBLISHERS 

2 53  Broadway,  New  York  ‘ ‘ 

Enclosed  find  $ , for  which  please  send  me 


Name  

Address 


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THE  BANKERS  MAGAZINE 


cashier;  Theodore  Stempfel,  assistant  cash- 
ier; Ralph  K.  Smith,  assistant  cashier; 
Charles  W.  Minesinger,  assistant  cashier; 
Gustav  H.  Mueller,  assistant  cashier;  Oscar 
P.  Wdborn,  assistant  cashier;  Will  H. 
W'ade,  manager  bond  department. 

September  first  the  American  National 
reported  resources  of  $13,768,713  and  the 
Fletcher  National  reported  resources  of 
$12,74:2,535. 

— The  First  National  Bank  of  Cleveland, 
Ohio,  in  its  statement  as  of  September  1, 
again  shows  substantial  gains  in  important 
items  over  the  statement  as  of  June  30. 
Loans  and  discounts,  which  at  the  time  of 
the  earlier  statement  were  $1 9,265,954,  have 
been  expanded  to  $20,514,220,  an  increase 
of  $1,218,265.  Deposits,  which  in  June 
w’ere  $27,605,731,  on  September  1 were 
$28,102,975,  an  improvement  of  $497,244. 
The  total  resources  of  the  bank  were  in- 
creased by  $480,436,  and  on  September  1 
were  $34,430,660. 

Other  items  in  the  latest  statement  were: 
Cash  and  due  from  banks,  $9,717,947;  capi- 
tal, $2,500,000;  surplus  and  profits,  $1,- 
314,153. 

— From  September  2,  1898,  to  September 
1,  1910,  the  deposits  of  the  First  National 
Bank  of  Canton,  Ohio,  increased  from  $375,- 
156  to  $2,889,298.  During  the  same  period 
of  time  the  loans  have  increased  from  $409,- 
538  to  $2,549,621.  According  to  its  latest 
report  the  bank  has  total  resources  of  $4,- 
008,775.50. 


WESTERN  STATES 

— The  Union  State  Bank  is  reported  to 
have  heen  organized  at  Muskogee,  Okla.,  to 
take  over  the  Alamo  State  Bank  of  that 
city.  With  the  reorganization  the  capital 
will  be  increased  from  $40,000  to  $100,000. 
W.  C.  Jackson  has  been  chosen  president,  to 
succeed  I^eo  E.  Bennett,  who  resigns  to 
enter  the  service  of  the  Capitol  Commission 
at  Oklahoma  City. 

— With  a capital  stock  of  $50,000  and 
shares  at  $100  each,  the  Security  Trust  and 
Savings  Bank  Company  of  Ogden,  Utah, 
has  filed  its  articles  of  incorporation.  The 


Advertisers  in  THE  BANKERS  MAGA- 
ZINE are  assured  a bona  fide  circula- 
tion among  Banks,  Bankers,  Capitalists 
and  others  in  this  and  foreign  countries, 
at  least  double  that  of  any  other  monthly 
banking  publication 


officers  of  the  bank  arc:  Timothy  Ryan, 
president;  John  F.  Kelley,  Britton,  S.  D., 
first  vice-president;  Joseph  Williams,  sec- 
ond vice-president;  John  M.  Kellecv.  Britton, 
S.  D.,  cashier.  The  officers,  with  John  Mc- 
Dermott, Thomas  B.  Farr,  Janies  H.  De- 
Vine,  P.  B.  Johnston,  Twin  Falls,  Ida.;  C. 
B.  Sears,  C.  H.  Goslin,  Emile  Alec,  Rock- 
land, Ida.;  Louis  Bitlon,  Heber  J.  Mac- 
Kav,  Anna  M.  McDermott,  Samuel  G. 
Dye  and  Edwin  Dix,  were  the  incorpora- 
tors. 

—Following  the  call  of  the  United  States 
Comptroller  of  the  Currency,  banks  in  Colo- 
rado Springs  have  prepared  statements 
showing  that  at  the  present  time  they  have 
on  deposit  a total  of  $11,296,097.28.  This 
sum  is  divided  as  follows:  Exchange  Na- 
tional Bank,  $3,839,283.61 ; El  Paso  Na- 
tional Bank,  $2,077,342-17;  First  National 
Bank,  $2,403,140.05 ; Colorado  Title  and 
Trust  Company,  $1 ,604,461.53;  Colorado 
Savings  Bank,  $900,581.32;  Colorado  Springs 
National  Bank,  $471,288.60. 

— For  September  1 the  Security  Bank  of 
Hot  Springs,  Ark.,  renders  a very  favorable 
and  w’ell-balanced  report  of  its  condition. 
WTith  a capital  of  $50,000  and  surplus  and 
undivided  profits  amounting  to  $98,321,  it 
carries  loans  and  discounts  of  $375,771  and 
has  secured  deposits  of  $463,433. 


PACIFIC  STATES 

— The  statement  of  the  Seattle  National, 
made  at  the  close  of  business  September  1, 
shows  the  following  gratifying  condition: 
Loans,  $9,092,914.03;  United  States  and 
other  bonds  and  warrants,  $2,914,164.24; 
cash  and  exchange,  $4,809,893.05;  total  re- 
sources, $16,898,572.94.  The  capital  is  $1,- 
000.000;  surplus  and  profits,  $289,573.21,  and 
deposits,  $15,108,999.73. 

— S.  C.  Osborn  & Co.  of  Seattle,  W’ash., 
on  August  22  opened  a branch  office  in  the 
Fidelity  Building,  Tacoma,  W’asli.  Osborn 
& Co.  are  correspondents  of  Logan  & Bryan, 
wiio  maintain  a private  wire  system  through- 
out the  Northwest  and  Pacific  coast. 

— The  National  Bank  of  Commerce  in 
Seattle  has  a capital  of  $1,000,000.  It  lias 
surplus  and  profits  of  $1,103,000,  and  it  has 
gained  over  $300,000  in  total  resources  since 
the  preceding  call,  June  30,  1910.  It  has 
loans  of  $8,255,246.04,  cash  and  exchange  of 
$5,379,021.81,  deposits  of  $12,206,019.05,  and 
totals  of  $14,700,051.74.  The  officers  of  this 
bank  are:  M.  F.  Backus,  president;  R.  R. 
Spencer,  Ralph  S.  Stacy,  vice-presidents; 
J.  A.  Swalwell,  cashier;  O.  A.  Spencer,  as- 
sistant cashier;  Emery  Olmstead,  R.  S. 
Walker,  assistant  cashiers. 


Digitized  by  t^ooQle 


BANKING  AND  FINANCIAL  NOTES 


605 


— The  Scandinavian-American  Bank  of 
Seattle  reflects  the  prosperity  of  its  district 
in  its  deposits  of  $2, 885, 539.63,  as  shown  by 
statement  issued  to  the  Comptroller  Sep- 
tember 1,  1910.  Its  capital  is  $500,000;  its 
surplus,  $500,000;  it  has  loans  of  $5,621,709.- 
12,  cash  and  exchange  of  $2,880,118.81,  and 
its  totals  are  $10,968,278.01.  The  officers 
are:  A.  Chilberg,  president;  J.  E.  Chilberg, 
Thomas  B.  Minahan,  vice-presidents;  J.  F. 
Lane,  cashier;  L.  H.  Woolfolk,  H.  V.  V. 
Bean,  S.  S.  Lindstrom,  assistant  cashiers. 

— E.  W.  Anderson,  formerly  with  the 
Traders  National  of  Spokane,  has  purchased 
an  interest  in  the  First  International  Bank 
of  Kennewick,  Wash.,  and  will  become  its 
cashier.  Mr.  Anderson  was  for  some  time 
cashier  of  the  First  National  of  Davenport, 
Wash.  S.  M.  Lockerby,  president  of  the 
Kennewick  bank,  will  retain  his  position  and 
will  have  the  general  management  of  the 
institution. 

— The  Oklahoma  Stock  Yards  National 
Bank,  with  a paid-up  capital  of  $250,000 
and  surplus  of  $25,000,  was  organized  at 
Oklahoma  City,  September  24,  and  expects 
to  open  up  at  the  Oklahoma  Stock  Yards 
about  October  1,  in  exceptionally  fine  quar- 
ters. The  officers  of  the  new  institution 
are:  T.  P.  Martin,  Jr.,  formerly  of  Marlow, 
president;  E.  F.  Bisbee,  vice-president,  and 
lT~J.  Robb,  cashier. 

— The  Dexter  Horton  National  Bank  of 
Seattle  has  been  gaining  new  business  at  a 
lively  rate  ever  since  it  entered  the  national 
banking  system.  In  a report  dated  Sep- 
tember 1,  it  places  its  deposits  at  $10,713,- 
948,  its  surplus  at  $240,000,  and  its  resources 
at  $12,256,941. 

— Statements  of  the  national  banks  of 
San  Francisco,  in  response  to  the  Comp- 
troller’s call  as  of  September  1,  show  sub- 
stantial increases  over  the  figures  of  June 
30.  A gain  of  more  than  $2,000,000  is 
.shown  by  ten  banks,  including  all  the  na- 
tionals except  the  Bank  of  California,  whose 
statement  was  delayed  in  publication  pend- 
ing the  receipt  of  figures  from  its  northern 
branches. 

Foremost  in  point  of  increase  is  the  Wells 
Fargo  Nevada  National,  with  total  deposits 
of  $24,743,346,  as  compared  with  $23,064,608 
on  June  30.  The  Crocker  National  records 
a gain  of  $435,744  in  deposits  over  the  J une 
figures;  the  First  National  has  gained  $131,- 
838;  the  American  National,  $669,247,  and 
the  Mercantile  National,  $442,720.  The  ac- 
cretions are  about  evenly  divided  between 
the  bank  depositors  and  individuals. 


CANADA 

— The  Union  Bank  of  Halifax,  N.  S.,  has 
issued  a circular  to  its  shareholders  commu- 
nicating an  offer  received  from  an  English 
syndicate  of  $240  a share  for  the  Royal 
Bank  of  Canada  shares  to  which  they  may 
become  entitled  on  the  consummation  of  the 
merger  of  the  two  banks  on  November  1 
next.  The  amount  of  stock  in  question  is 
12,000  shares. 

ltoyal  Bank  stock  recently  has  been  sell- 
ing in  the  market  around  $240.  The  offer 
would  mean  an  investment  by  the  English 
syndicate  of  $2,880,000,  ware  all  the  share- 
holders to  turn  over  their  stock. 

Royal  Bank  shares  go  on  a twelve  per 
cent,  dividend  basis  from  January  13,  1911. 

— The  capital  of  the  Bank  of  Nova  Sco- 
tia has  been  increased  from  $3,000,000  to 
$5,000,000,  following  the  passing  of  a new 
by-law.  It  was  not  announced  how  much 
of  the  increase  would  be  issued  imme- 
diately. 

— .Tames  Mackie  will  manage  the  London 
branch  of  the  Royal  Bank  of  Canada,  now 
open  for  business  at  2 Bank  Buildings, 
Princes  street. 


NEW  CUBAN  BANK 

— President  Gomez  has  signed  a decree 
awarding  the  concession  to  establish  a terri- 
torial bank  in  Cuba  to  the  Banco  Espanol 
de  Habana.  Ex-Secretary  of  the  Treasury 
Diaz  dc  Villegas  has  been  appointed  presi- 
dent of  the  new  bank. 


BANKS  CLOSED  OR  IN  LIQUIDA- 
TION 

Florence — Bank  of  Florence;  closed  by  or- 
dor  of  territorial  auditor. 

CALIFORNIA. 

San  Francisco — San  Francisco  National 
Bank;  in  \oluntary  liquidation,  August  1. 

ILLINOIS. 

Chicago— Prairie  National  Bank;  in  volun- 
tary liquidation,  Sept.  8. 

INDIANA. 

Evansville — Mercantile  National  Bank;  In 
voluntary  liquidation,  August  1. 

Indianapolis — American  National  Bank  and* 
Fletcher  National  Bank;  in  voluntary  liqui- 
dation, September  3. 

IOWA. 

Hamburg— Farmers  National  Bank;  in  vol- 
untary liquidation,  August  27. 


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THE  BANKERS  MAGAZINE 


MAINE. 

Richmond— Richmond  National  Bank;  In 
voluntary  liquidation,  August  1. 

NEBRASKA. 

Wymore — City  National  Bank;  in  volun- 
tary liquidation,  July  7. 

OHIO. 

Marshallville — Marshallvllle  Banking  Co.; 
closed  September  12. 

TEXAS. 

Princeton— First  National  Bank;  in  volun- 
tary liquidation,  August  15. 

WISCONSIN. 

Cuba  City— Farmers  Bank;  closed  by  bank 
commissioner,  September  10. 

Sheboygan  Falls  — Dairymens  National 
Bank;  in  voluntary  liquidation,  August  15. 


AUTOS  AND  MORTGAGES 

AN  inquiry  made  by  an  automobile  com- 
. pany  in  cities  and  places  where  198,- 
216  automobiles  were  owned,  has  pret- 
ty thoroughly  cleared  up  the  myth  that 
people  are  mortgaging  their  houses  to  buy 
autos  and  are  paying  for  them  with  bor- 
rowed money.  Of  this  number  of  automo- 
biles, 198,216,  only  1,254  automobiles  had 
been  bought  with  a mortgage,  or  less  than 
one  per  cent.  (.63  of  one  per  cent,  to  be 
accurate),  and  7,475  autos  were  bought  with 
borrowed  money,  or  3.72  per  cent. 

This  was  the  opinion  and  returns  made  by 
4,831  bankers  in  the  cities  and  towns  where 
198,216  autos  were  owned,  half  those  in  the 
country.  Bankers  know  who  is  mortgaging 
to  waste  and  who  is  borrowing  to  buy. 
Their  report  is  both  accurate  and  trust- 
worthy. What  is  true  of  this  198,216  autos 
is  true  of  all  the  autos  in  the  country. 

Money  has  been  borrowed  for  autos  and 
mortgages  made,  but  the  number  is  minute 
by  the  side  of  the  number  bought  without 
either  loan  or  mortgage.  If  the  automobile 
business  appealed  to  the  shiftless  and  thrift- 
less it  would  never  have  reached  its  present 
dimensions  or  collected  on  its  sales.  The 
same  class  of  people  are  buying  autos  who 
once  bought  horses  and  carriages,  teams  and 
drays,  or  delivery  wagons.  Taking  the  cost 
of  a horse  or  horses,  spans  and  teams,  of 
harness  and  of  carriages,  or  of  horses  and 
delivery  wagons  and  drays,  from  1860  to 
1880,  and  allowing  for  the  advance  in  in- 
comes and  in  business,  and  the  automobile  is 
not  a bit  dearer  than  the  horse  or  pair  and 
smart  turnout  of  twenty  to  forty  years  ago. 
The  country  has  twice  as  much  money  and 
twice  as  many  liberal  incomes  to  use  the 
auto  now  than  wanted  horses  and  carriages 


or  dray  and  delivery  wagon  then.  The  auto 
is  taking  the  place  of  the  horse.  Like  the 
horse  before  a carriage,  wagon  or  dray,  more 
autos  are  for  use  than  for  pleasure.  Every 
one  hears  of  joy-rides.  No  one  notes  the 
business  or  professional  auto.  So  one  once 
heard  more  in  city  or  village  of  a single 
costly  “high-stepping*’  team  than  of  all  tne 
doctors’  buggies,  the  grocers’  deliveiy  wag- 
ons, or  the  teamsters’  pairs  of  dray  horses, 
but  there  were  10,000  of  these  to  one  of  the 
other.  So  with  the  auto. 

It  is  here  to  stay,  to  grow,  and  to  become 
a daily  necessity  of  a larger  class  than  in  the 
past  once  used  the  horse  for  business,  pro- 
fessional needs  or  family  wants. — Philadel- 
phia Press. 


RAILROAD  PROGRESS  IN  THE 
SOUTH 

AT  a dinner  given  in  Richmond  a few 
months  ago  to  President  Eliot  of 
Harvard  University,  John  Skelton 
Williams,  president  of  the  Bank  of  Rich- 
mond, and  a well-known  Southern  railway 
man,  had  the  following  to  say  regarding 
railway  progress  in  the  South: 

“The  South  had  been  the  pioneer  in  rail- 
road construction.  • • • From  1880  to 
1900  the  railroad  mil  eagre  of  the  Southern 
States  Increased  from  20,887  miles  to  52,- 
928  miles,  which  was  more  than  the  total 
mileage  in  the  United  States  in  1870.  To- 
day the  railroad  mileage  in  the  Southern 
States  is  approximately  70,000  miles,  or 
nearly  enough  to  circle  the  earth  three 
times  at  the  equator.  The  total  railroad 
mileage  of  the  Union  is  now  230,000  miles, 
and  the  South  has  practically  one-third  of 
it.  the  same  proportion  it  had  In  1860,  before 
the  development  of  the  great  West  and  the 
Pacific  States,  and  notwithstanding  her 
four  years  of  war  * • • It  is  interesting 
to  note  that  the  railroad  mileage  in  our 
Southern  States  to-day  equals  the  entire 
railroad  mileage  of  England,  France  and 
the  German  Empire  combined. 

“At  the  beginning  of  the  South’s  revival 
in  1880,  there  was  no  railroad  system  In  the 
South  Atlantic  States  operating  more  than 
750  miles  of  railroad,  and  only  two  rail- 
road companies  In  this  whole  section  oper- 
ating as  much  as  600  miles.  During  the 
past  five  and  twenty  years  our  railroad 
lines  have  nearly  all  been  rebuilt,  extended 
and  consolidated  into  systems  operating  from 
1,500  miles  to  8,000  miles  each.  Scores  of 
small,  disconnected  and  inefficient  roads 
have  been  transformed  and  welded  together, 
creating  the  giant  combinations  which  to- 
day handle  our  mammoth  commerce,  and 
afford  the  quick  and  luxurious  means  of 
intercourse  between  all  sections.  Some  of 
these  systems  have,  I fear,  grown  almost 


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too  extensive,  and  it  is  a question  whether 
they  do  not  cover  too  much  territory  to 
secure  the  best  and  most  satisfactory  re- 
sults. . I am  inclined  to  the  belief  that  be- 
tween 3,000  and  6,000  miles  of  railroad  are 
quite  sufficient  for  one  set  of  stockholders 
to  own  and  one  set  of  officers  to  look  after, 
If  the  welfare  of  the  publfb  and  of  the 


owners,  and  not  the  personal  ambition  of 
a few,  is  to  be  the  paramount  considera- 
tion. 

“The  Southern  States  are  generally  fair 
and  conservative  in  their  treatment  of  rail- 
roads. When  the  roads  confine  their  activi- 
ties to  the  legitimate  business  of  transpor- 
tation, they  have  little  to  fear.’* 


WITH  BANKERS  MAGAZINE  ADVERTISERS 


VALUABLE  BOOKLET  ISSUED  BY 
THE  BURROUGHS  ADDING 
MACHINE  COMPANY 

THERE  is  one  real  opportunity  for 
service  to  their  clients  that  bankers 
are  coming  to  more  clearly  recognize 
each  year.  We  refer  to  the  influence  they 
can  exert  towards  the  adoption  of  better 
methods  of  accounting  in  business,  towards 
a more  accurate  and  thorough  knowledge 
of  their  true  business  condition  on  the  part 
of  their  patrons. 

To  induce  a manufacturer  to  install  a 


cost  system  is  a service  to  him  in  that  it 
puts  him  in  a position  to  know  what  is 
fundamental  to  his  success  in  the  market. 
Too  many  are  merely  estimating  their  costs, 
which  in  plain  language  is  guessing.  Many 
cases  can  be  cited  where  failure  might  have 
been  averted  by  a simple  workable  cost 
system. 

And  such  service  pays;  it  means  more  to 
bankers  to  build  up  the  business  of  those 


customers  they  now  have  than  to  get  new 
ones. 

Our  thought  is  suggested  by  a new  180- 
page  book  we  have  just  received  from  the 
Burroughs  Adding  Machine  Company  on 
the  subject  of  costs.  The  Burroughs  Com- 
pany distributes  this  gratis  to  any  one  in- 
terested, and  thereby  performs  a service 
to  business  which  is  none  the  less  real  for 
having  as  an  ultimate  object  the  develop- 
ment of  more  use  for  its  machine. 


A SUPERB  PUBLICATION 

ii  A ME  RICAN  Art  in  Bronze  and  Iron” 
XjL  is  the  title  of  an  extremely  hand- 
some book  recently  issued  by  John 
Williams,  Inc.,  New  York,  who  are  specialists 
in  bronze  and  iron  work  for  banks.  The  book, 
which  was  compiled  and  edited  by  William 
Donald  Mitchell,  consists  of  a large  number  of 
excellent  half-tone  illustrations,  principally 
of  the  interiors  of  the  large  banks  in  dif- 
ferent parts  of  the  country.  With  each 
illustration  is  a complete  description  of 
the  interior  arrangement  and  decoration  of 
the  banks  illustrated.  A book  of  this  kind 
is  assured  to  be  of  interest  and  value  to 
bankers,  especially  to  those  who  are  con- 
templating the  erection  of  a new  bank  build- 
ing, or  making  improvements  in  their  pres- 
ent banking  quarters. 

As  a piece  of  printing  the  book  itself 
is  one  of  the  finest  specimens  it  has  ever 
been  our  privilege  to  examine. 


VIEWS  OF  NOTABLE  BANK 
BUILDINGS 

HOGGSON  BROTHERS,  the  well-known 
New  York  firm  specializing  in  bank 
architecture,  construction,  engineer- 
ing, decoration  and  equipment,  have  issued 
a very  handsome  book  describing  their 
method  of  building  and  illustrated  with 
some  bank  interiors  and  exteriors  executed 


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<J()8 


THE  BANKERS  MAGAZINE 


by  them.  According  to  the  Hoggson  Build- 
ing Method,  the  bank  places  the  respon- 
sibility for  the  planning,  for  the  execution 
of  the  work  itself  and  for  its  cost,  all  upon 
one  responsible  organization.  The  detailed 
working  out  of  this  method  is  explained 
in  the  book  which  the  firm  has  just  issued. 
The  different  points  taken  up  include  the 
building  appropriation,  the  contract,  the 
architectural  plans,  the  materials,  changes 
in  plans,  supervision,  decorations  and  equip- 


ment and  remodeling.  The  essentials  of  a 
bank  exterior  are  dignity,  solidity,  pure 
architectural  design  and  a notable  contrast 
with  surrounding  buildings.  The  essen- 
tials of  a bank  interior  are  good  light,  con- 
venient arrangement,  decorative  unity  and 
an  inviting  atmosphere.  The  illustrations 
in  this  book  show  very  plainly  how  Hoggson 
Brothers  have  been  able  to  work  out  these 
results  in  a satisfactory  manner  under  a 
variety  of  conditions. 


PUBLISHERS'  ANNOUNCEMENTS 


A BEAUTIFUL  GIFT  BOOK  FOR 
BANKERS 

MOST  of  the  many  books  issued  by  the 
Bankers’  Publishing  Company  are  of 
a strictly  financial  or  technical  bank- 
ing nature,  but  in  “Tlie  Banker  in  Litera- 
ture,” by  Johnson  Brigham,  just  off  the 
press,  there  is  a shining  exception.  This 
is  a book  entirely  suited  for  the  banker’s 
leisure  moments,  and  on  account  of  the 
particularly  handsome  manner  in  which  the 
volume  is  printed  and  bound  it  makes  an 
especially  appropriate  gift  book.  Un- 
doubtedly it  will  be  in  great  demand  at  the 
approaching  holiday  season.  There  could  be 
no  more  appropriate  Christmas  gift  for  any 
bank  man. 

The  author  of  this  book  is  librarian  of 
the  Iowa  State  Library.  He  has  devoted 
his  spare  time  for  several  years  to  the 
preparation  of  this  work. 

“The  Banker  in  Literature”  appears  in 
three  parts,  namely: 

I.  Historical  Side  Lights;  II.  Bankers  as 
Creators  of  Literature;  III.  Notable  Bank- 
ers in  Fiction.  In  Part  II.  will  appear 
biographical  sketches  of  the  following 
banker-authors:  William  ltoscoe,  Samuel 

Rogers,  David  Ricardo,  Charles  Sprague, 
George  Grote,  Sir  John  W.  Lubbock,  Wal- 
ter Bagehot,  Fitz-Greene  Halleck,  Edmund 
Clarence  Stedman,  Thomas  Hodgkin,  Ed- 
ward Noyes  Westeott,  Wm.  Barnes  Rhodes, 
Bernard  Barton,  John  Law. 

In  Part  III.  the  author  discusses  the  sub- 
ject, “Notable  Bankers  in  Fiction,”  under 
the  following  heads:  Balzac’s  Bankers, 

Dickens's  Bankers,  Thackeray’s  Bankers, 
Charles  Reade’s  “Story  of  An  Old  Bank,” 
John  Law  in  “The  Mississippi  Bubble,”  A 
Meredith  Creation,  Westcott’s  “David 
Harum,”  The  Rothschilds  in  Literature,  Ib- 
sen’s “Hclmer”  (A  Doll’s  House,)  Mrs. 
Ward’s  Country  Banker,  Paul  I^icester 
Ford’s  “Mr.  Blodgett,”  Stockton’s  “J. 


Weatherin'  Stull,*’  Tlrmias  Nelson  Page’s 
“Norman  \Y  entworth,”  F.  Hopkinson  Smith’s 
“Peter,”  Kenneth  Grahame. 

The  book  concludes  with  a chapter  on 
“The  Ideal  Banker.”  Cloth-bound,  gilt  top, 
250  pp.  Price  $1.50. 


NEW  BANK  ADVERTISEMENTS 

WE  have  just  issued  the  Third  Series 
of  “60  Commercial  Bank  Adver- 
tisements.” This  announcement  will 
be  of  interest  to  the  hundreds  of  banks 
throughout  the  country  which  have  used 
the  previous  sets  of  advertisements,  and  also 
to  any  other  banks  who  want  to  get  effec- 
tive bank  advertisements  without  too  much 
trouble  on  their  own  part  and  with  very 
little  expense.  The  idea  of  these  adver- 
tisements is  to  present  the  best  possible  ar- 
guments for  the  various  kinds  of  banking 
service  in  a concise  and  interesting  form. 
They  are  written  in  such  a way  as  to  be 
easily  adapted  to  local  conditions.  They 
are  printed  in  pan  form  on  one  side  of 
the  paper  so  that  when  it  is  necessary  to 
send  copy  to  the  newspapers  one  or  two  of 
the  ads.  can  be  pasted  on  blank  paper  and 
changes  necessary  indicated  on  the  margin 
of  the  sheet.  These  advertisements  are  sold 
to  only  one  bank  in  a community,  so  that 
it  is  a case  of  “First'  come,  first  served.” 
The  price  of  the  60  Commercial  Bank  Ad- 
vertisements is  $3  and  this  includes  a copy 
of  our  bank  advertising  text-book  “Pushing 
Your  Business,”  a cloth-bound,  illustrated 
volume  of  181  pages  now  in  its  third  edi- 
tion. The  ads.  and  the  book  will  be  sent 
on  approval  if  you  wish. 

Next  month  we  will  issue  a new  set  of 
“100  Savings  Bank  Advertisements,”  and 
are  now  making  reservations  for  them. 


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--  ' 


j.  r.  McAllister 

President  Franklin  National  Bank  of  Philadelphia 


•See  page  0*7 


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THE 

BANKERS  MAGAZINE 

ELMER  H.  YOUNCMAN,  E&or 

SIXTY-FOURTH  YEAR  NOVEMBER,  1910  VOLUME  LXXXI,  NO.  5 

A “MODIFIED”  CENTRAL  BANK 


J^JOST  of  the  advocates  of  a central 
bank  are  careful  to  modify  their 
proposals  for  such  an  institution  by 
limiting  its  functions  in  a manner  un- 
known to  the  really  great  central  bank- 
ing institutions  of  the  world.  They 
realize  well  enough  that  if  a central 
bank  were  proposed  endowed  with  all 
the  functions  exercised  by  the  European 
central  banks,  such  an  institution  would 
encounter  the  hostility  of  the  existing 
banks,  particularly  of  those  in  the  cen- 
tral reserve  and  reserve  cities. 

One  of  the  latest  suggestions  for  a 
“modified”  central  bank  is  to  be  found 
in  the  admirable  address  of  Mr.  Irving 
T.  Bush,  delivered  before  the  recent 
convention  of  the  American  Bankers' 
Association  at  Los  Angeles.  Mr.  Bush 
is  chairman  of  the  Currency  Committee 
of  the  Merchants'  Association  of  New 
York.  In  the  address  referred  to,  after 
accurately  defining  the  improvements 
needed  in  our  banking  system  and  ex- 
plaining the  difficulties  encountered  in 
securing  agreement  on  a programme  of 
reform,  Mr.  Bush  said: 

“I  will  ask  you  to  picture  to  your 
minds  a central  bank  governed  by  a 
board  composed  of  bankers,  a limited 
number  of  government  officials,  and  the 
balance  men  engaged  in  business,  and 
not  identified  with  either  banking  or 
politics,  with  its  functions,  limited  ab- 
solutely to  dealing  in  foreign  exchange 
in  order  to  protect  or  build  up  our  gold 
reserves,  rediscounting  certain  approved 
forms  of  short-term  commercial  paper, 
and  bills  of  exchange  for  regularly  or- 


ganized financial  institutions,  and  the 
issuing  of  bank  notes.  All  profits 
above  some  fixed  percentage — say  four 
per  cent. — to  go  to  the  government,  or 
be  used  for  some  public  purpose.” 

An  institution  whose  functions  were 
so  limited  would  lack  one  of  the  es- 
sential attributes  of  a bank — the  hand- 
ling of  deposits.  So  limited  it  would 
be  chiefly  a bank  of  issue,  with  some 
control  of  the  foreign  exchanges. 

A bank  so  limited  in  its  functions 
might  be  of  considerable  service.  The 
notes  which  it  would  issue  based,  as  Mr. 
Bush  proposed,  upon  a gold  redemp- 
tion fund  and  further  secured  by  legi- 
timate commercial  paper,  would  be  a 
vast  improvement  on  our  present  nation- 
al bank  notes.  The  control  over  the 
foreign  exchanges  would  also  be  bene- 
ficial, and  the  rediscount  functions 
would  be  valuable. 

But  a bank  so  limited  in  its  func- 
tions would  lack  some  very  important 
attributes  of  a bank,  particularly  of  one 
issuing  notes.  Without  the  right  to 
receive  deposits  there  could  not  be  that 
automatic  change  of  notes  into  deposits 
or  of  deposits  into  notes  so  necessary 
to  the  efficient  working  of  a bank  of 
issue. 

In  a very  important  sense,  under  a 
proper  system,  the  issue  and  retirement 
of  notes  depend  upon  the  will  of  the 
business  community.  The  notes  go  out 
when  the  dealer  needs  them  and  they  are 
retired  by  being  deposited  when  he  no 
longer  needs  them. 

Now,  for  this  automatic  change  of 

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THE  BANKERS  MAGAZINE 


notes  into  deposits,  or  of  deposits  into 
notes,  a central  bank  that  did  not  re- 
ceive deposits  would  have  to  substitute 
the  arbitrary  judgment  of  its  governing 
board.  However  carefully  this  board 
might  be  constituted,  it  could  never  act 
with  anything  like  the  precision  of  the 
automatic  process  above  described. 

It  will  probably  be  found,  in  attempt- 
ing to  devise  a central  bank  that  will 
disarm  hostility,  that  the  proposed  in- 
stitution will  be  so  hampered  as  to  be 
of  little  use. 


“BICENTRAL  BANKING" 


TTNDER  this  title  there  appears  in 
another  part  of  this  issue  of  The 
Bankers  Magazine  an  article  describ- 
ing a method,  soon  to  be  put  into  prac- 
tical operation,  for  effecting  some  of 
the  improvements  in  our  banking  and 
commercial  systems  that  have  been 
widely  discussed. 

While  this  is  at  present  merely  a pri- 
vate enterprise,  it  promises  possibilities 
of  developing  into  something  of  far- 
reaching  importance  to  the  banks  and 
the  commercial  interests  of  the  country. 
Whether  it  shall  so  develop  will  depend 
upon  the  attitude  of  the  bankers  tow- 
ard its  organization,  and  the  character 
of  the  management  when  organized. 

Briefly  stated,  the  plan  is  this.  The 
National  Bank  Audit  Co.,  of  Washing- 
ton, D.  C.,  has  been  organized  for  the 
following  purposes: 


1.  To  examine  and  audit  banks. 

2.  To  make  good  the  assets  of 
banks  audited  and  examined  to  the 
amount  required  to  meet  their  liabilities 
in  case  of  failure. 

3.  To  inspect,  certify,  and  guaran- 
tee the  payment  of  commercial  paper. 

4.  To  provide  a fund  for  the  redis- 
count of  certified  and  guaranteed  com- 
mercial paper. 

The  first  aim  of  the  company  com- 


prises nothing  new,  as  several  auditing 
firms  are  already  engaged  in  making 
bank  examinations  and  audits.  But  the 
National  Bank  Audit  Co.,  as  its  title 
implies,  will  pay  special  attention  to 
this  line  of  work,  and  expects  to  de- 
velop a high  degree  of  efficiency. 

In  making  good  bank  assets,  the 
company  will,  in  effect,  insure  deposits, 
but  with  this  important  difference — 
there  will  be  no  blanket  guaranty  of  all 
banks,  good,  bad  and  indifferent.  Only 
the  banks  whose  assets  after  careful  in- 
spection satisfy  the  company’s  require- 
ments will  be  admitted  to  the  system. 
It  is  claimed,  and  seemingly  with  rea- 
son, that  this  does  not  put  a premium 
on  reckless  banking,  but  on  the  contrary 
makes  for  sound  banking. 

The  inspection,  classification  and 
guaranty  of  commercial  paper,  if  prop- 
erly and  thoroughly  done,  would  be  of 
immense  benefit  to  the  banks  and  to  the 
commerce  of  the  country. 

Could  a rediscount  centre  be  estab- 
lished to  which  the  banks  could  apply 
with  confidence  in  case  of  need,  a great 
step  would  be  taken  in  curing  one  of 
the  present  glaring  deficiencies  in  our 
banking  system. 

Possibly,  with  sufficient  capital,  and 
the  cooperation  of  a number  of  strong 
banks  in  the  chief  financial  centres,  this 
company  might  eventually  exercise 
some  effective  control  of  the  discount 
rate  and  leadership  of  the  money  mar- 
ket, as  is  done  by  the  central  banks  of 
Europe. 

The  National  Bank  Audit  Company 
seeks  to  accomplish  several  things  that 
bankers  quite  generally  agree  upon  as 
being  desirable.  But  it  attempts  to  do 
these  things  without  waiting  for  legis- 
lation, which,  however  desirable,  does 
not  seem  to  be  in  sight.  Its  fundamen- 
tal principle  appears  to  be  this:  action 
based  upon  the  most  searching  expert 
investigation.  Undoubtedly,  the  prin- 
ciple is  sound.  Its  successful  applica- 


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611 


tion  will  depend  upon  the  way  it  is 
developed  in  practice. 

We  believe  that  now,  in  the  time  of 
financial  calm,  is  the  opportune  moment 
for  the  bankers  of  the  country  to  seek 
for  some  efficient  remedy  for  the  weak- 
nesses in  our  banking  and  credit  system 
that  have,  in  times  of  panic,  wrought 
such  havoc.  “Bicentral  banking”  may 
or  may  not  be  the  appropriate  remedy. 
But  some  things  that  it  proposes  seem 
to  us  worthy  of  careful  attention  by  the 
bankers  of  the  United  States. 


MAKING  THE  CORPORATIONS 
BEHAVE 

/^AREFUL  observers  can  not  have 
failed  to  note  a lessening  of 
political  hostility  toward  corporations. 
Here  are  two  striking  evidences  of  this 
change  of  sentiment,  taken  from  sources 
widely  different.  In  his  address  before 
the  New  York  State  Republican  Con- 
vention, Former  President  Roosevelt 
said: 

“The  corporation  must  be  protected, 
must  be  given  its  rights,  but  it  must  be 
prevented  from  doing  wrong,  and  its 
managers  must  be  held  in  strict  account- 
ability when  it  does  wrong;  and  it  must 
be  deprived  of  all  secret  influence  in 
our  public  life.” 

And  Former  Judge  Alton  B.  Par- 
ker, speaking  before  the  Democratic 
convention  of  the  same  State,  said: 

“The  corporation  is  the  most  useful 
public  device  ever  originated  by  man. 
Without  it  our  great  railroad  systems, 
steamboat  lines,  etc.,  would  not  have 
been  created.  The  great  majority  of 
our  corporations  are  honestly  conducted 
and  render  useful  public  service.  He 
who  would  arouse  a prejudice  against 
the  corporation  as  such  is  not  a good 
citizen,  and  he  who  would  not  lift  his 
voice  to  turn  away  from  it  misguided 
wrath  i9  lacking  in  patriotism.  What- 


ever of  wrong  there  is  is  not  the  fault 
of  the  entity  called  a corporation  but  of 
the  officials  in  charge  of  it.  And  for 
the  individual  committing  the  offence 
there  should  be  punishment.  Such  a 
method  will  protect  the  public  and  at 
the  same  time  save  the  innocent  and  be- 
trayed stockholder  from  injustice.” 

To  this  testimony  as  to  the  lack  of 
utter  depravity  of  all  corporations 
might  be  added  the  comparison  made  by 
Woodrow  Wilson,  former  president  of 
Princeton  University,  and  Democratic 
candidate  for  Governor  of  New  Jer- 
sey. Mr.  Wilson  likened  the  offending 
corporations  to  automobiles  that  annoy 
pedestrians  and  others.  He  said,  how- 
ever, that  the  appropriate  remedy  was 
not  to  smash  the  automobile  (corpora- 
tion), but  to  punish  the  directors  who 
take  “joy  rides”  in  them. 

This  evidence  of  a saner  attitude  of 
politicians  toward  corporations  is  a 
hopeful  sign.  The  fact  that  the  cor- 
porate form  of  business  organization 
renders  it  difficult  to  fix  responsibility 
for  criminal  or  dishonest  acts,  will  call 
for  great  patience  in  seeking  to  remedy 
these  evil  practices.  But  that  the  right 
remedy  will  be  found  short  of  destruc- 
tion of  the  corporations  themselves,  can 
hardly  be  doubted.  It  is  toward  the  at- 
tainment of  that  end,  rather  than  to 
provoking  a hostile  spirit  toward  all 
corporations,  that  the  attention  of  re- 
sponsible statesmen  should  be  directed. 


THE  COMPTROLLER’S  CREDIT 
BUREAU 

NY  practical  measures  have  been 
devised  by  the  present  Comptrol- 
ler of  the  Currency  for  making  the  ex- 
amination of  national  banks  more 
efficient.  One  of  the  latest  inventions 
is  a credit  bureau,  perhaps  similar  to 
the  one  already  in  operation  as  an  aux- 
iliary of  the  New  York  State  Banking 
Department. 


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The  subjects  dealt  with  in  the  bank 
examiners  * reports,  and  which  will  be 
collated  in  the  new  credit  bureau  for 
the  information  of  the  Comptroller  and 
the  various  national  bank  examiners, 
will  include  the  following: 

“List  of  ‘outside  or  foreign  paper’  of 
borrowers  whose  principal  headquarters 
or  place  of  business  is  outside  of  their 
districts.” 

“Doubtful  or  questionable  paper  in 
which  officers  or  directors  are  inter- 
ested.” 

“ ‘Doubtful  or  questionable  paper’  of 
other  persons  or  firms  than  officers  or 
directors.” 

“ ‘Large  or  extended  lines  of  credit’ 
in  which  officers  or  directors  are  inter- 
ested.” 

“ ‘Large  or  extended  lines  of  credit’ 
to  other  persons  or  firms  than  officers  or 
directors.” 

As  exemplifying  the  need  of  some- 
thing like  the  credit  bureau,  the  follow- 
ing incident  is  related  in  the  Washing- 
ton correspondence  of  the  New  York 
“Journal  of  Commerce  and  Commercial 
Bulletin 

“An  examiner  had  requested  a cer- 
tain city  bank  to  write  off  certain  paper 
issued  by  a corporation  as  a loss,  and 
some  of  the  directors  visited  Washing- 
ton to  secure  a change  in  the  order. 
The  Comptroller  asked  one  of  the  men 
what  he  knew  about  the  corporation, 
and  the  director  replied  that  he  was 
familiar  with  its  affairs,  as  he  was  him- 
self president  of  the  concern.  In  an- 
swer Mr.  Murray  inquired,  what  was 
the  total  amount  of  paper  outstanding, 
and  the  answer  was  $80,000.  Mr. 
Murray  then  had  the  subject  inquired 
into  by  the  use  of  the  information  re- 
cently turned  in  by  the  examiners,  and 
found  that  the  total  outstanding  paper 
of  which  the  examiners  had  knowledge 
was  over  $800,000.” 

Undoubtedly,  if  the  bank  examiners 
had  access  to  a central  credit  bureau 


that  would  furnish  information  as  to 
the  borrowings  of  firms,  corporations 
and  individuals  from  different  banks  in 
all  parts  of  the  country,  it  would  be 
possible  to  weed  out  much  bad  and 
doubtful  paper  from  the  banks  under 
examination. 

The  credit  bureau  proposed  by  Comp- 
troller Murray  is  for  the  use  of  the 
Comptroller  and  his  staff  of  bank  ex- 
aminers, not  being  available  to  the 
banks.  Perhaps,  for  their  own  pro- 
tection, the  banks  before  long  will  be 
compelled  to  establish  a credit  bureau 
for  the  collation  of  credit  information 
that  may  be  exchanged  among  all  insti- 
tutions holding  membership  in  the 
bureau. 


CREDIT  INSURANCE 

OTHING  less  than  an  insurance 

^ of  credits  of  every  kind  is  pro- 
posed in  a contribution  published  in  the 
succeeding  pages  of  this  number  of  the 
Magazine. 

That  such  an  undertaking  is  a stu- 
pendous one,  the  author  of  the  article 
referred  to  fully  realizes.  But  he  pro- 
poses extraordinary  means  of  acquiring 
the  capital  requisite  to  the  successful 
operation  of  his  credit  insurance  sys- 
tem. 

We  venture  no  opinion  as  to  the  prac- 
ticability of  this  scheme — perhaps  it  is 
so  great  that  it  would  break  down  of  its 
own  weight.  Yet  we  believe  the  sug- 
gestions made  by  the  author — who,  we 
might  remark,  is  a foreign  student  of 
our  banking  and  commercial  systems — 
are  worthy  of  consideration. 

About  one  of  the  most  important 
things  in  their  lives — the  investment  of 
money — the  American  people  seem  to 
be  careless  almost  to  the  point  of  reck- 
lessness. It  may  or  may  not  be  feas- 
ible to  apply  the  principle  of  insurance 
so  as  to  protect  investors  against  loss. 
But  it  would  seem  to  be  possible  to 
adopt  some  plan  that  would  put  greater 


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618 


obstacles  in  the  way  of  the  sellers  of 
worthless  “securities”  than  now  exist. 

President  Taft  has  favored  Govern- 
ment supervision  of  stock  and  bond  is- 
sues. Perhaps  the  whole  problem  is 
one  too  vast  for  private  enterprise.  Yet 
it  is  an  open  question  whether  Govern- 
ment interference  in  this  direction  will 
be  wise  or  not.  But  in  some  way  a 
closer  inspection  of  the  investments 
offered  to  the  public  will  no  doubt  be 
brought  about  in  time. 


“GET  RICH  QUICK”  SCHEMES 

OUITE  deserved  was  the  denuncia- 
tion of  these  schemes  contained 
in  the  annual  address  of  the  president 
of  the  American  Bankers’  Association. 
President  Pierson  said: 

“As  bankers  I believe  we  owe  a duty 
to  our  communities  to  encourage  thrift 
and  economy  in  every  way  possible.  We 
should  get  closer  to  our  people,  and  en- 
courage investment  in  safe  securities, 
arranging  whenever  we  can  to  have  bond 
issues  offered  in  denominations  that 
will  attract  and  meet  the  requirements 
of  the  smallest  investors. 

“Experience  and  observation  place  us 
in  a position  to  give  advice  to  deserving 
men,  helping  them  avoid  mistakes  and 
to  particularly  escape  the  lure  of  the 
‘get  rich  quick’  schemes,  through  the 
advertisements  of  which  so  many  mil- 
lions are  each  year  coaxed  from  and 
lost  by  small  investors,  all  over  the  coun- 
try. These  ‘get  rich  quick'  schemes 
are  an  outrage  on  business  decency,  and 
it  is  hoped  that  the  post  office  officials 
will  soon  place  more  of  these  criminals 
in  the  penitentiary.” 

Only  bankers  know  to  what  extent  the 
people  are  gulled  by  these  schemes, 
which  generally  are  nothing  more  than 
impudent  and  bare-faced  swindles.  It 
is  a daily  experience  at  the  banks,  par- 
ticularly at  the  savings  banks,  to  have 
money  withdrawn  to  pay  for  “invest- 


ments” of  this  character  or  to  meet 
losses  sustained  through  them. 

The  stream  of  money  thus  poured  out 
constitutes  not  only  a grave  loss  to  in- 
dividuals, many  of  whom  can  ill  afford 
a further  depletion  of  their  scanty 
means,  but  it  is  a source  of  frightful 
national  economic  waste. 

For  the  person  unskilled  in  the  art  of 
safe  investing,  there  is  no  better  coun- 
sellor than  the  banker  or  investment 
house  of  recognized  standing.  The 
prudent  investor  can  no  more  dispense 
with  this  service  than  the  average  per- 
son can  get  along  without  the  help  of 
the  family  doctor. 


THE  VALUE  OF  COURTESY 

O less  a banking  authority  than 

^ George  G.  Williams,  the  late 
president  of  the  Chemical  National 
Bank  of  New  York,  declared  that  if  he 
could  speak  twenty  languages,  he  would 
preach  politeness  in  them  all. 

With  very  rare  exceptions,  the  bank- 
ers of  the  country  seem  to  have  learned 
the  value  of  courtesy.  But  it  is  some- 
thing that  by  precept  and  example  needs 
to  be  constantly  instilled  into  the  minds 
of  those  just  beginning  their  banking 
careers.  Lack  of  courtesy  constitutes  a 
negative  kind  of  advertising  which  no 
bank  can  afford. 

It  is  well  enough  to  demand  courtesy 
of  “public  servants,”  but  are  we  not  all 
public  servants,  except  the  few  drones 
and  idlers? 

In  a circular  addressed  to  the  mem- 
bers of  the  operating  organization  of 
the  Chicago  firm  of  H.  M.  Byllesby  & 
Co.,  engineers  and  managers  of  public 
utilities,  this  idea  is  strongly  enforced. 
The  circular  is  entitled,  “Yourself  as  a 
public  servant.”  Perhaps  if  everybody 
could  feel  that  it  is  his  or  her  own 
direct,  individual  obligation  to  be  cour- 
teous— not  merely  that  of  someone  else 
— most  of  the  bad  manners  that  now 


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THE  BANKERS  MAGAZINE 


add  to  the  annoyance  and  fretfulness 
incident  to  modern  life  would  disap- 
pear. 

The  circular  referred  to  was  prepared 
by  Arthur  S.  Huey,  vice-president  in 
charge  of  operation  of  the  firm  men- 
tioned, and  it  addresses  those  concerned 
in  this  forceful  style: 

“Gentlemen : As  members  of  the 

Byllesby  organization  you  are  public 
servants  in  the  true  meaning  of  the 
term. 

“It  is  particularly  important  that 
every  officer,  every  head  of  department 
and  every  employee,  of  whatever  capac- 
ity, should  realize  this  fact  and  regulate 
his  conduct  accordingly. 

“Each  one  of  us  owes  his  employment 
to  the  public. 

“In  all  municipalities  where  we  man- 
age electric,  gas  and  street  railway  util- 
ities, the  people  have  selected  our  or- 
ganization to  perform  essential  service, 
or  have  consented  to  such  an  arrange- 
ment. 

“The  operation  of  a public  utility  is 
in  the  most  positive  sense  a public  trust, 
and  is  so  regarded  by  H.  M.  Byllesby 
& Company. 

“Under  these  circumstances,  you  must 
realize  that  you  can  do  your  full  duty 
to  your  employer  only  by  doing  your 
full  duty  to  the  people  of  the  munici- 
pality where  you  are  occupied. 

“The  employee  who  serves  our  com- 
pany best,  is  the  employee  who  serves 
the  public  best. 

“This  applies  in  all  departments  of 
the  operating  organization — equally  to 
the  managers,  the  stokers  at  the  gas 
works,  the  trainmen  on  their  cars,  the 
engineers  at  the  power  houses,  the  men 
in  the  offices,  and  to  those  engaged  in 
construction  and  other  outside  duties. 

“To  a great  extent  our  organization 
is  judged  by  the  manners  of  its  em- 
ployees. Therefore,  you  must  culti- 
vate genuine  courtesy  and  exercise 
patience  and  forbearance  on  all  oc- 
casions. 


“Those  details  of  the  service  which 
the  public  have  a right  to  know,  while 
perfectly  familiar  to  yourself,  are  often 
not  understood  by  the  men  and  women 
with  whom  you  come  in  contact. 

“Part  of  your  duty  is  to  reply  to  in- 
quiries for  information  politely  and 
comprehensively.  If  you  are  unable  to 
supply  the  information  yourself,  the 
inquirer  should  be  personally  conducted 
(whenever  possible)  to  the  person  in 
authority  who  can. 

“You  are  never  too  busy  to  furnish 
the  public  with  proper  information,  nor 
to  be  courteous  in  manner  as  well  as  in 
words.  In  using  the  telephone  it  is 
especially  easy  to  be  gruff  and  abrupt 
and  to  turn  friends  into  enemies. 

“Courtesy  and  decent  treatment  are 
due  fully  as  much  to  those  of  small 
financial  means  as  to  the  largest  pros- 
pective patron. 

“The  possession  of  a habit  of  cheer- 
ful courtesy,  springing  from  an  honest 
desire  to  please,  is  an  invaluable  asset  to 
the  person  who  would  advance  himself 
in  popularity  and  material  welfare.  It 
is  worth  more  than  capital  and  at  times 
takes  precedent  of  ability. 

“But  all  of  your  good  manners  and 
willingness  to  make  agreeable  the 
points  of  contact  between  company  and 
patron  are  of  little  consequence  unless 
they  originate  in  a deep-seated  con- 
sciousness of  your  obligations  in  the 
public  service. 

“The  men  in  the  mechanical  and  in 
some  of  the  other  departments  seldom 
or  never  meet  the  public  in  an  official 
way.  Their  work  lies  in  helping  to 
back  up  our  reputation  with  satisfactory 
actual  performance. 

“The  standard  of  the  service  should 
be  guarded  as  scrupulously  as  the 
standard  of  the  food  supplied  on  your 
table.  Interruptions  to  the  service 
should  be  made  a matter  akin  to  the 
honor  of  every  man  upon  whom  the 
service  depends. 

“In  all  departments,  promises  to  pat- 


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rons  and  public  should  be  carefully  con- 
sidered before  they  are  made,  in  the 
light  of  the  fact  that  disappointment 
and  dissatisfaction  go  hand  in  hand. 

“Those  words  are  addressed  to  you, 
not  necessarily  because  you  have  been 
negligent,  but  to  impress  upon  you  the 
importance  and  dignity  of  your  occu- 
pation, and  to  assist  you  in  undertaking 
what  we  expect  from  the  members  of 
our  organization. 

“It  is  my  personal  belief  that  there 
does  not  exist  a body  of  employees  more 
loyal,  enthusiastic  and  efficient  than  the 
one  which  maintains  our  ideas  of  pro- 
gressive public  utility  management. 

“Perfection,  however,  is  approxi- 
mate at  best,  and  in  our  endeavors,  with 
so  many  customers  to  please,  there  is 
always  opportunity  for  earnest  effort 
toward  new  achievements. 

“At  this  time,  as  you  value  our  es- 
teem, I ask  you  to  give  careful  thought 
to  the  contents  of  this  circular/' 

We  believe  the  admonitions  given 
above,  if  generally  heeded,  would  do 
much  to  remove  the  spirit  of  hostility 
that  prevails  toward  some  of  the  public- 
service  corporations.  People  get  their 
ideas  of  a corporation  very  largely  from 
its  servants — those  whom  they  meet 
every  day. 

Whatever  tends  to  bring  about  a bet- 
ter understanding  and  more  cordial  re- 
lations between  the  people  and  the  pub- 
lic-service corporations  can  not  fail  to 
have  a wide  and  beneficial  effect. 

These  sound  words  of  counsel  that 
we  have  reprinted  are  applicable  in 
banking  and  indeed  in  business  of  every 
kind. 


THE  BILLS  OF  LADING  CON- 
TROVERSY 


/CONFERENCES  between  American 
and  English  bankers  regarding 
the  controversy  over  cotton  bills  of 
lading  have  thus  far  been  productive 
of  no  positive  results — the  English 


bankers  refusing  to  recede  from  the  de- 
mands already  made,  and  the  American 
bankers  still  being  unwilling  to  meet 
these  demands. 

One  way  out  of  the  difficulty  has  been 
suggested.  That  is,  the  formation  of 
a guaranty  company  of  large  capital, 
contributed  here  and  abroad,  to  effect 
the  desired  insurance.  It  has  also  been 
suggested  that  the  existing  American 
Surety  companies  would  gladly  under- 
take the  insurance  of  the  bills  of 
lading. 

While  these  proposals  would  seem  to 
meet  the  demands  of  the  foreign  bank- 
ers, and  would  be  satisfactory  in  some 
quarters  here,  it  has  brought  forth  a 
great  deal  of  hostility  in  the  South 
where  the  premium  to  be  paid  on  such 
insurance  is  looked  on  as  an  unnecessary 
tax  on  the  cotton  industry. 

In  a recent  issue  of  the  New  York 
“Sun,"  Mr.  George  Whitelock  of  Bal- 
timore gives  the  following  account  of 
the  origin  of  the  present  controversy: 

“The  present  embarrassment  has 
arisen  out  of  the  divergence  of  view  in 
the  American  courts  concerning  the 
rights  and  liabilities  of  the  parties  to 
bills  of  lading,  and  also  because  the 
weight  of  American  authority,  follow- 
ing the  English  precedents,  exonerates 
the  carrier  from  responsibility  to  an  in- 
nocent purchaser  for  value  of  a bill  of 
lading  when  the  carrier's  own  agent 
has  issued  the  bill  without  actually  re- 
ceiving the  goods. 

“As  shown  by  Mr.  Brumley's  lucid 
analysis  the  New  York  legal  rule  is 
otherwise,  and  according  thereto  the 
carrier  is  estopped  to  deny  the  authority 
of  his  agent;  in  consequence  an  inno- 
cent purchaser  of  such  a bill  can  recover 
from  the  carrier  in  the  New  York  State 
courts.  If  this  rule  of  law  prevailed 
in  all  of  the  States  and  were  control- 
ling in  the  Federal  courts  the  demand 
of  the  English  bankers  would  probably 
have  never  been  made.  But  by  the 
preponderance  of  American  authority 


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expressed  by  the  decisions  of  such 
courts  as  the  Supreme  Court  of  the 
United  States  and  the  Maryland  Court 
of  Appeals,  a bill  of  lading  is  treated 
as  not  being  negotiable  in  the  same 
sense  as  bills  of  exchange  and  promis- 
sory notes.  It  is  regarded  in  those 
courts  as  mere  evidence  of  ownership 
of  the  property  and  of  the  right  to 
receive  it  at  the  place  of  delivery.  By 
this  view  of  the  law  a banker  making 
advances  of  money  on  bills  of  lading 
does  so  at  his  own  risk,  and  with  notice 
that  the  agent  of  the  carrier  has  no  law- 
ful right  to  issue  the  instrument  so  as 
to  bind  the  carrier  for  goods  not  ac- 
tually received." 

Mr.  Whitelock  points  out  what  has 
been  done  by  the  Commissioners  on 
Uniform  Laws,  with  the  approval  of 
the  American  Bankers'  Association,  to 
obviate  the  difficulties  arising  from  the 
divergence  of  judicial  opinions  as  to  the 
rights  and  liabilities  created  by  these 
instruments.  Maryland  and  Massachu- 
setts have  already  enacted  the  law  as 
recommended  by  the  conference  of 
Commissioners. 

While  legislation  of  this  character 
would  doubtless  be  the  best  remedy  for 
the  present  situation,  it  is  not  one  that 
can  be  applied  promptly  enough. 

The  magnitude  of  the  losses  incurred 
through  forged  bills  of  lading  hardly 
seems  sufficient  to  justify  the  imposition 
of  a charge  of  five  or  six  cents  a bale 
on  all  the  cotton  shipped  abroad,  as  a 
premium  for  guaranteeing  the  gen- 
uineness of  the  bills  of  lading.  Yet,  if 
no  better  way  can  be  found,  it  may 
prove  a small  price  to  pay  for  restoring 
confidence  in  these  instruments. 


DRIVING  OUT  CAPITAL 

pROM  statistics  of  income  derived 
from  British  investments  abroad, 
jt  would  appear  that  the  recent  semi- 
socialistic  legislation  in  Great  Britain 


has  resulted  in  driving  a large  amount 
of  capital  out  of  the  country.  The 
British  Isles  are,  of  course,  in  a posi- 
tion to  stand  this  drain  on  their  home 
capital  much  better  than  most  other 
countries.  If  the  United  States  should 
experience  anything  like  the  loss  that 
is  believed  to  have  taken  place  in  Great 
Britain,  serious  depression  would  ensue 
in  nearly  all  lines  of  enterprise. 

In  fact,  the  Government  policy  with 
respect  to  industrial  corporations  and 
the  railways  has  already  had  consider- 
able ill  effect,  not  so  much  in  causing  a 
withdrawal  of  capital  as  in  preventing 
fresh  investments. 

The  agitation  in  regard  to  corpora- 
tion affairs  and  the  actual  revelations 
of  wrong-doing  have  also  tended  to 
bring  more  or  less  discredit  on  Ameri- 
can business  methods — a great  deal 
more  than  the  facts  warrant. 

European  investors,  however,  are  a 
little  puzzled  over  some  of  our  financial 
operations.  Representatives  of  Amer- 
ican enterprises  who  seek  to  borrow 
abroad  naturally  try  to  create  a favor- 
able impression  as  to  the  value  of  our 
securities.  To  these  representations  the 
European  investor  listens  patiently  and 
finally  becoming  convinced,  invests  his 
money.  What  is  his  surprise,  a little 
later  on,  to  find  that  the  leading  Ameri- 
can financiers,  aided  by  the  banks,  ap- 
pear to  be  engaged  in  a concerted  effort 
to  break  down  the  price  of  these  same 
securities  with  a view  to  buying  them 
back  again  at  low  prices. 

This  may  not  be  a condition  peculiar 
to  the  United  States,  and  it  may  not 
be  upheld  by  the  best  financial  houses 
nor  by  the  best  banks.  But  it  is  often 
successful,  and  this  success  could  not 
be  achieved  in  some  instances  without 
powerful  banking  and  financial  co-op- 
eration. 

It  may  be  said,  of  course,  that  the 
depression  of  price  leads  to  European 
buying.  But  the  investor  may  be  par- 
doned for  being  suspicious  of  securities 


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COMMENT 


017 


whose  values  may  be  so  suddenly  and  so 
materially  depressed  by  artificial  means. 
He  takes  chances  enough  in  the  in- 
fluences and  conditions  whose  effects 
may  be  seen  and  measured,  without  risk- 
ing his  capital  to  the  manipulations  of 
“bear”  syndicates  that  work  in  the 
dark. 

The  forces  of  speculation  may,  in- 
deed, offset  one  another,  but  they  in- 
troduce too  many  chances  of  sudden  and 
violent  fluctuations  into  the  field  of  in- 
vestment, where  stability  of  value  is 
essential  to  confidence  and  to  the  steady 
attraction  of  capital. 


OBSTACLES  TO  RAILWAY  CON- 
STRUCTION 

TXT'HILE  the  public  temper  con- 
tinues hostile  toward  the  rail- 
roads, a halt  in  railway  construction 
may  be  expected.  In  a letter  recently 
made  public,  B.  F.  Yoakum,  chairman 
of  the  executive  committee  of  the  St. 
Louis  and  San  Francisco  Railway  Co., 
reviews  the  railroad  situation  in  the 
State  of  Texas,  and  points  out  the  dif- 
ficulty of  obtaining  capital  for  new 
constructions,  under  present  conditions. 
He  enumerates  the  items  that  enter 
into  the  cost  of  railway  building,  and 
says  that  while  many  people  still  think 
that  construction  and  equipment  should 
be  figured  at  from  $15,000  to  $20,000 
per  mile,  $35,000  or  $40,000  would  be 
nearer  the  correct  figure. 

This  increase  in  the  necessary  cost 
of  railway  building  and  equipment  is 
not  due  altogether  to  the  advance  in 
labor  and  materials,  great  as  that  has 
been,  but  the  heavier  cars  and  the 
necessity  of  building  more  substantially 
have  contributed  materially  toward  en- 
hanced cost  of  construction. 

Mr.  Yoakum  tells  the  people  of 
Texas  that  other  communities  anxious 
for  railway  development  would  profit 
by  having  the  impression  get  abroad 


that  investments  in  Texas  railways  are 
not  treated  in  a liberal  spirit.  He 
states  one  case  where  a new  enterprise 
calling  for  the  construction  of  some 
350  miles  of  road  in  that  State  has  been 
postponed  indefinitely,  owing  to  the 
uncertainty  of  the  legislative  policy  of 
the  State  toward  the  railroads. 

As  Mr.  Yoakum  says,  one  of  the  ob- 
jectionable laws  may  be  declared  un- 
constitutional, but  while  it  remains  in 
force  difficulties  will  be  experienced  in 
procuring  capital  for  the  new  railroads 
which  the  State  undoubtedly  needs. 
He  says  that  the  State  ought  to  have 
double  its  present  railway  mileage,  and 
should  secure  it  at  the  rate  of  1,000  or 
1,500  miles  annually.  This  would  mean 
finding  investors  to  furnish  some  $420,- 
000,000  for  building  and  equipping  the 
new  mileage,  and  would  immensely  en- 
hance values  and  profit  labor. 

Another  complaint  about  existing 
railway  conditions  appears  in  the  an- 
nual report  to  the  shareholders  of  the 
Missouri,  Kansas  and  Texas  Railroad 
Co.  In  this  report  Mr.  Edwin  Haw- 
ley says  that  while  gross  earnings  for 
the  year  ending  June  30  were  greater 
than  ever  before,  increasing  $1,258,000 
over  the  previous  year,  net  earnings  de- 
creased $260,000,  owing  to  an  increase 
of  $1,519,000  in  operating  expenses. 

Mr.  Hawley  ascribes  the  increase  in 
expenses  to  increased  wages,  high  cost 
of  material  and  supplies,  difficulties 
and  expense  of  management  caused  by 
legislation  and  the  necessity  which 
exists  for  developing  and  maintaining 
improved  standards  of  physical  con- 
dition and  service.  High  taxes  are  also 
blamed  for  the  loss  in  net  revenue. 

Both  the  views  above  quoted  are  from 
the  railway  standpoint,  a fact  for  which 
some  allowances  ought,  perhaps,  to  be 
made.  But  there  is  no  doubt  that  the 
railroads  do  not  find  the  present  situa- 
tion an  easy  one. 

It  can  hardly  be  supposed  that  the 
policies  of  the  States  toward  the  rail- 


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THE  BANKERS  MAGAZINE 


roads  has  been  dictated  by  a spirit  of 
hostility.  Abuses  have  developed,  and 
in  attempting  to  correct  these  and  to 
prevent  their  recurrence,  some  of  the 
States  have  gone  too  far.  We  are  sure 
that  when  this  fact  becomes  fully  un- 
derstood, harsh  laws  will  be  modified. 

Stock  manipulations  by  some  of  the 
railway  financiers  have  done  much  to 
inflame  the  public  mind.  It  is  to  be  re- 
gretted that  legitimate  railway  opera- 
tions, and  the  entire  business  of  the 
country,  should  be  thus  placed  at  the 
mercy  of  speculators. 


INFLATION  AND  HIGH  PRICES 

tpROM  a political  standpoint,  it  is 
always  most  agreeable  to  ascribe 
high  prices  to  the  tariffs  and  the  trusts. 
The  tariff  has  long  been  familiar  as  the 
parent  of  abominations,  and  the  trust 
can  always  be  denounced  with  a sure 
feeling  of  a sympathetic  response  in 
the  popular  heart. 

Both  the  tariff  and  the  trusts  may 
have  had  much  to  do  in  raising  prices. 
That  they  are  solely  or  even  chiefly 
responsible  may  be  questioned.  Cer- 
tainly other  factors  have  been  at  work. 
One  of  these — perhaps  of  great  im- 
portance— is  the  large  increase  in  the 
supply  of  gold,  of  paper  money,  and 
the  increase  in  bank  credits  in  the  form 
of  “deposits.”  In  each  of  these  items 
there  has  been  a tremendous  increase 
within  a short  time.  It  might  have 
been  supposed  that  the  addition  to  the 
gold  supply  would  of  itself  have  been 
an  element  of  concern  on  account  of  the 
possible  effect  upon  prices.  But  a fur- 
ther disturbing  element  was  introduced 
by  the  inflation  of  the  bond-secured 
bank  currency.  Even  the  silver,  which 
though  actually  worth  only  half  as 
much  as  gold,  may  yet  be  used  as  bank 
reserves,  has  been  increased  by  the  pur- 
chase of  bullion  for  subsidiary  coinage. 
And  the  old  greenbacks,  an  obsolete 


form  of  paper  money  not  fully  covered 
by  gold,  also  retain  their  function  as 
reserve  money. 

But  a greater  and  more  dangerous 
means  of  inflating  bank  credit  has  ap- 
peared— or  at  least  has  only  lately  de- 
veloped to  large  proportions.  This  is 
the  paper  profit  made  by  financial  in- 
terests from  underwriting  and  promo- 
tion schemes,  this  profit  being  used 
again  as  the  basis  for  obtaining  fresh 
credits  for  other  operations.  By  a sys- 
tem of  redepositing  bank  reserves,  the 
latter  are  used  to  support  “deposits” 
to  an  extent  quite  beyond  anything  pos- 
sible if  the  reserves  were  required  to  be 
kept  actually  on  hand. 

The  facility  with  which  bank  loans 
may  be  had  has  vastly  increased  of 
late,  and  partially  for  the  reasons  above 
stated.  This  increase  in  loans  repre- 
sents an  increase  of  power  in  the  hands 
of  somebody  to  purchase  commodities 
and  securities.  Of  course  the  opera- 
tion is  not  wholly  one-sided,  nor  is  it 
by  any  means  wholly  detrimental.  But 
in  the  absence  of  some  more  effectual 
means  of  controlling  bank  advances,  this 
added  facility  for  obtaining  credit 
makes  it  more  and  more  difficult  for 
the  banks  to  keep  business  within  the 
bounds  of  safety. 

We  do  not  expect  that  anybody  will 
take  the  least  trouble  to  correct  this 
inflationary  tendency.  There  is  no 
political  popularity  to  be  gained  by 
such  a course.  Yet,  when  economists 
begin  seriously  to  study  the  cause  of 
high  prices,  they  may  find  an  inflation 
of  the  currency  and  of  bank  credits  to 
have  had  an  influence  no  less  important 
than  that  of  the  tariff  and  the  trusts. 


POLITICS  AND  BUSINESS 

OT  in  many  years  has  the  business 
situation  in  this  country  been  so 
much  affected  by  political  uncertainties 
as  it  is  at  the  present  time.  Undoubted- 


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COMMENT 


619 


ly,  enterprise  awaits  the  outcome  of  the 
future  with  a great  deal  of  apprehen- 
sion and  distrust.  It  would  be  easy  to 
speak  in  a blindly  optimistic  strain  and 
whistle  these  considerations  down  the 
wind.  But  that  would  be  the  part  of 
folly,  not  of  wisdom.  In  this  country 
business  enterprises  respond  very  quick- 
ly to  political  agitation.  We  are  not 
perpetually  menaced  by  revolution,  as 
is  the  case  with  some  countries,  but  the 
political  agitator — even  though  his  pur- 
poses be  laudable — occasions  nearly  as 
much  anxiety  and  uncertainty  as  the 
revolutionist.  Bryan's  threat  to  over- 
turn the  gold  standard  was  hardly  less 
disastrous  to  business  than  would  have 
been  a threat  to  overturn  the  Govern- 
ment. Similarly,  Colonel  Roosevelt's 
stirring  campaign  against  the  domi- 
nance of  “special  interests”  has  caused 
a chill  to  spread  over  the  business 
world. 

While  clearly  recognizing  that  agi- 
tation that  results  in  cleaning  things 
up  is  much  preferable  to  a condition 
of  rest  implying  stagnation  and  rot- 
tenness, one  can  not  help  reaching  the 
conclusion  that  this  country  has  had 
about  all  the  blood-letting  and  purg- 
ing that  it  can  bear  until  time  offers  a 
chance  of  recuperation.  If  drastic 
surgical  treatment  goes  on  unchecked, 
the  country  may  become  exceedingly 
virtuous,  but  exceedingly  dead. 

We  are  not  entering  a plea  in  behalf 
of  any  corporate  abuses  that  have  been 
unearthed,  nor  favoring  the  adoption 
of  half-way  remedies.  Possibly,  the 
reform  movement  has  but  just  begun. 
But  we  can  not  help  thinking  that  some 
patience  and  restraint  might  be  shown 
even  in  this  work.  Leave  just  a little 
to  be  done  by  other  reformers  who  may 
come  on  the  stage  of  the  world  later  on. 
They  must  have  something  to  afford 
exercise  for  their  talents  or  the  race 
of  reformers  will  die  out. 

We  believe  that  business  needs  rest 
now  much  more  than  it  needs  reform. 


This  opinion  may  be  heterodox — it 
may  be  a mistaken  idea,  but  we  know 
that  many  men  who  have  helped  to 
make  this  country  industrially  and  com- 
mercially great  and  prosperous  are  en- 
tertaining it. 

And  it  is  not  merely  the  “malefac- 
tors of  great  wealth”  who  want  to  be 
let  alone.  The  legitimate  industries 
and  trade  of  the  country  are  languish- 
ing because  of  violent  political  agita- 
tion. And  they  will  continue  to  lan- 
guish until  clear,  sober,  sane  thinking 
and  wise  action  take  the  place  of  the 
present  radical  and  inflammatory  ap- 
peals to  prejudice  and  hatred. 


A REPUBLICAN  OPPORTUNITY 

ALTHOUGH  a short  session  of  Con- 
**  gress  affords  little  chance  of  get- 
ting through  any  important  legislation 
except  the  appropriation  bills,  by  the 
exercise  of  enough  energy  the  Republi- 
can leaders  might  secure  the  enactment 
of  a currency  and  banking  bill  that 
would  be  of  immense  benefit  to  the 
country  besides  furnishing  the  party 
with  an  excellent  asset  for  the  Presi- 
dential campaign  of  1912. 

We  have  always  believed  that  a sound 
financial  and  banking  measure  could 
have  been  passed  as  readily  as  the  mis- 
erable inflation  law  enacted  in  the 
spring  of  1908.  In  other  words,  the 
people  would  have  accepted  a good  law 
as  readily  as  they  did  a bad  law.  We 
think  every  person  who  has  given  any 
intelligent  attention  to  the  course  of 
legislation  must  admit  that  the  passage 
of  the  Aid  rich- Vreeland  law  has  worked 
immense  mischief  to  the  Republican 
party.  It  shook  the  allegiance  of  many 
old  and  faithful  adherents  of  the  party 
and  greatly  strengthened  the  insurgent 
movement.  That  the  leaders  should  have 
insisted  on  forcing  through  a measure 
almost  universally  denounced  by  ex- 
perts as  unsound  and  dangerous, 


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620 


THE  BANKERS  MAGAZINE 


aroused  suspicion  that  the  law  was  de- 
signed for  some  ulterior  purpose.  This 
suspicion  may  not  have  been  correct, 
but  the  appearance  of  the  measure  it- 
self lent  color  to  it. 

But  nothing  is  to  be  gained  now  by 
dwelling  on  ancient  history.  The  party 
responsible  for  the  paper  inflation 
scheme  yet  has  the  opportunity  of  re- 
deeming itself  by  enacting  a sound  and 
practicable  banking  and  currency  law 
that  would  correct  inflation,  improve 
banking  conditions,  and  greatly  benefit 
the  business  of  the  country.  Will  it 
have  the  wisdom  and  the  courage  to 
take  such  action?  Having  had  a like 
opportunity  for  many  years,  it  would 
perhaps  be  too  much  to  expect  anything 
of  the  kind. 

Yet  we  can  hardly  doubt  that  good 
financial  legislation  would  be  “gpod 
politics.”  The  future  is  filled  with 
political  uncertainty.  It  is  quite  con- 
ceivable that  the  present  opportunity 
of  the  Republicans  to  enact  financial 
legislation  may  not  return  for  a long 
time.  Not  only  is  there  a prospect  of 
the  Democrats  carrying  the  House 
this  fall,  but  the  present  opposition 
party  is  developing  some  strong  Pres- 
idential timber — Wilson,  Gaynor  and 
Harmon  have  strength  with  the  people, 
and  either  of  them  may  prove  a for- 
midable opponent  of  any  candidate  tli^ 
Republicans  can  bring  forward  two 
years  from  now.  It  is  of  course  foolish 
to  attempt  this  early  to  forecast  the 
result  of  that  contest ; but  f rom  present 
indications,  the  Republicans  will  not 
have  the  walkover  they  had  in  1896, 
1900,  1904  and  in  1908. 

To  correct  inflation  of  the  currency 
and  of  bank  credit,  we  believe  that  some 
effectual  means  must  be  taken  to  secure 
but  one  kind  of  money — gold — as  the 
basis  of  our  currency  and  credit. 

Next,  the  reserve  banks  must  be 
strengthened  in  their  capital  and  equip- 
ment. 

And,  finally — though  not  of  least  im- 


portance— the  system  of  bank  exami- 
nation and  supervision  needs  a com- 
plete overhauling. 

The  Republican  party  will  have  the 
opportunity  of  carrying  out  these  re- 
forms at  least  between  the  first  Monday 
in  December  and  March  4.  It  might  do 
a great  deal  worse  than  to  take  ad- 
vantage of  it. 


CONGRESS  AND  BANKING  LEGIS- 
LATION 

\\T  ILL  any  attempt  be  made  to  en- 
* " act  financial  legislation  in  the 
session  of  Congress  extending  from 
December  to  March?  It  hardly  seems 
probable,  yet  the  aspects  of  the  situa- 
tion may  be  changed  by  political  con- 
ditions. 

Sound  banking  and  currency  legisla- 
tion, after  it  has  thoroughly  worked 
into  the  business  of  the  country  and 
contributed  toward  the  introduction  and 
maintenance  of  prosperous  conditions, 
is  one  of  the  best  assets  any  political 
party  can  have. 

But  until  such  new  legislation  has 
been  in  operation  for  a considerable 
period,  and  thus  given  a fair  chance  of 
showing  its  effectiveness,  it  is  just  as 
likely  as  not  to  prove  a political  boom- 
erang. 

Banking  legislation  is  always  a tick- 
lish matter  politically.  The  opposition 
party  will  surely  denounce  it  as  a piece 
of  favoritism  to  the  banks,  whatever 
may  be  its  real  character.  And  such 
appeals  to  prejudice  are  not  without 
effect,  especially  if  the  new  law  has  not 
had  time  enough  to  show  its  worth  and 
efficient  workings  and  to  prove  the 
falsity  of  such  charges. 

While  it  may  be  impossible  to  get 
any  important  banking  and  financial 
measure  through  at  the  approaching 
short  session,  from  a political  stand- 
point it  would  doubtless  be  more  ad- 
vantageous to  the  party  in  power  to 
hurry  through  a banking  bill  now  in- 


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COMMENT 


621 


stead  of  waiting  until  next  year.  With 
the  Presidential  contest  two  years  off, 
new  financial  legislation  would  have  a 
good  chance  to  show  its  efficiency  before 
the  next  national  campaign.  Should 
legislation  be  delayed,  it  would  be  too 
late  for  it  to  do  any  good  to  the  party 
responsible  for  it,  and  might  be  open 
to  successful  hostile  attack  of  a charac- 
ter against  which  its  friends  would  be 
powerless  to  put  in  the  most  telling  de- 
fence— that  is,  by  showing  the  benefits 
actually  conferred  by  the  law  itself. 


STATE  BANKERS’  ASSOCIATIONS 

p ERHAPS  the  great  size  attained  by 
the  American  Bankers'  Association 
and  the  high  degree  of  interest  attach- 
ing to  its  annual  conventions  have  some- 
what overshadowed  the  more  modest 
but  none  the  less  effective  work  being 
done  by  the  various  State  associations. 
These  organizations  have  an  advantage 
over  the  larger  body,  in  some  respects. 
The  very  fact  that  a smaller  number 
attend  the  conventions  of  the  State  asso- 
ciations makes  it  easier  for  the  bankers 
to  get  acquainted.  As  the  delegates  to 
a State  convention  all  come  from  the 
same  State,  there  is,  moreover,  a feeling 
of  neighborliness  impossible  in  the  con- 
ventions of  the  American  Bankers' 
Association,  made  up  of  delegates  from 
every  State  and  Territory  and  even 
from  foreign  countries. 

Hardly  any  subject  gets  by  at  these 
State  conventions  from  reforming  the 
currency  to  getting  the  cheapest  rates 
for  cleaning  time-locks.  Generally,  the 
discussions  are  about  matters  of  practi- 
cal interest  to  the  banks,  and  the  papers 
produced  are  often  of  great  and  perma- 
nent worth. 

For  instance,  at  the  last  annual  con- 
vention of  the  Wisconsin  Bankers'  Asso- 
ciation, a paper  was  read  by  H.  A. 
Moehlenpah  of  Clinton,  Wis.,  on 
“Taxation  of  Bank  Stocks."  This  is 


a subject  that  comes  close  home  to  the 
bankers,  and  the  paper  referred  to  dis- 
cusses the  subject  thoroughly  in  all  its 
more  important  bearings.  At  the  same 
convention,  Joseph  Chapman,  Jr.,  of 
the  Northwestern  National  Bank  of 
Minneapolis,  made  a most  instructive 
address  on  some  phases  of  out  present 
educational  system.  He  did  not  stop 
with  general  criticisms,  which  are  all 
too  common.  But  he  showed,  as  a result 
of  careful  investigation,  just  where  our 
educational  system  fails  in  training 
men  for  doing  the  real  work  of  the 
country.  His  views  were  of  a practical 
character,  and  ought  to  set  bankers 
thinking  of  the  final  outcome  of  such 
a system  for  the  nation. 

While  the  bankers  usually,  and  quite 
naturally,  discuss  topics  most  closely 
allied  to  their  business,  they  often  give 
attention  to  subjects  in  which  they  are 
concerned  only  as  citizens. 

As  a result  of  the  discussions  carried 
on  by  the  State  bankers'  associations, 
and  by  the  American  Bankers'  Associa- 
tion, a higher  and  better  standard  of 
banking  is  being  evolved  in  this  coun- 
try and  in  addition  a spirit  of  intelli- 
gent cooperation  developed  in  all  the 
business,  political  and  social  activities 
of  the  times. 


A CENTRAL  BANK  OF  LIMITED 
SCOPE 

Tf  LSEWHERE  in  this  issue  of  The 
Magazine  reference  is  made  to 
the  proposals  being  put  forward  for  a 
modified  form  of  a central  bank.  In  the 
“Quarterly  Journal  of  Economics"  for 
November,  Professor  Sprague  of  Har- 
vard proposes  “a  central  bank  of  lim- 
ited scope."  His  suggestions  are  well 
reasoned  out,  and  most  if  not  all  the 
things  which  his  restricted  bank  would 
do  ought  to  be  done.  But  we  doubt 
whether  the  bankers  will  ever  consent  to 
the  setting  up  of  this  new  and  strange 
piece  of  machinery,  or  that  they  would 


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622 


THE  BANKERS  MAGAZINE 


make  much  use  of  it  were  it  actually 
installed. 

Professor  Sprague  very  clearly 
shows  the  service  such  a bank  could 
render,  for  example,  in  the  matter  of 
collecting  checks  and  carrying  on  the 
domestic  exchanges  with  greater  econo- 
my in  the  use  of  time  and  money.  We 
have  urged  for  a long  time  that  the 
existing  clearing-houses  should  do  at 
least  a portion  of  this  work.  But  ex- 
cept in  Boston  and  a very  few  other 
places,  the  idea  has  not  met  with  much 
favor.  If  the  bankers  are  “scary” 
about  adapting  to  new  uses  a piece  of 
machinery  with  which  they  are  per- 
fectly familiar,  what  warrant  have  we 
for  expecting  that  they  will  welcome 
something  that  they  know  nothing 
about  ? 

Few  students  of  our  banking  system 
have  gone  deeper  into  the  subject  than 
Professor  Sprague.  But  while  his  in- 
vestigations have  been  thorough  and  his 
reasonings  sound,  the  remedy  he  pro- 
poses seems  to  us  ineffective.  And  this 
through  no  fault  of  his,  but  from  the 
difficulty  that  confronts  every  advocate 
of  a central  bank,  viz.,  that  such  an 
institution,  if  established  here,  must  of 
necessity,  owing  to  the  conditions  pre- 
vailing, be  shorn  of  the  attributes  by 
whose  exercise  alone  a central  bank 
could  become  an  effective  portion  of  our 
financial  machinery. 


ANCIENT  AND  MODERN  MILLION- 
AIRES 

TX/^EALTHY  citizens  of  more  remote 
times,  though  occupying  a con- 
spicuous place  in  the  Hall  of  Fame  be- 
cause of  their  millions,  were  probably 
far  from  being  as  well  off  as  the  pos- 
sessors of  the  great  fortunes  of  to-day. 
When  Croesus  went  rolling  down  the 
street  in  his  automobile,  people  doubt- 
less turned  to  look  at  him  because  of 
his  millions.  But  he  would  cut  less  of  a 


figure  in  these  pursy  times,  when  nearly 
every  person  you  meet  is  either  a mil- 
lionaire or  hopes  to  become  one  very 
shortly. 

Some  comparisons  between  ancient 
and  modern  rich  men  are  made  in  the 
following  from  the  New  York  “Times:” 

“In  the  course  of  a recent  review  of 
the  second  volume  of  Dr.  Ginsberg's 
‘Legends  of  the  Jews*  occurs  this  state- 
ment: 

“ ‘Rabbinic  fancy  is  exuberant.  We 
are  gravely  told  how  Job  had  130,000 
sheep  with  800  dogs  as  guardians,  be- 
sides 200  watchdogs  for  his  house.  He 
had  340,000  asses  and  3,500  pairs  of 
oxen.  His  benevolence  was  unlimited, 
and  ships  were  employed  to  carry  sup- 
plies to  the  cities  and  dwellings  of  the 
destitute/ 

“No  wonder  the  reviewer  regarded 
all  this  as  apocryphal;  yet  it  is  by  no 
means  necessarily  so.  For  if  we  are  to 
credit  the  newspaper  accounts  of  the 
possessions  of  ‘Mexico's  richest  citizen,' 
Gen.  Luis  Terrazas  of  Chihuahua,  Job 
was  only  in  the  second  class  of  the 
world’s  great  landed  proprietors.  This 
man — whose  wealth,  by  the  way,  was 
not  inherited — is  the  father-in-law  of 
Sefior  Don  Enrique  Creel,  late  Mexi- 
can Minister  to  the  United  States. 
According  to  one  of  the  latest  news- 
paper reports,  his  holdings  in  the  State 
of  Chihuahua  alone  comprise  several 
millions  of  acres,  employing  10,000 
men,  1,000  of  whom  are  occupied  in 
riding  the  boundaries  of  the  ranches 
and  keeping  up  the  thousands  of  miles 
of  wire  fences.  Several  hundred  thou- 
sand goats  and  sheep  graze  upon  his 
land,  we  are  told;  of  cattle  and  mules 
there  are  more  than  1,000,000  each,  and 
of  horses  about  5,000,000.  How  paltry 
appear  the  possessions  of  the  patient 
patriarch  of  Uz  when  contrasted  with 
an  inventory  such  as  this!” 

As  a piler  up  of  wealth  the  modern 
multi-millionaire  has  probably  far  out- 
classed his  ancient  rivals. 


Digitized  by  t^ooQle 


CREDIT  INSURANCE 

By  V.  Gonzales  Bazo 


ALMOST  every  contingency  of  life 
***■  is  protected  against  casualties  by 
some  sort  of  insurance. 

Human  life  and  all  its  accidents  are 
covered  in  various  forms  and  in  many 
ways,  to  such  an  extent  that  even  rail- 
way tickets,  in  some  instances,  and  some 
newspapers,  stand  for  a sort  of  tem- 
porary policy  of  insurance. 

Transportation  by  land  or  water  is 
protected  in  every  form,  and  scarcely 
anything  is  moved  from  one  place  to 
another  without  insurance. 

Fire  insurance  has  reached  the  small- 
est and  most' remote  cities  of  the  world, 
and  to-day  little  destructible  property 
is  uninsured. 

* Insurance  also  covers  the  risks  of 
losing  property  through  burglary, 
breakage,  infidelity  of  employees,  bad 
crops,  etc.,  etc. 

Investment  of  Money  Not  Pro- 
tected. 

Perhaps  the  only  risk  that  is  not  pro- 
tected by  insurance  is  the  investment  of 
money,  though  it  is  undoubtedly  the 
most  important  factor  of  the  economical 
life  of  nations.  All  the  savings  of  the 
people  and  all  the  accumulation  of 
wealth  formed  by  the  profits  of  capital 
and  labor  are  turned  again  into  circula- 
tion in  the  form  of  new  enterprises, 
which  continue  the  work  of  developing 
the  labor  of  the  world,  and  it  is  all  put 
to  work  at  a risk  which  is  entirely  un- 
protected. 

Why  investments  are  not  insured  in 
some  practical  and  tangible  form,  no- 
body could  tell.  As  matters  stand,  near- 
ly all  investors  seem  to  assume  their 
own  risks,  and  in  many  instances  this 
is  so. 

In  making  up  their  prices,  manufac- 
turers and  tradesmen  generally  leave  a 
margin  for  possible  losses  through  bad 
debts,  and  in  many  cases  this  margin 
may  cover  the  loss.  At  times,  especially 
under  abnormal  circumstances,  it  is  very 
probable  that  the  margin  will  not  cover 
it. 

s 


People  who  invest  their  money  in 
stocks,  bonds,  deposits  and  life  insur- 
ance, which  all  have  but  a limited  earn- 
ing power,  can  not  carry  their  own  in- 
surance, as  the  returns  are  not  big* 
enough.  The  average  rate  of  return  for 
money  invested  does  not  exceed  four  to 
six  per  cent,  per  annum,  and  that  does 
not  allow  anything  to  put  aside  for 
eventualities. 

Some  people — many  perhaps — pre- 
fer a high-paying  investment  involving 
an  unusual  risk,  and  can  gamble  at  the 
possibility  of  insuring  themselves.  But 
that  is  contrary  to  the  rule  of  prudence 
that  should  apply  to  all  sound  invest- 
ments. 

Even  the  best  of  the  gilt-edged  stocks 
carry  a certain  possibility  of  risk;  the 
strongest  and  best  managed  of  the 
financial  institutions  may  at  any  time  be 
subject  to  a contingency  entirely  un- 
foreseen, and  the  most  secure  invest- 
ment has  always  some  danger,  perhaps, 
not  in  sight.  The  most  successful  en- 
terprise, the  most  promising  stocks,  and 
the  best  secured  bonds  may  one  day  fail 
to  meet  the  expectations  of  their  hold- 
ers, despite  any  precautions  that  may 
be  taken  by  human  foresight,  under 
present  conditions. 

The  general  prosperity  of  the  coun- 
try and  the  constant  and  permanent  in- 
crease in  wealth  warrant  the  belief  that 
for  many  years  to  come  most  of  the 
enterprises  of  the  United  States  will 
prosper.  The  sincere  wish  of  every- 
body living  in  the  country  is  that  na- 
tional prosperity  will  continue.  But 
could  anybody  guarantee  it? 

The  investments  of  money  in  stocks, 
bonds,  loans,  deposits,  etc.,  in  this  coun- 
try to-day  represent  the  enormous  sum 
of  forty-five  billion  dollars,  much  of  it 
absolutely  unprotected,  and  little  or 
none  of  it  adequately  protected. 

Why  Are  American  Securities  Mis- 
trusted Abroad? 

Undoubtelv,  the  bulk  of  our  industrial 
and  financial  corporations  are  sound  and 

683 


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624  • 


THE  BANKERS  MAGAZINE 


honest;  they  are  honestly  managed  and 
are  giving  and  expect  to  give  during  a 
long  period  very  good  returns.  But, 
notwithstanding  these  facts,  why  is  it 
that  foreign  markets  are  beginning  to 
mistrust  American  securities? 

It  is  well  known  that  a few  corpora- 
tions have  given  ground  for  that  want 
of  confidence  which  has  affected  the  ma- 
jority of  our  stocks  and  bonds,  with 
results  that  are  being  widely  and  bitter- 
ly felt. 

Perhaps  only  a single  concern  started 
the  frauds  on  cotton  bills  of  lading,  but 
the  distrust  thus  aroused  has  heavily  bur- 
dened the  entire  cotton  market  and  has 
inflicted  serious  damage  upon  the  honest 
interests  concerned.  This  grave  offence 
against  business  morals,  though  charge- 
able to  one  individual  or  concern,  has 
greatly  injured  the  people  of  the  entire 
country. 

Something  is  needed  to  protect  the 
interests  of  the  people — something  that 
will  dissipate  all  want  of  confidence; 
the  “hall-mark”  that  Mr.  Stilwell  refers 
to  in  his  book,*  and  that  something  is  a 
certain  form  of  insurance  for  our  stocks 
and  bonds  and  for  all  our  credit  paper. 

Would  Stop  Violent  Fluctuations 
Due  to  Speculation. 

Speculation  causes  the  rise  and  fall  of 
stocks  arid  bonds  and  does  nothing  for 
the  benefit  of  the  country.  If  the  earn- 
ing power  of  the  enterprises  is  the  same, 
and  investors  can  expect  the  same  or 
better  returns  for  their  money,  why  are 
prices  subject  to  such  extreme  fluctua- 
tions ? 

Scarcity  of  money  may  affect  its  mar- 
ket price — the  interest,  but  it  should  not 
affect  the  prices  of  stocks  to  the  extent 
it  does  or  seems  to  do. 

The  stockholders  that  do  not  control 
the  management  of  corporations  are 
generally  ignorant  of  the  facts  concern- 
ing them,  and  do  not  know  what  return 
they  are  going  to  get  on  their  money. 
Certain  influential  interests  control  the 
market,  and  prices  rise  or  fall  without 
the  majority  knowing  the  reason.  If  a 

•“Confidence,  or  National  Suicide?”  by  A. 
E.  Stilwell. 


certain  minimum  dividend  was  insured, 
and  if  the  capital  was  verified  and  in- 
sured, the  fluctuations  in  the  prices  of 
stocks  would  be  limited  to  the  real 
proportion  of  the  current  value  of 
money  (interest). 

If  the  principal  and  interest  of  bonds 
were  insured  by  some  concern  that  could 
inspire  perfect  confidence,  the  prices 
would  fluctuate  only  according  to  the 
price  of  money  on  the  market. 

The  price  of  money  is  fixed  by  the 
offer  and  demand.  The  insurance  of 
stocks  and  bonds  would  afford  a means 
of  testing  them,  as  no  doubtful  paper 
would  ever  be  insured.  Insurance  would 
tend  to  enhance  the  price  of  the  stocks 
and  bonds,  as  public  confidence  would 
be  restored  and  many  more  investors 
would  call  for  these  securities. 

Insured  stocks  and  bonds  would  be 
accepted  more  readily  as  collateral  se- 
curity for  loans  at  the  banks,  thus  al- 
lowing many  more  people  to  become 
bona-fide  investors.  That  would  help 
to  retain  at  home  the  money  which  now 
goes  abroad,  and  would  stop,  in  the  near 
future,  the  borrowing  of  money  in 
Europe. 

Every  dollar  borrowed  abroad  is  a 
fresh  tribute  imposed  on  the  country’s 
future,  and  to  avoid  it  will  be  a great 
good  to  the  country. 

Deposit  Insurance  Favored. 

The  want  of  due  confidence  in  banks, 
trust  companies  and  other  financial  in- 
stitutions causes  the  hoarding  or  emi- 
gration of  some  part  of  the  money 
that  otherwise  would  be  put  into  cir- 
culation and  at  work.  If  bank  deposits 
could  be  insured  against  every  emer- 
gency, more  money  would  be  given  by 
the  public  to  the  banks  and  by  the 
banks,  in  their  turn,  to  the  public  for 
development  of  enterprise  and  the  em- 
ployment of  labor.  That  would  mean, 
in  the  end,  cheaper  money,  due  to  its 
abundance,  and  would  help  in  the  build- 
ing up  of  more  and  more  wealth. 

I f the  loans  due  to  the  banks  could  be 
insured,  the  banks  would  lend  more  free- 
ly and  the  result  would  undoubtedly  be 
an  enormous  expansion  of  business.  The 


Digitized  by  t^ooQle 


CREDIT  INSURANCE 


625 


banks,  being  made  sounder,  would  also 
get  more  confidence  from  the  public. 

Deposits  in  the  22,57 5 banks,  trust 
companies  and  other  financial  corpora- 
tions aggregate  over  fourteen  billion 
dollars,  and  as  security  they  have,  out- 
side of  their  capital  and  surplus  (3,300 
millions)  something  over  ten  billion  dol- 
lars of  loans  and  discounts — more  or 
less  unprotected. 

How  much  money  is  hidden  or  has 
gone  out  of  the  country  because  of  want 
of  confidence  in  the  banks?  How  much 
more  money  would  go  into  circulation 
if  the  people  had  full  confidence  in  the 
banks?  What  could  the  country  ex- 
pect of  that  additional  capital  put  to 
work  ? Nobody,  perhaps,  could  tell ; but 
it  must  be  an  enormous  quantity  and 
quite  enough  to  avoid  entirely  the  neces- 
sity of  calling  for  foreign  capital. 

Practicability  op  the  Proposed 
Plan. 

Could  a big  enough  corporation  be 
organised  to  undertake  this  scheme  and 
to  obtain  the  public’s  confidence? 

If  people  having  money  invested  or 
to  invest  would,  for  the  sake  of  safety, 
give  up  a very  small  portion  of  their 
income,  it  could. 

Would  not  stock  and  bond  holders 
pay  one  dollar  in  every  thousand  of 
their  investments  every  year  to  be  abso- 
lutely guaranteed  against  every  con- 
tingency? This  one  dollar  out  of  every 
thousand  dollars  would  not  take  any- 
thing from  them.  Their  stocks  and 
bonds,  as  a result  of  the  added  safety, 
would  be  worth  many  times  the  amount 
contributed  for  the  purpose  of  insuring 
their  investments. 

Could  not  the  banks  and  trust  com- 
panies well  afford  to  pay  a small 
amount,  say,  the  same  one  dollar  in 
every  $1,000,  on  all  their  loans  to  be 
absolutely  secured  against  any  loss? 

Would  not  the  banks  lend  their 
money  more  freely  if  the  loans  were 
all  guaranteed? 

Would  not  the  depositors  pay  one  dol- 
lar for  every  $1,000  of  their  outstand- 
ing balances  to  be  secured  against  any 
loss  whatever? 

Would  not  life  policy  holders  pay 


fifty  cents  for  every  $1,000  on  their 
policies  to  be  absolutely  guaranteed 
against  any  possible  emergency  ? 

Would  not  manufacturers  pay  a small 
premium  on  all  their  sales  to  be  also 
protected  against  loss  and  obtain  a 
strictly  cash  business  ? They  pay  to-day 
from  five  to  ten  per  cent,  commission  to 
agents  and  canvassers.  Would  they 
not  pay  $2.50  for  every  $1,000 — that  is, 
one-quarter  of  one  per  cent  to  be  as- 
sured against  loss? 

It  seems  that  all  the  concerns  men- 
tioned should  feel  interested  in  having 
their  money  secured,  and  that  the  per- 
centage estimated  is  nothing  that  could 
burden  them  in  any  way.  This  being 
true,  there  is  no  reason  why  such  a cor- 
poration could  not  be  organized  to  pro- 
tect them  all. 

How  the  Insurance  Fund  Would  Be 
Obtained. 

The  amount  of  stocks  and  bonds 
listed  on  the  New  York  Stock  Ex- 
change, including  railway  and  indus- 
trial corporations,  aggregates  over  $20,- 
000,000,000  (twenty  billions),  on  which 
one  dollar  for  every  $1,000  would  give 
an  income  of  $20,000,000. 

Deposits  in  banks  and  trust  compa- 
nies aggregate  over  $14,000,000,000; 
one  dollar  per  $1,000  would  be  $14,- 
000,000. 

Loans  and  discounts  of  the  banks  and 
trust  companies  amount  to  over  $10,- 
000,000,000  (exclusive  of  mortgages), 
on  which  one  dollar  per  $1,000  would 
be  $10,000,000. 

Life  insurance  policies  exceed  twelve 
billion  dollars,  and  at  the  rate  of  $0.50 
per  $1,000  would  yield  $6,000,000. 

Manufacturers’  sales  exceed  $15,000,- 
000,000,  on  which  $2.50  for  every 
$1,000  would  produce  $37,500,000. 

These  five  lines  only  would  bring  in 
$87,500,000. 

Other  commercial  insurance,  1.  e., 
drafts,  bills  of  lading,  as  well  as  pri- 
vate mortgages,  would  aggregate  pre- 
miums for  $12,500,000,  making  a pros- 
pective yearly  income  of  $100,000,000, 
taking  only  small  fractions  of  income 
from  the  bulk  of  investors  and  for  the 


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626 


THE  BANKERS  MAGAZINE 


purpose  of  securing  their  capital  and 
the  interest  yield. 

This  could  not  be  done  automatically, 
and  the  yearly  income  would  not  be  a 
sufficient  guarantee  for  the  public.  A 
corporation  with  sufficient  capital  would 
have  to  be  organized,  backed  and  sup- 
ported by  the  people. 

What  amount  of  capital  ought  to  be 
subscribed  to  obtain  the  public's  con- 
fidence ? 

Let  us  say  $1,000,000,000,  which 
would  be  about  one  per  cent,  of  the 
total  amount  guaranteed,  a proportion 
that  is  not  higher  in  any  other  insur- 
ance company  of  any  kind. 

How  could  $1,000,000,000  be  sub- 
scribed and  paid  in  for  this  purpose? 

Is  not  everybody  interested  in  the 
existence  of  this  concern — investors  and 
people  needing  money — wouldn't  they 
all  be  benefited  by  this  enterprise? 

Well,  let  them  all  help  to  form  it. 

Certainly,  it  is  reasonable  to  suppose 
that  there  would  be  1,000,000  people 
(one  in  each  ninety-six  of  the  popula- 
tion) that  would  subscribe  for  one  share 
of  $1,000,  to  be  paid  in  ten  years  in  in- 
stallments of  $100. 

The  entire  capital  is  not  needed  at 
once,  and  ten  years  is  quite  soon  enough 
to  call  for  it. 

Very  many  persons  could  subscribe 
to  ten  shares  (and  pay  $1,000  per  an- 
num) ; many  more  could  subscribe  to 
five  shares  (and  pay  $500  per  annum), 
and  the  remaining  shares  would  be  sub- 
scribed by  the  people  of  all  classes. 

Profit  Not  the  Principal  Aim. 

It  is  not  the  idea  of  establishing  a 
highly-profitable  concern,  and  nothing 
like  watering  the  stock  could  be  thought 
of.  Nobody  could  expect  to  get  any- 
thing above  a very  poor  return — not 
more  than  three  to  four  per  cent.  It  is 
not  a speculative  undertaking,  but  only 
a mutual  convenience.  One  hundred 
dollars  can  be  spared  by  at  least  1,000,- 
000  persons  in  the  country,  even  if  only 
for  the  country's  sake. 

The  $100  of  yearly  investment  would 
not  mean  money  taken  from  other  in- 
vestments, thus  depriving  other  sources 


of  wealth  of  that  much  of  working  cap- 
ital. Perhaps  more  than  $100  is  being 
thrown  away  every  year  by  much  more 
than  1,000,000  persons  in  this  country, 
and  this  money  is  doing  no  work  as  pro- 
ductive capital.  Such  a sum,  collected 
and  used  as  indicated  above,  would  af- 
ford a means  of  testing  the  country's  in- 
vestments and  a large  amount  of  new 
capital  would  be  put  to  work. 

The  corporation  would  not  leave  its 
capital  and  income  idle  and  unproduc- 
tive. Deducting  the  amount  of  annual 
losses,  the  rest  would  have  to  be  in- 
vested also,  and  that  would  be  new 
money  put  to  work. 

Out  of  the  yearly  income  (allowing 
fifty  millions  to  be  lost  each  year)  there 
would  remain  $100,000,000  of  capital 
installments  and  $50,000,000  of  profits 
to  be  invested.  Together  these  sums 
could  earn  a four  per  cent,  dividend  to 
shareholders,  and  leave  a very  large  sur- 
plus to  be  accumulated.  After  ten 
years  the  paid-up  capital  and  surplus 
would  be  perhaps  over  $1,500,000,000, 
increasing  every  year. 

Corporations  Would  Pay  the  Insur- 
ance Premiums. 

The  premiums  for  insurance  would 
ultimately  be  paid,  not  by  stock  and 
bond  holders  nor  by  depositors,  but  by 
the  corporations  themselves,  deducting 
the  amount  from  their  net  earnings.  It 
is  such  a small  charge  that  there  would 
be  no  ground  for  trying  to  escape  from 
it.  All  corporations  would  insure,  as 
the  public  would  not  touch  any  stocks 
or  bonds  not  insured. 

Government  Interference  Avoided. 

Everybody  feels  that  something  must 
be  done  to  protect  the  public's  interest, 
and  the  less  the  Government  interferes 
in  business  matters  the  better.  The  in- 
surance concern  would  save  the  corpora- 
tions from  much  disagreeable  Govern- 
ment interference  from  Which  the  pub- 
lic might  not  get  at  all  that  is  expected. 

Vastness  and  Complications  of  the 
Plan  Fully  Realized. 

The  operation  of  such  an  insurance 
company  would  be  very  complicated  and 


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THE  TAXATION  QUESTION 


627 


would  involve  an  enormous  amount  of 
work.  No  corporation  could  be  insured 
upon  any  other  basis  than  that  of  a 
thorough  and  honest  investigation,  in- 
cluding the  auditing  of  its  accounts.  But 
no  honest  company  should  fear  this;  for 
if  they  have  nothing  to  hide,  there  would 
be  no  harm  in  showing  the  true  facts. 
The  public  could  no  longer  be  deceived, 
and  that  would  be  enough  to  obtain  its 
entire  support. 

A Corporation  of  This  Character 
Not  Dangerous. 

There  should  be  no  fear  as  to  the 
power  that  this  company  would  have, 
since  it  could  not  be  injuriously  exer- 
cised. The  control  and  management 
could  be  put  into  the  hands  of  persons 
in  whom  the  public  would  have  entire 
confidence.  The  savings  banks  are  al- 
ready so  controlled,  and  the  people  have 
perfect  confidence  in  them. 

Helpful  to  the  Banks. 

Banking  interests  need  not  fear  the 
possibility  of  competition,  as  the  com- 


pany would  do  no  banking  business  at 
all,  except  with  the  banks  themselves. 
Were  commercial  paper  insured,  it  could 
be  discounted  at  the  banks  at  a lower 
rate  of  interest.  The  banks,  lending 
money  on  a safer  basis,  would  extend 
their  business  and  would  require  addi- 
tional capital.  The  company  could  fur- 
nish the  money,  investing  its  capital  and 
earnings.  It  might,  after  all,  be,  in 
many  ways,  a great  convenience  to  the 
banks. 

Powerful  Financial  Assistance  Nec- 
essary. 

Of  course,  the  carrying  out  of  this 
scheme  would  require  the  cooperation  of 
some  of  the  big  financiers  of  this 
country. 

Fortunately,  we  have  a few,  at  least, 
who  are  trying  to  do  good  to  the  coun- 
try for.  the  sake  of  their  names,  and 
they  could  not  possibly  do  anything  that 
would  more  surely  deserve  and  receive 
the  gratitude  of  mankind  than  by 
throwing  this  absolute  safeguard  around 
the  country's  investments. 


THE  TAXATION  QUESTION 

A FEW  THOUGHTS,  AN  OBJECT  LESSON  AND  SOME  SUGGESTIONS 

By  A.  Bankman 


'T'HE  question  of  taxation  as  it  re- 
lates  to  banks  has  puzzled  the 
minds  and  ingenuity  of  many  bankers. 
Not  to  see  how  much  they  could  pay, 
but  to  see  how  little  they  could  pay. 
Not  that  they  object  to  any  taxation, 
but  that  over-taxation  is  objectionable 
to  them.  It  is  true  that  politicians  in 
power  often  seem  to  think  that  the 
banks  are  great  money  makers  and  that 
some  of  that  money  should  be  in  a place 
where  they  would  have  authority  to  use 
it.  With'  this  in  their  minds,  the  taxes 
were  levied.  Such  taxes  are  usually 
looked  upon  as  graft.  Sometimes  they 
are  graft  and  sometimes  they  are  not. 

The  Baltimore  banks  have  for  some 
years  had  a peculiar  system  of  exorbi- 
tant taxation.  Some  effort  has  been 
made  to  secure  a reduction,  but  the 


writer  has  not  heard  of  any  marked  re- 
duction as  a result  of  the  efforts. 

In  addition  to  the  regular  State  and 
city  tax  there  are  a few  cities  where  the 
banks  have  to  pay  an  annual  license  for 
the  privilege  of  doing  business  within 
the  city  limits.  One  city  comes  to  mind 
where  the  license  is  $75.00  for  each 
bank,  regardless  of  the  size  of  capital 
or  deposits.  This  certainly  seems  like 
graft. 

Wiiat  the  Omaha  Bankers  Are 
Doing. 

The  object  lesson  we  want  to  set 
forth  is  that  of  the  Omaha  bankers  in 
their  recent  efforts  to  have  allowances 
made  for  paper  that  was  being  carried 
in  the  loans  and  discounts,  but  which 
might  have  to  be  charged  off  later.  The 


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62  8 


THE  BANKERS  MAGAZINE 


report  of  their  meeting  with  the  board 
of  assessment  is  interesting,  and  the 
arguments  set  forth  are  of  interest  to 
all  bankers  laboring  under  similar  diffi- 
culties. We  quote  part  of  the  report: 

Omaha  merchants  have  been  very  suc- 
cessful in  dealing  with  the  state  board  of 
assessment,  but  the  Omaha  bankers  ran  up 
against  a stone  wall  in  the  board  meeting 
when  they  asked  for  the  state  board’s  ap- 
proval of  the  deduction  of  $l,211,53i,  full 
value,  from  the  assessed  valuation  of  Douglas 
county  banks.  They  asked  for  this  on  the 
ground  that  three  per  cent,  of  the  loans 
made  by  large  city  banks  may  some  day 
turn  out  to  be  bad.  The  board  members 
present.  Treasurer  Brian,  Land  Commis- 
sioner Cowles  and  Secretary  of  State  Jun- 
kin,  being  a majority,  opposed  the  deduc- 
tion as  being  not  authorized  by  the  revenue 
laws.  The  members  appeared  determined, 
but  a majority  of  those  present  desired  to 
wait  for  an  opinion  from  Attorney  General 
Thompson. 

Land  Commissioner  Cowles  opposed 
waiting  tor  an  opinion.  ‘*There  is  the 
law,”  he  said.  “Why  not  vote  now  on  the 
question  ?” 

“Who  is  the  interpreter  of  the  law?” 
asked  Treasurer  Brian,  who  desired  to  get 
the  attorney  general’s  opinion.  “We  are,” 
said  Mr.  Cowles. 

During  the  discussion  nothing  was  said 
about  the  deduction  of  accrued  and  unpaid 
interest  on  time  certificates  of  deposit  and 
unearned  pro  rata  portion  of  discounts  on 
notes  or  bills  receivable. 

The  entire  discussion  was  devoted  to  the 
practice  in  Douglas  county  of  deducting 
from  bank  assessments  a fixed  arbitrary 
sum  on  account  of  alleged  losses  banks  may 
sustain  some  time  during  the  year  on  ac- 
count of  bad  loans.  One  per  cent,  was  de- 
ducted in  Douglas  county  on  account  of 
bad  loans  by  state  banks  and  three 
per  cent,  on  account  of  supposedly  bad 
loans  made  by  national  banks.  According 
to  Secretary  of  State  Junldn  this  amounts 
to  a reduction  of  about  17  per  cent,  from 
the  capital  stock  of  the  larger  banks  in 
Omaha.  The  deduction  for  smaller  banks 
is  much  less. 

The  board  takes  the  position  that  banks 
must  be  assessed  on  the  value  of  shares 
of  capital  stock,  surplus  and  undivided 
profits  and  that  any  deduction  made  by  as- 
sessors or  county  boards,  is  unauthorized 
by  law  and  cannot  be  sanctioned  by  the 
state  board.  The  bankers  of  Omaha  argued 
that  they  could  have  returned  a smaller 
total  valuation  to  be  assessed,  but  that 
they  openly  deducted  a percentage  for  bad 
loans.  This  deduction  they  said  was  merely 
a listing  of  the  net  undivided  profits  in- 
stead of  gross  undivided  profits,  and  that 
the  law  meant  that  net  profits  should  be 


listed,  the  courts  having  held  that  where 
credits  are  deducted  from  a business  man’s 
assessment  it  means  net  credits. 

The  board  contends  that  bad  paper  may 
be  thrown  out  entirely  and  qot  assessed, 
but  where  bad  paper  is  listed  by  a bank 
for  taxation  and  is  reported  to  the  comp- 
troller of  the  currency  as  good  paper,  any 
deduction  from  the  total  is  an  arbitrary 
deduction  not  allowed  by  law.  The  paper 
having  been  carried  as  good  paper  it  must 
be  taxed  and  no  deduction  made  for  a 
probable  or  uncertain  loss  that  may  or  may 
not  occur  in  the  future. 

Secretary  Junkin  illustrated  by  asking 
if  he  had  one  hundred  head  of  cattle 
whether  or  not  he  could  on  the  first  of 
April  list  only  ninety-seven  for  assessment 
on  the  supposition  that  three  head  would  die 
before  the  following  April.  T.  E.  Condon, 
who  was  spokesman  for  the  bankers  from 
Omaha,  said  that  could  not  be  done,  but 
that  if  three  of  the  cattle  were  sick  and 
poor  a deduction  ought  to  be  made,  or  if 
upon  rounding  up  the  cattle  three  should  be 
found  missing,  a similar  deduction  would 
be  fair. 

Attorney  General  Thompson’s  former 
opinion  was  read.  It  states  that  bad  paper 
may  be  considered  by  an  assessor  in  ar- 
riving at  the  true  value  of  shares  of  capi- 
tal stock,  but  that  no  arbitrary  deductions 
or  additions  can  be  made  to  the  total  as- 
sessed valuation. 

“We  do  not  know  that  you  have  any 
bad  paper  April  1,  when  the  assessor 
calls,”  said  Mr.  Junkin. 

Treasurer  Brian  who  presided  over  the 
meeting  was  the  first  to  come  out  openly 
in  opposition  to  approval  of  the  deduction 
for  bad  loans.  He  said  it  was  all  a matter 
of  law  with  him,  and  he  could  find  no 
authority  for  making  such  deductions. 

County  Assessor  M.  C.  Grover  of  Wash- 
ington county,  who  had  complained  against 
the  assessment  of  Douglas  county  banks 
was  an  interested  spectator.  Frank  Han- 
sen, county  assessor  of  Burt  county,  who 
complained  against  the  Dodge  county  as- 
sessment, was  not  present  County  Assessor 
Genoways  of  Hamilton  county  was  the  first 
to  go  upon  the  carpet.  He  said  he  de- 
ducted two  per  cent,  from  the  assessment 
of  two  banks  in  his  county  on  account  of 
bad  loans  but  he  said  he  believed  that  as 
long  as  a bank  carries  loans  on  the  books 
as  an  asset  such  loans  ought  to  be  assessed. 
He  said  he  had  one  bank  strikp  from  its 
books  $5,000  of  bad  paper. 

The  board  decided  that  it  has  power  to 
order  county  clerks  to  restore  to  the  as- 
sessment of  banks  the  amounts  stricken  off 
by  assessors  or  county  boards  on  account 
of  bad  loans.  This  will  be  ordered  in  seven 
counties  in  the  state. 

County  Assessor  Shriver  of  Douglas 
county  was  present  but  was  not  called 


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THE  TAXATION  QUESTION 


629 


upon.  It  is  his  private  opinion  that  the 
deductions  given  in  Douglas  county  are 
not  legal. 

How  Bad  or  Doubtful  Loans  Should 
Be  Treated. 

While  this  argument  may  be  inter- 
esting to  many  bankers,  there  are  quite 
a number  who  have  solved  the  difficulties 
of  the  Omaha  bankers,  and  they  can 
profit  by  following  the  same  lines.  The 
solution  of  the  difficulty  is  this:  Have 

a “contingent  account”  on  your  ledger 
against  which  to  charge  ‘bad  or  doubtful 
loans  and  build  up  the  contingent  ac- 
count by  transfers  from  your  earnings 
or  from  the  undivided  profit  account. 
By  doing  this  the  allowance  will  be 
made  for  losses,  and  no  question  will 
arise  as  to  how  to  reduce  the  undivided 
profits  when  the  call  for  statement  for 
taxation  purposes  approaches. 

Some  banks  have  the  contingent  ac- 
count on  the  general  ledger,  and  others 
carry  it  on  the  individual  ledger  so 
that  it  will  not  show  on  the  statement. 

The  question  arises — how  large 
should  the  contingent  account  be;  or 
what  percentage  of  the  total  loans 
should  be  carried  in  the  account?  Ac- 
cording to  the  claims  of  the  national 
banks  in  Omaha  it  should  be  three  per 
cent.,  but  by  the  claims  of  the  State 
banks,  only  one  per  cent.  The  average 
careful  banker  would  say  that  three  per 
cent,  is  entirely  too  large.  One  per 
cent,  ought  to  be  a safe  amount.  The 
bank  that  has  the  prospect  of  having 
occasion  to  write  off  three  per  cent,  of 
its  total  loans  cannot  be  said  to  hold 
out  to  its  stockholders  bright  prospects 
for  increased  dividends  or  increased 
book  value  of  its  stock.  Some  banks 
are  carrying  less  than  one  per  cent,  of 
total  loans  in  the  contingent  fund,  as  it 
is  usually  called,  and  have  sufficient  to 
meet  all  losses.  But  if  the  earnings 
will  warrant  a balance  of  two  or  three 
per  cent,  in  the  account,  it  will  be  a 
good  place  to  hide  surplus  earnings. 
The  only  trouble  with  carrying  too  large 
an  amount  in  the  account  is  that  poli- 
ticians will  decide  to  pass  a law  in- 
cluding the  amount  as  an  undivided 
profit  and  making  it  taxable. 

Another  question  raised  in  connec- 


tion with  the  report  quoted  above  was, 
that  nothing  was  said  about  the  de- 
duction of  accrued  and  unpaid  interest 
on  interest-bearing  deposits,  nor  was 
anything  said  concerning  the  amount  of 
unearned  interest  carried  in  the  dis- 
count account,  neither  was  the  accrued 
interest  receivable  mentioned.  All 
these  affect  the  profits  of  the  banks. 
For  that  reason  accrued  accounts  for 
these  purposes  should  be  carried  if  the 
bank  desires  the  amount,  on  which  it  is 
to  be  taxed,  to  be  no  higher  than  it 
should  be. 

Some  bankers  make  a practice  of 
charging  off  several  notes  a few  days 
before  the  date  on  which  they  are  to 
make  the  report,  and  then  after  the 
report  is  made  to  reverse  the  entries. 
This  practice  cannot  be  commended.  It 
is  liable  to  result  in  trouble  for  the 
banks  if  the  comptroller  or  banking 
commissioner  should  call  for  a state- 
ment just  after  the  reverse  entries  had 
been  made,  and  a comparison  of  the 
two  statements  would  be  made  by  the 
officials  of  the  tax  department. 

Last  year  the  business  world  and 
particularly  the  board  of  review  in  Chi- 
cago received  a shock  when  the  Chicago 
Telephone  Company  asked  that  its  per- 
sonal property  tax  assessment  be  in- 
creased $2,000,000.  This  year,  ac- 
cording to  the  report,  the  same  board 
was  surprised  when  the  Standard  Oil 
Company  requested  that  its  personal 
property  tax  assessment  be  increased 
$30,000.  These  requests  are  contrary 
to  the  ordinary  rule.  But  if  these  are 
the  beginnings  of  a movement  that  is 
going  to  grow,  the  bankers  surely  should 
not  be  the  last  in  joining  the  move- 
ment. 


LOCAL  REPRESENTATIVES 
WANTED 

THE  Bankers  Magazine  wishes  to  se- 
cure a local  representative  in  each  of 
the  large  cities  of  the  country  to  secure 
subscriptions  and  to  act  as  a general  repre- 
sentative. 

Liberal  arrangements  will  be  made  with 
responsible  persons.  Preference  given  to 
those  employed  in  banks  or  familiar  with 
the  banking  business. 

For  particulars,  address  Bankers  Pub* 
lishing  Co.,  958  Broadway,  New  York. 


Digitized  by  t^ooQle 


TRUST  COMPANIES 

Conducted  by  Clay  Herrick 


TRUST  COMPANY  MEN  AT  LOS  ANGELES 

O.  C.  FULLER,  OF  MILWAUKEE,  THE  NEW  PRESIDENT 


/ | "HE  fifteenth  annual  meeting  of  the 
A trust  company  section  of  the 
American  Bankers1  Association,  held  at 
Los  Angeles,  California,  on  October  5, 
1910,  in  connection  with  the  other  meet- 
ings of  the  various  sections  of  the  asso- 
ciation, marked  another  forward  step 
in  the  history  of  that  useful  organiza- 
tion. The  attendance  was  good,  the  in- 
terest well  marked,  and  the  tone  of  the 
addresses  thoughtful  and  progressive. 
The  membership  of  the  section  shows 
steady  growth,  the  number  of  companies 
now  enrolled  being  1,065,  with  aggre- 
gate resources  of  about  $4,000,000,000. 
It  is  estimated  that  there  are  from  1,700 
to  1,800  companies  in  the  country  to- 
day with  aggregate  resources  of  about 
$5,000,000,000;  the  section,  therefore, 
enrolls  over  sixty  per  cent,  of  the  total 
number,  and  represents  over  eighty  per 
cent,  of  their  total  resources.  It  is  safe 
to  say  that  the  great  majority  of  the 
strong  and  progressive  trust  companies 
of  the  country  are  now  allied  with  this 
organization,  which  is  doing  much  to  in- 
crease the  popularity  of  the  trust  com- 
pany, and  to  add  to  its  solidity  and  use- 
fulness as  a public  institution. 

The  meeting  opened  in  the  usual  way 
with  addresses  of  welcome  by  Joseph 
Scott,  president  of  the  Los  Angeles 
Chamber  of  Commerce,  and  by  J.  C. 
Drake,  president  of  the  Los  Angeles 
Trust  & Savings  Bank.  In  fitting  words 
these  gentlemen  welcomed  the  visitors, 
and  described  the  gratifying  growth  of 
the  great  State  of  California.  The 
meeting  was  presided  over  by  the  vice- 
president,  O.  C.  Fuller,  of  Milwaukee, 
in  the  absence  of  H.  P.  McIntosh,  of 
Cleveland,  the  president,  who  was  in 
Europe.  The  address  of  the  president, 
which  was  read  by  Mr.  Fuller,  contained 
a number  of  recommendations  for  work 

630 


to  be  undertaken  by  the  section,  includ- 
ing the  following: 

The  appointment  of  a committee  to 
promote  a uniform  system  of  accounting 
for  trust  companies. 

An  organized  movement  to  bring 
about  legislation  permitting,  if  not  mak- 
ing compulsory,  the  certification  of  mu- 
nicipal bonds  by  trust  companies. 

Insistence  in  every  State  upon  State 
examination  of  trust  companies. 

The  liquidation  of  insolvent  trust  com- 
panies by  State  superintendents  of 
banks  instead  of  by  receivers. 

Lawrence  L.  Gillespie,  of  New  York 
city,  the  chairman  of  the  executive  com- 
mittee, upon  whom  by  custom  devolves 
the  burden  of  carrying  the  activities  of 
the  section,  delivered  an  able  address. 
He  spoke  of  the  continued  growth  of 
trust  companies  in  the  country  and  in 
New  York  State  in  particular,  saying, 
in  part:  “There  is  every  indication  that 
the  momentum  gained  by  trust  compa- 
nies during  the  past  ten  years  is  not 
abating,  but  we  shall  see  their  influence 
spread  in  broad,  conservative  and  useful 
lines. 

“We  have  during  the  past  six  months 
experienced  a new  kind  of  a panic  which 
did  not  assume  the  gravity  of  a depres- 
sion. It  was  a panifc  spread  over  a con- 
siderable period  and  came  to  us  in  a 
hesitating  way,  really  consisting  in  a 
depreciation  of  values  more  than  in  any 
actual  apparent  curtailment  of  trade 
and  credit. 

“In  these  financial  difficulties  we  are 
glad  to  note  that  the  trust  companies  of 
the  United  States  have  in  no  way  been 
involved.  With  their  strength  and  pru- 
dence demonstrated  by  their  history; 
and  with  judgment  derived  from  expe- 
rience and  self-reliance  it  is  a matter  of 
congratulation  that  they  have  ap- 


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proached  closer  to  the  banks  of  the 
country  in  a spirit  of  friendly  business 
intercourse  and  with  a realization  that 
most  of  their  interests  are  shared  in 
common.  We  cannot  conceive  of  any 
catastrophe  to  the  banking  interests  of 
the  country  which  would  not  be  harmful 
to  trust  companies,  and  vice  versa.  Their 
successes  and  their  misfortunes  would  be 
inextricably  - woven  together.  In  this 
spirit  of  comradeship  the  banks  are  ob- 
served to  be  meeting  them  more  and 
more.” 

Discussing  “The  Advisability  of  a 
Trust  Company  Maintaining  an  Audit- 
ing Department,  Rather  Than  Having 
Periodical  Audits  from  the  Outside,” 
W.  M.  Baldwin,  assistant  treasurer  of 
the  Citizens’  Savings  and  Trust  Com- 
pany of  Cleveland,  took  a stand  in  favor 
of  the  maintenance  of  an  audit  depart- 
ment— a thing  which  his  company  has 
done  for  the  past  six  years.  He  said,  in 
part: 

“Now,  I ask  you,  is  it  not  better  that 
this  checking  should  be  done  by  a man 
who  can  watch  such  transactions  and 
perform  such  work  daily,  rather  than  at 
stated  periods?  True,  if  there  have 
been  mistakes  made,  the  periodical  audit 
will  disclose  them,  but  it  will  only  show 
that  they  have  been  going  on  for  some 
length  of  time,  and  enable  the  waste  or 
loss  to  be  stopped  for  the  future.  Had 
the  institution  in  which  such  errors  were 
discovered  maintained  an  auditing  de- 
partment of  its  own,  these  mistakes 
would  have  been  found  out  on  the  very 
day  they  occurred,  and  the  bank  would 
have  saved  just  so  much. 

“It  has  been  oftentimes  objected  that 
the  maintaining  of  an  auditing  depart- 
ment is  nothing  more  or  less  than  the 
establishment  of  a system  of  espionage 
upon  the  employees  and  officials  of  the 
bank.  No  employee,  however,  who  is 
worthy  of  the  name,  ever  places  opposi- 
tion in  the  way  of  the  auditor.  He  real- 
izes that  it  is  a check  upon  his  own  work, 
and  for  that  very  reason  welcomes  it. 
Moreover,  it  must  be  remembered  that 
no  individual  has  yet  been  found  who  is 
infallible,  and  if  errors  are  discovered 
by  the  auditor,  they  can  be  remedied  be- 


fore any  serious  results  have  occurred. 

“It  was  about  six  years  ago  that  our 
auditing  department  was  established, 
and,  I may  say,  none  of  the  officials  have 
ever  regretted  that  it  is  a check  upon 
their  work,  and  welcome  the  check  in 
order  that  it  may  be  established,  beyond 
peradventure,  that  their  work  is  up  to 
the  standard.  Moreover,  the  auditor, 
needless  to  say,  has  been  the  means  of 
suggesting  many  improvements  and 
economies  in  the  administration  of  the 
bank’s  affairs. 

“At  the  risk  of  tiring  you  I shall  go 
into  details  in  describing  the  operations 
of  some  departments,  seriatim. 

“At  irregular  periods  the  bonds  and 
stocks  owned  are  counted  by  the  auditor 
and  his  assistants.  When  any  securities 
are  taken  from  the  vault  or  others  put 
in,  memoranda  are  sent  to  this  depart- 
ment and  each  day  the  memoranda  are 
verified.  To  show  you  what  a close 
watch  we  keep  over  our  securities, 
I may  say  it  is  impossible  for  any 
stock,  bond  or  other  security  to  be 
taken  f rom  the  vault  except  by  an  officer 
when  he  is  accompanied  by  the  auditor 
or  his  assistant.  And  this  very  great 
care  which  we  take  of  our  own  securities 
is  duplicated  in  the  care  of  securities  in 
our  Estate  Trust  and  Corporate  Trust 
Departments,  as  well,  of  course,  as  of 
the  collaterals  pledged  for  loans. 

“The  interest  on  all  collateral  and 
real  estate  loans  is  figured  independent- 
ly by  our  auditing  department  from  its 
own  records.  Thus  the  cards  of  this 
department  become  practically  a balance 
sheet  of  the  total  amount  shown  on  the 
books  of  the  bank.  When  any  payments 
are  made  upon  loans  or  new  loans  nego- 
tiated, records  are  made  from  the  loan 
register  and  the  auditor’s  cards  are  bal- 
anced with  the  general  ledger  at  irregu- 
lar intervals.  Moreover,  the  collateral 
of  all  new  loans,  as  made  day  by  day,  is 
compared  with  the  notes  themselves.  We 
require  a double  combination  on  the 
vault  which  holds  them,  necessitating 
the  auditor  going  to  the  vault  together 
with  the  loan  teller. 

“As  a further  check,  we  send  peri- 
odically to  all  borrowers  upon  collateral 


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THE  BANKERS  MAGAZINE 


security  forms  for  their  signature  to 
reconcile  loans.  These  forms  describe 
in  detail  the  collateral  pledged,  the 
amount  of  their  loan,  and  any  necessary 
information.  The  majority  of  our  bor- 
rowers appreciate  this  safeguard,  and 
all  but  an  infinitesimal  number  of  the 
reports  are  signed  and  returned  without 
any  complaint  on  account  of  receiving 
the  blank,  whereas  these  complaints 
were  numerous  when  the  blanks  were 
sent  out  by  outside  auditors.” 

The  topic,  “The  Investment  of  Trust 
Funds,  and  the  Respective  Interest 
Therein  of  Life  Tenant  and  Remainder- 
man,” was  discussed  by  Isaac  H.  Orr, 
trust  officer  of  the  St.  Louis  Union  Trust 
Company.  After  calling  attention  to 
the  importance  of  the  work  of  investing 
trust  funds,  and  of  the  trust  company’s 
splendid  equipment  for  the  work,  he 
said,  in  part: 

“From  the  experience  of  older  com- 
panies, we  learn  that  the  best  results 
have  been  obtained,  not  by  having  one 
officer  make  such  investments,  subject  to 
the  approval  of  a board  of  directors,  but 
by  having  a group  of  men  or  a commit- 
tee, selected  from  the  roster  of  officers 
and  directors  who  are  charged  with  the 
special  duty  of  investing  trust  funds. 
This  committee  should  meet  in  regular 
session  and  keep  a permanent  record, 
showing  the  members  present,  the  in- 
vestment authorized,  the  price  paid,  and 
for  whom  purchased.  When  the  indi- 
vidual members  of  such  a committee 
realize  the  fact  that  their  personal  judg- 
ment on  the  investment  is  registered  for 
future  reference,  there  will  be  an  added 
appreciation  of  the  responsibilities  as- 
sumed. 

“The  first  and  most  important  ques- 
tion to  be  determined  is  the  character  of 
the  investment.  To  determine  this,  the 
trustee  will  first  consult  the  will,  deed, 
or  other  instrument  creating  the  trust. 
This  may  specify  the  character  of  the 
property  or  securities  in  which  to  invest 
the  trust  funds.  If  so,  such  specifica- 
tion should  be  followed.  If  the  instru- 
ment itself  fails  to  give  instruction  or 
limitations  concerning  the  investment, 
the  trustee  must  look  for  guidance  to  the 


statutes  of  the  State  wherein  the  trust 
is  created.  Twenty-six  States  have 
passed  laws  relating  to  this  subject.  In 
a number  of  cases  the  provisions  of  the 
statutes  are  not  adequate  to  cover  all  of 
the  contingencies  that  arise.  Others  are 
sufficiently  comprehensive  and  explicit 
to  enable  a trustee  to  properly  admin- 
ister any  trust.  It  would  not  be  profit- 
able, even  if  we  had  the  time  to  discuss 
in  detail  the  statutes  of  the  different 
States,  as  each  must  become  familiar 
with  the  law  of  his  own  bailiwick;  but  it 
may  be  of  interest  to  note  the  easy  and 
comprehensive  manner  in  which  some  of 
our  western  States  (California,  Mon- 
tana, and  North  Dakota)  have  disposed 
of  this  subject  in  a three-line  enactment, 
as  follows: 

“ ‘A  trustee  must  invest  money  re- 
ceived by  him  under  the  trust  as  fast  as 
he  collects  a sufficient  amount,  in  such 
manner  as  to  afford  reasonable  security 
and  interest  for  the  same.’  ” 

He  spoke  at  length  upon  the  impor- 
tant question  of  the  separate  interests  of 
life  tenants  and  remaindermen,  saying: 

“The  respective  interests  of  the  life 
tenant  and  remainderman  demand  the 
constant  attention  of  the  trustee.  The 
one  wants  the  highest  possible  income, 
and  the  other  the  safest  possible  invest- 
ment. Both  interests  must,  within  rea- 
son, be  conserved.  Separate  accounts 
should  be  kept  from  the  beginning, 
showing  income  and'  principal  funds. 
This  is  a simple  matter;  but  as  the  ad- 
ministration proceeds,  questions  will 
arise  as  to  what  constitutes  principal 
and  what  income. 

“Income  of  property  consists  of  the 
proceeds  of  what  the  property  produces, 
the  profit  which  comes  from  its  use  in 
business,  or  what  is  paid  for  its  use  by 
another  than  its  owner.  Principal,  or 
capital,  is  the  property  itself.  A trustee 
must  be  careful  to  distinguish  between 
real  income  and  that  increase  which 
comes  from  an  increase  in  the  value  of 
the  property.  For  example,  if  trust 
funds  are  invested  in  a certain  piece  of 
real  estate,  the  principal  is  not  the  cash 
paid,  but  the  real  estate  itself.  If  that 


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is  sold  at  an  advance  the  profit  is  a part 
of  the  principal  and  not  income/' 

In  illustration  of  this  principle  he 
gave  several  examples,  of  which  one  was 
this: 

“Stack  dividends.  A trustee  holds 
shares  in  a corporation  which  declares 
and  distributes  a stock  dividend.  Is  this 
to  be  credited  to  income  or  to  principal  ? 
There  are  three  well  defined  rules  on 
this  subject,  which  may  be  dominated 
respectively,  the  Pennsylvania,  the  Mas- 
sachusetts and  the  English  rule.  They 
lead  to  essentially  contrary  conclusions. 
The  Pennsylvania  rule  proceeds  on  the 
theory  that  the  trustees  should  ascertain 
the  time  when  the  fund  represented  by 
the  new  stock  was  accumulated.  If  it 
represents  earnings  made  before  the  life 
estate  began  it  belongs  to  the  corpus  or 
principal;  if  after  the  life  estate  began, 
then  to  income.  If  the  .fund  represents 
earnings  made  both  before  and  after  the 
life  estate  began,  then  the  stock  dividend 
should  be  apportioned  between  income 
and  principal  ratably.  The  Massachu- 
setts rule  Regards  cash  dividends, 
whether  large  or  small,  as  income,  and 
stock  dividends,  whenever  earned  or 
however  declared,  as  principal.  In  Eng- 
land an  ordinary,  or  usual  cash  or  stock 
dividend,  belongs  to  income,  while  an 
extraordinary  cash  or  stock  dividend  be- 
longs to  the  principal  fund/’ 

Discussing  the  question,  “Shall  Trust 
Companies  Charge  for  the  Care  of 
Small  Accounts?”  Edward  O.  Stanley, 
vice-president  of  the  Title  Guarantee  & 
Trust  Company  of  New  York  City,  took 
the  ground  that  they  should  charge.  He 
said,  in  part: 

“The  relations  between  the  bank  and 
its  depositors  have  not  always  con- 
formed to  the  usual  relations  between 
merchant  and  customer.  Yet  there  is 
absolutely  no  reason  why  they  should 
not.  The  banker  is  buying  the  use  of 
the  customer’s  money,  and  is  paying 
therefor  in  the  collection  of  the  checks 
and  other  items  which  may  be  presented, 
in  the  safe-keeping  of  the  funds  until 
they  are  wanted  by  the  customer,  and  in 
the  interest,  if  any,  which  he  allows 
upon  the  customer’s  balance.  In  no 


other  branch  of  trade  would  the  mer- 
chant wittingly  pay  something  where  he 
received  nothing  in  return;  nor  would 
the  professional  man  regularly  and  con- 
tinuously perform  a service  for  clients 
entirely  able  to  pay  him  and  receive 
nothing  therefor.  Yet  this  is  precisely 
what  the  banker  is  doing  when  he  ac- 
cepts an  account  which  continues  with- 
out a loanable  balance,  or  one  that  is  so 
small  as  to  be  absolutely  negligible, 
though  he  continues  to  perform  the  vari- 
ous services  required  by  the  dealer  in  the 
care  the  account.  The  banker  simply 
throws  upon  the  larger  account,  which 
has  a considerable  loanable  balance,  the 
proportion  of  the  burden  of  expense 
which  the  small  account  entails. 

“Now,  it  must  be  borne  in  mind  that 
the  privilege  which  a bank  extends  to  its 
customers  are  of  a positive  value.  They 
are  costly  to  the  banker  and  must  in 
some  way  be  paid  for  by  the  depositor. 
If  an  analysis  of  an  account  shows  that, 
deducting  the  checks  out  for  collection 
and  the  percentage  required  by  the  State 
law  to  be  maintained  as  reserve,  there  is 
left  to  be  loaned  a balance  so  small  as 
to  be  of  but  little  value  to  the  banker,  it 
is  quite  evident  that  he  must  in  some 
way  seek  for  remuneration  if  he  is  to  con- 
tinue to  carry  such  accounts  in  his  insti- 
tution. Rather  than  to  require  the  with- 
drawal of  all  accounts  of  this  class,  we 
believe  it  to  be  the  better  policy  to  con- 
tinue the  account  and  to  make  a small 
monthly  or  quarterly  charge  for  the  care 
of  it. 

“If  an  account  be  small  and  also  very 
active,  requiring  much  bookkeeping  and 
much  tellers’  and  correspondence  work 
in  paying  the  debits  and  collecting  the 
credits,  with  a very  small  actual  balance, 
it  is  clearly  unprofitable.  Furthermore, 
the  need  of  careful  watching  of  ac- 
counts by  bookkeepers  and  tellers,  lest 
they  be  overdrawn  or  lest  payments  be 
made  against  uncollected  credits,  lies  al- 
most wholly  in  the  small  accounts.  The 
large  accounts  need  but  little  supervi- 
sion for  overdrafts  or  drawing  against 
uncollected  credits. 

“Among  the  small  accounts  will 
usually  be  found  nearly  all  of  the  un- 


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satisfactory  and  troublesome  customers. 
If  the  adoption  of  this  policy  shall  re- 
sult in  the  elimination  of  some  of  them, 
we  think  that  the  banker  will  welcome 
the  release  from  this  trouble  rather  than 
regret  their  departure.” 

The  subject,  “The  Advantage  to  the 
Trust  Company  in  Making  Loans  Upon 
Marketable  Collateral,  Rather  Than 
Upon  Personal  Credit,”  was  discussed 
by  William  C.  Poillon,  vice-president  of 
the  Mercantile  Trust  Company  of  New 
York.  He  strongly  favored  the  collat- 
eral loans,  saying,  in  part: 

“In  the  to?m  ‘marketable  collateral'  I 
include  loans  upon  commodities,  such  as 
grain,  cotton,  live  stock,  coal,  ores  and 
metals,  as  well  as  bonds  and  stocks  of 
municipalities  and  corporations. 

“It  is  true  that  only  a small  percent- 
age of  the  large  amount  of  commercial 
paper  discounted  by  banks  is  defaulted 
upon,  yet  the  cause  of  the  failure  of 
hundreds  of  banking  institutions  in  the 
United  States  has  undoubtedly  been  the 
inability  of  these  institutions  to  realize 
upon  their  discounts  to  customers  at 
maturity,  even  in  times  of  no  particular 
monetary  stringency;  whereas,  if  only 
part  of  these  loans  had  been  secured  by 
marketable  collateral,  payment  would 
have  been  made  at  maturity,  in  most 
cases,  when  required.  This  would  have 
been  possijble  because  the  borrower,  in 
all  probability,  would  have  been  able  to 
secure  a renewal  elsewhere,  failing 
which  a sufficient  amount  of  the  collat- 
eral could  have  been  sold  to  liquidate 
the  loan. 

“As  a result  of  an  experience  of 
twenty  years  with  this  class  of  loans,  I 
venture  the  opinion  that  it  possesses  a 
great  advantage  over  double-named  com- 
mercial paper,  in  that  it  has  much 
greater  convertibility,  and  the  addition- 
al advantage  that,  even  though  the  bor- 
rower has  become  insolvent,  his  secur- 
ity has  not  necessarily  become  impartial 
because  of  this  occurrence;  or,  if  the 
security  is  not  adequate,  the  borrower 
has  not  necessarily  become  insolvent. 
There  have,  of  course,  been  occasions 
when  both  these  misfortunes  occurred  at 
once,  usually  in  times  of  panic.  In  this 


event,  experience  has  shown  that  the 
most  advantageous  course  for  the  lend- 
ing institution  to  pursue  has  been  to 
carry  the  loan  until  the  market  value  of 
the  collateral  reaches  a point  where  it 
can  be  sold  for  an  amount  sufficient  to 
liquidate  the  loan  without  loss.  I am 
strongly  of  the  opinion  that  fully  ninety 
per  cent,  of  such  default  loans  can  be 
liquidated  without  loss  to  the  lender,  if 
such  loans  were  made  with  reasonable 
prudence  in  the  first  instance. 

“The  security  at  the  base  of  the  cus- 
tomary commercial  credits  is  subject  to 
all  the  hazards  of  fire,  flood,  earthquake, 
robbery  and  fraud  to  a much  greater 
degree  than  is  the  security  behind  stock 
and  bond  issues,  largely  because  the 
properties,  plants,  or  lines  of  railway 
securing  capital  issues  of  large  corpora- 
tions are  located  at  widely-separated 
points,  and  a loss  of  the  character  men- 
tioned at  any  one  place  would  repre- 
sent only  a small  part  of  such  corpora- 
tion's assets.” 

Stuyvesant  Fish  of  New  York  city 
spoke  on  the  negotiability  of  bank 
shares  and  decried  the  custom  of  lend- 
ing upon  such  shares  as  collateral,  which 
he  regarded  as  dangerous.  He  showed 
that  British  joint-stock  banks  do  not 
lend  upon  the  shares  of  other  banks, 
nor  even  upon  those  of  the  Bank  of 
England.  He  believed  that  the  by-laws 
of  banks  should  provide  for  the  issue  of 
certificates  in  a form  not  pledgable,  and 
that  transfers  should  be  permitted  only 
when  approved  by  the  directors.  He 
said,  in  part: 

“My  purpose  is  not  to  decry  bank 
stocks  as  security  for  loans,  but  to  in- 
quire whether  there  are  not  reasons  of 
business  prudence  and  of  public  policy 
demanding  that  the  certificates  for  such 
stock  should  not  much  longer  be  avail- 
able as  collateral  for  loans.  Experience 
in  New  York  during  the  panic  of  1907 
affords  an  instance  in  point.  Despite 
differences  of  opinion  as  to  the  prime 
cause  of  this  our  latest  panic,  no  one  can 
question  that  the  ultimate  cause  which 
precipitated  it  was  the  breaking  down 
of  ‘Chains  of  Banks.'  Those  chains 
of  banks  had  been  created  through  loans 


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6§5 


being  made  by  one  bank  against  the 
pledge  of  shares  of  another  in  the  chain, 
which  in  turn  lent  on  the  stock  of  a 
third,  and  so  on  around  the  circle.  When, 
toward  the  close  of  October,  1907,  in  a 
time  of  general  stress,  a close  scrutiny 
was  made,  those  bubbles  collapsed  and 
crisis  ensued  immediately. 

“In  so  far  as  directors  are  concerned, 
the  National  Bank  Act  provides  that 
‘Every  director  must  own  in  his  own 
right  at  least  ten  shares  of  the  capital 
stock/  except  in  the  very  smallest  banks 
where  the  requirement  is  five  shares,  and 
that  each  director  shall  make  oath  ‘that 
he  is  the  owner  in  good  faith  and  in  his 
own  right,  of  the  number  of  shares  of 
stock  required  by  this  title,  subscribed 


by  him  or  standing  in  his  name  on  the 
books  of  the  association,  and  that  the 
same  is  not  hypothecated  or  in  any  way 
pledged  as  security  for  any  loan  or 
debt/ 

“If  it  is  right  to  require  this  of  di- 
rectors, why  is  it  not  both  wise  and  pru- 
dent to  require  that  the  stockholders  in 
an  institution  which  trades  upon  credit 
based  upon  the  stockholders’  liability, 
shall  at  all  times  own  in  good  faith  and 
in  their  own  right  the  number  of  shares 
standing  in  their  names  respectively, 
and  that  such  shares,  or  the  evidences 
of  them,  be  not  hypothecated  or  in  any 
way  pledged  as  security  for  any  loan  or 
debt?” 


BANKING  AND  COMMERCIAL  LAW 

Conducted  by  John  J.  Crawford.  Esq.,  Author  Uniform  Negotiable  Instruments  Act 


RECENT  DECISIONS  OF  INTEREST  TO  BANKERS 


FORGED  CHECK  — DUTY  OF 
DRAWEE  BANK  TO  KNOW 
DRAWER’S  SIGNATURE- 
GUARANTY  OF  INDORSE- 
MENTS. 

NATIONAL  BANK  OF  ROLLA  vs. 
FIRST  BANK  OF  SALEM. 

8PRINGFIELD  COURT  OF  APPEALS,  MIS- 
SOURI, FEB.  7,  1910. 

Where  a bank  on  which  a check  is  drawn 
pays  the  same  to  bona  fide  holder,  it 
cannot  recover  back  the  money  upon  dis- 
covering that  the  signature  of  the  drawer  is 
a forgery. 

This  rule  has  not  been  changed  by  the 
Negotiable  Instruments  Law. 

The  words  “indorsement  guaranteed” 
stamped  on  the  back  of  a check  applies  only 
to  indorsers,  and  cannot  be  relied  upon  by  a 
drawee  bank  as  guaranteeing  the  signaure 
of  the  drawer. 

RAY,  J On  September  23,  1907, 
one  Martin  L.  Chambers,  repre- 
senting himself  to  be  one  J.  B.  Ragan, 
presented  to  defendant  a check  for  the 
sum  of  $42,  purporting  to  have  been 
drawn  on  plaintiff  in  favor  of  said  J.  B. 


Ragan,  by  one  H.  W.  Lenox,  depositor  of 
the  plaintiff.  The  bookkeeper  of  defend- 
ant did  not  know  any  of  these  parties 
personally,  but  cashed  the  check  with- 
out requiring  any  identification  of 
Chambers.  The  defendant  then  sent 
the  check  to  its  correspondent,  the  Third 
National  Bank  of  St.  Louis,  and  through 
that  bank  presented  the  same  to  plaint- 
iff for  payment. 

When  the  check  was  presented  to  the 
plaintiff,  the  cashier  thereof  knew  that 
the  signature  thereto  was  not  the  signa- 
ture of  H.  W.  Lenox,  but  knowing 
Ragan  and  Lenox,  and  knowing  that 
they  dealt  a great  deal  in  live  stock  to- 
gether, and  noticing  that  the  defendant 
had  guaranteed  the  indorsement  thereon 
to  be  the  indorsement  of  Ragan,  con- 
cluded that  the  check  was  genuine,  and 
remitted  the  amount  thereof  to  the 
Third  National  Bank  of  St.  Louis,  and 
the  same  was  placed  by  that  bank  to 
the  credit  of  the  defendant.  Soon  after 
the  1st  of  October,  the  plaintiff’s  cash- 
ier sent  to  Lenox  his  paid  checks  for 
the  month  of  September,  included  among 


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m 


THE  BANKERS1  MAGAZINE 


which  was  this  check.  Lenox  discov- 
ered that  this  check  was  a forgery,  and 
returned  same  to  plaintiff  with  notice 
of  that  fact,  and  he  was  given  credit 
for  the  amount  of  this  check. 

The  plaintiff  then  wrote  defendant 
that  this  check  was  a forgery,  and  that 
inasmuch  as  plaintiff  had  honored  the 
same  on  the  strength  of  defendant's  in- 
dorsement and  guaranty  that  the  in- 
dorsement of  Ragan  was  genuine,  the 
defendant  should  refund  the  amount  of 
said  check  to  the  plaintiff.  After  sev- 
eral days*  delay,  defendant  notified  the 
plaintiff  that  the  amount  of  the  check 
would  not  be  refunded,  for  the  reason 
that  it  considered  it  was  not  liable. 
Plaintiff  brought  this  action  before  a 
justice  of  the  peace  to  recover  the 
amount  of  the  check.  The  plaintiff  ap- 
pealed from  the  judgment  of  the  jus- 
tice, and  on  October  29,  1908,  the  cause 
was  tried  in  the  circuit  court  of  Dent 
county,  and  judgment  was  rendered  for 
defendant,  and  plaintiff  appealed  to 
this  court. 

The  plaintiff's  petition  alleges  that 
both  parties,  at  the  dates  mentioned  in 
the  petition,  were  banking  corporations, 
and  on  September  26,  1907,  defendant, 
through  its  correspondent,  presented  to 
plaintiff  for  payment  a check  for  the 
sum  of  forty-two  dollars,  purporting  to 
be  drawn  on  the  plaintiff  by  one  H.  W. 
Lenox,  in  favor  of  one  J.  B.  Ragan,  and 
purporting  to  be  indorsed  by  the  said 
Ragan,  and  which  said  check  had  been 
duly  indorsed  by  the  defendant,  and 
previous  indorsements  thereon  in  writ- 
ing, guaranteed  by  the  defendant,  and 
relying  upon  the  indorsement  of  said 
check  by  the  defendant  and  defendant's 
said  guaranty,  and  believing  that  by 
reason  thereof  it  was  genuine,  cashed 
said  check  and  paid  the  amount  thereof 
to  the  defendant;  that  after  it  had 
cashed  said  check  and  paid  the  proceeds 
to  defendant  it  discovered  that  the  said 
check  was  forged,  and  thereupon  it 
caused  due  notice  to  be  given  to  defend- 
ant in  writing,  and  demanded  of  it  the 
payment  of  the  amount  of  said  check, 
and  that  defendant  refused  to  pay  the 
same,  and  asked  for  judgment  for  the 
amount  of  forty-two  dollars. 


It  will  be  noticed  that  no  allegation 
of  negligence  on  the  part  of  the  defend- 
ant in  cashing  the  check  for  Ragan  is 
made  in  the  petition,  and  the  instruction 
asked  by  the  plaintiff  and  refused  by 
the  court  presented  the  issue  as  alleged 
in  the  petition.  In  other  words,  the 
question  of  the  negligence  of  the  de- 
fendant in  cashing  the  check  for  Ragan 
was  not  submitted  either  in  the  petition 
or  the  instruction.  There  are  but  two 
reasons  alleged  for  a reversal  of  the 
judgment,  and  they  are:  Because  the 

court  erred  in  refusing  an  instruction 
asked  by  the  plaintiff ; and,  because  un- 
der all  the  evidence  in  the  case,  the 
judgment  should  have  been  for  the 
plaintiff. 

The  question  presented  here  may  be 
submitted  in  the  following  language:  If 
B representing  himself  to  be  A pre- 
sents to  C's  bank  a check  purporting  to 
be  signed  by  D,  payable  to  A,  and 
drawn  on  E's  bank,  of  which  D is  a cus- 
tomer, and  C's  bank  cashes  the  check 
and  sends  it  for  collection  to  E,  who, 
when  it  is  presented,  pays  the  same  and 
charges  it  to  D's  account,  and  at  the 
time  of  said  payment  E has  reason  to 
believe  that  the  signature  to  the  check 
is  not  D's,  can  E sue  C for  the  amount 
of  the  check,  upon  learning  that  D’s 
name  was  forged  to  the  check,  and  show- 
ing that  C had  sent  the  check  for  col- 
lection, and  that  the  money  paid  by  E 
at  the  time  it  cashed  the  check  had  been 
received  by  C ? 

The  question  has  been  answered  in 
the  negative  many  times  in  the  courts 
of  this  country.  Since  the  case  of  Price 
vs.  Neal,  3 Burrows,  1,355,  decided  by 
Lord  Mansfield  in  1762,  the  general 
rule  has  been  that  when  the  drawee  of 
a check  or  bill  pays  the  same  to  a bona 
fide  holder,  such  drawee  cannot  recover 
the  money  back  upon  discovering  such 
check  or  bill  to  be  a forgery.  Many 
of  the  text-writers  on  negotiable  in- 
struments declare  that  when  a bank, 
upon  which  a check  is  drawn,  pays  it 
upon  the  forged  signature  of  the  drawer, 
the  money  can  be  recovered  as  paid  un- 
der mistake  of  fact.  (Story  on  Prom- 
issory Notes,  §§  379-529;  2 Parsons  on 
Notes  and  Bills,  80.)  Others,  while 


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BANKING  LAW 


637 


recognizing  a different  rule,  incline  to 
the  opinion  that  the  one  just  cited  is  the 
most  equitable.  (2  Daniel  on  Negotia- 
ble Instruments,  c.  48,  § IS.) 

Whatever  the  text-writers  may  think 
and  declare  the  law  to  be,  a long  line  of 
cases  sustain  the  proposition  that  as 
between  the  drawee  and  the  holder  of 
a check  the  drawee  bank  is  to  be  deemed 
the  place  of  final  settlement  where  all 
prior  mistakes  and  forgeries  can  be  cor- 
rected and  settled  at  once,  henceforth 
and  forever  more;  and,  if  overlooked 
and  payment  is  made,  the  chapter  is 
closed  and  there  can  be  no  recovery 
over»  (Price  vs.  Neal,  3 Burrows,  1,355-; 
Redington  vs.  Woods,  45  Cal.  406 ; Bank 
vs.  Ricker,  71  111.  439;  First  National 
Bank  of  Chicago  vs.  Northwestern  Na- 
tional Bank,  152  111.  296;  National 
Park  Bank  of  New  York  vs.  Ninth  Na- 
tional Bank,  46  N.  Y.  77;  Ellis  vs. 
Trust  Co.,  4 Ohio  St.  628.) 

Judge  Allen,  in  Bank  vs.  Bank,  46 
N.  Y.,  loc.  cit.  80,  states  the  rule  in  the 
following  clear  language:  “For  more 

than  a century  it  has  been  held  and  de- 
cided, without  question,  that  it  is  incum- 
bent upon  the  drawee  of  the  bill  to  be 
satisfied  that  the  signature  Of  the  drawer 
is  genuine ; that  he  is  presumed  to  know 
the  bandwriting  of  his  correspondent; 
and,  if  he  accepts  or  pays  a bill  to 
which  the  drawer’s  name  has  been 
forged,  he  is  bound  by  the  act,  and  can 
neither  repudiate  the  acceptance  nor 
recover  the  money  paid.” 

In  Price  vs.  Neal,  which  was  a similar 
action,  Lord  Mansfield  stopped  the 
counsel  for  the  defendant,  saying  that 
it  was  one  of  those  cases  that  never 
could  be  made  plainer  by  argument; 
that  it  was  incumbent  upon  the  plaintiff 
to  be  satisfied  that  the  bill  drawn  upon 
him  was  the  drawer’s  hand,  before  he 
accepted  and  paid  it. 

In  the  case  of  Ellis  vs.  Trust  Co., 
supra,  the  doctrine  as  announced  in 
Price  vs.  Neal,  is  reviewed,  approved, 
and  a long  list  of  authorities  cited  in 
support  thereof,  and  among  these  au- 
thorities will  be  found  the  case  of  the 
Northwestern  National  Bank  vs.  Bank 
of  Commerce,  107  Mo.  402.  This  doc- 
trine is  founded  by  many  courts,  upon 


the  thought  that  the  drawee  bank  is 
conclusively  presumed  to  know  the  sig- 
natures of  its  depositors.  Upon  exam- 
ination of  the  authorities,  this,  how- 
ever, is  too  narrow  a basis.  The  courts 
that  declare  the  rule  as  above  stated 
put  it  upon  the  theory  that  the  rule  is 
demanded  by  the  necessities  of  business 
in  these  times  when  the  currency  of  the 
commercial  world  is  composed  so  largely 
of  checks  and  drafts. 

There  is  another  line  of  decisions  that 
state  the  rule  as  follows:  The  drawee 
of  a forged  check,  who  has  paid  the 
same,  may,  upon  discovery  of  the 
forgery,  recover  the  money  paid  from 
the  party  who  received  the  money,  even 
though  the  latter  was  a good  faith  hold- 
er, provided  the  latter  has  not  been  mis- 
led or  prejudiced  by  the  drawee’s  fail- 
ure to  detect  the  forgery,  and  the  bur- 
den of  showing  that  he  has  been  misled 
or  prejudiced  by  the  drawee’s  mistake 
rests  upon  him  who  claims  the  right  to 
retain  the  money.  (First  National  Bank 
of  Lisbon  vs.  Bank  of  Wyndmere,  15 
N.  D.  299.) 

In  speaking  of  the  doctrine  declared 
in  Price  vs.  Neal,  and  other  cases  above 
cited,  Judge  Engerud,  who  wrote  the 
opinion  in  First  National  Bank  vs.  Bank 
of  Wyndmere,  said:  “This  doctrine  is 

fast  fading  into  the  misty  past  where  it 
belongs.  It  is  almost  dead,  the  funeral 
notices  are  ready,  and  no  tears  will  be 
shed,  for  it  was  founded  in  misconcep- 
tion of  the  fundamental  principles  of 
law  and  common  sense.  Most  of  the 
courts  now  agree  that  one  who  pur- 
chases a check  or  draft  is  bound  to  sat- 
isfy himself  that  the  paper  is  genuine; 
and  that,  by  indorsing  it,  or  presenting 
it  for  payment,  or  putting  it  into  circu- 
lation before  presentation,  he  impliedly 
asserts  that  he  has  performed  this 
duty.” 

And  in  support  of  his  position,  cites 
a number  of  late  cases,  and  finally  con- 
cludes that  the  great  weight  of  authority 
is  between  the  two  propositions;  that  is, 
that  notwithstanding  the  payee  has  ac- 
cepted the  check  and  paid  it,  yet  if  it  is 
afterwards  discovered  to  be  a forgery 
and  the  purchaser  of  the  check  took  it 
from  a stranger,  without  making  proper 


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638 


THE  BANKERS  MAGAZINE 


inquiry  as  to  his  identity,  the  payee  can 
recover  from  the  purchaser  the  amount 
of  the  check.  The  courts  adopting  the 
theory  that  the  payee  can  recover  where 
it  is  shown  that  the  purchaser  of  the 
check  was  guilty  of  negligence  in  tak- 
ing the  same  are  numerous,  and  among 
them  are  the  following:  First  National 
Bank  vs.  First  National  Bank,  151 
Mass.  280;  Ford  vs.  Bank,  74  S.  C.  180; 
Canadian  Bank  vs.  Bingham,  SO  Wash. 
484;  Bank  vs.  Bank,  22  Neb.  769*  The 
latter  doctrine  is  well  stated  in  Ford  vs. 
People’s  Bank,  as  follows:  “We  think 

the  true  rule  is  found  stated  in  the  case 
of  National  Bank  vs.  Bangs,  106  Mass. 
441  [8  Am.  Rep.  349],  and  National 
Bank  vs.  Bank,  151  Mass.  280.  The 
language  of  the  court  in  the  last-cited 
case,  after  stating  that  the  presumption 
is  that  the  drawee  bank  knows  the  sig- 
natures of  his  own  customers,  is  as  fol- 
lows : ‘This  presumption  is  conclusive 
only  when  the  party  receiving  the 
money  has  in  no  way  contributed  to  the 
success  of  the  fraud  or  the  mistake  of 
fact  under  which  the  payment  has  been 
made.  In  the  absence  of  actual  fault 
on  the  part  of  the  drawee,  his  construc- 
tive fault  in  not  knowing  the  signature 
of  the  drawer  and  detecting  the  forgery 
will  not  preclude  his  recovery  from  one 
who  took  the  check  under  circumstances 
of  suspicion  without  proper  precaution, 
or  whose  conduct  has  been  such  as  to 
mislead  the  drawee,  or  induce  him  to  pay 
the  check  without  the  usual  inquiry 
against  fraud.  Where  a loss  which  must 
be  borne  by  one  of  two  parties  alike 
innocent  of  the  forgery  can  be  traced  to 
the  neglect  or  fault  of  either,  it  is  rea- 
sonable that  it  should  be  borne  by  him, 
even  if  innocent  of  any  intentional 
fraud  through  whose  means  it  has  suc- 
ceeded/ ” 

The  different  doctrines  are  well 
stated  by  the  different  opinions  of  the 
judges  of  the  Supreme  Court  of  Minne- 
sota, in  the  case  of  Germania  Bank  vs. 
Boutell,  60  Minn.  189,  62  N.  W.  327, 
and  for  further  information  upon  these 
points,  reference  is  made  to  that  case. 
In  nearly  all  of  the  authorities  where 
opinions  are  cited  to  sustain  the  differ- 
ent theories,  the  case  of  the  Northwest- 


ern National  Bank  vs.  Bank  of  Com- 
merce, 107  Mo.  402,  is  cited  in  support 
of  the  doctrine,  that  it  is  the  absolute 
duty  of  the  payee  to  ascertain  at  his 
peril  when  a check  is  presented  for  pay- 
ment, purporting  to  be  drawn  by  a cus- 
tomer of  his  bank,  whether  or  not  it  i9 
the  genuine  signature  of  the  customer, 
and  if  he  cashes  the  check  all  rights 
against  any  person  except  the  forgerer 
are  forever  barred.  But  upon  reading 
the  case  of  Bank  vs.  Bank,  107  Mo.  402, 
it  will  be  found  that  the  question  of 
negligence  on  the  part  of  the  purchaser 
of  the  check  is  made  a material  issue  in 
the  case.  In  addition  to  what  we  have 
said,  attention  is  called  to  the  case  of 
Bank  vs.  Bank,  15  N.  D.  299,  108  N. 
W.  546,  supra,  as  found  in  10  L.  R.  A. 
(N.  S.)  59,  125  Am.  St.  Rep.  588. 

In  Bank  vs.  Bank,  109  Mo.  App.  665, 
the  Kansas  City  Court  of  Appeals,  in 
an  opinion  by  Judge  Broaddus,  declares 
the  rule  to  be  that  when  the  payee  pays 
a check  purporting  to  be  drawn  upon  its 
bank  by  one  of  its  customers  its  right 
of  action  against  any  other  parties  to 
the  check  is  gone,  unless  it  can  be 
shown  that  the  purchaser  was  guilty  of 
gross  negligence,  and  that  a purchaser 
is  not  guilty  of  such  negligence  as  to 
authorize  a recovery  against  him  from 
the  fact  that  he  has  knowledge  of  cir- 
cumstances sufficient  to  put  a prudent 
man  on  inquiry.  This  authority  goes 
much  further  in  regard  to  the  notice 
necessary  to  make  the  purchaser  guilty 
of  negligence  than  most  any  other  case 
recognizing  the  negligence  doctrine. 

From  a review  of  these  authorities, 
we  are  satisfied  that  leaving  out  of  view 
our  negotiable  instrument  act  of  1905 
(Laws  1905,  p.  243  [Ann.  St.  1906,  §§ 
463 — 1 to  463 — 197]),  the  great  weight 
of  the  modern  cases  sustains  the  theory 
that  the  payee  cannot  recover  from  the 
purchaser  without  basing  his  action 
upon  the  negligence  of  the  latter.  In 
Germania  Bank  vs.  Boutell,  supra,  the 
demurrer  to  the  petition  was  sustained 
because  there  was  no  allegation  of  neg- 
ligence on  the  part  of  the  defendant. 
Also,  in  Ford  vs.  Bank,  supra,  demur- 
rer was  filed  to  the  petition  and  sus- 
tained by  the  court  because  the  petition 


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BANKING  LAW 


639 


did  not  allege  any  negligence  of  the 
defendant. 

Under  the  allegations  of  the  petition 
in  this  case,  the  defendant  was  not 
liable.  Stout  vs.  Benoist,  39  Mo.  277, 
90  Am.  Dec.  466.  In  that  case  the  court 
said:  “The  acceptor  of  a forged  bill  is 
bound  to  know  the  handwriting  of  the 
drawer;  and  if  he  has  accepted  and 
paid  the  bill  to  a holder  bona  fide  and 
for  a valuable  consideration,  he  cannot 
recover  back  the  money.  Where  per- 
sons are  equally  innocent,  and  one  is 
bound  to  know  and  act  upon  his  knowl- 
edge, and  the  other  has  no  means  of 
knowledge,  it  would  be  unjust  to  bur- 
den the  latter  with  a loss  for  the  pur- 
pose of  exonerating  the  former.”  The 
court  did  not  err  in  refusing  the  plaint- 
iff’s instruction,  as  it  also  left  out  the 
question  of  negligence  on  the  part  of 
the  defendant. 

In  addition  to  the  authorities,  the 
negotiable  instrument  act  of  1905  con- 
tains the  following  sections: 

“Sec.  62.  The  acceptor,  by  accepting 
the  instrument  engages  that  he  will  pay 
it  according  to  the  tenor  of  its  accept- 
ance; and  admits:  The  existence  of  the 
drawer,  the  genuineness  of  his  signa- 
ture, and  his  capacity  and  authority  to 
draw  the  instrument;  and  the  existence 
of  the  payee  and  his  capacity  to  en- 
dorse.” 

“Sec.  188.  Where  the  holder  of  a 
check  procures  it  to  be  accepted  or  cer- 
tified, the  drawer  and  all  indorsers  are 
discharged  from  liability  thereon.” 

Judge  Broaddus  in  Bank  vs.  Bank, 
109  Mo.  App.  665,  in  answer  to  the 
argument  that  absolute  payment  was 
not  an  acceptance,  said:  “An  accept- 

ance binds  the  acceptor  to  pay  the  bill, 
and  he  cannot  be  heard  to  deny  that  he 
has  funds  in  his  hands  for  the  purpose. 
A payment  of  the  bill  is  more  than  an 
acceptance,  for  the  one  is  an  obliga- 
tion to  pay ; the  other  a discharge  of  the 
indebtedness  represented  by  such  bill. 
If  the  one  concludes  the  drawee  it  is 
inconceivable  why  the  other  would  not.” 

We  fully  concur  in  the  views  of  Judge 
Broaddus,  as  quoted  above.  If  a mere 
promise  to  pay  a check  is  binding  on 


the  bank,  why  should  the  absolute  pay- 
ment of  the  check  not  have  the  same 
effect?  The  adoption  in  this  and  other 
States  of  our  negotiable  instrument  law 
was  for  the  purpose  of  having  in  the 
statutory  laws  of  the  States  a uniform 
law  in  regard  to  commercial  paper. 

A confusion  was  known  to  exist  on 
many  of  the  everyday  transactions  con- 
cerning such  paper,  and  it  may  be  said 
that  there  was  no  question  upon  which 
the  courts  were  more  in  conflict  than 
upon  the  question  involved  in  this  case. 
After  a careful  examination  of  the  new 
law,  we  are  inclined  to  believe  that  it 
was  intended  to  adopt  the  law  as  de- 
clared in  Price  vs.  Neal,  supra.  In  sup- 
port of  our  views,  we  are  sustained  by 
the  late  case  of  Title  Guarantee  & Trust 
Co.  vs.  Haven,  126  App.  Div.  802,  111 
N.  Y.  Supp.  305,  wherein  the  court,  in 
construing  section  62  of  our  negotiable 
instrument  act,  said:  “A  bank  which 

pays  a check  purporting  to  be  drawn  on 
it  by  one  of  its  depositors,  guarantees 
the  existence  of  the  drawer,  the  genuine- 
ness of  his  signature,  and  his  capacity 
and  authority  to  draw  the  instrument, 
and,  where  such  signature  is  forged, 
cannot  recover  back  the  amount  from 
the  person  to  whom  it  was  paid,  al- 
though the  position  of  the  parties  to 
such  person  has  not  changed  in  any 
respect.” 

The  appellant,  however,  contends  that 
because  the  check  was  indorsed,  “En- 
dorsement guaranteed.  Pay  any  National 
or  State  Bank  or  Order.  The  First  Na- 
tional Bank  of  Salem.  W.  J.  Bennett, 
Cashier,”  that  it  had  the  right  to  rely 
upon  this  guaranty,  and  that  its  suit  is 
maintained  thereon.  Such  an  indorse- 
ment is  only  an  indorsement  for  collec- 
tion, and  does  not  transfer  the  title  to 
the  indorsee.  (Bank  vs.  Bank,  109  Mo. 
App.  673,  83  S.  W.  537.)  And  the 
guaranty  only  applies  to  the  indorsers, 
and  does  not  protect  the  payee  against 
the  risk  of  cashing  a check  to  which  the 
maker’s  name  is  forged.  (See  authori- 
ties cited  on  other  points  in  this  opin- 
ion.) 

There  is  another  element  in  plaint- 
iff’s case  disclosed  by  the  evidence, 


Digitized  by  t^ooQle 


640 


THE  BANKERS  MAGAZINE 


which,  under  all  the  authorities,  pre- 
cludes its  right  to  recover  in  this  case. 
It  stands  admitted  that  when  the  check 
was  presented,  the  officer  of  plaintiff 
who  paid  the  same  knew  that  the  signa- 
ture was  not  that  of  the  bank's  cus- 
tomer. With  this  knowledge,  the  plaint- 
iff could  not  cash  the  check  and  hold 
the  defendant  for  money  received 
thereon. 


After  a thorough  examination  of  the 
law  as  it  existed  prior  to  our  negotiable 
instrument  act,  and  as  changed  by  that 
act,  we  are  satisfied  that  the  court  com- 
mitted no  error  in  refusing  plaintiff's 
instruction,  and  that  upon  the  allega- 
tions of  the  petition  the  plaintiff  was 
not  entitled  to  recover,  and  the  judg- 
ment of  the  trial  court  will  be  affirmed. 
All  concur. 


NOTES  ON  CANADIAN  CASES  AFFECTING  BANKERS 
[Edited  by  John  Jennings,  B.A..  L.L.B.,  Banister,  Toronto] 


CHOSE  IN  ACTION— ASSIGN- 
MENT OF— NOTICE  TO  DEBT- 
ORS—RIGHT  OF  ASSIGNEE  TO 
MONEYS  COLLECTED  BY  AS- 
SIGNOR AND  HANDED  OVER 
TO  ANOTHER  CREDITOR— ES- 
TOPPEL BY  CONDUCT— DUTY 
OF  ASSIGNEE  TO  NOTIFY 
OHER  CREDITORS  OF  THE 
ASSIGNMENT . 

BANK  OF  BRITI8H  NORTH  AMERICA  V8. 

wood  (19  Manitoba  Reports,  638). 

The  plaintiffs  had  an  assignment  from 
one  Thomas  of  all  his  book  debts,  notes 
and  other  choses  in  action  as  security  for 
their  claim,  but  did  not  notify  the  debtors 
or  any  other  creditors  of  Thomas  although 
they  knew  there  were  such  creditors.  They 
allowed  Thomas  to  collect  the  accounts 
and  pay  over  the  proceeds  to  them.  The 
defendants,  not  knowing  of  the  assignment, 
and  having  a large  claim  against  Thomas, 
induced  him  to  allow  them  to  receive  the 
proceeds  of  the  collections  of  some  of  the 
debts  and  a number  of  the  promissory 
notes  covered  by  the  assignment,  and  the 
plaintiffs  brought  this  action  to  recover 
these  moneys  and  notes  including  some  re- 
ceived after  notice  of  the  plaintiffs’  claim. 

Held f that  the  defendants  were  equitable 
assignees  of  all  such  moneys  and  notes  as 
they  had  reduced  into  possession  before  re- 
ceiving notice  of  the  assignment  and  were 
entitled  to  retain  them,  but  that  the  plain- 
tiffs were  entitled  to  judgment  for  all 
collections  of  book  debts  made  by  the  de- 
fendants after  receipt  of  such  notice. 

Held,  also,  that  there  was  no  estoppel 
against  the  plaintiffs  by  reason  of  their 
failure  to  notify  the  defendants  of  their 
assignment. 

/~JN  August  28,  1907,  one  J.  E.  Thom- 
as,  trading  as  Anderson  & Thom- 
as, and  carrying  on,  at  the  city  of 
Winnipeg,  a retail  hardware  business, 


being  then  largely  indebted  to  the 
plaintiff  bank,  and  the  bank  having  de- 
manded security,  executed  to  the  bank 
an  assignment  in  writing  of  his  bills 
receivable  and  book  debts.  Thomas 
himself  says  that  he  also  assigned  to 
the  bank  everything  he  had,  consisting 
of  life  insurance,  fire  insurance  and 
real  estate.  It  does  not  appear,  how- 
ever, that  the  bank  had  any  assignment 
of  the  stock  in  trade  in  the  store. 

Thomas,  by  this  assignment,  irrevoca- 
bly appointed  the  bank  and  its  man- 
ager for  the  time  being,  at  Winnipeg, 
his  attorneys  to  grant  and  execute  dur- 
ing the  continuance  of  the  security  all 
such  further  assignments  and  transfers 
to  the  bank  as  the  bank  might  deem 
necessary. 

It  appears  at  this  time  that  Thomas 
was  quite  heavily  involved,  not  only  to 
the  bank  but  to  various  wholesale  mer- 
chants from  whom  the  retailer  bought 
in  the  ordinary  course  of  business.  The 
officers  of  the  bank  and  Thomas  thought 
that  if  he  continued  to  carry  on  his 
business  he  might  be  able  to  weather 
the  storm  by  paying  his  creditors  from 
time  to  time  a portion  of  his  existing  in- 
debtedness and  perhaps  that  business 
would  improve.  The  arrangement  then 
made  with  the  officers  of  the  bank  was 
that  Thomas  should  still  to  carry  on 
business  practically  as  though  no  as- 
signment of  these  book  debts  and  other 
securities  had  been  made;  that  he  was 
to  collect  all  moneys  and  deposit  them 
in  a current  account,  against  which  he 
was  permitted  to  draw  checks  and  make 
payments  to  his  various  creditors  as  he 


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BANKING  LAW 


641 


saw  fit.  The  bank;  howeveT,  was  to  be 
furnished  with  a monthly  statement 
showing  the  details  of  his  accounts  re- 
ceivable, and  these  were  furnished  by 
Thomas  to  the  bank  from  time  to  time. 

From  that  time  onward  no  further  ad- 
vances were  made  by  the  bank  to  Thom- 
as. He  was  permitted  to  deposit  his 
moneys  in  what  is  termed  a current  ac- 
count and  he  was  permitted  to  check 
these  out  as  he  desired. 

It  seems,  however,  to  have  been  the 
desire  of  the  bank  that  all  moneys  so 
collected  should  be  deposited  in  this  ac- 
count so  that  they  could  observe  the  na- 
ture of  the  withdrawals.  The  bank  did 
not  notify  any  of  Thomas’  debtors, 
neither  did  they  perform  any  act  or  do 
anything  towards  further  perfecting 
the  assignment,  other  than  to  receive 
the  monthly  statements  from  time  to 
time  of  the  details  of  the  accounts 
owing. 

At  the  time  of  this  assignment  to  the 
bank,  Thomas  owed  the  defendants  over 
$3,000,  and  the  trial  judge  is  of  the 
opinion  that  the  bank  was  aware  of  this 
indebtedness  and  that  if  Thomas  con- 
tinued in  business  his  indebtedness  was 
likely  to  increase.  Wood  & Co.  con- 
tended that  the  increase  in  the  credit 
extended  to  Thomas  would  not  have 
been  allowed  had  they  been  aware  of 
the  assignment  to  the  bank.  Afterwards 
Wood  & Co.,  being  the  largest  creditor, 
insisted  on  Thomas  sending  out  col- 
lectors to  get  in  his  accounts  and  that 
the  money  so  collected  should  be  paid 
over  to  them,  Wood  & Co.  It  was  the 
* money  so  collected  and  received  by 
Wood  & Co.  that  was  sued  for  in  this 
action.  Later  Wood  & Co.  demanded 
from  Thomas  an  assignment  of  his  book 
debts  to  them,  and  he  thereupon  told 
them  of  the  assignment  to  the  bank. 

At  the  trial  the  defendants  allege 
that  the  bank  knew  that  Thomas  was 
making  payments  to  them  and  that  the 
official  of  the  bank  had  told  Thomas  not 
to  give  everything  to  Wood  & Co.,  but 
to  give  everybody  a little.  After  be- 
coming aware  of  the  assignment  to  the 
bank.  Wood  & Co.  supplied  further 
goods  to  a very  small  amount.  It  was 
not  until  after  Thomas  had  made  an 


assignment  for  the  benefit  of  creditors 
that  the  bank  notified  the  various  debt- 
ors of  the  assignment  of  the  book  debts 
to  them. 

Judgment  (Metcalf,  J.):  The 

plaintiff  brought  this  action  alleging  a 
fraudulent  scheme  and  conspiracy  be- 
tween Geo.  D.  Wood  & Co.  and  Thomas 
to  deprive  the  bank  of  the  moneys  col- 
lected and  the  notes  received.  The  de- 
fendants countered  that  the  claim  that 
the  assignment  to  the  bank  was  fraudu- 
lent and  preferential.  After  more  ma- 
ture consideration,  both  parties  aban- 
doned these  claims. 

The  assignment  to  the  bank,  there- 
fore, stands,  and  the  bank  claims  that 
the  moneys  belonged  to  it  at  the  time 
they  were  received  by  the  defendants, 
and,  therefore,  all  moneys  and  notes 
must  be  delivered  up.  As  to  the 
moneys,  the  defendants  say  that  the 
bank,  under  the  circumstances,  after  al- 
lowing Thomas  to  continue  to  trade 
and  \purchase  additional  large  quan- 
tities of  goods,  and  to  make  the  repre- 
sentations usually  made  by  a trader  to 
the  wholesaler,  and  especially  the  rep- 
resentation that  the  bank  was  permit- 
ting him  to  dispose  of  his  moneys  as  he 
saw  fit,  and  knew  of  the  arrangement 
with  the  defendants  and  did  not  object, 
ought  not  now  to  be  heard  to  say  either 
that  Thomas  had  not  authority  to  make 
the  payments  or  the  representations. 

Regarding  the  notes,  they  further 
urge  that  they  are  bona  fide  holders  for 
value  without  notice. 

I must  confess  that  at  first  I was  im- 
pressed with  the  defendants’  right  to 
urge  estoppel.  Mr.  Ewart,  in  his  work 
on  Estoppel,  at  p.  143,  says  that  there 
are  many  cases  in  which,  a creditor  hav- 
ing actually  been  deceived  by  the  ap- 
pearance of  ownership,  estoppel  against 
the  true  owner  has  been  declared.  To 
them  there  can  be  no  objection,  but 
there  are  some  in  which  the  presence 
of  that  factor  has  not  been  thought  to 
be  essential.  He  refers  to  the  case  of 
Troughton  vs.  Gitley,  Amb.  630.  In 
that  case  a bankrupt  bought  his  estate 
from  his  assignees,  but  did  not  get  his 
discharge;  he  continued  to  trade  and 
afterwards  failed,  and  it  was  held  that 


Digitized  by  t^ooQle 


642 


THE  BANKERS  MAGAZINE 


the  creditors  under  the  second  bank- 
ruptcy were  to  be  preferred  to  those  of 
the  first  upon  the  principle  that  they 
knew  the  bankrupt  continued  to  trade 
and  that  the  effects  were  delivered  over 
to  him  and  that  he  was  trading  with  a 
multitude  of  persons,  and  that  in  order 
to  do  so  it  was  necessary  that  he  should 
take  as  well  as  give  credit,  and  that  such 
dealing  fell  within  the  principle  that  if 
a man,  having  a lien,  stands  by  and  lets 
another  make  a new  security,  he  shall 
be  postponed. 

Upon  consideration,  I do  not  think 
the  principle  applies.  There  is  here 
neither  a subsequent  encumbrance  nor 
any  question  between  trustees  and 
creditors.  The  bank  had  the  right  to 
take  the  assignment.  While  it  is  per- 
haps true  that  the  defendants  would 
not  have  made  further  advances  if  they 
had  knowledge  of  the  assignment,  I do 
not  think  that  a duty  was  thrown  upon 
the  bank  to  notify  the  general  creditors 
of  the  fact  so  as  to  create  an  estoppel. 

While  I must,  I think,  infer  from  the 
facts  that  the  bank  had  knowledge  that 
the  traders  would,  in  the  ordinary 
course  of  business,  obtain  credit  from 
the  wholesaler,  yet  it  is  not  unfair  to 
assume  that  the  wholesaler  might  rea- 
sonably expect  that  the  trader  might 
also  make  an  assignment  to  the  bank 
to  which  he  was  so  heavily  involved. 
They  knew  where  the  trader  carried  his 
bank  account  and  might  have  made  in- 
quiries. Instead  of  making  specific  in- 
quiries of  the  bank,  the  defendants  wait 
until  most  of  the  additional  advances 
were  made  and  then  a general  question 
was  put  by  Mr.  McBride  of  the  de- 
fendant company  to  an  accountant  of 
the  bank  as  to  the  state  of  the  bank's' 
account.  I cannot  find  any  estoppel 
created  by  the  answer  then  made.  If 
the  defendant,  before  making  the  ad- 
vances, had  inquired  of  the  bank  as  to 
any  such  assignment  and  had  been  mis- 
led or  misinformed,  it  might,  perhaps, 
have  supported  the  defendants'  con- 
tention. 

However,  the  bank  slept  on  its  rights, 
In  the  meantime,  Wood  & Co.,  before 
notice  of  the  assignment  to  the  bank, 


had  received  the  $600.  The  bank's  claim 
for  this  was  abandoned  at  the  trial. 

I think  the  defendants  must  be  consid- 
ered as  equitable  assignees  of  these  notes 
and  items  and  that,  having  reduced  the 
notes  and  moneys  into  possession  before 
notice  of  the  plaintiff's  claim,  the 
plaintiff  cannot  recover  as  to  these. 

I think  the  plaintiff  must  succeed, 
however,  as  to  the  other  items  claimed. 

There  will  be  judgment  for  the 
plaintiff  as  claimed,  less  the  $600  and 
the  items  mentioned.  The  plaintiff  to 
have  the  eosts  of  the  action. 


PROMISSORY  NOTE— INDORSER 
—BILLS  OF  EXCHANGE  ACT , 
R.  S.  C.,  1906,  c.  119,  s.  131— 
HOLDER  IN  DUE  COURSE- 
ESTOPPEL. 

KNECTEL  FURNITURE  COMPANY  VS.  IDEAL 
HOUSE  FURNISHERS,  LIMITED  (19 

Manitoba  Reports,  652). 

Under  Section  131  of  the  Bills  of  Ex- 
change Act,  R.  S.  C.  1906,  c.  119,  a person 
who  indorses  a promissory  note  not  en- 
dorsed by  the  payee  at  the  time  may  be 
liable  as  an  indorser  to  the  payee. 

Difference  between  above  section  and  the 
corresponding  section  (56)  of  the  Imperial 
Act  pointed  out. 

Although  the  defendant  company  had 
made  the  note  in  question  in  pursuance  of 
an  agreement  to  assume  the  debt  of  an- 
other to  the  plaintiff  company;  yet,  as 
there  was  a good  and  valuable  considera- 
tion given  for  that  assumption,  the  plain- 
tiffs were  holders  in  due  course  and  the 
defendant  company  was  liable  upon  the 
note. 

The  other  defendants  being  directors  of 
the  defendant  company,  having  indorsed  the 
note  and  induced  the  plaintiffs  to  enter 
into  and  perform  the  agreement  in  con- 
sideration of  which  the  note  was  given, 
were  estopped  from  disputing  the  validity 
of  this  transaction  or  setting  up  that  the 
defendant  company  had  not  power  to  give 
the  note;  Bills  of  Exchange  Act,  s.  133. 

'T'HIS  is  an  appeal  from  the  judg- 
A ment  of  Mr.  Justice  McDonald 
in  favor  of  the  plaintiffs  in  an  action  on 
a promissory  note  for  $4,000,  made  by 
the  defendant  company  in  favor  of  the 
plaintiffs  and  indorsed  by  the  other  de- 
fendants. 

The  defense  was  that  the  note  was 


Digitized  by  t^ooQle 


BANKING  LAW 


643 


made  and  executed  by  them  as  an  ac- 
commodation to  the  plaintiffs  and  that 
there  was  no  consideration  for  the  pay- 
ment thereof;  in  the  alternative  that 
William  Grundy  and  C.  F.  Grundy 
were  indebted  to  the  plaintiffs  in  the 
sum  of  $4,000,  and  the  note  in  ques- 
tion was  given  by  the  defendant  com- 
pany for  the  purpose  of  assuming  the 
debt  of  the  said  William  Grundy  <md 
C.  F.  Grundy  to  the  plaintiffs  and  that 
the  making  of  the  same  by  the  company 
was  illegal  and  beyond  the  powers  of 
the  company  and  of  the  officers  or  direc- 
tors who  signed  or  authorized  the  mak- 
ing of  the  said  note,  and,  further,  that 
the  assumption  of  the  debts  of  others 
is  beyond  the  powers  of  the  company. 
All  the  defendants  admit  the  signatures 
on  the  note  to  be  theirs,  but  allege  that 
they  indorsed  the  note  as  a guarantee 
to  the  plaintiffs  under  the  following  cir- 
cumstances: That  one  Grundy  was  a 

stockholder  in  the  defendant  company 
and  his  stock  was  not  paid  up;  that  the 
plaintiffs  agreed  to  make  a loan  of 
$4,000  to  him  to  enable  him  to  make 
payment  on  his  stock  in  the  said  com- 
pany of  that  amount  and  that  he  agreed 
to  give  security  therefor.  That  this 
loan  was  made  by  means  of  $4,000  of 
merchandise  which  the  plaintiffs  agreed 
to  deliver  to  the  said  Grundy  and  the 
latter  proposed  to  deliver  to  the  de- 
fendant company  the  said  merchandise 
in  payment  of  and  on  account  of  his 
capital  stock  in  the  company,  and  that 
the  note  in  question  was  given  as  such 
security  and  accommodation  and  not 
otherwise,  but  the  plaintiff  company, 
contrary  to  the  said  agreement,  did  not 
deliver  to  the  said  Grundy  the  $4,000 
worth  of  merchandise  nor  any  merchan- 
dise, nor  did  they  or  he  deliver  the  same 
to  the  said  company,  and  that  the  mak- 
ing of  the  said  note  and  the  indorse- 
ments thereof  were  made  without  any 
consideration. 

The  defendants,  indorsers,  other  than 
the  defendant  Moore,  further  repudiate 
liability  as  indorsers  by  reason  of  the 
fact  that  the  note  is  not  complete  and 
regular  on  its  face,  that  they  are  not 
indorsers  liable  in  the  sense  in  which 
indorsers  of  a note  complete  and  regu- 


lar would  be.  The  irregularity  claimed 
is  that  plaintiffs,  being  payees  of  the 
note,  must  first  indorse  to  make  the  note 
negotiable  and  hold  indorsers  liable. 

Judgment  (Howell,  C.J.A.;  Rich- 
ards, Perdue  and  Cameron,  J.J.A.): 
It  was  contended  that,  because  the  note 
was  made  payable  to  plaintiffs  and  in- 
dorsed by  the  directors  before  delivery  * 
to  or  indorsement  by  the  payees,  the 
directors  were  not  liable  upon  their  in- 
dorsements. 

Robinson  vs.  Mann  was  followed  by 
the  Ontario  Court  of  Appeal  in  Mc- 
Donough vs.  Cook,  19  O.  L.  R.  267.  In 
the  last  mentioned  case,  Maclaren,  J . A., 
points  out  the  difference  that  exists  be- 
tween section  56  of  the  Imperial  Act 
and  the  corresponding  section  of  the 
Canadian  Act.  Section  131  of  our  Act 
reads : “Where  a person  signs  a bill 
otherwise  than  as  a drawer  or  acceptor, 
he  thereby  incurs  the  liabilities  of  an  in- 
dorser to  a holder  in  due  course,  and  is 
subject  to  all  the  provisions  of  this  Act 
respecting  indorsers.”  The  portion  of 
the  section  following  the  word  “course” 
is  not  contained  in  the  Imperial  Act. 

It  was  argued  that  the  plaintiffs  in 
this  action  were  not/  holders  in  due 
course.  The  trial  Judge  has  found  that 
there  was  ample  consideration  given  by 
the  plaintiffs  for  the  note,  and  I see  no 
ground  for  disturbing  his  finding  upon 
that  point.  The  evidence  also  shows 
that  the  plaintiffs  took  the  note  in  good 
faith  and  pursuant  to  a clear  and  well 
understood  arrangement  between  the  de- 
fendants, including  their  indorsers. 
Under  the  effect  of  section  2,  sub-sec- 
tion (g)  and  section  56  of  the  Bills  of 
Exchange  Act,  the  plaintiffs  became 
holders  in  due  course. 

It  was  urged  on  behalf  of  the  appellant 
that  the  note  sued  upon  was  made  by 
the  defendant  company  for  the  purpose 
of  paying  a note  made  by  Grundy  in 
favor  of  the  plaintiffs  to  secure  a loan 
made  to  Grundy,  that  the  company  had 
no  power  to  assume  the  debt  of  a third 
party,  and  that  if  the  company  is  not 
liable  the  indorsers  are  not.  The  trans- 
action, which  resulted  in  the  giving  of 
the  note,  formed  the  subject  of  consid- 


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644 


THE  BANKERS  MAGAZINE 


erable  correspondence  and  negotiation 
between  the  plaintiffs  and  the  directors 
of  the  defendant  company.  It  was  dis- 
cussed at  meetings  of  the  directors  and 
ratified  by  resolution.  The  considera- 
tion for  assuming  the  indebtedness  upon 
the  Grundy  note  was  that  the  plaintiffs 
should  subscribe  and  pay  for  $5,000  in 
’stock  in  the  defendant  company.  The 
plaintiffs  subscribed  for  and  paid  up 
the  stock  in  full. 

Whatever  objection  might  be  taken 
by  the  defendant  company  as  regards 
its  liability,  I think  the  directors  who 
indorsed  the  note  are  estopped  from  dis- 
puting the  validity  of  the  transaction, 
both  by  their  indorsements  and  by  the 
part  they  took  in  entering  into  the 
agreement  with  the  plaintiffs  and  in 
inducing  the  plaintiffs  to  perform  it 
upon  their  part:  Bills  of  Exchange 

Act,  s.  183. 

The  appeal  should  be  dismissed  with 
costs. 

Appeal  dismissed. 


CONTRACT— EQUITY  RUNNING 
WITH  — OFFSET  — ACCOUNT- 
ING-FORM OF  ACTION . 

THE  ROYAL  BANK  VS.  SCHAFFNER  (44 

Nova  Scotia  Reports,  89). 

Defendants  purchased  from  P.  a quan- 
tity of  saw  logs  in  the  Meander  river,  es- 
timated at  500,000  feet,  for  the  price  of  $5 
per  thousand  feet  and  in  connection  with 
the  purchase  accepted  an  offer  of  P.  to 
cut  and  haul  the  lumber  for  $3  per  thou- 
sand additional. 

Defendants  made  advances  to  P.  in  con- 
nection with  the  contract  and  subsequently 
accepted  an  order  in  favor  of  the  plain- 
tiff bank  for  any  balance  due  P.  on  account 
of  the  logs  purchased  and  the  sawing  and 
hauling  thereof  after  payment  of  defend- 
ants’ account. 

The  quantity  of  logs  in  the  river  fell 
largely  short  of  that  estimated,  and  there 
was  a breach  on  the  part  of  P.  of  the 
contract  to  saw  and  haul  which  made  it 
necessary  for  defendants  to  have  the  work 
done  by  others  at  an  increased  cost. 

Held,  that  this  was  an  equity  running 
with  the  contract  and  that  defendants  were 
entitled  to  offset  the  payments  made  by 
them  resulting  from  the  breach  of  con- 
tract on  the  part  of  P. 

With  respect  to  another  lot  of  logs  there 
appears  to  have  been  an  agreement  that  P. 


should  do  certain  work,  and  that  defend- 
ants should  supply  funds,  and  that  P.  should 
share  in  any  margin  after  disposal  of  the 
lumber. 

Held,  that  the  most  that  P.  would  be 
entitled  to  under  these  circumstances  was 
an  accounting,  and  that  plaintiffs  could  not 
recover  in  their  action,  as  framed,  as  as- 
signees of  P.,  for  lumber  sold  and  services 
and  supplies  furnished. 

Such  further  facts  as  are  not  set  down 
here  will  be  found  in  the  judgment  given 
below. 

Judgment  (Townsend,  C.J.;  Gra- 
ham, E.J.,  and  Meagher,  Drysdale 
and  Laurence,  J.J):  The  judgment 

of  the  Court  was  delivered  by  Mr. 
Justice  Drysdale. 

Dealing  first  with  the  Meander  River 
logs,  I think  the  true  construction  of 
the  contract  between  Prince  and  the  de- 
fendant, relating  to  such  logs,  was  a 
sale  of  all  such  logs  in  the  river  at  five 
dollars  per  thousand,  as  were  then  ac- 
tually there.  After  conversation  re- 
lating to  such  logs,  Prince,  by  a letter 
dated  August  IS,  says:  “I  enclose  the 

bill  for  the  logs,  and  I can  meet  Mr. 
Adams  by  appointment  to  take  delivery 
of  them.” 

The  bill  is  dated  August  13,  1904, 
and  is  as  follows: 

August  13,  1910. 
Messrs.  I.  B.  Schaffner  & Co.: 

500,000  feet  of  spruce  and  hemlock  logs 
now  lying  in  the  Meander  River,  above 
Parker’s  Mills,  at  Upper  Kennetcook,  in 
the  County  of  Hants,  at  $5,  $£,500. 

Prince  also,  in  the  letter,  offered  to 
saw  and  haul  the  lumber  from  saw  logs 
at  three  dollars  per  thousand. 

To  this  letter  the  defendants  replied 
as  follows,  under  date  of  August  18, 
1904: 

Dear  Sir: 

Referring  to  our  conversation  of  two 
or  three  days  ago,  we  hereby  confirm  the 
purchase  from  you  of  between  five  and  six 
hundred  thousand  feet  of  spruce  and  hem- 
lock logs,  now  in  Meander  River,  Upper 
Newport,  in  the  County  of  Hants,  at  $5 
per  thousand,  and  the  same  has  been 
placed  to  your  credit  as  per  your  invoice 
of  August  13.  These  are  the  logs  which 
our  Mr.  Adams  examined  on  the  sixteenth 
and  took  possession  of. 

We  accept  your  offer  of  $3  per  thousand 
for  sawing  the  same,  and  we  understand 
you  will  put  them  f.  o.  b.  cars  at  not  more 


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645 


than  fifty  cents  per  thousand  extra.  The 
cost  of  the  sawing  and  loading  will  be  paid 
as  soon  as  the  logs  are  sawed  and  de- 
livered, and  we  will  instruct  shipment  as 
fast  as  the  sales  are  made.  We  wish  to 
have  part  of  these  manufactured  as  fast 
as  possible  in  order  that  we  may  place 
them  on  the  market.  Will  you  please  ad- 
vise us  how  soon  you  can  commence  sawing. 

Also  please  confirm  this  sale  and  agree- 
ment by  return  mail.  We  will  accept  the 
draft  on  account  of  the  purchase  for  the 
amount  agreed  upon,  and  when  it  is  sawed 
and  disposed  of  we  will  settle  the  balance. 

Yours  truly, 


Then  Prince,  under  date  of  August 
20,  wrote  defendants,  referring  to  said 
letter  of  the  18th,  saying: 

I hereby  confirm  the  sale  and  purchase 
of  the  logs  in  the  Meander  River,  and  will 
begin  sawing  as  soon  as  possible. 

I think  the  500,000  mentioned  in  the 
so-called  bill,  or  invoice,  of  August  12 
must  be  considered  only  as  an  estimate, 
and  that  Prince  would  be  entitled  to 
recover  on  such  contract  the  actual 
quantity  then  in  the  river  at  five  dol- 
lars per  thousand,  and  it  imposed  an 
obligation  upon  Prince  to  saw  and  haul 
the  lumber  for  the  price  stipulated 
therefor  in  the  contract. 

On  September  24,  1904,  Prince,  by  a* 
order  on  defendants,  directed  them  to 
pay  plaintiff  bank  any  balance  due  (af- 
ter payment  of  his  account)  on  account 
of  saw  logs  so  purchased  under  agree- 
ment of  August  18,  1904.  On  its  face 
this  order  was  accepted  in  terms  as  fol- 
lows: “Accepted  October  5,  1904,  as 

per  our  letter  this  date,”  and  in  the  let- 
ter here  referred  to  defendants  say  they 
return  accepted  order  for  any  surplus 
proceeds  over  and  above  the  amount  of 
their  account  against  Prince,  express  a 
hope  there  was  as  much  lumber  as 
Prince  claims,  and  state  to  the  bank 
that  in  the  meantime  they  have  put  up 
more  money  to  saw  and  market  the 
lumber. 

At  this  date  (the  date  of  the  accept- 
ance) the  defendants  had  advanced 
Prince  $2,125.74,  and  the  question  be- 
fore us  is  whether,  in  the  proof  of  this 
action,  more  than  this  sum  is  due  and 
payable  by  defendants  to  plaintiff  un- 
der such  contract.  According  to  the 


finding  of  the  learned  trial  judge,  the 
logs  in  the  Meander  fell  short  of  the 
estimated  500,000  about  85,000,  and 
according  to  this  finding  the  state  of 
Prince’s  account  at  that  time  with  the 
defendants  would  entitle  plaintiffs  to 
recover  three  dollars  and  thirty-nine 
cents,  provided  no  deductions  are  en- 
titled to  be  made  by  reason  of  Prince’s 
breach  of  contract  to  saw  and  haul. 
There  was  an  undoubted  breach  in  this 
respect,  and  defendants  being  obliged 
to  get  such  work  done,  and  having  suf- 
fered a loss  as  compared  with  Prince’s 
three  dollars  contract  to  saw  and  haul, 
a loss  amounting  to  about  $300  the 
question  is,  can  such  deduction  be 
made  ? I think  it  can.  It  was  an  equity 
that  ran  with  the  contract.  It  was  part 
of  the  contract  that  Prince  should  saw 
and  haul,  and  in  the  equitable  assign- 
ment to  the  bank  they  merely  took  the 
balance  due  as  per  contract,  of  which 
express  mention  was  made  in  the  order. 

I see  no  reason  to  disturb  the  learned 
judge’s  finding  as  to  quantity.  In  fact, 
plaintiffs  offered  no  evidence  of  quan- 
tity except  such  as  is  obtained  through 
the  medium  of  defendants,  their  books 
and  sales.  On  this  branch,  in  my  opin- 
ion, the  action  fails. 

As  to  the  Northover  logs,  so-called, 
the  plaintiff  sues  under  an  assignment 
from  Prince  for  supplies  and  ^ork  and 
labor  furnished  and  performed  by 
Prince.  I think  it  very  clear  under  the 
evidence  that  there  can  be  no  remedy 
in  this  form  of  action,  and  that  Prince 
could  not  recover  for  such  supplies 
and  labor.  The  most  that  he  would  be 
entitled  to  is  an  accounting.  This  claim 
was  not  made  either  below  or  before  us, 
and  I think  the  action  as  framed  fails. 
It  seems  clear  that  any  rights  that 
Prince  may  have  in  respect  to  such  logs 
is  based  on  an  agreement  under  which 
he  was  to  do  a certain  amount  of  work, 
the  defendants  furnish  the  moneys  and 
other  outlay,  and  if  any  margin  were 
made  after  the  disposal  of  the  timber 
he  was  to  share  in  such  margin.  Coun- 
sel for  plaintiffs  insist  he  was  iiot  to 
furnish  supplies,  and  that  he  or  his  as- 
signee ought  to  recover  for  some  sup- 


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646 


THE  BANKERS  MAGAZINE 


plies  furnished  in  connection  with  his 
work  in  respect  of  said  logs.  Any  such 
supplies  as  he  alleges  were  furnished 
were  not  supplied  at  defendants'  re- 
quest. They  were  used  by  him  in  the 
work  of  the  joint  venture,  and  in  my 
view  are  only  a proper  matter  of  ac- 
counting in  connection  with  the  result 
of  the  venture. 

No  doubt  an  accounting  was  not  asked 


f or  because  it  is  apparent  that  there  was 
a loss  on  the  Northover  venture  and  the 
accounts  as  presented  show  an  adverse 
balance  against  Prince. 

I am  of  opinion  the  action  fails  and 
that  the  appeal  ought  to  be  dismissed 
with  costs. 

The  other  members  of  the  Court  con- 
curred. 

Appeal  dismissed  with  costs. 


REPLIES  TO  LAW  AND  BANKING  QUESTIONS 

Questions  in  Banking  Law— submitted  by  subscribers— which  may  be  of  sufficient  general  interest 
to  warrant  publication  will  be  aniwered  in  this  department 


PROMISE  OVER  TELEPHONE  TO 
PAY  CHECK 

Sioux  Falls,  S.  D.,  Sept.  24,  1910. 

Editor  Bankers  Magazine: 

Sih:  Will  you  kindly  inform  me  whether 
under  the  following  circumstances,  a bank 
would  be  held  liable  for  certification? 

“A,”  a banker  living  in  Sioux  City,  tele- 
phones an  officer  of  the  bank  of  “B”  at 
Cherokee  after  banking  hours,  the  phone 
connection  being  made  at  “B’s”  home,  ask- 
ing whether  “C’s”  check  on  the  bank  of 
"B”  is  good  for  a certain  amount.  The 
banker  at  “B”  says  the  check  is  good  and 
the  same  was  good  at  that  time,  but  prior 
to  the  presentation  of  the  check  the  funds 
were  reduced  to  such  amount  that  there 
was  not  enough  necessary  to  pay  the  check 
and  the  same  was  refused  for  non-payment. 
Can  “A”  hold  “B”  for  certification  of  this 
check?  Assistant  Cashier. 

Answer:  It  would  seem  to  be  clear 

that  this  would  not  amount  to  a certifi- 
cation binding  upon  the  bank.  A cer- 
tification is  equivalent  to  an  acceptance, 
and  the  statute  of  South  Dakota  re- 
quires all  acceptances  to  be  in  writing. 
In  Nat.  State  Bank  of  Camden  vs. 
Lindeman  (161  Pa.  St.  199)>  the  de- 
fendant claimed  that  the  bank  was 
liable  on  a verbal  promise  made  by  its 
president  to  pay  a check  drawn  by  one 
of  its  depositors.  The  court  said:  “The 
affidavit  of  defense  alleges  that  the 
president  of  the  bank  substantially  ac- 
cepted it  and  promised  to  see  it  paid  if 
the  holder  would  retain  it  for  a few 
days.  We  are  clearly  of  opinion,  how- 
ever, that  the  act  of  May  18,  1881, 
P.  L.  17  Purd.  188  pi.  2,  applies  to  that 
aspect  of  the  case  and  defeats  any  right 


of  action.  The  act  expressly  declares 
that  no  person  within  this  State  shall 
be  charged  as  an  acceptor  of  a bill, 
draft  or  order  for  the  payment  of  money 
exceeding  $20.00,  unless  his  acceptance 
shall  be  in  writing,  signed  by  himself 
or  his  lawful  agent."  See  also  Maginn 
vs.  Dollar  Savings  Bank,  181  Pa.  St 
862.  And  the  same  rule  was  applied  in 
cases  arising  under  the  former  New 
York  statute. 

In  Duncan  vs.  Berlin  (60  N.  Y.  151) 
the  payee  of  a check  called  at  the  bank 
on  which  it  was  drawn,  and  was  ad- 
vised that  “the  check  was  in  order  and 
would  be  paid,”  and  the  payee,  without 
requiring  a written  acceptance,  took  the 
check  away  and  deposited  it  in  his  own 
bank.  Before  the  check  was  presented 
for  payment,  the  drawer's  account  was 
levied  upon  by  the  sheriff  under  a writ 
of  attachment.  The  Court  of  Appeals 
held  that  the  bank  could  not  deduct  this 
check  from  the  balance  to  be  turned 
over  to  the  sheriff,  since  the  oral  promise 
did  not  bind  the  bank  as  acceptor.  The 
Court  said:  “A  check  is  said  to  be  a 

bill  of  exchange  payable  on  demand. 
The  drawee  owes  no  duty  to  the  holder 
until  the  check  is  presented  and  ac- 
cepted. The  statement  of  the  holder 
that  the  check  was  in  order  and  would 
be  paid  before  the  attachment  was 
served  is  of  no  avail.  A parol  accept- 
ance is  not  valid.  (I  Rev.  Stat.  768.) 
The  promise  did  not  bind  the  bank,  and 
no  action  would  lie  upon  it  in  favor  of 
the  holder.” 

And  in  Risley  vs.  Phenix  Bank  (83 


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BANKING  LAW 


647 


N.  Y.  318),  which  was  likewise  a case 
where  an  attachment  had  been  served 
after  an  oral  promise  by  the  bank  to 
pay  a check,  the  Court  said:  “The 

check  was  a bill  of  exchange,  within  the 
statute  that  no  person  shall  be  charged 
as  an  acceptor  of  a bill  of  exchange, 
unless  his  acceptance  shall  be  in  writ- 
ing; and  the  defendant  not  having  made 
a written  acceptance  of  the  check,  no 
right  of  action  accrued  thereon  to  the 
plaintiff  by  reason  of  the  verbal  prom- 
ise to  pay  the  check  made  by  the  de- 
fendant on  its  presentation.* * 

In  Bank  of  Springfield  vs.  First  Nat. 
Bank  of  Springfield  (80  Mo.  App.  271), 
the  defendant  received  from  a corre- 
spondent a draft  drawn  on  M.,  who 
tendered  to  the  defendant  in  payment 
of  the  draft  a check  drawn  on  the 
plaintiff  bank.  M.*s  financial  standing 
was  not  good,  and  he  was  distrusted 
by  the  officers  of  the  defendant, 
who,  therefore,  judged  it  prudent  be- 
fore receiving  the  check  to  inquire  of 
the  plaintiff  bank  over  the  telephone 
whether  it  was  good.  They  according- 
ly called  up  the  plaintiff  over  the  tele- 
phone, and  received  in  reply  to  their 
inquiry  the  statement  that  the  book- 
keeper of  the  plaintiff  was  sick,  but  that 
the  plaintiff  would  shortly  inform  them 
whether  the  check  was  good.  About 
ten  minutes  later  the  plaintiff  called 
up  the  defendant,  and  stated  that  the 
check  was  “all  right.**  The  defendant 
thereupon  received  the  check  in  pay- 
ment of  the  draft,  delivered  the  draft 
to  M.,  and  at  once  remitted  the  amount 
of  it,  less  charges,  to  their  correspon- 
dent at  Kansas  City.  Before  the  check 
was  presented  for  payment,  M.  failed. 
It  was  held  that  the  statement  over  the 
telephone  did  not  amount  to  a certifica- 
tion and  bound  the  bank  to  nothing 
more  than  the  truth  of  the  statement  at 
the  time  when  it  was  made. 

The  court  said : “The  certification  of 
checks  is  well  known  to  be  one  of  the 
greatest  dangers  to  the  integrity  of 
their  funds  with  which  bankers  have  to 
contend.  The  power  to  certify  checks, 
unless  guarded  and  restrained,  is  noth- 
ing less  than  the  power  of  a corrupt 


teller  or  other  servant  to  give  away  the 
funds  of  the  bank.  Such  abuses  have 
been  produced  by  the  exercise  of  this 
power  that  prudent  banks,  as  is  well 
known,  have  generally  discontinued  the 
practice  of  certifying  checks,  and  have 
substituted  therefor  the  practice  of  tak- 
ing up  the  check  tendered  for  certifica- 
tion and  issuing  in  its  place  llieir  own 
cashier’s  check,  which  is  tantamount  to 
their  own  promissory  note. 

“The  assets  of  a bank  are  a trust  fund 
for  its  depositors  and  stockholders.  If 
we  establish  as  a rule  of  law  the  prin- 
ciple that  these  funds  can  be  pledged 
by  the  parol  statements  of  the  tellers  or 
other  agents  of  the  bank  to  the  effect 
that  a check  held  by  an  inquirer  is  good, 
we  establish  a principle  which  would 
greatly  jeopardise  these  trust  funds 
and  which  we  have  no  doubt  would 
startle  the  business  community. 

“In  cases  which  involve  but  a small 
amount,  like  the  case  before  us,  the 
truth  would  be  told  by  the  witnesses  on 
both  sides,  as  it  has  been  told  here;  but 
the  rule  which  we  make  for  one  hundred 
and  eighty-seven  dollars  would,  if  sound 
in  law,  be  a rule  for  one  hundred  and 
eighty-seven  thousand  dollars.  The  re- 
sult of  such  a rule  would  be  that  in 
cases  involving  large  amounts  of  money 
the  assets  of  a bank  would  become  the 
mere  sport  of  perjured  witnesses. 

“Upon  any  ground,  then,  we  must  hold 
that  the  statement  over  the  telephone 
by  the  agent  of  the  plaintiff  that  the 
particular  check  in  question  was  all 
right,  was  not  an  agreement  on  the  part 
of  the  plaintiff  that  it  should  be  paid 
at  all  events  whenever  presented  within 
the  period  of  the  statute  of  limitations, 
which,  as  we  have  seen,  is  the  effect 
which  the  law  ascribes  to  the  certifica- 
tion of  a check.**  When  the  case  last 
cited  was  decided,  there  was  no  statute 
of  Missouri  similar  to  that  of  South  Da- 
kota, and  the  decision  shows  how  re- 
luctant the  courts  are  to  give  conversa- 
tions of  this  character  the  effect  of  a 
certification,  even  where  there  is  no 
statute  requiring  acceptances  to  be  in 
writing. 


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SAYINGS  BANKS 

Conducted  by  W.  H.  Kniffin,  Jr. 


SAVINGS  BANK  MEN  IN  LOS  ANGELES 


TJT  AVING  gone  on  record  as  unal- 

**■  terably  opposed  to  the  postal 
savings  bank;  and  having  fought  a 
good,  but  losing  fight  against  it,  the 
savings  bank  section  of  the  American 
Bankers’  Association,  in  session  at  Los 
Angeles,  October  6,  had  nothing  more 
serious  to  engage  its  attention  than  the 
high  cost  of  living  and  the  cheap  price 
of  bonds.  It  could  therefore  occupy 
its  time  with  some  of  the  ethical  and 
practical  phases  of  savings  banking  and 
employ  its  logic  in  endeavoring  to  dis- 
cern the  signs  of  the  times. 

In  his  annual  address.  President 
Creer  said: 

“Our  position  on  the  subject  of  the 
postal  savings  bank  has  been  misunder- 
stood by  both  press  and  people  to  a 
considerable  degree.  The  measure  was 
opposed,  not  because  we  feared  compe- 
tition to  our  business  on  the  part  of  the 
government,  but  for  the  reason  that  we 
considered  it  wrong  fundamentally,  ill- 
advised,  unnecessary  and  un-American. 

“The  discussion  of  the  subject  has, 
however,  been  of  great  good,  affording 
a better  idea  of  the  number,  work  and 
success  of  the  various  institutions  for 
savings  all  over  our  country,  one  of 
the  most  important  contributions  to  sav- 
ings bank  literature  being  a compilation 
by  the  secretary  of  this  section  of  the 
savings  deposits  of  the  various  States, 
and  the  character  of  the  financial  insti- 
tutions holding  them.  This  was  so 
vastly  different  in  the  number  of  banks 
given  and  the  total  amount  of  deposits, 
that  it  came  in  the  nature  of  a surprise 
and  the  article  was  copied  and  repro- 
duced in  all  parts  of  the  country. 

“The  postal  savings  bill  has  become 
a law,  and  as  loyal,  patriotic  citizens  it 
is  our  duty  to  see  that  the  utmost 
amount  of  good  shall  be  secured  by  the 
act,  and  that  as  little  harm  as  possible 
may  result.  That  the  banking  fraterni- 
ty is  not  only  willing  but  anxious  to 

648 


operate  with  the  government  in  this 
work,  is  shown  by  the  report  recently 
made  that  three  times  as  many  banks 
had  asked  to  be  made  depositories  for 
postal  savings  funds  as  there  were  ap- 
plications from  post  offices  to  be  desig- 
nated as  postal  banks.  From  the  activ- 
ities of  our  postal  savings  bank  commit- 
tee a large  amount  of  knowledge  has 
been  given  us  regarding  our  own  busi- 
ness. • The  committee  has  done  loyal 
work  of  which  we  are  proud,  and  it  is 
deserving  of  great  praise  for  its  efforts. 

“Following  the  financial  disturbance 
of  1907-8  there  has  not  occurred  that 
adjustment  of  prices  to  a lower  scale 
that  usually  follows  a panic.  On  the 
contrary  the  cost  of  living  has  steadily 
increased.  There  needs  must  be  an  ad- 
justment between  prices  and  wages  or 
there  is  a serious  problem  ahead  for  our 
savings  depositors.  Figures  recently 
issued  would  indicate  that  savings  de- 
posits have  increased  largely  during  the 
past  year,  but  a careful  analysis  will  in 
many  cases  show  that  it  is  the  amount 
of  interest  credited  that  increases  the 
figures  and  not  increased  deposits. 
Thus,  while  a greater  total  in  savings 
deposits  is  shown  in  some  States,  in 
reality  the  withdrawals  have  been  great- 
er than  the  deposits  for  the  same  period. 
The  present  situation  demands  greater 
care  and  conservatism  than  usual  upon 
our  part.” 

Lost  Books,  Dormant  Accounts,Veri- 

FICATION  OF  PAB8  BOOKS,  MORT- 
GAGE Loans. 

Involving,  as  it  did,  the  assembling 
of  the  answers  to  something  over  12,000 
questions  (644  banks  answering  twenty 
questions  each),  the  report  of  the  audit- 
ing committee  represents  no  little  man- 
ual labor.  Upwards  of  1,700  savings 
institutions  were  asked  to  outline  their 
methods  and  practices  in  the  matter  of 
(a)  verification  of  pass  books  ( b ) lost 


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or  stolen  pass  books;  (c)  dormant  ac- 
counts; ( d ) bond  and  mortgage  loans. 
Replies  were  received  from  644  banks 
in  forty-six  states  and  territories.  A 
summary  of  these  replies  affords  an  in- 
teresting and  profitable  study  in  practi- 
cal savings  bank  work. 

Verification  of  Pass  Books. 

“In  a majority  of  the  States  there 
seems  to  be  no  law  requiring  such  veri- 
fication at  stated  periods,  but  in  others 
the  law  is  very  strict  and  well  enforced. 
In  Massachusetts,  for  instance,  banks 
are  required  to  call  in  their  pass  books 
by  advertisement  in  the  newspapers 
every  three  years,  and  statistics  show 
that  the  operation  of  the  law  is  much 
more  effective  as  time  goes  on;  whereas 
there  was  much  adverse  criticism  re- 
garding the  law  at  the  time  of  its  en- 
actment, some  twenty  years  ago,  there 
is  now  almost  universal  commendation 
of  it. 

“A  general  practice,  although  not  f re- 
quently  mentioned,  is  to  print  notice  on 
pass  book  or  pass-book  cover  to  the  ef- 
fect that  interest  should  be  written  up 
on  the  book  frequently  and  that  the 
book  should  be  presented  at  the  bank  at 
from  six  months  to  three  years  for  that 
purpose.  Sixty-five  compare  books 
every  time  presented;  seventy-one  when 
interest  is  added;  127  banks  compare 
when  the  book  is  presented  for  that 
purpose,  but  not  every  time  the  book 
may  come  in;  twenty-two  take  the  bal- 
ance on  deposit  slip  or  draft  ticket  and 
compare  this  with  the  ledger  in  posting; 
three  in  sending  out  notices  asking  for 
the  presentation  of  the  books  include 
the  ledger  balance  with  a card  to  be 
signed  and  returned  if  the  book  is  sent, 
acknowledging  the  balance  to  be  cor- 
rect; thirteen  have  verification  made  by 
auditor;  forty-one  pass  the  books 
through  other  hands  than  the  teller, 
either  at  the  time  of  transaction  or 
when  presented  for  purpose  of  verifica- 
tion. Behind  all  the  varying  practices 
there  seems  to  be  one  controlling  pur- 
pose, which  is,  to  establish  an  internal 
audit,  within  the  bank,  by  which  the 
work  of  one  teller,  or  set  of  tellers, 
shall  be  checked  up  and  proved  by  an 


entirely  different  person  or  persons, 
who  may  be  a subordinate  clerk,  a book- 
keeper or  a special  auditor.  The  de- 
tails of  the  system  must  of  necessity 
vary  according  to  the  size  of  the  banks, 
their  activity  as  to  number  of  transac- 
tions, and  the  convenience  of  operation, 
as  regards  counter  room,  bookkeeping 
space,  etc.,  but  the  system  should  be 
such  that,  so  far  as  possible,  the  work 
of  all  clerks,  tellers  and  bookkeepers 
shall  be  checked  up  or  proved  by  others, 
and  frequent  verification  of  pass  books 
is  an  essential  feature  of  such  a system. 

Lost  or  Stolen  Pass  Books. 

“Four  methods  of  protecting  the  bank 
in  case  of  lost  or  stolen  books  are  in 
common  use,  viz. : Affidavit  of  loss ; bond 
of  indemnity;  advertisement  in  newspa- 
per; notice  of  loss.  Some  banks  com- 
bine two  or  more  of  these,  while  others 
use  but  one.  Many  commercial  banks 
issue  a duplicate  book  on  mere  state- 
ment of  loss.  Some  savings  banks  do 
so  upon  being  satisfied  that  a thorough 
search  has  been  made  for  the  missing 
book,  but  these  are  not  common.  The 
practices  most  in  use  may  be  classified 
as  follows:  205  require  a bond;  185  do 
not  ask  for  a bond;  eighty-four  if  occa- 
sion warrants;  193  require  advertise- 
ment of  loss;  345  do  not;  forty-four 
under  certain  circumstances;  474  issue 
duplicate  books;  142  do  not;  fourteen 
at  times.  Only  six  banks  report  charg- 
ing a fee  for  lost  book,  other  than  the 
cost  of  advertising  or  drawing  the  bond, 
which  usually  costs  a nominal  sum,  from 
$1  to  $3.  The  only  fees  reported  are 
in  one  case  fifty  cents,  one-half  of  which 
is  refunded  if  book  is  found  or  returned. 
The  others  are  twenty-five  cents  each, 
and  one  bank  charges  fee  if  book  is 
closed  out  within  thirty  days. 

Dormant  Accounts. 

“Wherever  the  law  covers  the  question 
of  dormant  accounts  by  stated  proced- 
ure, it  may  be  taken  for  granted  that 
the  banks  comply  with  the  same;  but  in 
some  States  there  seems  to  be  a laxness 
on  the  part  of  the  State  officials  and  the 
law  is  more  or  less  a dead  letter.  It  is 
somewhat  surprising  to  notice  from  the 


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tone  of  the  answers  in  many  cases  that 
these  dormant  balances  seem  to  be  wel- 
come and  that  no  effort  is  made  by  the 
officers  of  the  banks  to  avoid  dormancy. 
Four  hundred  and  twenty-seven  banks 
report  that  their  by-laws  do  not  cover 
this  subject,  while  those  that  have  such 
provision  conform  to  the  State  law. 
Two  banks  made  mention  of  the  fact 
in  their  by-laws  that  entry  of  interest 
does  not  operate  to  revive  the  account. 

“Two  hundred  and  sixty-seven  banks 
report  that  they  make  systematic  and 
continuous  efforts  to  prevent  accounts 
becoming  dormant,  and  if  such  accounts 
have  accumulated  they  make  every  effort 
by  advertising,  looking  up  names  in  old 
directories,  personal  inquiry,  etc.,  to 
trace  the  depositor  or  representatives. 
A few  banks  take  the  address  on  every 
withdrawal  slip  and  make  note  of  this 
on  the  card  record,  thus  keeping  the 
lists  up  to  date  and  affording  a better 
opportunity  to  keep  in  touch  with  the 
depositor.  We  cannot  refrain  from 
urging  the  desirability  of  some  system- 
atic effort  toward  preventing  accounts 
becoming  dormant.  In  nearly  all  sav- 
ings banks,  where  dividends  are  com- 
puted not  oftener  than  quarterly  or 
semi-annually,  there  are  times  during 
the  year  when  some  of  the  clerks  can  be 
spared  from  the  regular  work.  At  such 
times  an  effort  could  be  made  to  reach 
the  owners  of  dormant  accounts  without 
additional  expense  to  the  bank,  and  in 
our  opinion  results  would  show  such  ef- 
forts to  have  been  worth  while. 

Bond  and  Mortgage  Loans. 

“The  answers  to  questions  concerning 
bond  and  mortgage  practices  are  so  di- 
versified that  a general  summary  is  dif- 
ficult; the  following,  however,  may  be 
taken  as  indicative  of  the  general  pro- 
cedure: 138  banks  take  periodical  trial- 
balances  of  mortgage  loans ; running 
from  a daily  proof  to  six  months*  pe- 
riods; seventy-seven  prove  by  checking 
back  the  postings  with  cash  book,  jour- 
nal, mortgage  register,  or  by  whatever 
name  the  book  of  record  may  be  called: 
seventy-nine  compare  endorsements  and 
balance  as  shown  by  the  papers  with 
that  shown  by  the  mortgage  account; 


nine  send  out  interest  notices  stating 
the  amount  still  unpaid  on  the  mortgage, 
leaving  it  to  the  borrower  to  verify  the 
correctness  of  the  figures  (this,  of 
course  he  virtually  does  when  he  pays 
his  interest) ; seventeen  check  this  work 
either  by  the  banks*  auditor  or  public 
accountant,  while  several  pass  the  trans- 
action through  an  officer  who  must  coun- 
tersign the  receipt,  or  who  makes  the 
entry  on  his  own  book  of  records. 
Here,  as  in  the  verification  of  deposit- 
ors* pass  books,  the  vital  point  would 
seem  to  be  that  more  than  one  person 
should  be  interested  in  and  held  ac- 
countable for  the  proof  of  the  mort- 
gage loan  account,  i.  e.,  that  the  work  of 
receiving  the  money  for  interest  and 
principal  and  the  bookkeeping  records 
of  those  transactions  should  be  separate 
and  distinct  and  entrusted  to  different 
persons,  so  that  the  work  of  one  is  a 
check  on  that  of  the  other. 

“Receipts  are  quite  generally  given, 
350  banks  reporting  that  they  do  so.  A 
few  banks  that  take  installment  mort- 
gages issue  pass  books  for  that  pur- 
pose; 433  banks  report  that  they  make 
endorsements  on  the  bond  or  mortgage 
note,  and  a few  on  the  wrapper. 

“In  the  matter  of  taxes,  most  banks 
give  some  attention  to  the  payments,  al- 
though a limited  few  pay  no  attention 
whatever  to  the  matter.  The  customs 
in  use  vary  only  as  to  detail.  Some 
banks  have  the  records  in  the  tax  col- 
lector's office  searched,  either  by  their 
own  representative  or  by  the  tax  offi- 
cials, who  are  sometimes  paid  a small 
fee  for  the  labor.  Other  banks  send  a 
list  of  their  mortgages  to  the  tax  de- 
partment, with  instructions  to  notify  of 
unpaid  taxes.  A few  banks  employ  a 
title  company  to  do  this;  others,  their 
own  attorney  or  tax  searcher.  Other 
banks  havp  an  arrangement  with  the 
collector  of  taxes  to  present  bills  for 
unpaid  taxes  to  the  bank,  the  latter  pay- 
ing them  and  charging  the  borrower. 
Another  method,  which  seems  to  be 
quite  popular,  but  which  would  not  be  a 
safe  practice  in  all  localities,  is  to  rely 
on  the  newsaper  advertisement  prior  to 
the  sale  of  the  property  for  delinquent 


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taxes.  A most  excellent  custom,  and 
one  quite  common  in  New  York,  is  to 
require  tax  receipts  to  be  shown  at  least 
once  in  two  years  and  generally  yearly, 
at  the  time  of  payment  of  interest. 

“The  assessed  valuations  are  not  close- 
ly followed,  and  in  many  instances  not 
at  all ; 349  banks  pay  no  attention  what- 
ever to  the  assessors’  valuations,  and 
prefer  to  depend  upon  their  own  estab- 
lished values  as  made  by  their  loan  com- 
mittee or  appraiser.  Eighty-two  banks 
give  heed  to  changes,  and  a very  few 
advocate  this  as  a criterion  of  value.  A 
number  of  banks  (principally  in  Mas- 
sachusetts, where  the  State  law  requires 
it)  have  periodical  revaluations  by  their 
own  men.  Reports  from  the  West  state 
that  in  many  places  land  values  are  con- 
stantly rising,  so  that  no  attention  need 
be  given  to  depreciation,  but  inasmuch 
as  the  trend  of  development  in  a city  or 
town  may  change  materially  in  a com- 
paratively short  time,  this  would  not  ap- 
pear to  be  an  entirely  safe  practice. 
There  is  certainly  much  to  be  said  in 
commendation  of  the  periodical  revalua- 
tion of  mortgaged  properties  by  compe- 
tent and  conservative  appraisers,” 

Bond  Amortization  Severely  Criti- 
cized. 

In  speaking  of  “The  Amortization 
of  Bonds,”  John  Harsen  Rhoades  of 
New  York,  after  defining  amortization 
to  mean  “the  reduction  of  a debt 
through  the  agency  of  a sinking  fund,” 
and  explaining  the  process  as  applied 
to  the  investment  of  the  funds  of  an 
estate  so  that  the  principal  shall  be  kept 
intact  and  only  the  interest  earned  shall 
be  paid  over  to  the  life  tenant,  said: 

“In  the  management  of  an  estate  the 
purpose  of  scientific  amortization  of 
premiums  is  clearly  apparent.  But  the 
administration  of  an  estate  is  quite  a 
different  proposition  from  the  manage- 
ment of  an  institution  for  savings. 

“As  already  explained,  it  is  the  busi- 
ness of  the  trustee  of  an  estate — the  will 
permitting — to  pay  the  life  tenant, 
when  feasible,  all  income  earned,  and 
to  preserve  the  principal  for  the  re- 
mainderman, and  it  should  be  empha- 


sized that  the  trustee  of  an  estate  is  re- 
sponsible to  the  remainderman  merely 
for  securities,  not  essentially  for  their 
cash  value  at  the  time  of  receipt  or  pur- 
chase. 

“In  the  management  of  an  institution 
for  savings  the  paramount  duty  of  the 
trustee  or  director  is  to  keep  the  in- 
vested principal  of  each  and  every  de- 
positor as  if  it  were  cash — for  deposits 
are  a cash  liability — to  the  best  of  his 
knowledge  and  belief  intact,  and  be 
ready,  however  remote  the  contingency, 
to  make  a cash  payment  in  full  to  each 
and  every  depositor  upon  reasonable  if 
not  immediate  demand. 

“With  the  stock  savings  bank  the  di- 
rector is  privileged  to  reserve  out  of 
earnings  as  much  as  he  desires  for  stock 
dividends,  and  hence  the  amount  of  ac- 
tual interest  earned  is  of  minor  impor- 
tance. But  with  the  trustee  savings  bank 
there  is  no  stock,  and  such  net  earnings 
should  be  paid  to  depositors  as  are  con- 
sistent with  the  stability  of  the  institu- 
tion, and,  inasmuch  as  they  are  not 
money-making  concerns,  competing  with 
one  another  for  deposits,  it  is  obvious 
that  the  banks  should  unite  on  a divi- 
dend policy  subservient  to  the  best  in- 
terests of  each  and  all,  for  only  on  such 
lines  can  they  best  serve  the  philan- 
thropic purpose  for  which  they  were 
founded — the  encouragement  of  thrift. 

The  Merits  and  Demerits  op  Amor- 
tization. 

“Perhaps  the  merits  and  demerits  of 
amortization,  in  its  application  to  the 
management  of  a savings  institution, 
can  best  be  demonstrated  by  carefully 
scrutinizing  a law  recently  enacted  in 
the  State  of  New  York.  It  is  but  fair 
to  say  in  its  defence  that  the  savings 
bank  law  governing  investments  is  rigid, 
only  the  purchase  of  the  highest  grade 
securities  being  permitted. 

“On  January  1,  1908,  the  country 
had  not  wholly  recovered  from  the  pan- 
ic ; bonds  were  much  depressed  in  price ; 
and  many  of  our  savings  institutions 
discovered  the  startling  fact  that,  if 
they  appraised  their  securities  at  their 
estimated  market,  or  probable  liquidat- 


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ing  worth,  they  would  be  unable  to  show 
a surplus.  Assuming  that  all  invest- 
ments were  gilt-edged,  and  certain  to 
be  paid  at  maturity,  and  thinking  pure- 
ly of  dividend  payments,  to  the  exclu- 
sion of  conservation  of  principal,  they 
persuaded  themselves  and  the  Legisla- 
ture that  the  old  law,  which  demanded  a 
semi-annual  report  of  their  condition, 
based  upon  market  values,  should  be  ab- 
rogated, and  that  mortgages  upon  real 
estate  should  be  appraised  at  par,  and 
bonds  at  basis  or  investment  cost,  ad- 
justed to  date  by  the  gradual  amortiza- 
tion of  premiums  and  discounts.  * * * 
It  can  be  seen  that  under  such  a law 
no  bank  could  report  a deficit,  fpr  to  all 
intents  and  purposes  all  securities  would 
be  appraised  at  cost.  Nevertheless,  ig- 
noring its  powers  for  evil,  a law  permit- 
ting this  procedure,  and  called  the 
amortization  law,  was  enacted.  To  be 
sure,  under  the  general  banking  law  of 
the  State,  the  Superintendent  of  Bank- 
ing has  the  legal  right  to  demand  from 
the  banks  a report  based  upon  market 
values.  This,  however,  is  not  manda- 
tory, and  * places  entirely  too  much  re- 
sponsibility upon  the  shoulders  of  the 
superintendent.  Bank  superintendents 
are  but  human;  many  owe  their  ap- 
pointment to  banking  interests;  and, 
with  the  amortization  law  behind  him,  a 
man  with  political  aspirations  might  be 
sorely  attempted  to  shape  his  conduct 
so  as  to  keep  in  good  grace  with  the 
banks. 

The  Bank's  Earnings. 

“Gentlemen,  this  law,  enacted  at  a 
time  of  stress,  was  advocated  for  two 
purposes,  one  laudable,  the  other  not. 

“Many  a savings  bank  man  thought  it 
expedient  that  interest  earned  for  a six 
months’  period  should  be  accurately  as- 
certained, for  the  purpose  of  determin- 
ing the  proper  amount  applicable  to 
dividends,  or  interest  credits,  as  they 
are  called  in  the  East,  since  the  law  has 
always  held  that  regular  dividends 
should  be  paid  out  of  earnings,  and  not 
to  the  detriment  of  surplus;  and  many 
men  were  of  the  opinion  that  a uniform 
method  of  computing  earnings  was  high- 
ly desirable.  *The  amortization  law  par- 


tially serves  this  purpose,  for  if  we  ap- 
praise semi-annual  mortgages  at  par 
and  securities  at  basis  or  investment 
cost,  and  adjust  this  basis  to  date  by  a 
semi-annual  amortization  of  premiums 
and  discounts,  we  obtain  the  actual 
amount  earned  upon  the  moneys  in- 
vested for  a six  months’  period;  but  in 
amortizing  discounts,  although  theoreti- 
cally it  is  presumed  that  premiums  and 
discounts  offset  one  another,  practically 
we  are  compelled  to  draw  upon  surplus. 
However,  when  we  get  at  the  heart  of 
the  matter,  the  question  arises,  in  the 
management  of  a savings  bank,  what 
essential  purpose  is  served  by  knowing 
the  actual  interest  earned  for  any  given 
period?  I do  not  deny  that  it  is  of 
academic  interest  and  a conservative 
procedure;  but  there  are  times  when  the 
trustee  savings  institution  would  be  en- 
tirely warranted  in  paying  a portion  of 
its  regular  dividends  out  of  surplus — 
which  belongs  to  depositors — provided 
the  surplus  be  larger  than  necessary, 
and,  on  the  other  hand,  there  are  times 
when  the  bank  would  by  no  means  be 
justified  in  paying  anything  like  the 
actual  interest  earned  or  even  received, 
for  the  instability  of  the  institution 
might  demand  a reduction  of  the  divi- 
dend rate. 

Amortization  Attacked. 

“It  may  be  amusing,  it  certainly  is 
humiliating,  to  observe  how  some  of  our 
savings  institutions  have  defeated  the 
intent  of  the  law.  I wish  to  point  out 
that  the  amortization  law  very  unwisely 
fails  to  provide  that  any  fixed  ratio  of 
surplus  to  deposits  shall  be  maintained, 
and  explicitly  states  that,  after  the  ex- 
penses and  the  amortization  of  pre- 
miums and  discounts  have  been  duly 
provided  for,  all  interest  earned,  as 
nearly  as  may  be,  shall  be  paid  to  de- 
positors, abandoning  the  matter  of  in- 
crease or  reinforcement  of  surplus  com- 
pletely to  the  discretion  of  the  trustee. 
Such  being  the  case,  a bank  striving  to 
pay  larger  dividends  has  merely  to  sell 
those  securities  purchased  upon  low 
bases,  viz.,  at  high  prices,  charge  the 
loss  to  profit  and  loss  account,  and  re- 
purchase the  same,  or  others  equally 


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653 


good,  upon  high  bases.  Thus  a new 
basis  or  investment  cost  is  established, 
and  the  amount  of  interest  earned,  ap- 
plicable to  dividends  under  the  law,  is 
increased.  Do  not  misunderstand  me. 
There  are  times  when  a shrewd  banker 
can  quite  properly  sell  and  buy  bonds 
to  advantage,  but  the  possibility  here 
opened  of  a mischievous  juggling  of  se- 
curities and  a consequent  manipulation 
of  earnings  proves  the  futility  of  the 
law  even  in  its  most  laudable  purpose, 
the  computation  of  earnings  as  a basis 
for  a proper  dividend  disbursement. 

“Now,  if  the  old  law  demanding  a 
periodical  report  of  assets  and  liabili- 
ties, or  the  true  condition  of  a bank,  was 
abrogated,  and  the  amortization  law 
knowingly  enacted  for  the  purpose  of 
hiding  the  deficits  of  the  future,  the 
proceeding  was  and  is,  so  long  as  we 
supinely  acquiesce,  a disgrace  to  the 
State  of  New  York.  Let  us  charitably 
assume  that  this  violation  of  the  prin- 
ciples of  sound  banking  was  born  of  ig- 
norance at  a time  of  fear. 

“For  the  purpose  of  establishing  sol- 
vency no  figancial  institution  in  the 
land,  barring  the  life  insurance  com- 
pany, has  the  right  to  appraise  its  bonds 
at  basis,  or  investment  cost,  and  this 
single  financial  institution  is  excepted 
only  because,  by  means  of  its  mortality 
tables,  it  can  ascertain  its  liabilities,  not 
only  their  amount,  but  their  due  date, 
with  almost  mathematical  precision,  for 
they  are  based  upon  a certainty — death 
— but  the  cash  liabilities  of  a savings 
bank  are  subject  to  the  whim  of  the  liv- 
ing. 

“If  it  be  said  that,  in  the  propositions 
here  laid  down,  I am  theoretical  and 
ultra-conservative,  I answer  that  many 
bankers  would  do  well  to  put  more 
sound  banking  theories  into  practice; 
and,  as  for  ultra-conservatism,  in  the 
handling  of  other  people’s  money  ultra- 
conservatism is  a virtue. 

“I  have  set  before  you  these  facts 
and  possible  delinquencies  in  no  spirit 
of  captiousness  or  ill-will,  but  merely  to 
exemplify  the  indifference  that  exists 
among  directors  and  trustees  towards 
the  principles  of  sound  banking;  men 
who  are  no  more  immune  from  their  re- 


sponsibilities than  are  the  heads  of  the 
institutions.  Gentlemen,  apathy  is  the 
shield  behind  which  many  a man  shel- 
ters his  ignorance.  If  we  do  not  care 
for  responsibilities  we  need  not  assume 
them,  but,  if  assumed,  for  the  sake  of 
those  who  have  placed  their  trust  in  us 
and  for  our  own  sake,  let  us  compre- 
hend them.  Directors  need  not  always 
direct,  but  they  should  at  least  know 
how. 

“.We  are  not  here  to-day,  I take  it,  for 
the  purpose  of  glorifying  the  banking 
methods  of  this  country,  but  rather  se- 
riously to  discuss  the  financial  problems 
of  the  hour.  For,  if  not  here,  where 
should  they  be  discussed?  A just  pride 
in  our  achievements  should  not  blind  us 
to  our  faults  and  weaknesses.  If  there 
are  weak  spots  in  the  financial  structure 
it  is  our  duty  to  expose  them,  not  only 
for  our  own  good,  but  for  the  benefit  of 
others. 

“In  closing,  I desire  to  revert  to  the 
main  subject  and  to  repeat  that,  with 
the  savings  institution,  the  purpose  of 
amortization  of  premiums  and  dis- 
counts, if  that  purpose  be  solely  the  de- 
termining of.  earnings,  is  scientifically 
correct,  but  as  a guide  for  the  declara- 
tion of  dividends,  such  earnings  at  best 
are  of  little  value,  and  of  absolutely 
none  unless  we  know  the  condition  of 
stability  of  the  institution,  as  measured 
by  the  market  value  of  its  assets. 

“Thjee  things  are  certain.  Basis  or 
investment  cost  for  the  purpose  of  es- 
tablishing solvency  is,  dangerous,  for  it 
may  be  used  to  conceal  the  truth.  Es- 
timated market  or  probable  liquidating 
values  are  ignored  at  our  peril,  for  they 
best  express  the  facts.  The  absolute 
truth,  or  the  positive  knowledge  that  we 
can  meet  our  obligations,  can  only  be 
learned  if  called  upon  to  face  them. 

“From  all  of  which  we  can  but  con- 
clude that,  whatever  its  usefulness  in 
other  fields,  in  its  application  to  such  an 
institution  as  a savings  bank,  where  de- 
posits are  a cash  liability,  the  process  of 
scientific  amortization  may  be,  and,  as 
performed  under  the  present  savings 
bank  laws  of  New  York  State,  it  is  both 
a delusion  and  a snare. 

“Gentlemen,  we  have  in  our  keeping 


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THE  BANKERS  MAGAZINE 


the  savings  of  the  poor.  It  is  a noble 
responsibility  and  a privilege  to  guard 
them” 

The  report  of  the  secretary  showed  a 
membership  of  1773,  making  a net  gain 
of  137  members  during  the  year.  The 
expenses  of  the  section  were  $9,034.29, 
out  of  which  the  committee  on  postal 
savings  banks  reported  an  expenditure 
of  $3,151.74  in  its  propaganda  against 
the  bill  for  their  establishment.  This 
committee  said  on  this  subject: 

“Thus  it  would  seem,  on  the  face  of 
it,  that  the  efforts  of  your  committee 
and  those  who  have  so  loyally  supported 
its  work  the  last  few  years,  have  been  of 
no  avail,  and  in  a great  measure  this  is 
true.  However,  we  believe  that  the  dig- 
nified activities  of  the  association  in  car- 
rying on  this  educational  compaign  and 
in  presenting  the  situation  to  commit- 
tees in  Congress  had  a great  deal  to  do 
in  bringing  about  such  favorable  condi- 
tions as  exist  in  the  present  law.  Some 
of  the  evil  effects  resulting  from  the 
establishment  of  a postal  savings  bank 
system  will  be  offset  by  the  redeposit- 
ing of  funds  in  the  communities  in  which 
they  originate,  and  if  those  who  admin- 


ister this  law  will  see  to  the  carrying 
out  of  that  provision,  as  we  believe  they 
will,  the  people  in  the  several  commu- 
nities will  have  the  advantage  of  using 
their  own  money  in  building  up  their 
industries.” 

The  new  officers  are:  President,  Ed- 
ward L.  Robinson,  Baltimore ; vice- 
president,  Alfred  L.  Aiken,  Worcester, 
Mass.;  secretary,  William  Hanhart, 
New  York. 

Newton  F.  Hawley,  treasurer  of  the 
Mechanics  and  Farmers  Savings  Bank, 
Minneapolis,  read  a paper  on  “The 
Savings  System  in  Jthe  Public  Schools,” 
and  “The  Segregation  of  Savings  De- 
posits” was  treated  by  R.  M.  Welch, 
cashier  Union  Savings  Bank  of  San 
Francisco.  “The  Building  and  Loan 
Movement  in  the  United  States”  was 
reviewed  by  James  M.  McKay  of 
Youngstown,  Ohio;  “Thrift,”  by  Robert 
J.  Burdette,  the  well-known  humorist, 
and  the  “Future  of  Bonds,”  by  Edmund 
D.  Fisher,  Deputy  Comptroller  of  New 
York  City.  J.  H.  Johnson,  president 
of  the  Peninsular  Savings  Bank,  De- 
troit, also  spoke  on  the  question  of 
segregating  savings  deposits. 


SCALING  DOWN  DEPOSITS  IN  SAVINGS  BANKS 


'T'HE  rehabilitation  of  the  South- 
bridge  Savings  Bank,  of  South- 
bridge,  Mass.,  by  the  scaling  do\vn  of 
its  deposits  fifteen  per  cent,  again  illus- 
trates a fundamental  principle  of  sav- 
ings banking  and  a legal  point  con- 
nected therewith  not  generally  known 
to  the  public  and  unfamiliar  to  many 
bank  men. 

Through  the  misappropriation  and 
abstraction  of  its  funds  by  its  treasurer, 
the  bank  became  insolvent  and  a tem- 
porary injunction  was  issued  restrain- 
ing the  bank  from  further  prosecuting 
its‘  business.  This  was  later  made  a per- 
manent injunction.  The  statement  of 
condition  of  the  bank  as  of  October  30, 
1909,  to  the  Massachusetts  Banking  De- 
partment, showed  assets  of  $2,578,- 
428.80,  to  meet  deposits  of  $2,368,- 
799-22, — a very  healthy  condition;  but 


— according  to  an  examination  made 
January  21,  1910,  there  was  due  de- 
positors $3,020,466.62,  with  assets  of 
$2,596,023.73,  leaving  a deficit  of  $424,- 
442.89, — a very  unhealthy  condition. 

Such  a statement  of  fact  would  seem 
to  indicate  that  it  was  not  the  assets  of 
the  bank,  particularly,  that  had  been 
tampered  with,  but  the  liabilities  as  rep- 
resented by  the  pass  books.  Just  the 
method  pursued  by  the  treasurer  is  not 
known  to  the  writer,  but  that  is  imma- 
terial. The  bank  by  its  own  records 
was  solvent,  but  by  the  depositors'  rec- 
ords was  far  from  a going  concern.  It 
is  quite  evident  that  the  periodical  veri- 
fication of  pass  books,  as  required  by 
law,  made  in  1907,  did  not  disclose  the 
true  state  of  affairs  in  this  institution, 
or  the  work  was  so  arranged  as  to  cover 
up  such  abstractions.  At  any  rate  the 


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655 


bank  was  hopelessly  insolvent,  and  one 
of  two  courses  remained  open, — re- 
ceivership or  scaling  of  deposits,  and 
the  latter  course  was  very  wisely  de- 
cided upon. 

By  the  present  arrangement  the  bank 
was  to  re-open  its  doors  during  August, 
with  liabilities  scaled  as  above  noted. 
The  trustees  have  contributed  a guar- 
antee fund  of  $50,000  to  place  the  bank 
on  a sound  financial  basis.  The  usual 
two  per  cent,  dividend  will  be  paid 
shortly  after  opening,  and  it  is  hoped 
within  a few  months  to  declare  an  addi- 
tional dividend  of  about  three  per  cent, 
from  contingent  assets. 

This  process  has  twice  been  used  in 
New  York  State  to  re-establish  savings 
banks  that  have  been  rendered  insolvent, 
and  in  both  cases  with  most  satisfactory 
results,  saving  the  depositors  much  more 
than  the  amount  of  the  scaling  by  avoid- 
ing lengthy  and  expensive  receiverships. 

The  legal  point  in  such  cases  is  this: 
A savings  bank  is  a mutual  institution, 
conducted  without  profit  to  the  man- 
agers and  for  the  sole  benefit  of  the  de- 
positors. It  is  really  a cooperative  in- 
vestment concern  whose  members  share 
the  earnings,  and  if  necessary  the  losses. 
The  obligation  of  the  trustees  is  moral 
rather  than  financial,  although  they  are 
holden  for  due  diligence  and  good  faith 
in  the  same  measure  that  men  of  sound 
judgment  would  use  in  their  own  busi- 
ness. They  cannot,  of  course,  be  ab- 
solved from  liability  if  they  are  care- 
less and  negligent  in  their  management, 
or  remiss  in  the  discharge  of  their 
duties.  In  this  case  they  seem  to  real- 
ize their  responsibility  and  have  come 
forward  with  the  guarantee  fund.  The 
present  instance  emphasizes  the  old 
adage  that  it  is  too  late  to  lock  the  barn 
door  after  the  horse  has  been  stolen,  and 
it  would  seem  that  some  system  of  State 
supervision  and  examination  could  be 
devised  to  prevent  such  happenings.  The 
periodical  audit  of  pass  books,  as  ad- 
mirable as  it  is  in  theory,  seems  in  this 
case  to  have  been  impotent  to  uncover 
such  a fraud  upon  the  depositors.  If 
done  at  all,  it  should  be  by  an  outside 
audit  company,  free  to  make  the  test  as 
rigid  as  good  banking  demands, 
s 


The  depositor  in  handing  in  his 
money  says,  in  substance:  “Take  this 
money  and  invest  it,  according  to  law, 
for  me  on  joint  account  with  other  de- 
positors, and  from  the  income  received 
deduct  the  necessary  expenses  of  man- 
agement, setting  aside,  if  you  please, 
enough  to  insure  my  principal  at  all 
times,  and  give  me  the  balance  as  inter- 
est according  to  your  rules.  If  losses 
accrue,  I will  bear  my  share.,,  In  the 
present  instance  he  is  doing  the  latter, 
but  it  would  not  seem  just,  either  in  law 
or  morals,  to  ask  him  to  share  these 
losses  unless  the  trustees  have,  in  good 
faith  and  with  due  regard  to  the  law  and 
careful  management,  administered  the 
trust  committed  to  them. 

In  two  other  cases  in  Massachusetts, 
of  recent  date,  the  losses  were  beyond 
control,  and  were  properly  a charge 
upon  depositors.  In  the  case  of  the 
Marblehead  Savings  Bank,  the  insol- 
vency was  caused  by  depreciation  of  as- 
sets, and  the  bank  was  closed  for  three 
years  by  order  of  the  court,  with  ex- 
penses of  $3,480.15,  or  .69  of  one  per 
cent.,  and  the  only  loss  to  depositors 
was  ten  and  one-half  per  cent,  in  inter- 
est. The  Greenfield  Savings  Bank  was 
likewise  enjoined,  by  court  order  on 
February  9,  1909,  from  further  con- 
ducting its  business  on  account  of  de- 
preciation of  real  estate  loans.  The 
bank  is  now  in  statu  quo  and  will  re- 
main so  until  such  time  as  it  k possible 
to  reopen  on  a solvent  basis,  and  the 
losses  will  probably  not  be  large,  if  any. 
Meanwhile  the  bank  will  make  loans  on 
depositors*  pass  books  and  make  the 
closing  of  its  doors  as  light  a burden  as 
possible.  The  bank  commissioner  for 
Massachusetts  is  at  present  converting 
the  assets  into  cash,  in  view  to  an  early 
opening  of  this  institution. 

A similar  scaling  will  take  place  in  the 
York  County  Savings  Bank,  Biddeford, 
Me.,  in  which  recent  disclosures  have 
uncovered  defalcations  of  $300,000,  ne- 
cessitating a scaling  of  25  per  cent. 

The  law  in  the  Southbridge  case  is 
plain,  and  the  results  will  no  doubt 
justify  the  action  taken,  but  it  will  be  a 
difficult  task  to  make  the  average  de- 
positor understand  the  fine  points  of 


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656 


THE  BANKERS  MAGAZINE 


the  legal  side  of  the  matter,  as  the 
“fifteen  points  loss”  will  be  apt  to  make 
him  a trifle  biased.  The  disgruntled 
patrons  will  tend  to  keep  the  occurrence 
prominent  in  the  minds  of  many,  and  if 
such  can  be  persuaded  that  the  loss  was 
all  interest  and  not  principal,  the  lamen- 
tations may  not  be  quite  so  long  or  so 
loud. 


THE  HELPFULNESS  OF  THE 
SAVINGS  BANK 


/^\N  May  20,  1899,  a little  boy,  eight 
years  old,  who  had  been  properly 
taught,  opened  with  the  Wachovia  Loan 
& Trust  Company  a savings  fund  ac- 
count. His  first  deposit  was  $1.05.  As 
time  went  on  he  made  many  deposits; 
at  first  they  were  all  small,  but  as  he 
grew  in  years  and  ability  the  size  of  his 
deposits  increased.  This  lad  is  not  the 
son  of  wealthy  parents,  but  has  had  in 
his  home  the  example  of  thrift,  economy 


and  good  management;  and  all  during 
his  boyhood  he  made  it  a practice  to 
divide  his  income  into  three  portions; 
one  part  went  for  clothing,  the  second 
part  went  for  spending  money  and  the 
third  part  he  saved  for  his  education. 
It  is  not  necessary  to  say  which  one  of 
these  parts  was  the  smallest.  His 
father  did  not  charge  him  anything  for 
board  and  lodging,  but  his  other  ex- 
penses he  bore  himself.  He  has  during 
his  youth  accumulated  quite  a consider- 
able library,  to  which  his  friends  and 
playmates  have  had  free  access. 

This  career  as  above  stated  started 
ten  years  ago,  and  to-day  this  boy,  now 
a young  man,  is  at  college,  paying  his 
own  expenses  out  of  money  saved  from 
his  own  earnings  and  allowed  to  earn 
interest  in  the  savings  department  of 
the  Wachovia  Loan  & Trust  Company. 
He  has  enough  to  his  credit  to  see  him 
through. 

It  is  not  necessary  to  point  any  moral 


FOREIGN  BANKING  AND  FINANCE 

Conducted  by  Charles  A.  Conant 


SUBSTITUTING  PAPER  FOR  BANK  NOTES 


'T'HE  policy  of  substituting  govern- 
ment  paper  for  bank  notes  seems 
to  be  gaining  ground  in  the  British  de- 
pendencies. In  Australia,  where  this 
cloud  has  hung  over  the  banking  com- 
munity for  several  years,  it  has  at  last 
been  crystallized  into  a definite  pro- 
posal, introduced  into  the  Federal  Par- 
liament by  the  Prime  Minister,  Mr. 
Fisher.  The  bill  provides  for  a total 
issue  of  £7,000,000  in  Federal  notes, 
against  which  a gold  reserve  is  to  be 
held  amounting  to  twenty-five  per  cent, 
of  outstanding  issues.  Additional  issues 
may  be  made  against  the  deposit  of  gold 
to  the  full  amount.  The  issue  only  part- 
ly covered  by  gold  somewhat  exceeds 
the  total  note  circulation  of  the  Austral- 
ian banks  at  a recent  date.  It  is  con- 
templated that  the  banks  shall  retire 
their  circulation,  and  provision  is  made 


for  the  return  to  the  government  of  all 
notes  which  have  not  ye.t  been  issued. 
Nominally  the  vested  rights  of  the 
banks  to  issue  notes  under  their  char- 
ters are  not  taken  away.  The  obj  ect  is 
attained  in  the  same  manner  as  in  the 
United  States,  when  it  was  desired  to 
stamp  out  the  circulation  of  State  banks, 
by  fixing  the  tax  upon  note  issues  at  ten 
per  cent. 

The  banks,  while  protesting  generally 
against  the  new  project,  are  apparently 
not  making  a very  stubborn  fight,  be- 
cause of  the  conviction  that  it  will  be 
useless.  The  project  is  one  of  the  re- 
sults of  the  predominance  of  the  Labor 
party,  which  has  adopted  so  many  meas- 
ures of  state  socialism,  and  which  has 
for  several  years  been  demanding  a 
bank  owned  and  operated  by  the  gov- 
ernment. Mr.  Fisher,  the  Prime  Min- 


Digitized  by  t^ooQle 


Digitized  by  t^ooQle 


Bellamore 

Armored  Steel  Bank  Car 

A BANK  ON  WHEELS 


Brings  to  the  door  of  every  depositor  all  tho  conveniences 
of  a bank.  NO  RISK  for  monoy  and  seourlties  In  transit 


Armored  Steel  Motor  Bank  Car  Type  11  VC.  Side  View 

Amongst  the  many  uses  of  the  Bellamore  Armored  Steel 
Bank  Car  are  the  following: 

The  collection  of  heavy  deposits. 

The  delivery  of  pay-roll-money  to  factories. 

The  delivery  of  large  sums  of  money  to  customers. 

The  transportation  of  bullion. 

The  carrying  of  money  and  securities  between  branch  institutions. 
The  collection  and  delivery  of  valuables  for  safe  deposit. 

Descriptive  booklet  and  prices  on  application. 

Bellamore  Armored  Car  & Equipment  Company 

286  FIFTH  AVENUE,  NEW  YORK 


Digitized  by  t^ooQle 


FOREIGN  BANKING  AND  FINANCE 


657 


ister,  is  apparently  throwing  out  the 
proposal  of  a government  note  issue  as 
a tub  to  the  whale,  in  order  to  post- 
pone the  agitation  for  a government 
bank.  The  banks  will  be  put  to  a con- 
siderable increase  of  expense  in  main- 
taining their  branches,  because  hereaf- 
ter they  will  be  compelled  to  keep  gold 
or  government  notes  in  their  tills  instead 
of  unissued  notes,  which  become  a lia- 
bility only  after  being  put  into  circula- 
tion. At  the  annual  meeting  of  the 
City  Bank  of  Sydney,  on  July  19  last, 
it  was  pointed  out  by  the  chairman, 
Mr.  Gould,  that  it  might  be  necessary 
to  offset  this  loss  by  charging  exchange 
rates  on  country  checks. 

There  are  several  ominous  features 
to  the  project  from  the  political  and 
economic  point  of  view,  apart  from  its 
immediate  effect  upon  the  banks.  One 
of  the  provisions  of  the  bill  is  that  notes 
may  be  issued  for  ten  shillings  ($2.40). 
This  means  that  gold  will  be  expelled 
from  circulation  down  to  this  minimum 
denomination,  so  that  sovereigns  will  be 
progressively  rarer  as  the  new  system 
comes  into  operation.  In  a sense,  Aus-' 
tralia  will  profit  by  the  amount  of  gold 
sent  abroad,  but  the  basis  of  her  mone- 
tary system  will  be  correspondingly 
weakened.  There  is  grave  fear,  more- 
over, that  if  the  first  note  issue  under 
the  law  proves  successful,  the  tendency 
always  disclosed  where  paper  takes  the 
place  of  gold  will  prevail, — to  keep  on 
meeting  special  requirements  by  new 
issues  of  paper.  It  is  admitted  that  one 
of  the  purposes  of  the  new  issue  is  the 
creation  of  the  new  fleet.  In  other 
words,  the  expenditure  will  not  even  be 
for  a productive  purpose,  but  the  notes 
will  remain  afloat  and  uncancelled  after 
some  new  invention  in  armor  or  gunnery 
shall  have  sent  the  new  ships  to  the 
scrap-heap. 

In  the  United  Provinces  of  South 
Africa,  also,  there  is  some  talk  of  sub- 
stituting a government  issue  for  the  ex- 
isting bank-note  currency,  upon  the 
ground  that  there  is  at  present  no  uni- 
form currency  system.  The  question 
whether  the  existing  banking  systems 
shall  be  reduced  to  a common  standard, 


and  whether  their  note  issue  shall  be  se- 
cured by  bonds,  as  is  already  required 
in  Cape  Colony,  will  probably  be 
threshed  out  before  the  more  radical 
change  is  seriously  taken  up.  It  is  de- 
clared by  a South  African  correspon- 
dent of  the  “London  Bankers’  Maga- 
zine,” for  September,  that  the  old 
Kruger  coins  will  probably  be  called  in 
and  a uniform  coinage  established  for 
the  Union. 


A UNIFORM  INTERNATIONAL 
CHECK 

A STRONG  indorsement  of  the  prin- 
**  **  ciple  of  a uniform  law  for  the 
check  was  given  at  the  twenty-sixth  con- 
ference of  the  International  Law  Asso- 
ciation, which  was  held  in  London  early 
in  August.  There  was  a strong  dispo- 
sition to  approach  the  liberality  of  the 
English  and  American  laws  on  the  sub- 
ject and  to  get  rid  of  some  of  the  for- 
malism embodied  in  Continental  laws. 
A committee  which  was  appointed  to- 
prepare  some  uniform  principles  in  re- 
gard to  checks  presented  a project  em- 
bodying the  following  provisions: 

(1)  That  it  shall  not  be  obligatory 

(a)  to  insert  into  the  context  of  the 
check  an  indication  either  of  the  ac- 
count to  be  debited  or  of  the  balance 
out  of  which  the  payment  is  to  be  made ; 

(b)  to  write  the  date  all  in  letters  or  in 
the  hand  of  the  writer  of  the  context; 

(2)  that  the  check  shall  be  payable  upon 
demand  only,  shall  be  dated,  and  shall 
be  deemed  payable  to  order,  unless  there 
are  express  words  prohibiting  transfer; 

(3)  that  the  English  provisions  relating 
to  crossed  checks  are  to  be  maintained, 
and  should  be  accepted  generally. 

Further  provisions  to  promote  uni- 
formity, in  their  relations  to  the  Eng- 
lish law,  are  discussed  by  the  “London 
Economist”  of  August  20,  as  follows: 

“These  rules  adopt  either  the  existing 
English  law  or  the  regular  English 
practice,  for  though  legally  a check 
need  not  be  dated,  in  effect  bankers  re- 
quire that  formality.  Modification  of 
the  English  rule,  however,  is  introduced 
by  the  recommendation  that  internal 


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checks  shall  be  presented  for  payment 
within  a fixed  period  limited  by  the  law 
of  each  country,  and  foreign  checks 
within  an  interval  fixed  in  relation  to 
this  period.  Under  our  existing  law,  a 
check  must  be  presented  within  a rea- 
sonable time  after  issue  to  make  the 
drawer  unconditionally  liable,  but 
though  this  elasticity  has  advantages,  it 
tends  to  uncertainty,  and  the  Institute 
of  Bankers  has  recommended  the  Con- 
tinental system  of  fixing  a definite  limit. 

“Again,  it  is  proposed  that  the  duty 
and  authority  of  the  banker  to  pay 
should  be  terminated  by  the  drawer’s 
countermand  of  payment,  but  not  by 
notice  of  the  drawer’s  death.  The  first 
part  of  the  rule  adopts,  the  second  part 
negatives,  the  English  law;  but  here, 
too,  our  peculiar  practice,  based  on  a 
judicial  decision  of  1822,  has  been  gen- 
erally recognized  as  unreasonable  and 
inconvenient,  and  there  would  be  a gen- 
eral gain  in  abandoning  it. 

“It  is  noteworthy  that  two  proposals 
submitted  to  the  committee,  requiring 
the  insertion  of  the  word  “check”  or  its 
equivalent  in  the  instrument,  and  the 
specification  of  the  place  where  the 
check  is  drawn,  were  not  adopted. 
Neither  of  these  forms  is  required  in 
England,  and  to  require  them  would 
mean  such  a grave  inconvenience  to  the 
habits  of  our  banks  and  business  people 
generally,  that  the  change  would  have 
little  chance  of  acceptance.” 


STRENGTHENING  THE  BANK  OF 
BELGIUM 

'T'HE  National  Bank  of  Belgium  has 
recently  taken  important  steps  to 
strengthen  its  monetary  position  among 
the  other  central  banks  of  Europe.  For 
some  years  exchange  has  been  adverse 
to  the  little  monarchy,  in  spite  of  fa- 
vorable business  conditions  and  large 
accumulations  of  capital,  with  the  re- 
sult that  coin,  both  gold  and  silver,  has 
largely  crossed  the  French  frontier  and 
disappeared  from  the  domestic  circula- 
tion. The  bank  has  been  loth  to  raise 
the  rate  of  discount  unduly,  because  of 


the  burden  which  would  be  imposed  by 
such  action  upon  Belgian  commerce. 

For  many  years  the  National  Bank 
stood  alone  in  counting  as  a part  of  its 
metallic  reserve  foreign  bills  payable  in 
London,  Paris,  Berlin  and  other  cen- 
ters. Gradually  the  holdings  of  bills 
encroached  upon  the  holdings  of  actual 
gold  and  silver  and  the  reserve  consisted 
of  a larger  percentage  of  bills  than  of 
metal.  This  policy  has  been  criticised 
by  many  economists  at  home  and  abroad, 
and  these  criticisms  have  finally  brought 
about  a change.  The  National  Bank 
engaged  in  negotiations  early  in  the 
summer  with  the  Bank  of  France  to  con- 
vert a portion  of  its  bill  holdings  into 
coin.  The  Bank  of  France  was  willing 
to  supply  a considerable  amount  of  coin 
if  a part  were  taken  in  five-franc  pieces. 
When  the  exchanges  made  the  trans- 
action an  advantageous  one,  the  bank 
proceeded  to  realize  nearly  $8,000,000 
in  bills  during  July  and  to  have  the  pro- 
ceeds remitted  in  gold  and  silver  to 
Brussels.  The  result  was  an  increase 
in  the  gold  reserve  from  118,000,000 
francs,  on  July  7,  to  142,000,000  francs, 
on  August  18,  and  in  the  silver  reserve 
from  46,000,000  francs  to  62,000,000 
francs.  Thus  the  total  metallic  reserve 
rose  from  164,000,000  ($31 ,700,000)  to 
204.000,000  francs  ($39,400,000). 

The  decision  of  the  managers  of  the 
bank  was  reached  only  after  long  and 
careful  deliberation,  because  it  means 
the  renunciation  of  a very  considerable 
amount  in  earnings.  It  was  felt,  how- 
ever, that  the  time  had  come  to  take 
some  measures  to  protect  the  reserve 
and  the  local  circulation.  One  of  the  in- 
fluences which  has  expelled  coin  rapidly 
has  been  the  issue  in  recent  years  of 
large  amounts  in  twentv-franc  notes. 
The  amount  of  these  notes  outstanding 
increased  from  87,535,160  francs  on  the 
average  of  the  year  1900  to  149,360,320 
francs  in  1908.  While  there  are  some 
economists  who  advocate  the  drastic  step 
of  retiring  or  reducing  the  volume  of 
these  notes,  it  is  felt  by  those  familiar 
with  the  situation  that  the  issue  of  gold 
for  notes  would  not  prevent  the  flight  of 
the  gold  across  the  French  frontier  and 


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would  simply  reduce  the  circulation.  The 
policy  of  the  bank  will  probably  be, 
however,  to  restrict  further  issues  of 
twentv-f ranc  notes  and  to  cover  them 
by  gold  in  a larger  proportion  than  the 
notes  of  higher  denominations,  which 
form  the  legitimate  currency  of  com- 
merce. 


THE  BIG  FRENCH  BANKS 

'T'HE  steady  accumulation  of  savings 
in  France  appears  to  afford  good 
returns  to  the  big  banking  institutions 
which  act  as  distributors,  like  the 
Credit  Lyonnais  and  the  Societe  Gene- 
rate, in  spite  of  the  lassitude  in  the 
financial  world.  The  value  of  163  lead- 
ing securities  which  are  compared  semi- 
annually by  “L’ficonomiste  Europeen” 
showed  a decline  from  December  31, 
1909,  to  June  30,  1910,  amounting  to 

653.000. 000  francs  ($130,000,000). 
Curiously  enough,  the  heaviest  loss, — 

469.000. 000  francs, — was  in  the  de- 
partment of  railway  bonds.  The  mar- 
ket value  of  these  163  selected  securi- 
ties on  June  30,  according  to  the  French 
journal  of  July  22,  was  59,478,000,000 
francs  ($1 1 ,484,000,000) . 

The  character  of  the  change  in  finan- 
cial conditions  is  illustrated  by  the  fact 
that  the  five  principal  banks  outside  the 
Bank  of  France  showed  a shrinkage  in 
commercial  assets  between  December  3 1 , 
1909,  and  May  31,  1910,  while  there 
was  a considerable  increase  in  advances 
on  securities  and  in  deposits.  The  de- 
cline in  the  commercial  portfolio  was 
only  19,000,000  francs,  leaving  the 
amount  on  May  31  at  3,048,000,000 
francs.  The  increase  in  advances  on 
securities  and  stock  exchange  loans  was 

120.000. 000  francs,  leaving  the  amount 
at  1,276,000,000  francs.  Deposits  and 
current  accounts  increased  during  the 
five  months  by  302,000,000  francs  and 
stood  at  4,645,000,000  francs  ($900,- 
000,000). 

The  total  commercial  portfolio  of  the 
big  banks  increased  considerably  be- 
tween May  31  and  June  30,  but  this 
was  probably  due  in  part  to  the  amounts 
usually  required  at  the  turn  of  the  half 


year.  Current  accounts  kept  on  increas- 
ing, carrying  the  total  to  4,816,100,000 
francs  on  June  30.  Advances  and  stock 
exchange  loans  again  showed  an  advance 
on  June  30  to  a total  of  1,342,400,000 
francs.  It  is  pointed  out  by  M.  Thery, 
in  “L’ficonomiste  Europeen,”  of  August 
26,  that  this  increase  in  stock  exchange 
loans  is  due  largely  to  the  fact  that 
there  were  offered  to  French  capitalists 
during  the  first  six  months  of  the  cur- 
rent year  more  than  3,500,000,000 
francs  in  new  securities,  while  the  total 
for  the  corresponding  period  of  1909 
was  only  about  2,500,000,000  francs. 


CREDIT  METHODS  IN  ENGLAND 

TN  discussing  the  introduction  written 
*■*  by  Mr.  Hartley  Withers  to  a new 
edition  of  Bagehot’s  “Lombard  Street,” 
the  “London  Economist,”  of  August  27, 
refers  to  some  of  the  changes  in  bank- 
ing methods  which  have  occurred  since 
Bagehot  wrote  a generation  ago.  In 
addition  to  the  increasing  use  of  checks 
and  the  concentration  of  capital  in  the 
joint-stock  banks,  the  English  journal 
outlines  several  changes  which  cannot 
be  reduced  to  a mathematical  basis,  but 
which  are  the  result  of*  observation 
among  bankers.  Among  these  is  the 
fact  that  the  manufacturing  districts  of 
the  north  now  finance  themselves.  In 
Bagehot’s  time  London  was  the  go-be- 
tween, the  intermediary  through  which 
the  agricultural  districts  where  money 
accumulated  supplied  capital  and  credit 
to  the  enterprising  and  expanding  in- 
dustrial centers  of  the  Midlands  and 
the  North.  No  doubt  since  Bagehot’s 
time  the  bills  discounted  by  the  London 
banks  have  increased  in  volume,  but  that 
is  because  of  the  vast  increase  in  foreign 
trade.  Yorkshire  and  Lancashire  are 
always  pouring  their  surpluses  into 
London.  The  great  staple  manufactur- 
ers have  always  been  far  more  inde- 
pendent of  the  banks  than  their  Con- 
tinental rivals.  No  doubt  there  are,  and 
always  will  be,  the  small  beginners  and 
the  weaker  brethren,  to  whom  a bank 
credit  is  everything;  but  Bagehot  would 


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probably  have  written  very  differently 
on  this  head  now. 

The  character  of  the  paper  now  sub- 
mitted for  discount  and  the  growth  in 
the  use  of  international  checks  are  thus 
commented  upon: 

“While  the  manufacturers  are  richer 
and  more  independent,  a change  has 
also  come  over  the  position  of  the  retail 
merchants.  Technically,  this  change — 
which  has  been  for  some  time  in  pro- 
gress— may  be  described  as  the  substitu- 
tion of  advances  from  local  bankers  for 
acceptances.  This  has  resulted  in  the 
disappearance  of  an  immense  amount 
of  “white  paper** — inland  trade  bills — 
from  the  market,  much  to  the  detriment 
of  the  brokers;  for  it  was  a safe  busi- 
ness, carrying  good  rates,  from  a half 
to  one  per  cent,  above  bank  rate.  Now, 
the  retailer  does  not  accept,  but  pays 
the  warehouseman  or  general  merchant 
in  cash,  getting  a heavy  discount,  the 
said  cash  being  usually  borrowed  from 
the  bank,  which  shares  with  him  the 
profit  of  this  substitution  of  cash  for 
credit.  But  this  change,  in  so  far  as  it 
reflects  a general  shortening  of  credit, 
is  beneficial,  and  may  be  ascribed  in  part 
to  the  banking  amalgamations  of  recent 
years,  which  have  helped  to  put  things 
on  a sounder  footing  in  some  quarters 
where  old-fashioned  and  too  easygoing 
methods  had  been  in  vogue.  * * * 

“The  growth  of  the  check  is  already 
making  itself  felt  at  conferences  of  in- 
ternational law,  and  we  may,  before  very 
long,  see  an  international  check  passed 
about  freely  in  all  civilized  countries. 
This  may  probably  diminish  the  impor- 
tance of  bills  of  exchange  just  as  the 
inland  trade  bill  is  being  driven  out  as 
we  have  seen  by  cash  transactions.** 


THE  EXCHANGE  RATE  IN  BRAZIL 

'T'HE  exchange  situation  in  Brazil  has 
been  considerably  complicated  by 
the  effort  of  the  government  to  advance 
the  legal  value  of  the  milreis.  Doubt  as 
to  the  future  rate  of  exchange,  it  is  de- 
clared, is  postponing  transactions 
amounting  to  many  millions.  The  gold 


deposits  in  the  Conversion  Fund  having 
reached  the  legal  limit  in  July,  the  gov- 
ernment sent  a message  to  Congress  re- 
questing an  alteration  of  the  exchange 
rate  from  fifteen  to  sixteen  pence.  The 
results  and  the  outlook  for  the  future 
are  thus  discussed  in  the  “London  Econ- 
omist** of  August  20  last: 

“Shortly  afterwards  the  Banco  do 
Brasil,  a semi-official  institution,  raised 
its  rate  to  sixteen  pence,  indicating  that 
the  approval  by  Congress  of  the  sug- 
gested increase  was  then  considered  a 
foregone  conclusion.  * * * An  ac- 

tive campaign  is  being  carried  on 
against  the  proposed  alteration,  antag- 
onism being  specially  marked  in  the 
State  of  Sao  Paulo,  but  although  the 
party  that  holds  out  for  the  fifteen- 
pence  rate  has  strengthened  its  position 
considerably,  it  is  expected  that  the 
Government  will  finally  have  its  way  in 
this  matter,  and  according  to  recent 
rumors,  the  Executive  is  charged  with 
the  intention  of  altering  its  first  pro- 
posal by  substituting  seventeen  or  even 
eighteen  pence.  It  is  further  mentioned 
that  this  question,  which  requires  imme- 
diate attention,  will  not  be  voted  by 
Congress  until  the  return  of  the  future 
President,  Marshal  Hermes  de  Fonseca, 
expected  in  October.  In  the  meantime, 
commerce  must  suffer,  and  all  con- 
cerned make  the  best  of  the  present  un- 
satisfactory situation.  The  Govern- 
ment seems  to  regard  this  exchange 
problem  with  too  much  optimism,  being 
evidently  inclined  to  push  the  rate  up  as 
far  as  it  can,  apparently  not  taking 
into  consideration  that  the  favorable 
economical  expansion,  evident  during 
the  past  few  months,  may  at  any  mo- 
ment suffer  a set-back,  and  seriously 
threaten  the  stability  of  the  present 
rate.** 


“Would  you  take  $10,000  to  fly  from  Al- 
bany to  New  York?” 

“Why  not?  Our  cashier  took  only  a 
thousand  to  fly  to  Europe.” — Puck . 


Digitized  by 


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PRACTICAL  BANKING 


HANDLING  INCOMING  DIVIDENDS* 

By  James  P.  Whitlock 


"1TITITH  the  enormous  increase  in 
* * railroad  traction  and  industrial 
securities  which  are  now  offered  to  in- 
vestors, the  difficulties  of  the  dividend 
clerks  in  banks,  trust  companies  and 
private  firms  handling  such  dividends 
for  themselves  and  their  clients  have  in- 
creased, and  it  has  become  necessary  to 
find  some  system  that  will  be  easy  of 
operation  and  accurate  in  effect. 

The  system  should  show  at  a glance 


ers  of  attorney  or  mailing  orders,  and 
here  it  would  be  well  to  advise  dividend 
clerks  always  to  secure  powers  of  attor- 
ney in  preference  to  mailing  orders 
where  possible.  It  frequently  happens 
that  checks  are  drawn  by  mistake  to 
the  order  of  the  stockholder  instead  of 
to  the  collecting  concern.  If  a power 
of  attorney  has  been  signed  by  the 
stockholder,  the  collecting  concern  can 
endorse  the  check  as  attorney,  whereas 


NAME  OF  COMPANY 

Date  Filed  | Surname  Christian  Name 

Power'  From  wh°m  Rec'd 

1 ' i 

1 

I ! 1 

* 1 

1 

1 

j ; 

* I 

i.J 

i 

i : — . — . — : 

Form  1 


the  full  particulars  of  the  dividend  as 
collected,  including  the  shares  held  in 
the  office  or  vaults,  the  names  in  which 
they  are  registered,  the  dividends  col- 
lected under  powers  of  attorney  or  mail- 
ing orders  on  stock  not  held  in  the  office, 
and  the  amounts  credited  to  each  ac- 
count. It  should  also  enable  the  divi- 
dend clerk  to  prepare  to  some  extent 
his  credits  and  advices  in  advance  of  the 
date  of  payment,  as  time  is  an  impor- 
tant consideration  to  him  when  many 
dividends  are  paid  on  the  same  date. 

The  first  thing  necessary  is  a conven- 
ient form  of  register  for  recording  pow- 

•The  author  of  this  article  is  connected 
with  a large  and  well-known  international 
banking-house,  and  it  Is  believed  his  sug- 
gestions will  be  found  of  much  practical 
value.— Editor. 


under  a mailing  order  it  must  be  re- 
turned for  correction. 

Form  No.  1 is  recommended  for  reg- 
istering powers  of  attorney,  etc.,  and 
the  book  should  be  provided  with  a 
good-sized  index  for  the  names  of  com- 
panies. 

By  referring  to  this  register  the  pow- 
ers of  attorney  filed  with  each  company 
since  the  last  dividend  payment  can  be 
ascertained  and  added  to  the  list  for  the 
coming  dividend. 

The  most  convenient  form  for  the 
dividend  record  is  the  loose  leaf  system, 
as  it  is  frequently  necessary  to  insert 
additional  dividends’  after  the  book  has 
been  started,  and  it  is  much  more  con- 
venient if  they  can  all  be  put  in  their 
proper  place. 

The  dividends  should  be  separated 

Ml 


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662 


THE  BANKERS  MAGAZINE 


into  two  classes;  those  payable  quarter- 
ly and  those  payable  semi-annually  and 
annually. 

The  quarterly  dividends  are  again 
separated  into  three  divisions,  accord- 
ing to  the  month  in  which  they  are  paid 
and  the  months  separated  by  cardboard 
sheets  bearing  tags  marked — Jan.,  Apl., 
July,  Oct.;  Feb.,  May,  Aug.,  Nov.,  etc. 
(Form  2.)  As  the  transfer  books  close, 
the  list  of  holders  and  shares  is  entered 
on  sheets  similar  to  the  form  below,  the 
names  of  the  companies  being  kept  in 
alphabetical  order.  (Forms  2 and  3.) 

The  same  course  is  followed  with  the 
semi-annual  and  annual  dividends,  ex- 
cept that  the  book  is  divided  into  six 
sections  instead  of  three,  and  the  tags 
are  marked,  J any.,  July; — Feb.,  Aug.; 
— March,  Sept.; — etc. 

Where  the  number  of  dividends  col- 
lected is  not  too  large,  the  quarterly 
and  semi-annual  sections  may  be  in- 
cluded under  one  cover,  and  on  the 
other  hand,  where  many  dividends  are 
handled  it  may  be  advantageous  to  sep- 
arate the  semi-annual  dividends  into 
two  books. 


If  it  is  desired  to  distinguish  between 
the  stock  held  in  the  office  and  that  not 
held,  but  collected  on  under  powers  of 
attorneys,  the  stock  held  in  the  office 
may  be  entered  in  red  ink  and  the  other 
in  black. 

The  space  on  the  right  of  the  names 
may  be  used  for  instructions  regarding 
the  account,  as  “A”  for  advise;  “F” — 
foreign  account;  “Com.” — deduct  com- 
mission, etc. 

As  the  dividends  are  paid  the  dollar 
figures  are  entered  against  the  various 
accounts  and  the  date  filled  in  at  the 
top  of  the  column  with  a dating  stamp. 

Form  2 is  printed  only  on  one  side 
and  is  spaced  for  four  dividends.  Form 

3 is  printed  the  same  on  both  sides,  and 
is  spaced  for  eight  additional  dividends. 
The  numbers  on  the  margin  are  an  as- 
sistance in  making  the  entry  on  the 
proper  line,  and  it  is  a further  assist- 
ance if  the  sheets  are  ruled  alternately 
with  a light  and  heavy  line. 

The  credit  slip  for  the  cash  book  may 
be  made  directly  from  this  list.  Form 

4 is  a convenient  one  to  use  for  this  pur- 
pose. 


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Form  3 


Digitized  by  t^ooQle 


PRACTICAL  BANKING 


663 


CREDIT 


The  dividend  record  may  be  indexed 
by  using  a small  book  divided  alpha- 
betically and  entering  against  the  name 
of  the  company  “Q"  for  quarterly,  and 
“S.  A."  for  semi-annually,  with  the  first 
month  of  the  year  in  which  the  dividend 
is  paid.  It  may  also  be  found  a con- 
venience to  paste  small  cloth  tabs  bear- 
ing the  letters,  on  the  margin  of  the 
dividend  sheets.  These  alphabets  may 
be  purchased  for  a few  cents  each. 

A few  days  before  the  end  of  each 
month  the  dividends  for  the  coming 
month  should  be  checked  over  with  the 
power  of  attorney  register,  so  that  no 
powers  lodged  since  the  last  dividend 
may  be  overlooked. 

Where  there  are  a large  number  of 
dividends  to  be  handled  it  is  well  to  use 
a diary,  entering  all  dividends  payable 
after  the  first  therein  and  checking 
them  out  as  received. 

There  are  many  additional  helps  and 


safeguards  which  may  be  developed  in 
connection  with  this  system  and  which 
will  occur  to  the  man  on  the  job  from 
time  to  time.  These  will  differ  to  some 
extent  according  to  the  requirements  of 
different  offices. 

The  advantages  claimed  for  the  sys- 
tem are  as  follows:  A complete  and 

continuous  record  of  dividends  which 
will  cover  at  least  three  years;  the  as- 
sembling in  chronological  order  of  the 
dividends,  bringing  all  such  as  were 
paid  in  the  previous  period  before  the 
dividend  clerk,  and  acting  as  a reminder 
to  investigate  when  checks  are  not  re- 
ceived; the  ability,  by  the  use  of  the 
loose-leaf  book,  to  place  the  records  of 
new  companies  in  the  correct  alphabeti- 
cal position,  and  last,  but  not  least,  the 
saving  in  time  resulting  from  writing 
the  names  of  clients  but  once  for  twelve 
dividends. 


DOING  AN  OLD  THING  IN  A NEW  WAY 

HOW  “ THE  MATURITY  GUIDE  ” SAVES  THE  BANKER  A LOT  OF 

TIME  AND  WORK 


*T^HE  illustration  accompanying  this 
article  shows  a page  of  the  new 
“Bankers'  and  Merchants'  Per- 
petual Maturity  Guide,"  just  issued 
by  The  Bankers  Publishing  Company. 
This  is  not  a review  of  the  book,  but 
simply  an  explanation  of  the  really 
remarkable  features  of  the  work  which 
make  it  as  much  an  advance  over  old 
ways  of  computing  interest  as  the  ad- 
ding machine  is  an  improvement  over 
the  human  adder. 

Briefly  stated,  this  300-page  book 


consists  of  a series  of  tables  showing 
the  number  of  days  between  any  two 
given  dates.  It  contains  every  possi- 
ble combination  of  dates  in  the  calen- 
dar— 133,590 — and  is  so  arranged  that 
the  number  of  days  between  any  two 
dates  can  be  ascertained  at  a glance. 
The  work  has  been  completed  after 
many  years  of  careful  computation.  It 
has  been  verified  and  reverified  until  it 
is  absolutely  accurate  in  the  minutest 
detail. 

The  pre-eminent  feature  of  this  new 


Digitized  by  t^ooQie 


664t 


THE  BANKERS  MAGAZINE 


system  is  that  absolutely  no  calculation 
is  necessary  on  the  part  of  the  person 
using  the  tables — just  a glance  and  the 
correct  result  is  at  hand. 

The  “Maturity  Guide”  is  especially 
advantageous  in  dealing  with  coupon 

BIARCH — JULY 

3rd  Mo.  71b  Me. 


bonds,  which  are  now  bought  and  sold 
subject  to  the  accrued  interest.  Thus: 
If  a six  per  cent,  coupon  bond  of 
$1,000,  interest  payable  January  and 
July,  were  sold  or  bought  at  110  on 
May  10,  the  number  of  days  of  ac- 

56  4 MONTHS  NOTES 


NUMBER  0^  DAYS  BETWEEN  GIVEN  DATES’— BOTH  INCLUSIVE. 


Sir  Mr  0 art 

llvMr  Dart 

Mar  Mr  in* 

iar  JWf  Bars 

iar  Ml  Dart 

■ar  Mr  lars 

■ar  Mr  tors 

■ar  J*r  tort 

1—  1=  123 

2-  1=  122 

3—  1=  121 

4-  1=  120 

6—  1=  119 

6-  1=  118 

7—  1=  117 

8—  1=118 

1—  2=  124 

2-  2=  123 

3-  2=  122 

4—  2=  121 

6-  2=  120 

6—  2=  119 

7—  2=  118 

8—2=117 

1—  3=  126 

2—  3=  124 

3—  3=  123 

4—  3=  122 

5—  3=  121 

6—  3=  120 

7—  3=  IIS 

8—  3=116 

1—  4=  126 

2—  4=  128 

3—  4=  124 

4-  4=  123 

6—  4=  122 

6—  4=  121 

7—4=120 

8-  4=  119 

1—  6=  127 

2—  6=  126 

3—  6=  126 

4—  6=  124 

6—  6=  123 

6-6-122 

7-  6=  121 

0—  6=  120 

1—  6—  128 

2-  6=  127 

3-  6=  126 

4—  6=  126 

6-  6=  124 

6-  6 - 123 

7-  6=  122 

8—  •=  121 

i—  7=  m 

2—  7=  128 

3-  7=  127 

4—  7=  126 

6—  7 - 126 

6—  7 --  124 

7-  7=  128 

8—  7=  122 

1—  8=  130 

2-  8=  129 

3—  8=  128 

4—  8=  127 

6-  8=  126 

6-  8=  126 

7—  0=  124 

8-8=116 

1—  9=  131 

2—  9=  130 

3-  9=  129 

4—  9=  128 

5-  9 127 

6—  9=  126 

7-  9=  128 

8 — 8=  126 

1—10=  132 

2—10=  131 

3—10=  130 

4—10=  129 

6-10  128 

6-10=  127 

7-10=  126 

8—10=  120 

1—11=  133 

2-11=  132 

3—11  = 131 

4-11=  130 

6—11=  129 

6—11  ^ 128 

7-H=  127 

8-11=120 

1—12=  134 

2—12=  133 

3—12=  132 

4—12  = 131 

6-12^  130 

6-12=  129 

7-12=  128 

8-12=  127 

1—13=  136 

2—13=  134 

3—13=  133 

4—13=  132 

5—13-  131 

6-13=  130 

7-13=  126 

8—13=  128 

1—14=  136 

2—14=  138 

3—14=  134 

4—14=  133 

6-14=  132 

6—14-  131 

7-14  = 130 

8—14=  128 

1-16=  137 

2—15=  136 

3—15=  136 

4—15=  134 

6-16  = 133 

6—15=  132 

7—16=  131 

8—16=  130 

1—16=  138 

2—16=137  , 

3—16=  136 

| 4-16=135 

6-16=  134 

6-16=  133 

7—16=  132 

0—10=  131 

1—17=  139 

2-17=  138 

3-17=137 

i 4—17=  138 

5—17—  136 

6—17  = 134 

7—17=  133 

0—17=  132 

1—18=  140 

2—18=  139  l 

3-18=  138 

4—18=137 

6—18  - 136 

6—18  - 136 

7-16=  134 

8-10=  133 

1—19=  141 

2-19=  140  i 

3—19=  139 

. 4-19=138 

5—19=  137 

6-19=  136 

7-19=  136 

0—19=  134 

1—20=  142 

2—20=  141  ! 

3—20=  140 

4-20=  139 

6-20_  138 

6—20=  137 

7-20=  136 

8—20=  138 

1—21=  143 

2-21  = 142 

3-21=  141 

4—21=140 

6—21=  139 

6 — 21=  138 

7-21=137 

6—21=  136 

1—22=  144 

2—22=  143 

3-22=  142 

| 4—22=  141 

6—22=  140 

6-22=  139 

7-22  -r  138 

8—22=  137 

1—23=  146 

2—23=  144 

3—23=  143 

4—23=  142 

6—23=  141 

6—23=  140 

7-23=  138 

8—23=130 

1—24=  146 

2—24=  146 

3—24=  144 

1 4—24=  143 

5—24=  142 

6—24  = 141 

7—24=  140 

0—24=  130 

1—26=  147 

2-26=  146 

3—25=  145 

4—28=  144 

6—26=  143 

6-26=  142 

7—26=  141 

0—26=146 

1-28=  148 

2—26=  147 

3—26=  146 

4—26=  146 

5—26=  144 

6—26=  143 

7-26=  142 

8-20=141 

1—27=  149 

2—27=  148 

3—27=  147 

4—27=148 

6—27=  146 

6—27=  144 

7—27=  143 

8-27=  142 

1—28=  160 

2—28=148 

3-28=  148 

4—28=  147 

6—28=  146 

6-28=  146 

7—28=  144 

8-28=  143 

1—29=  161 

2—29=  160  1 

3—28=  149 

4—29=  148 

6—29=  147 

6-29=  146 

7—29=  146 

8-29=  144 

1—30=  162 

2—30=  161  : 

3—30=  160 

4—30=  149 

6—30=  148 

6—80=  147 

7—30=  146 

6 30=  146 

1—31=  163 

2—31=  162  1 

3-31=161 

4—31=  160 

6—31=  149 

6—31=  148 

7—31=  147 

8—31=  148 

■ar  Mr  Bara 

■ar  Mr  Dart 

■ar  Jilr  Bars 

■ar  Mr  Dart, 

■ar  Mr  Dart 

■vJtir  Dart 

■ar  Mr  Bapt 

■vmt 

0—  1=  116 

10—  1=  114 

11—  1=113 

12—  1=  112 

13—  1=  111 

14—  1=110 

10—  1=  100 

16—  1=  108 

9—  2=  116 

10—  2=  116 

11—  2=114 

12—  2=  113 

13—  2=  112 

14—  2=  III 

16—  2=110 

18—  2=  108 

0—  3=  117 

10—  3=  116 

11-  3=116 

12—  3=  1 14 

13—  3=  1 13 

14—  3=112 

16—  3=  111 

16—  3=116 

9-  4=  118 

10—  4=  117 

11  - 4=  116 

12—  4=  1 16 

13—  4=  114 

14—  4=113 

16-  4=112 

18—  4=111 

0—  6=  119 

10—  6=  118 

11-  6=  117 

12—  6=  110 

13-  6=  116 

14—  6=  1 14 

16-  5=113 

10—  6=112 

0—  6=  120 

10—  6 = 1 19 

11—  6=  118 

12-  6=  1 17 

13-  6=  110 

14-  6=  116 

16—  6=  114 

16—  8=  113 

0—  7=  121 

10—  7=  120 

11—  7=  110 

It—  7=  1 10 

13-  7=  117 

14-  7=  110 

16—  7=116 

10—  7=  114 

9—  8=  122 

10-  8=  121 

11-  8=  120 

12-  0=  119 

13-  0=  1 10 

14—  0=  117 

15-  8=  1 16 

10—  8=116 

9—  8=  123 

10-  9=  122 

11—  0=  121 

12-  9=  120 

13—  0=  119 

14-  9=  no 

16—  0=417 

18—  8=  ItO 

§-10=  124 

10—10=  123 

11—10=  122 

12—10=  121 

13—10=  120 

14—10=  no 

16—10=  110 

18—10=  117 

9-H=  126 

10—11=  124 

11—11=  123 

12—11=  122 

13—11=  121 

14—11=  120 

16—11=119 

10—11=  118 

9-12=  126 

10—12=  126 

11—12=  124 

12—12=  123 

13—12=  122 

14—12=  121 

16—12=  120 

16—12=  110 

9—13=  127 

10-13=  126 

11—13=  126 

12—13=  124 

13—13=  123 

14—13=  122 

16—13=  121 

16—13=  136 

9-14=  128 

10—14=  127 

11—14=  126 

12—14=  126 

13—14=  124 

14—14=  123 

16—14=  122 

16—14=  iH 

9-16=  129 

10—15=  128 

11—16=  127 

12—16=  120 

13-16=  126 

14—16=  124 

16—16=  123 

16—16=  122 

9—16=  130 

10—16=  128 

11—18=  128 

12—10=  127 

13—10=  t2B 

14—10=  126 

16-10=  124 

16—16=  122 

6—17=  131 

10—17=  130 

11—17=  129 

12—17=  128 

13-17=  127 

14—17=  120 

16-17=  126 

16—17=  124 

9—18=  132 

10—10=  131 

11—10=  130 

12—10=  120 

13—10=  128 

14-18=  127 

16-18=  126 

16-18=  126 

0—19=  133 

10-19=132 

11-19=  131 

12—19=  130 

13—19=  129 

14—10=  128 

16—18=  127 

18-18=  128 

9—20=  134 

10—20=  133 

11— 20=  132 

12—20=  131 

13—20=  130 

14-20=  129 

16-20=  128 

18—20 — 127 

9-21=  136 

10-21=  134 

11—21=133 

12—21=132 

13-21=131 

14—21=  130 

16—21=  128 

10-21=  128 

9-22=  136 

10—22=  136 

11-22=  134 

12—22=  133 

13—22=132 

14—22=  131 

16-22=  130 

18-22=  128 

6-23=137 

10—23=  136 

11—23=  136 

12—23=  134 

13—23=  133 

14—23=  132 

16—23=  131 

18-23=  130 

9-24=  138 

10—24=  137 

11—24=  136 

12—24=  136 

13-24=  134 

14—24=  133 

16-24=132 

18-24=  131 

9-26=  139 

16-26=  138 

11—25=  137 

12—26=  138 

13—26=  136 

14—26=  134 

16-26=133 

18-25=  132 

9-26=140 

10—26=  138 

11—26=136 

12—26=  137 

13—26=136 

14—26=  136 

16-28=  134 

18-28=  133 

9—27=  141 

10—27=  140 

11—27=  139 

12—27=  138 

13—27=  137 

14—27=  136 

16—27=136 

18-27=  134 

9—28=  142 

10—28=  141 

11—28=140 

12—28=  130 

13—28=138 

14—28=  137 

16-20=138 

18-28=136 

9—29=  143 

10—29=  142 

11—29=  141 

12—29=  140 

13—20=139 

14—29=138 

16—20=137  | 

18-29=  130 

9-30=  144 

10—30=  143 

11—30=  142 

12—30=141 

13—30=  140 

14—30=  130 

16—30=130  | 

10—30=137 

9—31=  146 

10—31=  144 

11—31=  143 

12—31=142 

13—31=  141 

14—31=140 

16—31=130 

16—31=  m 

When  only  one  of  the  datee  it  to  be  counted,  deduct  one  day. 

Falla  nur  tin  elnzioet  Datum  oesucht  warden  sollte,  zlehe  man  elnen  Tag  ab. 

SI  voua  ne  devez  compter  qu'une  eeuie  dee  dates,  dtduisez  un  Jour. 

Cuando  solamente  una  de  las  fechas  se  ha  de  contar.  rebijese  un  dfa. 

Quando  sot  tan  to  una  delle  date  deve  esser  contata,  tog  I fete  un  glorno. 

Reduced  Specimen  Page  from  **  The  Bankers  and  Merchants  Perpetual  Maturity  Guide.’*  There 
are  295  pages  in  the  book,  giving  every  possible  combination 


Digitized  by  t^ooQle 


INVESTMENTS 


665 


crued  interest  must  be  counted  from 
January  1,  to  May  10.  That  number  is 
130  days,  yielding  fractional  interest 
of  $21.66;  to  this  add  the  cost  of  the 
bond,  $1,100;  making  the  price  $1,- 
121.66. 

Without  the  use  of  this  book,  the 
days  of  the  several  months  would  have 
to  be  set  down  and  added  thus: 

31,  28,  31,  30,  10—130 

or,  by  a system  of  subtraction,  the  re- 
sult is  obtained,  not  an  invariably  cor- 
rect one,  however. 

Thus  it  will  be  seen  that  the  tables 
not  only  give  the  number  of  days  and 
the  number  of  months  between  given 


dates  for  time  and  call  loans,  but  they 
also  give  the  number  of  days  of  ma- 
tured fractional  interest  of  coupon 
bonds  when  bought  or  sold  in  accord- 
ance with  the  rule  of  the  New  York 
Stock  Exchange,  which  has  been 
adopted  by  all  stock  exchanges  through- 
out the  United  States. 

With  this  book  and  a calendar  before 
him  a man  can  find  instantly  the  num- 
ber of  months  and  days  of  notes  from 
the  beginning  to  the  end  of  the  year 
without  pen  or  pencil.  He  simply  looks 
and  reads  the  answers.  And,  what  is 
most  important,  he  can  be  absolutely 
sure  that  the  answer  is  infallibly  cor- 
rect. 


INVESTMENTS 

Conducted  by  Franklin  Escher 


OUR  OVERDONE  STOCK  MARKET 

By  Frederic  Drew  Bond 


TN  the  fall  of  1907,  when  banks  and 
trust  companies,  the  country  over, 
were  closing  doors  or  suspending  specie 
payments  and  when  prices  of  shares 
were  each  day  making  new  low  levels, 
one  active  stock  remained  nearly  unaf- 
fected by  the  panic.  When  nine  per 
cent.  Delaware  & Hudson  was  selling 
on  the  New  York  Stock  Exchange 
around  123  and  ten  per  cent.  Union  Pa- 
cific at  100,  and  when  the  shares  of 
America's  premier  railroad,  Pennsylva- 
nia, were  barely  above  the  same  price, 
Canadian  Pacific,  a six  per  cent,  stock, 
touched  138  as  its  lowest  quotation.  It 
is  true  that  the  company  had  just  paid 
an  extra  one  per  cent,  dividend  from 
land  sales  and  that  earnings  had  been 
growing  very  rapidly,  but  neither  in 
financial  strength  nor  in  physical  condi- 
tion could  it  compare  with  the  great 
American  railways  whose  shares  it  so 
largely  overtopped  in  price.  Whence, 
then,  its  ability  so  well  to  weather  the 
storm? 


The  answer  made  at  the  time  to  this 
question  was  simply:  Its  primary  mar- 
ket is  London,  not  New  York.  But  to 
those  struck  with  the  pecular  position  of 
the  Canadian  Pacific  shares  this  reply 
suggested  the  further  query:  Why  is 
this  stability  lacking  in  our  home  mar- 
ket? During  the  last  ten  years.  New 
York  Stock  Exchange  prices  have  been 
up  in  1901,  down  in  1903,  up  by  1905, 
down  in  1907,  up  again  by  1909*  down 
again  the  present  year. 

Bank  Loans  and  Speculation. 

What  causes  this  chronic  difference, 
year  in  and  year  out,  between  values 
and  prices  in  Wall  Street?  One  might 
name  the  great  development  of  specula- 
tion, the  custom  of  trading  on  small 
margins  of  ten  points  or  less,  the  ticker 
and  the  Stock  Exchange  Clearing 
House  as  factors  in  the  situation.  But, 
though  without  these  things  and  meth- 
ods Wall  Street  would  hardly  be  possi- 


Digitized  by  t^ooQle 


To  Increase  Principal  and  Income 

No  form  of  Investment  has  proven  more  uniformly  8afe  and  Profitable  than  the  Shares  of 
Gas  and  Electric  Companies.  The  growth  of  the  lighting  business  has  been  and  is  remark- 
able, the  demand  for  Service  is  Constant  and  varies  only  to  Increase. 

The  Stocks  of  the  older  Companies  sell,  in  many  cases,  as  high  or  higher  than  the  best 
Railroad  Stbcks  and  are  more  closely  held. 

We  offer  a small  block  of  Participating  5 per  cent.  Preferred  Stock  of  a large  Gas  and 
Electric  Company  This  8tock  has  paid  regular  dividends  at  the  rate  of  5 per  cent,  per  annum 
since  July  1,  1907,  shdws  earnings  now  amounting  to  more  than  Three  Times  the  Dividend 
Requirements  and  is  entitled  to  share  equally  with  the  Common  Stock  after  the  Common  has 
received  its  5 per  cent,  dividend. 

We  Recommend  These  Shares,  as  in  our  opinion  a Safe  Investment  in  which  there  is  an 
unusual  opportunity  for  Increase  of  Principal  and  Income. 

SPECIAL  CIRCULAR  ON  REQUEST. 

A.  H.  BICKMORE  & GO.,  Bankers  30  Pine  Street,  New  York 


ble  as  it  now  stands,  their  consideration 
does  not  get  to  the  root  of  the  differ- 
ence between  the  course  of  prices  on 
the  New  York  Stock  Exchange  and  on 
the  great  foreign  bourses.  The  fact  is 
that  in  America,  and  especially  in  New 
York  City,  a relation  between  bank 
loans  and  speculation  has  devoloped 
which  has  never  been  known  in  any 
other  place  and  which  has  no  parallel 
abroad.  To  understand  this  point,  let 
us  advert  to  what  ordinarily  happens 
when  stocks  are  bought  for  speculation. 

Concrete  Illustration. 

In  such  instances  the  customer  depos- 
its a margin  with  his  broker.  This,  as 
a rule,  consists  of  a sum  equivalent  to 
at  least  ten  points  on  the  price  of  the 
shares  traded  in.  Thus,  on  a purchase 
of  100  shares  of  Atchison  at  $100  a 
share,  the  customer  would  deposit 
$1,000.  To  carry  the  shares  the  broker 
usually  arranges  to  pledge  them  at  his 
bank — generally  for  a sum  equal  to  the 
buying  price,  less  about  twenty  points. 
Thus,  in  the  present  case,  $10,000  is 
needed  to  pay  for  the  100  shares  of 
Atchison.  Of  this  sum,  the  customer^ 
margin  supplies  $1,000,  the  broker  sup- 
plies another  $1,000  and  the  remaining 
$8,000  is  supplied  by  the  broker's  bank 
as  a loan  on  the  pledge  of  the  shares. 
When  the  sales  and  purchases  in  a stock 
by  any  brokerage  house  partly  balance, 
as  is  very  often  if  not  usually  the  case, 


the  bank  will  still,  ordinarily,  be  called 
on  by  the  broker  to  finance  the  cash 
balance  due  on  an  excess  of  purchases, 
after  as  many  offsets  as  possible  be- 
tween sales  and  purchases  of  stocks  have 
been  made  through  the  stock  exchange 
clearing  house. 

Now  a bank  loan  is  ordinarily  entered 
by  the  bank  as  a deposit  to  the  credit  of 
the  borrower.  Thus,  the  loans  and  de- 
posits of  banks  increase,  as  a general 
rule,  hand  in  hand.  But  the  New  York 
national  banks  (and  all  the  “financial 
banks"  are  national  banks)  are  required 
by  federal  law  to  hold  twenty-five  per 
cent,  of  their  deposits  in  actual  money. 
When  loans  (and,  consequently,  depos- 
its) are  relatively  few  and  this  twenty- 
five  per  cent,  reserve  easy  to  maintain, 
the  banks  are  willing  to  make  new  loans 
at  very  low  rates  of  interest.  At  such 
times,  as  at  the  beginning  of  1908,  it  is 
not  long  before  stocks  begin  to  rise.  A 
constant  bidding-up  occurs  between  pro- 
fessional speculators,  large  speculative 
owners  and  such  brokers  as  speculate 
for  themselves — all  assisted  by  the 
willingness  of  the  banks  to  lend  readily 
and  at  easy  interest  rates  on  the  shares 
when  they  are  bought.  Now,  here 
comes  in  the  peculiarity  of  our  system. 
As  soon  as  the  price  of  stocks  at  such 
times  advances,  the  banks  are  willing  to 
lend  an  additional  sum,  up  to  the  extent 
of  the  advance.  When  Union  Pacific 
sold,  at  the  opening  of  1908,  at  around 
$120  a share,  few  banks,  if  any,  would 


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GEO.  H.  WORTHINGTON,  President 
J.  F.  HARPER,  Vice-President 
E.  R.  FANCHER,  Vice-President 
G.  A.  COULTON,  Cashier 
W.  E.  WARD,  Asst.  Cashier 


1}  Organized  in  1884*  More  than 
twenty  Jive  years  of  service  back 
of  us*  May  we  be  of  use  to  you? 


lend  more  than  $100  a share.  But  just 
as  soon  as,  by  the  to-and-fro  bidding  of 
owners  and  speculators  on  the  exchange, 
the  price,  in  1908,  had  advanced,  the 
banks  increased  also  the  amount  of  their 
loans.  When  the  stock  reached  $150  a 
share  in  May  of  that  year,  the  banks 
were  willing  to  lend  up  to  $180  a share. 
Now  this  is  the  case  with  all  the  active 
shares  on  the  exchange;  the  more  they 
advance  in  price,  the  more  the  banks 
will  lend  on  them.  But  as  these  very 
advances  in  price  occur  because  of  the 
previous  loans  of  the  banks,  the  result 
is  that  the  banks  themselves  create  the 
very  prices  on  which  they  rely  to  lend. 

A “Vicious  Circle.” 

Thus  the  inflation  of  loans  on  the 
basis  of  rising  quotations  makes  a sort 
of  circle,  for  the  time  being,  for  the 
advance  of  stock  prices.  The  more 
prices  go  up,  the  more  is  lent;  and  the 
more  is  lent,  the  more  they  go  up.  Of 
course,  when  a stock  is  held  by  an  im- 
mense number  of  investors,  like  Penn- 
sylvania (which  has  about  60,000  regis- 
tered stockholders),  little  attempt  is 
made  by  speculative  pools  to  take  ad- 
vantage of  banking  liberality  to  ad- 
vance prices  unduly.  For  a pool  en- 
deavors to  advance  prices  with  the  help 
of  the  banks,  as  just  outlined,  in  order 
to  sell  to  the  public  at  high  prices.  But, 
in  the  case  of  a security  like  Pennsyl- 
vania, a great  number  of  the  public  al- 
ready have  the  stock  as  an  investment. 
Did  its  price  rise  very  high,  so  many 
bona-fide  investment  owners  would  be 


tempted  to  sell  at  the  big  profit  offered 
that  the  speculators,  in  order  to  main- 
tain quotations,  would  have  to  buy  alto- 
gether too  many  shares  at  high  prices  for 
it  to  be  pleasant  for  them.  To  find  ex- 
amples of  the  possibilities  of  the  bank- 
ing relations  with  speculation  ,one 
should  turn  to  stocks  less  widely  distrib- 
uted. In  1902,  General  Electric,  then, 
as  now,  an  eight  per  cent,  stock,  sold  at 
$834  a share.  The  same  year  Chicago 
& Northwestern  common,  then,  as  at 
present,  a seven  per  cent,  security,  sold 
at  $274  a share.  About  this  same  time. 
New  York,  New  Haven  & Hartford's 
eight  per  cent,  stock  sold  at  $255  a 
share.  In  1901,  five  per  cent.  New 
York  Central  sold  at  $170  a share  and 
in  1905  (the  dividend  being  the  same) 
sold  at  nearly  the  same  figure.  In  190 6, 
Great  Northern  sold  at  $341  a share, 
which,  allowing  $85  for  the  ore  rights 
the  stock  then  carried,  would  still 
amount  to  $256  a share  for  a seven  per 
cent,  stock. 


Our  “Call-Loan”  System. 

But  this  method  of  lending  on  stocks 
on  the  basis  of  their  exchange  price  is 
so  dangerous  that  the  banks  have  their 
own  way  of  guarding  against  its  un- 
pleasant possibilities.  A very  large 
percentage  of  financial  loans  of  this 
kind,  especially  when  stock  prices  are 
cither  very  low  or  very  high,  are  made 
on  “call” — a method  practicallly  non- 
existent in  Europe.  Such  loans  are 
subject  to  termination  by  the  bank 
whenever  wished.  The  other  sort  of 

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THE  BANKERS  MAGAZINE 


loans — those  on  “time” — are  subject  to 
demand  by  the  bank  for  more  stock  to 
be  pledged  by  the  borrower  as  collateral 
security.  Thus  the  bank  may  at  any 
time  “call”  some  of  its  loans  and  re- 
ceive back  the  sum  lent;  or,  if  the  bor- 
rower is  unwilling  or  unable  to  repay 
the  amount  loaned,  may  at  once  sell  on 
the  exchange  the  stock  deposited  as  se- 
curity for  the  loan,  and  thus  obtain  the 
sum  due.  If  the  loan  is  on  “time,”  the 
bank  may  demand  more  collateral  when- 
ever it  sees  fit  to  do  so ; and  if  this  is  not 
forthcoming,  sell  the  collateral  already 
in  its  possession,  the  same  as  in  the  case 
of  a “call”  loan. 

Now  we  have  seen  that  as  long  as  the 
banks  will  lend  freely  on  stock  as  col- 
lateral, prices  of  speculative  securities 
on  the  exchange  can  be  put  to  excessive 
heights.  But,  in  the  end,  there  may 
come  a time  when  the  banks  are  no 
longer  able  to  lend  freely.  As  com- 
mercial discounts  are  increasing  while 
stock  loans  are  also  growing,  the  depos- 
its of  the  New  York  banks  swell  as  a 
result  of  the  proceeds  of  these  various 
loans,  and  at  the  same  time  their  cash 
reserves,  unless  enhanced  by  an  inflow 
of  gold  from  other  localities,  approach 
nearer  and  nearer  to  the  twenty-five  per 
cent,  legal  reserve  mark  below  which  they 
are  prohibited  to  fall  by  Federal  law. 
When  the  banks  outside  of  New  York 
City  are  themselves  loaned  up  as  far  as 
they  can  go,  and  gold  can  be  imported 
from  abroad  only  at  a loss,  the  New 
York  banks  have  no  other  resource  left, 
in  order  to  safeguard  themselves,  but  to 
reduce  or  “call”  loans.  The  deposits 
which  arise  from  these  same  loans  are 
thus,  also,  cancelled,  and,  consequently, 
the  cash  reserves  on  hand  bear  a larger 
percentage  than  before  to  the  remaining 
deposits. 

Undermining. 

Now  the  more  loans  are  thus  “called” 
the  more  stock  is  sold  to  meet  these 
“calls,”  and  the  more  such  sales  there 
are  the  more  prices  on  the  exchange 
fall.  But  each  time  prices  fall,  other 
loans  previously  judged  “safe”  by  the 
banks,  are  “weakened,”  and,  in  addi- 


tion, the  margin  of  the  customers  of 
the  brokerage  houses  (whose  loans  the 
banks  are  handling)  is  also  impaired. 
New  “calls”  by  the  banks  and  new  de- 
mands by  brokers  for  margin  from  cus- 
tomers are  then  made,  and,  in  conse- 
quence, new  sales  of  stock,  the  whole 
process  developing  into  a continued,  re- 
current fall  of  prices  on  the  exchange, 
which  does  not  come  to  an  end  till  bank- 
ing resources  have  been  repleted  and 
stocks  lodged  in  the  hands  of  strong 
owners — i.  e.,  those  who  can  carry  them 
outright  or  by  means  of  relatively  small 
loans  compared  with  the  current  price 
of  the  shares.  The  very  prices  which 
the  banks  formerly  created  they  now 
destroy. 

But  it  is  possible  that  the  fall  in 
prices,  although  dependent  on  the  con- 
nection of  bank  loans  with  speculation, 
may  start  from  the  side  of  speculators. 
It  may,  in  other  words,  reflect  not  so 
much  a weakened  condition  of  the  banks 
as  an  over-extended  position  of  specu- 
lative groups.  The  exploitation  of 
vast  enterprises  in  America  has  had  the 
result,  again  and  again,  of  tying  up 
liquid  capital;  or,  to  speak  more  con- 
cretely, of  bringing  about  a situation 
where,  at  current  prices,  goods  of  one 
sort  were  not  readily  exchangeable  for 
goods  of  other  sorts.  Such  was  the 
case  as  regards  exchange  securities  in 
1903.  In  that  year  the  “undigested 
securities”  which  their  nominal  owners 
could  neither  hold  outright,  sell  to 
others  at  current  quotations  or  carry 
any  longer  on  banking  terms,  were  most- 
ly listed  on  the  exchange.  In  the  pres- 
ent year  the  over-supply  has  been  more 
of  securities  of  other  sorts  into  which 
the  surplus  capital  of  the  country  had 
already  been  largely  drawn,  leaving  too 
little  to  absorb  the  standard  issues  when 
they  were  offered  for  sale. 

Prices  and  Values. 

It  has  been  said  that  Wall  Street 
“discounts,”  or  anticipates,  the  future 
business  situation,  by  the  movement  of 
stock  prices  and  that  this  is  a cause  of 
the  divergence  between  prices  and  val- 


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and  receive  suggestions  for  investment  or  speculation  through  our  weekly 
44  Market  Letter  on  Stocks*” 


Swartwout  & Appenzellar,  Bankers 

Members  New  Tork  Stock  Exchanre 

40*42-44  PINE  STREET,  NEW  YORK  CITY 

Afrtaultural  Nat.  Bank  Bide*  First  Nat.  Bank  Bids* 

Pittsfield,  Mass.  Chicago,  HI. 


ues.  But  in  the  case  of  specific  securi- 
ties, this  “discount”  is  usually  meaning- 
less. When  Great  Northern  stock  goes 
to  $341  a share,  no*  one,  on  the  mere 
face  of  things,  can  tell  whether  the 
stock  price  is  actually  “discounting” 
some  very  valuable  development  in  the 
property  (as  such  becomes  gradually 
known  and  is  acted  on  by  far-sighted 
buyers) ; or,  whether,  as  was  pretty 
much  the  case,  a powerful  clique  is 
marking  up  the  price  by  the  aid  of  bank 
loans,  with  the  intention  of  selling  the 
shares  at  top  prices  to  the  speculative 
public  on  the  lookout  for  extraordinary 
developments.  And,  in  like  manner, 
when  a stock  declines,  especially  at  a 
time  of  general  weakness,  no  one  can 
say,  from  the  mere  fact  of  the  decline, 
whether  there  is  even  a likelihood  that 
its  property  is  depreciating.  Speaking 
of  the  “solid  dividend  payers,”  a writer 
regarding  the  matter  from  an  investor's 
standpoint  comments  thus  in  the  May 
number  of  Investments: 

“Missouri  Pacific's  big  decline  [in 
1906  and  1907]  before  the  dividend 
was  finally  passed,  foreshadowed  that 
event.  Union  Pacific's  decline  from 
nearly  200  down  to  par  foreshadowed 
nothing — no  reduction  in  the  dividend 
was  made  and  the  panic  period  passed 
with  but  slight  decrease  in  earnings.” 

Remedies. 

Thus  the  New  York  Stock  Exchange 
lacks  one  of  the  prime  qualities  a stock 
market  should  possess — that  of  being  a 
reliable  index  to  the  condition  of  the 
corporations  whose  shares  are  traded  in 
thereon.  The  difficulty  of  the  situation 
is  enhanced  by  the  fact  that  in  America 


the  sales  of  the  great  securities  are  con- 
centrated on  one  exchange ; were  the 
country  split  up,  as  in  Europe,  in  a 
number  of  independent  states,  these 
transactions  would  probably  be  scat- 
tered on  four  or  five  different  bourses. 
To  better  our  financial  conditions,  sug- 
gestions have  been  made  to  do  away 
with  the  ticker,  to  abolish  “call”  loans, 
to  have  stock  settlements  fortnightly 
(as  abroad),  instead  of  daily,  to  do  away 
with  the  stock  exchange  clearing  sys- 
tem. Recently  the  present  writer 
(Bankers  Magazine,  May,  1910)  sug- 
gested that  stock  and  bond  loans  should 
be  unalterable  till  maturity)  as  with  all 
other  sorts  of  loans).  Sometimes  a 
combination  of  two  or  three  of  these 
suggestions  has  been  broached. 

At  the  present  the  most  mooted  reme- 
dy for  our  financial  troubles  is  undoubt- 
edly the  creation  of  a central  bank,  as 
in  the  European  capitals,  and  the  issu- 
ance of  bank  notes  against  bank  assets 
instead  of  against  Government  bonds 
only.  There  is  no  question  but  what 
the  tendency  of  both  measures  would  be 
to  avert  a financial  crisis  like  that  of 
1907,  by  making  banking  resources 
more  elastic  in  a time  of  what  otherwise 
would  be  monetary  strongency.  But 
whether,  in  the  present  state  of  things, 
both  measures  would  not  be  likely  to 
lead  to  greater  stock  price  inflations 
than  ever  before,  is  a reasonable  query. 
Currency  reform  and  unjustifiable  sto^k 
speculation  present,  in  reality,  two  al- 
most entirely  distinct  problems  which 
have  been  only  too  much  confused  to- 
gether. Until  the  true  cause  of  our 
over-done  bull  and  bear  markets  is  real- 
ized as  lying  in  the  peculiar  relations 
subsisting  in  America  between  bank 

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TELEPHONES 
67901 
6791 

6799  } BROAD 

6793 

6794 


Union  Ferry 
Stock  ond  S’e 
Now  Amsterdam 
Gas  ft's 


WILLIAMSON  A SQUIRE 

MEMBERS  N.  T.  STOCK  EXCHANGE 

INVESTMENT  SECURITIES 

SS  BROAD  ST*  NEW  TORE  CITY 

All  Local  Street  Railway,  Gas,  Electric  and  Ferry 
Companies  Boaffht,  Sold  and  Quoted 


Economy  UgM  • 
Power  ft's,  IMS 


Syracuse  Light- 
ing Fa,  1961 
Debt..  Lack.  • 


Western  Coal 
Pacific  Gas  and 
Electric 

King's  Connty 
El,  Lt.  • Power 


loans  and  speculation,  there  will  be  no  on  the  New  York  Stock  Exchange  some- 
getting  down  to  the  root  of  the  trouble  thing  like  a true  register  of  stock  ^al- 
and extirpating  it — making  stock  prices  ues. 


THE  COMMONSENSE  ABOUT  THE  TRADE 

BALANCE 

By  Carl  Weingarten 


AT  various  times  in  past  years  when 
^ ^ exports  have  very  largely  ex- 
ceeded imports,  there  has  been  more  or 
less  of  a feeling  of  satisfaction  that  it 
should  have  been  so,  but  never  any  very 
great  interest  in  the  matter,  one  way  or 
the  other.  In  some  years  when  the 
balance  of  exports  has  been  heavier 
than  in  others  there  has  been  some  little 
attention  paid  to  the  question,  but  as  a 
real  live  market  influence  this  matter 
of  the  trade  balance  has  never  been  of 
much  account.  For  years  and  years 
past  there  has  always  been  a big  bal- 
ance on  the  right  side  of  the  ledger.  In 
some  years  it  has  been  bigger  than  in 
others  but  it  has  always  been  there. 
We  have  come  to  count  upon  it,  as  it 
were,  and  there  has  been  comparatively 
little  serious  discussion  as  to  what 
would  happen  were  the  balance  in  our 
favor  no  longer  to  exist. 

Demanding  Attention. 

But  on  account  of  the  way  in  which 
our  foreign  trade  has  been  going  dur- 
ing the  past  couple  of  years  the  mat- 
ter has  ceased  to  be  one  for  academic 
discussion  and  has  become  highly  prac- 
tical. Last  year,  it  will  be  remembered, 
the  excess  of  exports  showed  a very  big 
reduction  from  the  year  before  and  fell 
very  much  below  the  average  of  recent 
years.  This  year,  so  far,  the  showing 
has  been  even  more  striking.  For  the 
first  eight  months  of  the  calender  year, 

670 


indeed,  imports  have  actually  run  larg- 
er than  exports.  To  find  the  parallel 
of  that  it  is  necessary  to  go  back  all 
the  way  to  1895. 

Economists  real  and  alleged  are 
bringing  out  all  sorts  of  theories  re- 
garding the  importance  of  the  trade 
balance,  but,  paying  not  too  much  at- 
tention to  theory,  it  is  the  commonsense 
of  the  thing  that  by  selling  more  than 
you  buy,  you  are  establishing  tangible 
credit  somewhere.  There  may  be  all 
kinds  of  offsetting  influences  but  that 
does  not  in  the  least  alter  the  fact  that 
credit  has  been  established.  Where 
offsetting  influences  exist,  indeed,  it’s  a 
mighty  important  thing  that  there 
should  be  a credit  out  of  which  the 
settlements  can  be  made. 

The  Need  of  the  Balance. 

That  is  exactly  our  case  at  present 
and  has  been  for  a long  time  back.  Nor 
is  there  any  mystery  about  what  the 
offsetting  influences  are.  There  is  in 
the  first  place  an  immense  amount  of 
foreign  capital  invested  here  on  all  of 
which  interest  must  annually  be  paid. 
In  the  next  place,  there  is  the  big 
amount  of  money  which  we  have  to  pay 
the  foreigners  each  year  for  freights, 
insurance  and  other  service  which  they 
render  us.  Again,  there  is  the  money 
spent  each  season  in  Europe  by  Amer- 
ican tourists,  roughly  estimated  as 
amounting  to  several  hundred  million 


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HUD80N  COMPANIES  OWNSi 

•Hudson  * Manhattan  R.  R.  Co.  First  Mt*e.  Bonds 

• Hudson  • Manhattan  R.  R.  Co.  Common  Stock 

Hudson  ft  Manhattan  R.  R.  Co.  Preferred  Stock  Equities  In  Beal  Estate 

OBLIGATIONS  CONSIST  OPi 

•Hudson  Cos.  Secured  Notes  of  Various  Maturities 

• Hudson  Cos.  Preferred  Stock  Hudson  Cos.  Common  Stock 

* I will  buy,  sell  or  quote  these  securities 
DETAILED  INFORMATION  FURNISHED  UPON  REQUEST 

Tal.  Hanav.r  8076  BrlggS  C.  Keck  45  Wall  StrMt 


dollars.  Concerning  the  total  of  what 
we  owe  each  year  on  these  various 
counts  there  is  the  greatest  difference 
of  opinion — estimates  running  all  the 
way  from  4*00  million  to  800  million 
dollars.  That,  however,  isn't  material. 
The  point  isn't  whether  the  amount  is 
400  or  800  million.  The  fact  is  that 
there  is  a huge  sum  which  we  have  to 
pay  abroad  each  year  and  which  in  the 
past  has  been  sufficient  completely  to 
absorb  the  credit  balance  we  have 
gained  on  foreign  trade.  Suppose,  now, 
that  things  are  to  change  so  that  ex- 
ports no  longer  exceed  imports.  Where 
will  we  be  then?  These  payments  for 
freight  and  insurance  and  tourists  and 
the  various  other  considerations  all  run 
along  just  the  same.  Suppose,  now, 
that  the  balances  out  of  which  for 
years  past  wc  have  always  been  able  to 
settle  these  accounts  are  no  longer  to 
stand  to  our  credit? 

The  Economic  Side  op  It. 

So  unpleasant  is  contemplation  of 
what  would  happen  in  that  case  that 
the  mind  turns  with  relief  to  the  fact 
that  this  balance  credited  to  our  ac- 
count, and  out  of  which  we  have  always 
been  able  to  pay  our  debts,  is  not  going 
to  be  wiped  off  the  slate.  During  the 
past  couple  of  years,  it  is  true,  it  has 
not  been  credited  up  to  us  as  regularly 
as  before,  but  that  is  a long  way  from 
saying  that  conditions  have  permanent- 
ly changed  and  that  we  shall  have  to 
do  without  it  from  now  on.  This,  it 
must  be  remembered,  is  a young  coun- 
try, of  vast  natural  resources,  and  still 


in  process  of  development.  Under  the 
circumstances  a balance  of  exports 
over  imports  is  the  normal  condition. 
As  the  resources  of  such  a country  are 
developed  it  is  the  natural  state  of 
things  that  production  should  outrun 
consumption.  Later  on,  as  population 
increases  and  resources  are  more  heav- 
ily drawn  upon,  the  tide  turns  and  we 
may  expect  to  use  up  more  than  we 
produce.  But  in  the  case  of  this  coun- 
try that  time  is  still  a long  way  off* 
To  anyone  who  has  travelled  much 
throughout  the  United  States  and  re- 
alizes the  vast  resources  of  the  country, 
it  is  evident  that  the  process  of  develop- 
ment is  nowhere  near  complete.  A 
combination  of  circumstances  may  bring 
it  about  that  productivity  is  lowered 
and  consumption  increased,  but  that, 
in  our  case,  is  only  for  the  time  being. 
Sooner  or  later  the  natural  condition 
of  things  is  bound  to  assert  itself  and 
exports  are  bound  again  to  run  ahead. 

At  the  same  time  it  must  not  be  lost 
sight  of  that  we  are  making  rapid 
progress  in  the  direction  of  the  point 
where  our  consumptive  needs  will  catch 
up  with  our  productive  capacity.  Very 
possibly  the  changed  condition  of  our 
foreign  trade  means  that  from  now  on, 
exports  will  no  longer  exceed  imports 
to  the  same  extent  as  they  have  ex- 
ceeded them  in  the  past.  It  will  be  a 
long  time,  however,  before  the  process 
is  completed.  And  it  must  also  be  con- 
sidered that  in  the  meantime  our  need 
for  a favorable  balance  of  trade  will 
decrease  correspondingly.  By  the  time 
that  it  comes  about  that  we  regularly 

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INTERNATIONAL  NICKEL  CO.  SECURITIES 

Dn-PONT  POWDER  CO.  SECURITIES 

OIL  FIELDS  OF  MEXICO  CO.  STOCK 

STANDARD  PAINT  CO.  STOCK 

S.  H.  P.  PELL 

& CO. 

Members  New  York  8tock  Exchange  Members  New  York  Cotton  Exchange  1 

Dealers  in 

Tel.  7866-6-7-8-9  Hanover 

Unlisted  and  Inactive  Securities 

43  EXCHANGE  PLACE,  N.  Y. 

import  more  merchandise  than  we  ex- 
port, very  likely  it  will  also  have  come 
about  that  we  shall  have  got  ourselves 
into  the  same  position  that  England  is 
in  now — where  we  shall  not  need  any 
balance  of  trade  in  our  favor. 


DEFINITIONS  THAT  DEFINE 

r |AHE  following  definitions  are  taken 
from  the  “Financial  Glossary” 
recently  issued  by  Hornblower  & 
Weeks. 

Bank  Reserve.  Money  held  by  a 
bank  against  deposits.  The  law  pro- 
vides that  National  Banks  in  the  “Cen- 
tral Reserve  Cities” — New  York,  Chi- 
cago and  St.  Louis — shall  at  all  times 
have  a cash  reserve  equal  to  25  per 
cent,  of  their  deposits.  The  banks  in 
thirty-nine  other  large  cities  called 
“Reserve  Cities”  must  maintain  the 
same  percentage,  but  are  permitted  to 
deposit  half  the  amount  with  national 
banks  in  the  Central  Reserve  cities. 
Other  national  banks  must  keep  a re- 
serve of  15  per  cent.,  of  which  three- 
fifths  may  be  on  deposit  in  the  Central 
Reserve  or  Reserve  cities.  Does  not 
apply  to  savings  banks. 

Borrowing  Securities.  When  a 
broker  sells  stock  he  is  under  obligation 
to  deliver  it  the  next  day.  To  do  so  he 
must  often  borrow  it  from  another 
broker,  especially  if  his  customer  has 
sold  “short.”  The  broker  borrowing 
the  stock  pays  the  market  price  for  it, 
but  he  has  the  privilege  of  returning  it 
at  the  same  price.  The  lender  also 
can  demand  return  of  the  stock  at  any 
time. 

Crossing.  When  a broker  receives  a 
buy  order  from  one  person  and  a sell 
order  from  another  for  the  same  stock, 
number  of  shares  and  the  same  price. 
Such  orders  must  be  executed  on  the 

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floor  of  the  Stock  Exchange,  and  not 
by  allowing  one  customer  to  buy  from 
the  other  in  the  broker's  office. 

Income  Basis.  The  yield  or  rate 
which  a stock  or  bond  nets  upon  the 
purchase  price.  For  instance,  a 6 per 
cent,  stock  bought  at  120  nets  only  5 
per  cent.  This  result  is  obtained  by 
dividing  the  amount  of  dividend  by  the 
purchase  price.  The  income  from 
bonds  cannot  be  ascertained  so  simply, 
as  the  interest  payments  are  figured  as 
being  reinvested.  For  this  purpose, 
there  are  “bond  tables”  computed  from 
logarithms. 

Put.  An  agreement  by  which  the 
maker,  for  value  received,  gives  the 
holder  the  privilege  to  deliver  to  him 
a specified  stock  or  commodity  within 
a stated  time  for  a stated  price.  It  is, 
however,  optional  with  the  holder  to 
exercise  the  privilege. 

Pyramiding.  Buying  stock  on  the 
strength  of  nominal  profits  made  but 
not  actually  collected,  without  deposit- 
ing any  additional  amount  of  money. 
For  instance,  if  one  purchases  stock 
and  its  market  value  advances,  one  fig- 
ures without  selling  that  stock  a paper 
profit.  With  this  as  margin  more  stock 
is  bought  and  if  the  price  again  ad- 
vances, still  more  is  purchased. 

Rights.  The  privilege  given  to  the 
holder  of  a corporation's  securities  to 
subscribe  to  new  issues  is  called  a 
“Right.”  One  right  always  attaches 
to  each  share  of  stock.  For  example 
if  a corporation  with  10,000  shares  of 
stock  outstanding,  issues  5,000  addi- 
tional shares,  each  holder  would  have 
the  privelege  of  subscribing  to  one  new 
share  for  every  two  shares  which  he 
held.  If  the  old  stock  sells  at  110  and 
the  new  ^tock  is  issued  at  100,  there 
is  an  advantage  of  $10  to  be  had  for 
every  new  share  which  can  be  bought 
The  theoretical  value  which  will  attach 


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Miners  Bank,  Joplin,  Mo. 

We  cordially  invite  correspondence  relative  to  opportunities  and  investments,  the  advan- 
tages of  Joplin  as  a manufacturing  point,  etc.  Accounts  and  collections  also  invited. 

Capital,  $100,000  Surplus,  $100,000  Deposits,  $750,000 


to  each  share  is  found  by  taking  the 
price  of  two  old  shares  and  one  new 
share,  dividing  the  result  thus  obtained 
by  three  and  subtracting  this  quotient 
from  the  market  value  of  the  stock. 
This  figures  out  to  be  three  and  a third. 
These  rights  are  usually  traded  in  on 
the  Stock  Exchange,  where  holders  may 
buy  or  sell  enough  to  make  up  even 
amounts  of  new  stock. 

Yield.  The  percentage  return  on 
capital  invested.  If  a stock  paying 
$6  in  dividends  is  bought  at  105  it 
yields  5.71  per  cent.  In  figuring  the 
yield  on  a bond,  however,  it  is  neces- 
sary to  take  into  consideration  the  fact 
that  at  maturity  the  bond  will  be  worth 
par.  Taking  the  difference  between  the 
present  market  price  of  the  bond  and 
the  par  value  and  dividing  by  the  num- 
ber of  years  before  maturity,  we  have 
an  approximation  of  the  adjustment  to 
be  made  to  the  yield  as  found  in  the 
case  of  a stock.  Tables  evolved  by 
logarithms  are  necessary  for  an  accu- 
rate finding. 

Books  Close.  The  day  on  which  a 
corporation  closes  its  transfer  books  in 


order  to  make  a list  of  stockholders  to 
determine  who  is  entitled  to  dividend, 
or  to  vote  at  a stockholders  meeting. 

Books  Open.  The  day  upon  which 
the  transfer  books  of  a corporation  are 
reopened  after  a meeting  or  declaration 
of  a dividend.  In  the  meantime,  stocks 
or  registered  bonds  cannot  be  trans- 
ferred. 

Ex.  A stock  sells  “ex.  dividend”  on 
the  date  of  record  when  the  transfer 
books  are  closed  for  dividend  purposes. 
A stock  sells  “ex.  rights”  on  the  date 
of  record  which  is  set  for  taking  ac- 
count of  stockholders  for  subscription 
purposes. 

Accrued  Interest.  Interest  accu- 
mulated since  last  regular  payment,  but 
not  yet  due.  All  bonds  in  Boston  and 
New  York  are  sold  at  a quoted  price 
plus  the  interest  accrued  since  the  last 
interest  date. 

Wash.  The  operation  by  which  the 
identical  shares  are  bought  and  sold  by 
the  same  party  or  parties  for  the  pur- 
pose of  creating  or  maintaining  a mar- 
ket. Such  transactions  are  illegal 
under  the  rules  of  the  stock  exchange. 


THE  QUESTION  OF  THE  CAPITAL  SUPPLY 

IS  THERE  ENOUGH  CAPITAL  IN  THE  COUNTRY  AT  PRESENT  TO 
SUPPLY  THE  NEEDS  OF  BUSINESS? 

By  Charles  A.  Darrell 


TX7TTH  the  bond  market  improving 
" * as  it  is,  and  general  business 
showing  that  it  is  feeling  the  stimulus 
of  the  great  crops  which  are  being  mar- 
keted, the  question  as  to  whether  there 
is  enough  capital  in  the  country  to  go 
around  comes  sharply  into  the  fore- 
ground. Back  in  the  middle  of  the 
summer,  when  the  surplus  reserves  of 
the  New  York  banks  ran  above  fifty 


million  dollars  and  business  and  finan- 
cial conditions  were  quieter  than  they 
are  now,  there  was  less  disposition  to 
inquire  into  this  matter.  On  account 
of  the  way  things  have  drifted  since 
then,  however,  the  question  as  to 
whether  there  is  actually  enough  cap- 
ital to  do  business  on  has  become  of  first 
class  importance. 

In  looking  into  this  matter,  it  must 

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be  borne  in  mind  that  there  is  a big 
difference  between  capital  and  what  is 
ordinarily  known  as  “money.0  The 
question  as  to  whether  there  is  enough 
capital  on  which  to  do  business  is  not  a 
question  of  the  ability  of  the  Wall 
Street  banks,  for  instance,  to  lend 
money  on  stock  exchange  collateral. 
Not  infrequently,  indeed,  it  happens 
that  the  banks  have  plenty  of  money 
which  they  are  willing  to  lend  out  in 
this  way  at  low  rates,  while  at  the  same 
time  that  people  who  want  to  borrow 
money  for  business  purposes  have  the 
hardest  kind  of  a time  getting  it.  There 
is  a whole  lot  of  difference  between 
money  which  is  to  be  had  for  a short 
time  to  use  in  stock  speculation  or  for 
other  purposes  and  capital  which  is 
wanted  for  a considerable  period  of  time 
to  do  business  on. 

• Since  1907. 

It  being  now  generally  admitted  that 
the  main  cause  of  the  panic  of  1 907  was 
the  complete  exhaustion  of  the  country's 
capital  supply,  that  memorable  time 
may  be  taken  as  a sort  of  a starting 
point  in  gauging  the  country's  capital 
supply  now.  After  the  closing  months 
of  1907,  it  will  be  remembered,  came  a 
long  time  when  business  and  finance 
were  practically  at  a standstill — when 
capital  had  a great  opportunity  to  accu- 
mulate. For  very  nearly  a year  this 
process  went  steadily  on.  So  little  busi- 
ness was  doing  that  only  very  moderate 
amounts  of  capital  were  needed  to  carry 
it  on.  So  quiet  were  all  the  financial 
markets  that  the  demand  from  that 
source  amounted  to  comparatively  little. 
The  result  was  that  during  1908  the 
reservoirs  in  which  capital  accumulates, 
filled  rapidly. 

Then  came  the  election  at  the  end  of 
1908  and  the  radical  change  in  business 
conditions  which  followed.  And  as  the 
wheels  began  to  turn  again,  oil  was  once 
more  needed  to  make  the  machinery  go, 
and  in  all  the  greater  quantity  because 
that  machinery  had  for  so  long  been 
standing  idle.  At  once  the  accumulated 
amounts  of  capital  began  to  be  reavily 
drawn  upon,  and  all  through  1909  these 


demands  continued  on  a rising  scale. 
The  overdoing  of  things  toward  the  end 
of  1909  has  now  become  a matter  of 
record.  By  a good  many  people  who 
want  to  see  another  boom  started  now, 
however,  it  does  not  seem  to  be  realized 
to  what  extent  the  over-activity  at  the 
end  of  1909  tied  up  the  country's  avail- 
able capital  supply. 

It  did  tie  it  up,  however,  and  to  so  re- 
markable an  extent  that  at  the  begin- 
ning of  the  present  year  the  corpora- 
tions which  wanted  to  borrow  money 
found  it  an  almost  impossible  under- 
taking. Appeal  to  the  foreign  markets 
followed,  and  about  150  million  dollars 
of  French  and  other  European  capital 
were  secured  in  the  late  winter.  That, 
however,  only  served  to  emphasize  how 
scarce  capital  was  here.  Finally  came 
the  break-down — the  cessation  of  the 
hitherward  stream  of  foreign  capital 
and  the  admission  that  business  could 
no  longer  be  carried  on  in  the  same  way. 
Toward  the  end  of  the  spring,  borrow- 
ing by  the  corporations  came  practically 
to  an  end.  The  hum  of  industrial  ac- 
tivity began  to  sink  to  a lower  pitch. 

Replenishment. 

It  was  unpleasant  to  have  what 
seemed  so  promising  a boom  checked  in 
that  way,  but  it  was  the  only  way  in 
which  the  supply  of  oil,  without  which 
the  machinery  could  not  be  operated, 
could  be  replenished.  • And  since  the 
beginning  of  the  summer  this  process 
of  replenishment  has  been  going  steadi- 
ly on.  Instead  of  investors  being  called 
upon  to  put  their  savings  into  all  sorts 
of  issues  of  new  securities,  they  have 
been  quietly  allowed  to  bank  their 
money.  Instead  of  banks  and  other 
institutions  tying  themselves  up  with 
large  underwritings  of  new  securities, 
they  have  allowed  capital  to  accumulate, 
awaiting  a favorable  chance.  All  over 
the  country  this  has  been  going  on. 
Even  in  the  West,  where  the  speculation 
in  land  early  in  the  year  so  seriously 
threatened  the  capital  supply,  there  has 
been  a great  change  in  this  regard  and 
large  amounts  of  capital  have  been 
steadily  accumulating. 


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Six  months  is,  of  course,  not  a very 
long  time  in  which  to  replenish  a supply 
of  capital  exhausted  as  was  ours  at  the 
end  of  1909,  but  in  the  opinion  of  com- 
petent observers  it  is  believed  that  very 
great  progress  has  been  made.  The 
supply  of  capital  is  not  redundant — no- 
body who  is  familiar  with  industrial 
•conditions  believes  that  it  is.  But  on 
the  other  hand  it  must  be  borne  in  mind 
that  to  what  has  been  saved  during  the 
summer,  all  the  great  amounts  of  capi- 
tal which  will  be  called  into  existence 
by  the  marketing  of  this  year’s  record- 
breaking  crops  must  be  added.  Forti- 
fied by  that  addition,  the  capital  that 
has  been  accumulated  this  summer 
ought  to  amount  to  a sum  sufficient  to  do 
-a  good  deal  of  business  on. 

FROM  A WESTERN  VIEWPOINT 

O PEAKING  of  the  outlook  for  the 
year’s  closing  months,  the  Na- 
tional City  Bank  of  Chicago  says: 

There  is  good  reason  to  believe  that 
this  last  quarter  of  the  year  will  be  by 
far  the  most  interesting  of  the  whole 
twelve-month  period.  Political  uncer- 
tainty is  still  holding  up  trade  ventures, 
and  indecision  is  reflected  in  many 
quarters  that  are  ordinarily  active  at 
this  time.  But  an  offsetting  influence 
which  is  bound  to  become  more  influen- 
tial as  the  season  advances  is  the  cer- 
tainty of  a great  corn  crop — perhaps 
the  largest  ever  harvested — and  a cot- 
ton crop  at  least  equal  to  that  produced 
last  year.  The  total  crop  production, 
therefore,  is  likely  to  reach  an  un- 
usually high  valuation. 

Within  the  next  three  months  various 
important  financial  operations  that 
have  been  held  back  by  the  peculiar 
complications  incident  to  the  prolonged 


liquidation  in  securities  and  the  un- 
settlement in  general  business  will  be 
put  through.  Many  of  the  railroads 
are  in  need  of  funds,  and  although  the 
disposition  still  is  to  borow  as  little  as 
possible  pending  more  settled  develop- 
ments, some  financing  will,  in  all  prob- 
ability, have  to  be  arranged  for  in  the 
near  future  if  the  important  systems 
are  to  equip  themselves  to  handle  the 
larger  business  which  will  offer  later 
on.  It  may  be  doubted,  however, 
whether  these  requirements  can  be  fully 
satisfied  through  the  facilities  of  the 
short-term  loan  market. 

Europe,  in  a way,  holds  the  key  to 
the  situation  in  the  United  States,  so 
far  as  the  money  market  is  concerned, 
because  of  the  altogether  phenomenal 
showing  of  our  foreign  trade.  The 
whole  story  is  told  in  the  fact  that  for 
the  first  time  since  1895,  for  the  eight 
completed  months  ending  with  last 
August,  the  United  States  showed  an 
import  excess  of  $913,569-  The  really 
startling  disclosures  of  these  figures 
will  be  appreciated  when  it  is  recalled 
that  for  the  same  period  of  1909  our 
exports  exceeded  imports  by  $59,482,- 
000,  while  for  the  same  months  of  1908 
the  unprecedented  export  excess  of 
$391,000,000  was  reported.  Such  a 
showing  suggests  inevitably  large  gold 
exports  later  on  unless  the  foreign  de- 
mand for  our  securities  enlarges  or 
commodity  prices  in  the  United  States 
decline  to  a level  at  which  Europe  will 
again  become  a large  buyer. 

After  Election. 

After  the  Congressional  elections  are 
held  a better  tone  to  general  business 
may  be  expected  to  develop.  At  the 
moment  business  men  everywhere  have 
been  unsettled  by  the  complications  in 
national  politics  and  the  uncertainty 

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that  usually  arises  when  the  possibility 
of  tariff  revision  is  under  discussion. 
The  progress  of  the  railroad  freight 
rate  inquiry  and  the  support  given  the 
roads  by  the  unions  suggest  that  a 
compromise  settlement  may  be  arrived 
at  ultimately  which  will  be  acceptable 
to  all  parties.  It  seems  idle,  however, 
to  expect  any  definite  announcement 
from  the  Interstate  Commerce  Com- 
mission for  several  months  to  come,  as 
the  investigation  now  under  way  has 
developed  a great  many  questions  of 
broad  significance  which  can  be  only 
adjusted  after  the  most  painstaking 
work  that  has  ever  been  expended  upon 
such  subjects. 

One  of  the  most  favorable  develop- 
ments is  the  better  tone  shown  by  the 
bond  market,  which  has  lately  reflected 
increased  inquiry  from  institutions  that 
have  long  deferred  purchases.  The 
fact  that  many  high-grade  issues  are 
now  obtainable  at  prices  which  show  a 


remarkably  advantageous  investment 
yield  indicates  that  the  absorption  from 
such  sources  will  enlarge,  with  the  re- 
sult that  the  whole  bond  market  will 
show  definite  improvement  before  long. 
The  fact  that  no  very  heavy  flotations 
have  been  attempted  within  the  last 
two  months  has  in  a way  relieved  the 
congestion  that  the  market  showed  in 
July  when  the  reinvestment  of  semi- 
annual dividends  was  expected  to  en- 
large the  inquiry.  The  situation  at  the 
moment  is  much  more  satisfactory  than 
it  was  then,  and  it  seems  reasonable  to 
expect  a better  inquiry  from  investors 
in  Europe  as  well  as  here  in  the  not 
distant  future.  After  a prolonged  in- 
terval of  depression  such  as  the  security 
markets  have  reflected  for  several 
months  past,  any  sign  of  renewed  pub- 
lic interest  is  almost  invariably  felt  first 
in  the  bond  market  before  it  appears 
as  a strengthening  factor  in  the  stock 
market,  and  this  is  as  it  should  be. 


CORPORATION  PUBLICITY 

WESTERN  UNION'S  MOVE  INJ  THAT  DIRECTION  AND  WHAT 

IT  MEANS 

By  Peter  Simmons 


A T the  company’s  offices  at  195 
^ Broadway,  New  York  City,  the 
directors  of  the  Western  Union  were 
recently  in  session.  Before  the  meeting 
lay  a report  of  Messrs.  Price,  Water- 
house  & Co.,  who  had  been  appointed 
some  eight  months  before  to  make  a 
complete  reappraisal  of  the  Western 
Union’s  assets  and  property.  Should 
or  should  not  the  contents  of  this  report 
be  made  public? — that  was  the  question 
being  considered.  Eventually  it  turned 
out  to  be  the  sense  of  the  meeting  that 
it  should — that  the  shares  of  the  com- 
pany were  widely  scattered  and  that 
the  shareholders  had  a right  to  know — 
that  the  company  did  business  by  public 
franchise,  and  that  the  public  had  a 
right  to  know.  At  the  meeting’s  close, 
the  Wall  Street  news  agencies  were 
called  up  and  the  facts  given  out.  Writhin 


an  hour  they  had  been  telegraphed  to 
every  part  of  the  Union. 

The  Motive  of  the  Movement. 

To  get  to  the  bottom  of  this  action 
on  the  part  of  Western  Union,  it  is 
necessary  to  go  back  to  last  December 
when  the  American  Telephone  and  Tel- 
egraph Company  acquired  the  minority 
stockholdings  of  the  Gould  family  in 
Western  Union.  Just  how  much  stock 
was  taken  over  was  not  at  the  time 
publicly  announced.  Whether  it  was 
twenty  per  cent,  or  twenty-five  per  cent., 
however,  makes  no  difference;  it  was 
enough  in  the  case  of  a company  like 
Western  Union,  with  its  shares  scattered 
all  over  the  United  States,  to  insure 
virtual  control  to  the  buyer.  And,  in- 
deed, changes  in  the  conduct  of  Western 
Union’s  affairs  began  at  once  to  take 


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place.  Most  important  of  all  was  the 
decision  on  the  part  of  the  Executive 
Committee  to  find  out  the  exact  value 
of  the  property  they  had  bought. 
“Here/'  they  said,  4 ‘we’ve  taken  over 
control  of  this  corporation;  we  know 
it’s  an  immensely  valuable  property, 
but  we  do  not  know  exactly  what  it  is 
worth.  The  values  given  in  this  old 
balance  sheet  may  have  been  made 
some  time  ago,  under  different  book- 
keeping methods  than  the  ones  we  pro- 
pose to  use.  Let’s  find  out  now,  not 
what  this  property  may  have  been  worth 
at  some  time  in  the  past,  but  what  it’s 
worth  now.” 

Making  the  Appraisal. 

With  that  idea  in  mind  one  of  the 
best  known  firms  of  chartered  account- 
ants in  the  country  was  engaged  to 
make  a thorough  appraisal  of  the  West- 
ern Union’s  real  estate,  equipment,  and 
other  assets.  Carte  blanche  practically 
was  given  to  the  appraisers.  Get  at  the 
facts,  they  were  told,  regardless  of 
whether  the  values  that  you  place  on 
things  agree  with  the  figures  as  given 
in  the  old  balance  sheet  or  not.  Every 
facility  will  be  put  at  your  command. 
The  report  which  you  will  make  is  to 
represent  an  outside  and  independent 
view  of  what  our  assets  amount  to. 

Instructed  in  that  way,  Messrs.  Price, 
Waterhouse  & Company  went  forward 
with  the  great  work  of  investigation 
and  appraisal.  Almost  the  first  thing 
they  did  was  to  retain  the  engineering 
firm  of  Westinghouse,  Church,  Kerr  & 
Co.  to  aid  them  in  making  the  physical 
valuation.  With  the  aid  of  these  engi- 
neers a complete  appraisal  of  all  the 
company’s  property,  real  estate,  and 


equipment  was  made.  The  market  for 
the  securities  held  by  the  company,  too, 
was  closely  figured.  The  old  balance 
sheet,  furthermore,  was  gone  over  with 
a fine-toothed  comb,  and  any  number  of 
changes  and  adjustments  made. 

Result  of  the  Investigation. 

To  make  a long  story  short,  when 
the  investigation  had  been  completed, 
the  appraisers  found  that  about  13  mil- 
lion dollars  would  have  to  be  lopped  off 
the  19-million-dollar  surplus  reported 
in  the  old  balance  sheet.  Of  this  13 
million  dollars  about  half  represented  a 
lower  valuation  of  property  and  invest- 
ments the  other  half  consisting  of  ad- 
justments which  it  was  found  necessary 
to  make.  That,  however,  is  not  so  mate- 
rial. The  real  point  of  the  thing  is 
that  when  they  had  finished  their  in- 
vestigation, the  appraisers  came  to  the 
company  and  said,  “Here,  we’ve  made 
this  valuation  and  we  find  that  your 
1 9-million-dollar  surplus  ought  to  be 
scaled  down  to  about  six  million  dol- 
lars.” 

There  are  some  boards  of  directors 
who  upon  the  receipt  of  such  good  news 
would  have  wanted  to  keep  it  all  to 
themselves,  but  not  so  with  this  body  of 
men  headed  by  Theodore  N.  Vail.  If 
it  is  true,  they  said,  that  our  surplus 
does  not  amount  to  what  the  sharehold- 
ers of  this  company  have  been  led  to 
believe  it  amounts  to,  it  is  the  right  of 
the  shareholders  to  know  it.  If  the 
modern  valuation  of  this  plant  shows 
that  the  statement  of  our  assets  ought 
to  be  cut  down  by  IS  million  dollars  or 
by  113  million  dollars,  the  public  and 
the  stockholders  of  this  company  must 
be  apprised  of  the  fact.  And  so  with- 

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■out  delay,  without  hesitation,  the  in- 
formation was  given  out. 

With  regard  to  reasons  why  such  a 
•cut  was  necessary  it  may  be  said  that, 
in  the  first  place,  radically  changed 
methods  of  bookkeeping  are  largely  re- 
sponsible, and  that  in  the  second  place 
there  are  different  ways  of  looking  at 
things — particularly  liabilities  to  con- 
stituent companies.  Under  the  old 
system  for  instance,  it  had  been  figured 
that  the  liability  to  the  Gold  & Stock 
Telegraph  Company  had  been  so  and  so 
much.  Under  the  new  system  it  was 
figured  that  the  liability  was  about  two 
million  dollars  more.  Then  again, 
values  of  real  estate,  and  particularly 
of  investments,  change.  What  may 
have  been  a perfectly  fair  valuation  at 
some  time  in  the  past  might  now  be  far 
from  correct. 

Publicity. 

Western  Union's  action,  important  as 
It  is  in  itself,  has  nevertheless  a far 
wider  significance  in  its  bearing  on  the 
general  question  of  corporation  public- 
ity. For  the  past  two  or  three  years  it 
has  become  more  and  more  apparent 
that  the  Star  Chamber  days  in  cor- 
poration finance  are  a thing  of  the  past. 
The  United  States  Steel  Corporation's 
new  move  in  giving  out  monthly  state- 
ments of  unfilled  orders,  the  giving  out 
of  reports  by  many  important  compa- 
nies who  previously  gave  out  practically 
no  reports  at  all — these  are  all  signs  of 
the  dawn  of  a new  era  in  the  relation- 
ship between  the  corporation  and  the 
public.  It  remained  for  Western 
Union,  however,  to  set  the  landmark 
which  will  stand  as  a monument  to  the 
inauguration  of  the  new  movement. 
From  one  end  of  the  country  to  the 
other  its  action  has  been  received  by 
corporation  stockholders  with  unquali- 
fied approval.  Similar  action  by  other 
big  companies,  it  is  believed,  is  bound 
to  follow.  The  time  is  at  hand  when 
the  stockholder  is  to  be  a partner  in 
fact  as  well  as  in  name. 

Question  of  Surplus. 

Of  course  there  is  to  be  considered 
the  fact  that  such  a cut  in  surplus  as 


was  announced  by  Western  Union  is 
bound  to  give  rise  to  a certain  amount  of 
uneasiness  to  stockholders  of  other 
companies  who  fear  that  the  surplus  in 
their  company  may,  too,  exist  largely 
on  paper  only.  From  the  published  re- 
ports of  many  of  the  big  industrial 
companies  it  would  appear  that  per- 
fectly huge  surpluses  exist — 5,  10  even 
20  million  dollars.  There  are  corpora- 
tions, of  course,  who  actually  have  the 
surplus  they  claim,  but  in  most  cases  it 
must  be  admitted,  were  a revaluation 
like  Western  Union's  to  be  made,  these 
surpluses  would  have  to  be  radically 
cut  down. 

That,  however,  is  no  more  than  is 
generally  known  to  everyone  but  the 
most  guileless  investor.  It  is  not  be- 
lieved that  most  of  these  industrial  com- 
panies whose  balance  sheets  show  such 
big  surpluses  have  anything  like  that 
amount  of  cash  actually  on  hand.  It 
will  be  a good  thing,  perhaps,  if  in- 
stead of  such  surpluses  being  reported, 
they  are  cut  to  what  they  actually  ought 
to  stand  at,  “as  was  done  in  the  case  of 
Western  Union.”  Such  action,  if  it 
.becomes  general,  would  of  course  be 
bound  to  bring  about  a certain  amount 
of  uneasiness  and  confusion,  but  those 
are  conditions  which  inevitably  accom- 
pany the  reform  of  an  abuse.  The 
thrashing  out  of  the  railroad  rate  mat- 
ter, for  instance,  has  not  done  any  good 
to  the  market  for  railroad  securities, 
but  in  the  long  run  is  bound  to  prove 
beneficial.  So  it  is  with  this  movement 
which  has  been  set  in  motion  by  the 
action  of  the  Western  Union  Direct- 
ors. The  process  itself  may  not  be 
pleasant,  but  in  the  long  run  is  bound 
to  be  on  the  constructive  side  of  values. 


ARE  BONDS  A PURCHASE? 

CUMMING  up  a careful  analysis  of 
^ the  bond  market,  Arthur  Batty,  of 
the  firm  of  John  T.  Steele,  Buffalo, 
makes  the  following  observations: 

Acknowledging  that  a ten-year  aver- 
age is  a safe  basis, — especially  when 


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Investors  Want 


as  large  a return  on  their 
investment  as  possible 

Safety  of  Principal 

You  can  get  safety  of  principal  in  companies  having 
an  established  business  and  dividend  record 
We  can  offer  the  preferred  stock  of  several  compa- 
nies that  meet  the  above  requirements 

J.  HATHAWAY  POPE  & CO. 

67  Exchange  Place  R*ctor  ft86  New  York  City 


three  periods  of  depression  were  ex- 
perienced during  that  time 

(a)  That,  if  it  be  possible  to  pur- 
chase bonds  at  an  average  price  of 
5y$  per  cent.,  less  than  the  ten-year 
average  when  money  conditions  are 
considerably  better  than  the  average, 
is  it  not  an  opportune  time  to  invest? 

(b)  Taking  into  account  a gradual 
retrenchment  in  business  and  conse- 
quent decrease  in  interest  rates,  should 
not  bonds  sell  on  a lower  income  basis, 
and,  therefore,  at  higher  prices? 

(c)  Also  the  existence  of  a whole- 
some condition  of  the  banks  as  to  re- 
serve and  average  surplus  at  the  pres- 
ent time  with  a better  and  saner  feeling 
toward  corporate  interests.  (This 
especially  applies  to  franchise  corpora- 
tion bonds  in  the  State  of  New  York, 
due  to  the  test  during  the  past  three 
years  of  the  Public  Service  Commission 
Act  of  1907). 

(d)  With  an  average  annual  fluctua- 
tion in  market  values  of  only  5%  per 
cent.,  are  not  bonds  extremely  conser- 
vative investments,  especially  when  the 
average  prevailing  price  is  but  l1/^  per 
cent,  in  excess  of  the  extremely  low 
prices  of  the  panic  of  1907? 

(e)  Are  not  bonds  a purchase  when 
it  is  possible  to  secure  the  same  class  on 
a basis  to  yield  0.28  per  cent,  in  excess 
of  the  average  annual  income  for  the 
ten-year  period;  that  is,  4.29  per  cent, 
upon  the  thirty  representative  bonds, 


based  upon  present  market  prices  as 
compared  with  4.01  per  cent,  average 
income  for  the  past  decade? 


NOT  TOO  MUCH  GOLD 


TXTITH  one  alleged  economist  seek- 
* * ing  to  outdo  the  next  in  weird- 
ness of  argument  concerning  the  dire 
effect  of  increasing  gold  production,  it 
is  refreshing  to  come  across  a common- 
sense  treatment  of  the  subject  such  as 
is  contained  in  a recent  discussion  of 
the  “Future  of  Bonds”  by  Mr.  Edmund 
D.  Fisher,  Deputy  Comptroller  of  the 
City  of  New  York.  Referring  to  the 
marked  lowering  of  bond  prices  during 
recent  years.  Mr.  Fisher  says: 


The  abnormal  increase  in  the  supply 
of  gold,  followed  by  higher  commodity 
prices,  has  recently  been  frequently 
ascribed  as  the  main  reason  for  this 
change.  There  is,  however,  a serious 
question  whether  increased  gold  produc- 
tion has  been  the  dominant  factor. 
While  it  is  probable  that  the  stimulat- 
ing effect  of  gold  has  been  a contribut- 
ing element  in  the  increased  activity  of 
the  world's  business,  still,  the  outlook 
over  a long  period  of  years  tends  to 
disprove  its  quantitative  force  in  ma- 
terially affecting  prices.  Gold  produc- 
tion has  more  than  trebled  in  amount 
during  the  last  thirty  years,  but  it  is 
very  doubtful  whether  the  much  smaller 

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increase  in  commodity  prices  during  the 
same  period  has  been  mainly  due  to  this 
cause.  The  truth  is  that  gold  cannot 
be  classed  as  an  ordinary  commodity. 
It  is  a law  unto  itself.  The  demand 
for  it  is  constant.  It  always  has  value 
and  its  holder  is  quite  as  frequently 
satisfied  with  its  latent  worth  as  with 
the  advantage  of  its  actual  use.  It  is 
therefore  true  that  gold  in  use,  either 
in  bar.  or  coin  form  or  its  equivalent, 
is  the  only  gold  that  has  an  influence 
as  a commodity  in  affecting  prices.  As 
this  is  an  inconsiderable  portion  of  the 
world’s  store,  and  as  the  amounts  used 
are  largely  for  reserve  purposes  and 
are  so  employed  under  definite  banking 
regulations,  it  would  seem  that  the  ef- 
fect of  its  use  upon  commodity  prices 
is  inconsiderable  in  long  periods  of  time 
but  may  be  acute  during  short  periods. 

Credit  Now  the  Real  Medium  op 
Exchange. 

Business  is,  after  all,  only  the  me- 
chanics of  distribution.  It  began  with 
the  barbarian,  who  seized  what  he 
could  to  maintain  life.  Civilization 
now  compels  a man  to  earn  his  living 
By  serving  others.  Radical  departure 
from  the  principle  tends  to  unsound 
business  methods.  There  is,  of  course, 
the  broad  period  of  transition  from 
barbarism  to  civilization,  passing 
through  the  various  phases  of  seizure, 
barter  and  exchange.  Exchange  was 
at  first  based  upon  simple  and  restricted 
mediums  of  value,  which  gradually 
broadened  until  gold  became  the  stand- 
ard. But  with  the  expansion  of  busi- 
ness activity  even  gold,  with  its  equiva- 
lent the  banknote,  became  cumbersome 
as  a general  medium  of  exchange  and 
was  supplanted  by  the  check,  the  draft 
and  bill  of  exchange — all  expressive 
of  the  confidence  between  man  and  man 
and  the  close  touch  between  the  bank- 
ing system  and  the  business  world. 
This  really  means  that  credit  is  fast 
becoming  the  chief  medium  of  exchange, 
with  gold  for  reserve  purposes  and  for 


the  adjustment  of  domestic  and  inter- 
national balances. 

Gold  and  Prices. 

As  the  momentum  of  a period  of 
business  activity  develops  credit  ex- 
pands and  ultimately  works  into  a con- 
dition of  inflation  which  temporarily 
depreciates  the  purchasing  power  of 
the  unit,  namely,  the  dollar;  with  a 
resultant  increase  in  commodity  price- 
Then,  after  the  crisis  of  inflation  f- 
reached,  the  reverse  process  ttikes  place, 
credit  automatically  contracts  and  gold 
quietly  retires  to  its  position  as  a latent 
rather  than  an  active  force,  giving  the 
business  world  a period  of  needed  rest 
The  measure  of  inflation  which  remains 
after  such  a period  continues  to  be  a 
force  in  maintaining  a higher  level  of 
prices  until  the  credit  on  which  it  is 
based  has  been  liquidated.  For  in- 
stance, the  volume  of  liquidation  was 
much  greater  after  the  panic  of  1908 
than  after  that  of  1907,  with  the  result 
that  the  amount  of  capital  released  for 
investment  in  the  former  period  was 
larger  than  the  amount  that  has  been 
released  since  1907.  As  a consequence 
the  average  level  of  bond  values  has 
not  yet  recovered.  The  amount  of 
gold,  or  its  equivalent,  that  remains 
continually  in  active  circulation,  or  in 
active  reserve  form,  in  excess  of  the 
normal  increase  required  by  a growing 
population,  is  the  only  gold  that  can 
permanently  affect  prices.  Any  in- 
crease in  credit  caused  by  the  growth 
of  the  deposits  of  banking  institutions, 
which  are  required  by  law  to  keep  min- 
imum reserves,  tends  also  to  inflate 
prices.  The  decrease  of  the  average 
reserve  in  this  country  during  recent 
years  from  twenty  to  about  twelve  per 
cent,  indicates  a strong  tendency  to 
such  inflation.  It  is  evident,  there- 
fore, that  gold  must  be  given  a not  too 
important  place  as  a cause,  both  in  the 
increase  of  commodity  prices,  and  the 
interrelated  depreciation  of  bonds  as 
investments  with  fixed  maturities. 


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RETROSPECT  AND  PROSPECT 

By  H.  Prentiss  Taylor,  of  H.  P.  Taylor  & Company,  New  York  and  Pittsburg 


A REVIVAL  of  interest  in  the  bond 
market  has  been  a noteworthy 
feature  of  the  financial  situation  since 
the  opening  of  September.  While  pur- 
chases for  account  of  the  individual  in- 
vestor are  still  comparatively  narrow, 
the  recovery  in  prices,  the  transfer  of 
large  blocks  of  securities  from  the  un- 
-derwriters  to  bond  houses  at  home  and 
abroad,  the  broadening  inquiry  in  all 
■directions  and  the  comparative  ease 
with  which  municipal  issues  are  being 
disposed  of  are  signs  warranting  the 
belief  that  the  movement  has  stability 
.and  that  it  will  expand. 

Financiers  are  now  convinced  that 
u monetary  stringency  this  year  is  im- 
probable. The  wisdom  of  the  bankers 
in  New  York  and  Chicago  in  calling  at- 
tention, in  May  and  June,  to  the  ab- 
normal increase  in  the  loan  item  of  the 
national  banks  of  the  country,  and  in- 
sisting upon  correction,  has  been  ex- 
emplified many  times.  Between  Jan- 
uary 31  and  March  29,  loans  had  in- 
creased $202,589,000,  an  unprecedented 
record  for  any  period  between  calls. 
From  April  28,  1909,  to  March  29, 
1910,  the  increase  had  reached  the  sur- 
prising total  of  $469,000,000.  Of  this 
amount  the  middle  western  states  had 
•contributed  $165,000,000,  the  southern 
$91,300,000  and  the  far  western  $58,- 
300,000.  Meanwhile,  the  banks  of 
New  York  City  had  contracted  their 
loan  item  by  $47,000,000.  Speculation 
in  land,  particularly  in  the  west,  had 
been  in  progress  for  three  or  four 
years  and  had  finally  reached  a stage 
necessitating  a radical  check  if  an  ulti- 
mate disaster  were  to  be  avoided.  Loans 
to  farmers  and  grain  dealers,  for  the 
purpose  of  withholding  agricultural 
products  from  market,  not  only  had 
weakened  the  position  of  the  banks  but 
had  accelerated  speculation  in  grain,  the 
high  prices  for  which  had  been  a mate- 
rial factor  in  elevating  the  costs  of  liv- 
ing. 


Improvement. 

The  banks,  by  demanding  liquidation 
of  loans,  forced  the  shipment  of  grain 
and  food  products  from  the  farms  to 
primary  markets,  the  immediate  results 
being  that  August  receipts  thereat  were 
the  largest  for  any  month  on  record, 
with  a single  exception.  As  a further 
precautionary  measure.  New  York 
banks  imported  about  $18,000,000  gold. 
The  national  banks  in  their  statements 
as  of  June  30  and  of  September  1,  did 
not  show  the  expected  improvement  in 
their  condition  so  far  as  the  loan  item 
was  concerned,  but  the  figures  plainly 
indicated  the  extent  to  which  western 
institutions  had  called  upon  their  cor- 
respondents for  funds  within  the  six 
months  and  the  readiness  with  which 
their  demands  had  been  complied. 

It  is  seldom  that  realization  equals 
expectation.  October  arrived  without 
any  evidence  of  the  conditions  predicted 
four  and  five  months  previously.  Poli- 
tics and  political  events  for  a time  ex- 
erted a potent  influence  on  sentiment 
and  stimulated  conservatism.  Business 
gradually  slackened,  which  released 
capital  from  the  ordinary  channels  of 
trade.  The  controversy  over  freight 
rates  restricted  the  ordinary  require- 
ments of  the  railroads  and  naturally 
affected  all  lines  of  industry  closely  de- 
pendent upon  the  purchasing  power  of 
the  transportation  systems.  Money,  in- 
stead of  showing  decided  firmness,  when 
crop-moving  demands  were  heaviest,  has 
been  relatively  easy.  And  as  election 
day  approaches,  there  has  been  a sub- 
sidence of  the  fears  expressed  at  mid- 
summer. Instead,  a feeling  of  assur- 
ance that  a political  change  might  bring 
freedom  from  legislative  hindrance  to 
business  exists  in  quarters  which  form- 
erly became  unduly  frightened  at  the 
prospect  of  such  an  event. 

The  Trade  Revival  of  1909- 

There  has  been  a general  expression 
of  opinion  during  the  last  six  months, 

ill 


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on  a fact  economically  apparent  just  a 
year  ago,  that  the  trade  revival  of  1909 
was  not  only  over-extended  but  that  it 
had  made  its  start  from  a tilted  founda- 
tion. Precedents,  particularly  in  the 
iron  and  steel  industry,  clearly  outlined 
the  probable  culmination,  but  trade  and 
speculative  enthusiasm,  especially  in  the 
west  where  prices  of  animal  and  agri- 
cultural products  were  lifted  to  the 
highest  level  in  many  years,  assisted 
the  general  movement.  Within  an  in- 
credibly brief  period,  the  production  of 
iron  was  doubled,  excelling  all  previous 
records,  and  the  value  of  the  finished 
products  set  a new  mark  in  American 
manufacturing  history. 

Reaction. 

A reaction  was  discernible  before  the 
end  of  last  year  but  the  stock  market 
did  not  begin  to  realize  that  readjust- 
ment was  under  way  until  January, 
when  prices  broke  violently.  Political 
developments  were  directly  charged 
with  responsibility  for  the  collapse  and 
subsequent  events  were  freely  credited 
to  the  same  depressing  influence,  where- 
as they  were  directly  attributable  to  at- 
tempted nullification  of  the  operation 
of  natural  laws.  Failure  to  liquidate 
labor  in  1908  made  it  impossible  to  deny 
demands  for  higher  wages,  when  rail- 
road and  industrial  corporations  were 
last  year  showing  phenomenal  increases 
in  earnings  and  were  either  restoring 
or  increasing  dividend  disbursements. 
However,  it  was  not  until  last  spring 
that  wage  increases  became  a fixture. 
By  that  time,  reaction  in  business  had 
been  progressing  for  some  months.  It 
is  still  uncompleted,  partly  because  high 
wages  and  low  efficiency  of  labor  nat- 
urally tend  to  retard  the  movement. 
Nevertheless,  the  purchasing  power  of 
the  dollar  is  slowly  expanding.  As 
compared  with  the  high  prices  estab- 
lished on  the  Chicago  Board  of  Trade 
in  April  and  May,  wheat  has  declined 
13  cents  per  bushel,  corn  16  cents  and 
oats  8 cents  per  bushel.  Wheat  and 
corn  are  selling  lower  than  at  any  time 
since  1907  and  oats  since  1906.  Mess 
pork  is  $8  per  barrel  lower  and  market 


quotations  on  animal  products  in  gen- 
eral are  becoming  more  rational. 
Leather,  lumber,  boots  and  shoes,  wool- 
en fabrics,  rubber,  iron  and  steel  and 
many  manufactured  articles  are  lower. 
Cotton  remains  high,  partly  because  of 
a disappointing  yield  and  partly  be- 
cause of  a dangerous  speculation. 

The  Need  of  Lower  Prices. 

Labor  can  hardly  be  expected  to  ad- 
just itself  to  a changing  situation  in 
view  of  its  commanding  influence  in 
political  affairs  and  to  the  wholesome 
fear  in  which  it  is  held  by  the  railroads. 
Contentions  of  the  latter  for  higher 
f reight  rates  have  been  predicated 
largely  on  the  plea  that  increased  wages 
necessitate  the  rise  in  order  to  show  a 
fair  return  on  the  capital  invested. 
This  may  be  the  easiest  solution  of  the 
question  but  labor  cannot  continue  to 
command  the  present  basis  of  remuner- 
ation unless  there  is  a corresponding 
permanent  elevation  in  cost  of  living. 
The  pressing  need  of  the  country  is  for 
lower  prices,  particularly  if  the  United 
States  is  to  regain  anything  like  its 
former  position  among  grain  exporting 
nations.  An  ability  to  compete  in  the 
world’s  markets  likewise  is  essential  if 
we  are  to  liquidate  our  huge  foreign 
indebtedness  and  to  command  free  capi- 
tal on  attractive  terms.  Statistics  show 
that  the  world’s  weekly  shipments  of 
wheat  to  importing  European  countries 
have  recently  been  in  excess  of 
15,000,000  bushels,  of  which  the 
United  States  and  Canada  have  been 
supplying  about  one-seventh.  Our  pro- 
portion several  years  ago  was  40  to  50 
per  cent.  Russia,  Egypt,  India  and 
Argentina  have  been  underselling  us 
and  have  been  strengthening  their  finan- 
cial position  largely  at  our  expense. 

Making  tiie  Turn. 

Increase  in  manufactured  exports 
has  partially  offset  the  decrease  in 
cereal  shipments,  but  the  one  thing 
needful  to  restore  our  financial  equilib- 
rium is  to  be  able  to  offer  our  com- 
modities at  a level  that  will  appear  at- 


Digitized  by  t^ooQle 


INVESTMENTS 


683 


tractive  to  consuming  nations,  as  in 
1908,  when  excess  exports  for  the 
twelve  months  aggregated  $636,461,300; 
last  year  the  excess  was  $273,998,100. 
While  our  aggregate  trade  for  nine 
months  ending  September  30  amounted 
to  $2,395,300,000,  the  excess  of  exports 
was  only  $50,500,000,  or,  2.11  per 
cent,  of  the  total.  This  showing  was 
made  possible  by  the  highly  favorable 
statement  for  September.  The  excess 
of  exports  was  $51,587,000  over  im- 
ports as  compared  with  the  correspond- 
ing month  in  1909,  due  largely  to  the 
unusually  heavy  shipments  of  cotton, 
which  were  accelerated  by  the  bill  of 
lading  controversy.  The  need  of  a per- 
manent change  is  apparent;  when  it 


comes  the  investment  situation  will  lack 
many  of  the  perplexing  features  of  the 
past  two  or  three  years. 


ANNOUNCEMENT 

tj'OR  the  benefit  of  its  many  readers 
**•  who  want  impartial  information 
Investments  maintains  a bureau  fully 
prepared  to  answer  questions  on  in- 
vestment matters. 

For  this  service,  which  is  under  the 
personal  direction  of  the  editor,  no 
charge  is  made.  The  only  condition  is 
that  postage  to  cover  replies  must  ac- 
company questions. 


INVESTMENT  AND  MISCELLANEOUS  SECURITIES 

[Corrected  to  October  20,  approximate  yield  as  figured  November  1.] 


GOVERNMENT,  STATE  AND  CITY  BONDS.  Name  and  Maturity 


Price.  Yield. 


Quoted  by  J.  Hathaway  Pope  Sc  Co.,  brokers 
in  investment  securities  and  dealers  in  un- 
listed and  inactive  railroad  and  industrial 
securities,  67  Exchange  pi..  New  York. 

Name  and  Maturity.  Price.  Yield. 

U.  S.  Gov.,  reg.  2.  1930 100%-101%  1.66 

U.  8.  Gov.,  reg.  3s.  1918 102  -102%  2.60 

Panama  Canal,  reg.  2s,  1936.  .100% -101  1.94 

Diet,  of  Columbia  3-65s  105  -106 

Alabama  4s,  July,  1956  101  -104%  3.77 

Colorado  4s,  '23  (op.  *12) 95  -100  4.00 

Connecticut  3%s,  Apr.  *30....  99  -102  8.87 

Georgia  4%s.  July  1916 104  -105  3.40 

Louisiana  4s,  Jan.,  1914 96  -101  3.72 

Massachusetts  3%s,  1940 94 %-  95  3.75 

New  York  State  3s.  ’59 101%-103  2.88 

North  Carolina  6s,  Apr.,  ’19.  .114 %-116%  3.80 

South  Carolina  4%s.  1933 103  -104  4.22 

Tenn.  New  Settlement  3s,  '13..  96%-  96%  4.40 


v u..  os,  n.  n.  oc  uo.ciis. , ua  tu  - ... 

Boston  3%s,  1929  95  - 96%  3.85 

New  York  City  4%s,  1957... 108  -108%  4.10 

New  York  City  4%s,  1917 102%-103%  3.95 

New  York  City  4s,  1959 99  - 99%  4.06 

New  York  City  4s.  1955 98  - 98  % 4.05 

New  York  City  3%s,  1954 87  %-  8S%  4.10 

New  York  Coty  3%s,  1930 89%-  91  4.12 

New  York  City  rev.  6s.  1910.. 101  -101%  1.30 

Philadelphia  4s,  Jan..  1938...  100  -101%  3.95 

8t.  Louis  4s,  July.  1928 100  -101%  3.92 


Am.  Cig.  4s,  "A”  Mar.  15,  ’ll  98 %-  99%  4.92 

Am.  Cig.  4s.  ”B”  Mar.  15,  '12  97 %-  98%  6.10 

Am.  Locomotive  5s,  Oct.,  ’10..  99%-100%  4.25 

Bethlehem  Steel  6s,  Nov.,  ’14..  97  - 98  6.20 

"Big  Four”  5s.  June,  '11.... 100  -100%  4.35 

B.  R.  & P.  Equip.  4%s 99  -100% 

Chic.  St  Alton  6s.  Mar.  15.  ’13  98 %-  99%  5.25 

C.  H.  Sc  D.  4s,  July,  ’13 96 %-  97%  6.05 

Diamond  Match  6s,  July,  *12  98  -100  5.00 

Hudson  Co.  6s.  Oct.,  ’ll 98  -100  6.00 

Interboro  6s,  May,  ’ll 101%-101%  3.92 

K.  C.  R.  & L.  6s.  Sept.,  ’12..  98  - 99  6.50 

Maine  Central  4s,  Dec.,  ’14 98  -100  4.25 

Minn.  Sc  St.  Louis  5s,  Feb.,  '11  98  %-  99%  6.58 

New  Orl.  Term.  6s,  Apr.,  ’11..99%-100  3.45 

N.Y.C.  Equip.  5s.  Nov.,  '10  100  -101%  4.16 

N.Y.C.  Equip.  5s,  Nov.,  *14 . .102%-103%  4.15 

N.Y.C.  Equip.  5s.  Nov.,  '16.  .103%-104%  4.16 

N.Y.C.  Equip.  5s.  Nov.,  '19.  .104%-106%  4.16 

N.Y..N.H.&H.  5s,  Jan.,  ’ll 100  -100%  3.70 

N.Y..N.H.&H.  5s.  Jan.,  '12 100%-101  3.93 

No.  American  5s,  May,  '12..  99  -100  6.00 

St.  L.  & S.  F.  4 %s,  Feb.,  '12..  95 %-  96%  6.00 

Southern  Ry.  5s,  Feb.,  1913 98  - 98%  6.45 

Tidewater  6s.  June,  '13 100%-101%  5.36 

Westinghouse  6s,  Aug.,  *10....  99%-100%  4.26 

Wood  Worsted  4%s,  Mar.,  ’ll  99 %-  ..  4.50 

Western  Tel.  5s,  Feb.,  '12 99  - 99%  6.20 


INACTIVE  RAILROAD  STOCKS. 

Quoted  by  J.  Hathaway  Pope  Sc  Co. 


SHORT  TERM  SECURITIES. 

Quoted  by  J.  Hathaway  Pope  & Co. 

Following  are  current  quotations  for  the 
principal  short-term  railway  and  industrial 
securities.  Date  of  maturity  is  given,  be- 
cause of  the  Importance  of  those  dates  in 
computing  the  value  of  securities  with  so 
near  a maturity.  All  notes  mature  on  the 
first  of  the  month  named  except  where  the 
day  Is  otherwise  specified;  interest  is  semi- 
annual on  all.  Accrued  Interest  should  be 

adaed  to  price. 


Bid.  Asked. 

Ann  Arbor,  pref 65  72 

Arkansas,  Oklahoma  Sc  Western — 4 9 

Atlanta  & West  Point  132 

Atlantic  Coast  Line  of  Conn 230  250 

Buffalo  & Susquehanna,  pref 10  12 

Central  New  England  10  16 

Central  New  England,  pref 20  27 

Chicago,  Bur.  & Quincy  210  230 

Chicago,  Indianapolis  & Louisville.  50  60 

Chicago,  Ind.  & Louisville,  pref. ...  60  75 

Cincinnati,  Hamilton  & Dayton...  85  60 

Cincinnati,  Ham.  & Dayton,  pref. . 65  70 

Cincin.,  N.  O.  & Tex.  Pac 130  140 

Cincln.,  N.  O.  St  Tex.  Pac.,  pref...  102  106 

Cincinnati  Northern  50  60 

Cleveland.  Akron  & Columbus 70  84 


Digitized  by  L^OOQle 


681- 


THE  BANKERS  MAGAZINE 


Cleve.,  Cln.,  Chic.  & St.  L.,  pref. 

Delaware  

Dea  Moines  & Ft.  Dodge,  pref.. 

Detroit  & Mackinac  

Detroit  & Mackinac,  pref 


Georgia,  South  & Florida  1st  pref 
Georgia,  South  & Florida,  2d  pref 

Huntington  & Broad  Top  

Huntington  & Broad  Top,  pref. . 
Kansas  City,  Mexico  & Orient.. 
Kansas  City,  Mex.  & Orient,  prel 
Louisville,  Henderson  & St.  Louis 
Louisville,  Hend.  & St.  L.,  pref.  . 

Maine  Central  

Maryland  & Pennsylvania  

Michigan  Central  

Mississippi  Central  

Northern  Central,  new  ctfs 

Pitts.,  Cln.,  Chic.  & St.  L.,  pref... 

Pittsburg  & Lake  Erie  

Pittsburg,  Shawmut  & Northern. 

Pere  Marquette  

Pere  Marquette,  1st  pref 

Pere  Marquette,  2d  pref 

8t.  Louis,  Rocky  Mt.  & Pac.,  pref 

Seaboard  1st  pref 

Seabord  2d  pref 

Spokane  & Inland  Empire.* 

Spokane  & Inland  Empire,  pref.. 


Williamsport  & North  Branch 


Bid. 

Asked. 

. 98 

110 

. 42 

46 

. * . . 

70 

. 75 

•85 

. 90 

100 

. 40 

60 

. 30 

40 

r.  90 

98 

r.  70 

75 

. 6 

9 

. 20 

30 

. 15 

18 

f.  20 

25 

i.  12 

18 

. 30 

37 

.205 

. . . 

. 15 

24 

.155 

175 

. 30 

35 

.200 

• . • 

.101 

112 

.296 

. . • 

. 1 

. • • 

. 24 

35 

. 45 

58 

. 30 

40 

r.  . . 

40 

. 70 

75 

. 39 

43 

. 30 

50 

. 50 

70 

. 18 

25 

. 80 

84 

. 1 

4 

GUARANTEED  STOCKS. 

Quoted  by  J.  Hathaway  Pope  & Co. 

(Guaranteeing  company  in  parentheses.) 

Bid.  Asked. 

Albany  & Susquehanna  (D.  & H.)..270  300 

Allegheny  & West’n  (B.  R.  I.  & P.).135  145 

Atlanta  & Charlotte  A.  L.  (So.R.R. ) .180  ... 

Augusta  & Savannah  A.  L.  (Cen. 

of  Ga.j  104  112 

Beech  Creek  (N.  Y.  Central) 95  100 

Boston  & Lowell  (B.  & M.) 205  215 

Bleecker  St.  & F.  Ry.  Co.  (Met. 

St.  Ry.  Co.)  15  22 

Boston  & Albany  (N.  Y.  Cen.) 218  221 

Boston  & Providence  (Old  Colony). 270  290 

Broadway  & 7th  Av.  R.  R.  Co. 

(Met.  St.  Ry.  Co.)  115  135 

Brooklyn  City  R.  R.  (Bk.  H.  R.  R. 

Co.)  165  170 

Camden  & Burlington  Co.  (Penn. 

R.  R.)  140  150 

Catawissa  R.  R.  (Phlla.  & Read.).. 112  120 

Cayuga  & Susquehanna  (D.L.&W. ) . 218  ... 

Cent.  Pk.  N.&E.  R.R.  (Met.  St.  Ry.)  15  26 

Christopher  & 10th  St.  R.  R.  Co. 

(M.  S.  R.)  75  90 

Cleveland  & Pittsburg  (Pa.  R.  R.).164  170 

Cleveland  & Pittsburg  Betterment..  93  100 

Columbus  & Xenia  (Pa.  R.  R.) 200  215 

Commercial  Union  (Com’l  C.  Co.).. 100  110 

Commercial  Union  of  Me.  (Com.  C. 

Co.)  100 

Concord  & Montreal  (B.  & M.)....155  170 

Concord  & Portsmouth  (B.  & M.) . .175 
Conn.  & Passumpsic  (B.  & L. ) . .130  135 

Conn.  River  (B.  & M.)  260  270 

Dayton  & Mich.  pfd.  (C.  H.  & D.)..180  190 

Delaware  & Bound  B.  (Phlla.  & R.).190  200 

Detroit,  Hillsdale  & S.  W.  (L.  S.  & 

M.  S.)  95  100 

East  Pa.  (Phlla.  & Reading)  135 

Eighth  Av.  St.  R.  R.  (M.  S.  R.  Co.) 250  300 

Elmira  Sc  Williamsport  pfd.  (Nor. 

Cen.)  135  140 

Erie  & Kalamazoo  (J.  S.  & S.) 220  240 

Erie  & Pittsburg  (Penn.  R.  R.) 135 

Franklin  Tel.  Co.  (West.  Union)..  40  50 

Ft.  Wayne  & Jackson  pfd.  (L.  S.  Sc 

M.  S.)  125  135 

Forty-second  St.  Sc  G.  St.  R.  R. 

(Met.  St.  Ry.)  200 

Georgia  R.  R.  & Bk.  Co.  (L.  & N. 

& A.  C.  L.)  252  262 

Gold  & Stock  Tel.  Co.  (\y.  U.) 100  110 

Grand  River  Valley  (Mich.  Cent.). .120 
Hereford  Railway  (Maine  Central).  85  92 


Bid.  AskedL 

Inter  Ocean  Telegraph  (W.  U.)....  90  100 

Illinois  Cen.  Leased  Lines  (111.  Cen.)  95  100 

Jackson.  Lans.  & Saginaw  (M.  C.)..  84  90 

Joliet  & Chicago  (Chic.  & Al.) 164  173 

Kalamazoo,  Ai.  & G.  Rapids  (L.  S. 

& S.)  135 

Kan.  C.,  Ft.  Scott  & M.,  pfd.  (St. 

L.  & S.  F.)  65  75 

K.  C.  St.  L.  & C.  pfd.  (Chic.  & Al.).125  140 

Lake  Shore  Special  (Mich  S.  & N. 

Ind.)  330  360 

Little  Miami  (Penn.  R.  R.) 205  21i 

Little  Schuylkill  Nav.  & Coal  (Phil. 

& R.)  115  130 

Louisiana  & Mo.  Riv.  (Chic.  & Atl.)160  170 

Mine  Hill  St  Schuylkill  Hav.  (F.  & 

R.)  120  120 

Mobile  & Birmingham  pfd.  4%  (So. 

Ry.)  68  78 

Mobile  & Ohio  (So.  Ry.)  76  85 

Morris  Can.  pfd.  (Lehigh  Valley)..  170 
Morris  & Essex  (Del.  Lack.  & WJ.173  180 

Nashville  & Decatur  (L.  & N.) 185  192 

N.  H.  & Northampton  (N.  Y.,  N.  H. 

& H.)  100 

N J.  Transportation  Co.  (Pa. R.R.)  . 260  255 

N.  Y.,  Brooklyn  & Man.  Beach  pfd 

(L.  I.  R.  R.)  107  118 

N.  Y.  & Harlam  (N.  Y.  Central) . .300 

N.  Y.  L.  & Western  (D.  L.  & W.).120  125 

Ninth  Av.  R.  R.  Co.  (M.  St.  Ry.  Co.)15<T  180 

North  Carolina  R.  R.  (So.  Ry.) 166  164 

North  Pennsylvania  (Phlla.  & R.)..196  ... 

North.  R.  R.  of  N.  J.  (Erie  R.  R.).  85  95 

Northwestern  Telegraph  (W.  U.)..105  112 

Nor.  & Wor.  pfd  (N.Y.,N.H.&H.) . .208 
Ogden  Min.  R.R.  (Cen.R.R.ofN.J.) . 95  105 

Old  Colony  (N.  Y..N.H.&H.)  180 

Oswego  & Syracuse  (D.  L.  & W.)..215  225 

Pacific  & Atlantic  Tel.  (W.  U.) 60 

Peoria  & Bureau  Val.  (C.R.I.&P.) . .175  185 

Philadelphia  & Trenton  (Pa.R.R.)  .248 
Pitts.  B.  & L.  (P.  L.  E.  & C.  Co.).  32  85 

Pitts.,  Ft.  Wayne  & Chic.  (Pa.R.R.)166 
Pitts.,  Ft.  Wayne  & Chic,  special 

(Pa.  R.  R.)  155  165 

Pitts.  & North  Adams  (B.  St  A.).  127  134 

Pitts.,  McW*port  St  Y.  (P.  & L.  E. 

M.  S.)  117  125 

Providence  & Worcester  (N.  Y.,  N. 

H.  & H.)  260  800 

Rensselaer  & Saratoga  (D.  St  H.)  . .195 
Rome,  Watertown  & O.  N.Y.Cen.)120 
Rome,  Watertown  & O.  (N.Y.Cen.)118  120 

Saratoga  & Schenectady  (D.  & H.)166  171 

Second  Av.  St.  R.  R.  (M.  S.  R.  Co.)  10  20 

Southern  Atlantic  Tel.  (W.  U.)...  80  100 

Sixth  Av.  R.  R.  (Met.  S.  R.  Co.).. 112  130 

Southwestern  R.  R.  (Cent,  of  Ga.).100  110 

Troy  & Greenbush  (N.  Y.  Cent.).. 165 
Twenty-third  St  R.  R.  (M.  S.  R.)..200  250 

Upper  Coos  (Maine  Central)  ....135  145 

Utica  & Black  River  (Rome,  W. 


& O.)  166  176 

Utica.  Chen.  & Susqueh.  (D.  L. 

Sc  W.)  144  155 

United  N.  J.  & Canal  Co.  (Pa.R.R.)  .241  248 

Valley  of  New  York  (D.,  L.  & W.).122  130 

Ware  R.  R.  (Boston  & Albany) ...  .160 
Warren  R.  R.  (D.,  L.  & W.) 168  175 


NEW  YORK  CITY  RAILWAY,  GAS  AND 
FERRY  COMPANY  BONDS  AND  STOCKS. 


Quoted  by  Williamson  & Squire,  members  New 
York  Stock  Exchange,  brokers  and  dealers  in 
Investment  securities.  25  Broad  street.  New 


York  City. 

Bleecker  St  & Ful  Fy 

1st  4s  1950 

Bway  Surf  Ry  1st  5s..  1924 

Bway  & 7th  Av  stock 

Bway  Sc  7th  Av  Con  5s.  1943 
Bway  & 7th  Av  2d  5s.  1914 
Col  & 9th  Av  1st  5s..  1993 
Christopher  & 10th  St.... 
Dry  Dk  E B & Bat  5s.  1932 
Drv  Dock  E B Sc  Bat 

Ctfs  5s  1914 

42d  St  M & St  N Av  6s.  1910 


Bid. 

Asked. 

J&J 

54 

60 

J&J 

102 

104 

120 

135 

J&J 

100 

102 

J&N 

99 

100% 

M&S 

95 

100 

Ajd 

80 

95 

96 

100 

F&A 

40 

49 

M&S 

99% 

100% 

Digitized  by  CjOOQle 


INVESTMENTS 


685 


Second  At  Ry  stock. 


Sixth  Av  Ry  stock.. 


NY  & East  River  Fy. 
10th  A 23d  St  Ferry. 
10th  * 23d  St  Fy  1st  5s 

Union  Ferry  

Union  Ferry  1st  6s... 


,1922 

MAS 

Bid. 

95 

Asked. 

98 

7 

14 

1909 

MAN 

97% 

99 

1948 

FAA 

50 

60 

s s • • 

120 

135 

, 1919 

AAO 

88 

91 

1928 

MAS 

60 

80 

.1942 

FAA 

100 

102 

.1943 

JAJ 

66 

85 

1946 

AAO 

70 

85 

,1927 

JAJ 

100% 

102 

,1982 

MAS 

104 

107 

,1948 

JAJ 

99 

101 

,1944 

JAJ 

102 

104 

, 1945 

JAJ 

98 

100 

.1927 

MAN 

99 

101 

.1930 

MAN 

103 

106 

.1950 

JAD 

100 

102 

.1943 

20 

26 

.1946 

MAN 

102 

105 

.1911 

JAJ 

98 

97 

.1946 

JAD 

96 

99 

QM 

20 

28 

AAO 

30 

40 

.1919 

JAD 

65 

75 

QJ 

26 

29 

.1920 

MAN 

95 

99 

ACTIVE  BONDS. 

Quoted  by  Swartwout  A Appenzellar,  bankers, 
members  New  York  Stock  Exchange.  44  Pine 
street.  New  York. 


Bid.  Asked. 

Amer.  Agri.  Chem.  5s  102  102% 

Amer.  Steel  Founderies  4s,  1923...  69  71 

Amer.  Steel  Founderies  6s,  1935..  100  102 

Balt.  A Ohio,  Southwest.  Div.  3%s.  90  90% 

Bethlehem  Steel  5s  84  85 

Chi.,  Burlington  A Quincy  Gen.  4s.  97%  98 

Chi.,  Burl.  & Quincy  111.  Div.  4s.  ..100%  101 
Chi.,  Burl.  & Quincy  111.  Div.  3%s.  88  89 

Cin..  Hamilton  & Dayton  4s 97%  93% 

Denver  A Rio  Grande  RcCng  5s..  92%  93 

Louis.  A Nashville  unified  4s 98  98% 

Mason  City  A Ft.  Dodge  4s 81  84 

Norfolk  A West.  Divisional*  4s...  93  94 

Savannah.  Florida  A Western  6s.. 122%  125 

Va.  Carolina  Chem.  1st  5s 99%  100% 

Western  Maryland  4s  86%  87 

Wheeling  & Lake  Erie  cons.  4s 83  86 

Wis.  Central,  Superior  A Duluth  4s  92%  93% 

Western  Pacific  5s  94%  95% 


EQUIPMENT  BONDS. 

Quoted  by  Blake  A Reeves,  dealers  in  invest- 
ment securities,  34  Pine  st..  New  York. 


POWER  COMPANY  BONDS. 

Quoted  by  Wm.  P.  Bonbright  A Co.,  bankers, 
members  of  the  New  York  Stock  Exchange, 
24  Broad  street,  New  York. 


Quotations  are  given  in  basis. 


Central  of  Georgia  4%%,  July, 
Central  of  N.  J 4 7c,  Apr.,  ’13. 

Ches.  A Ohio  4 7c.  Oct.,  ’16 

Chic.  A Alton  47*.  June,  *16... 
Chic.  & Alton  4%%.  Nov.,  ’1 
Chic.,  R.  I.  A Pac.  4%%,  Feb., 
Den.  & Rio  Grande  5%,  Mar., 
Del.  & Hud.  4 %<Tc,  July,  ’22... 


Erie  4 7c, 
Erie  47*. 


June, 

Dec., 


*13 
14  . 


Erie  47c . June,  *16  

N.  Y.  Cent.  5%,  Nov.,  '11 
N.  Y.  Cent.  67*.  Nov.,  '18... 

No.  West  4 7*.  Mar.,  ’17  

Pennsylvania  4%,  Nov.,  *14.. 
Seaboard  Air  Line  5 7c,  June, 
So.  Ry.  4%%,  Series  E,  Jun 


Bid 

Asked 

, , 

4% 

4% 

27 

4% 

4% 

19 

5% 

5 

16 

6 

4% 

, , 

4% 

4% 

5 

4% 

. . 

6% 

5 

.. 

5% 

5 

17 

5% 

4% 

11 

5% 

4% 

4% 

4% 

6 

5 

6 

5 

6 

5 

ft 

ft 

6 

5 

4% 

4% 

4% 

4% 

4% 

4% 

4% 

4% 

!*. 

6 

6 

14 

5% 

4% 

COAL  BONDS. 

Quoted  by  Frederick  H.  Hatch  A Co.,  dealers  in 
Investment  securities,  30  Broad  street,  New 
York. 


Bid.  Asked. 

Beech  Creek  C.  & Coke  1st  5s,  1944.  70  75 

Cahaba  Coal  Min.  Co.  1st  6s,  1922.105  110 

Clearfield  Bitum  Coal  1st  4s,  1940.  80  85 

Consolidated  Indian  Coal  1st  Sink- 
ing Fund  5s.  1935  85%  87% 

Continental  Coal  1st  5s.  1952 95  100 

Fairmount  Coal  1st  5s,  1931 93  95 

Kanawha  & Hocking  Coal  A Coke 

1st  Sinking  Funds  5s.  1951 99  101 

Monongahela  River  Con.  Coal  A 

Coll.  Tr.  6s.  1947  95  97 

New  Mexico  Railway  A Coal  1st  A 

Coll  Tr.  6s,  1947  95  97 

New  Mexico  Railway  A Coal  Con. 

A Coll.  Tr.  5s.  1951 94  96% 

O'Gara  Coal  Co.  1st  6s,  Sept.,  1955.  70  80 

Pittsburg  Coal  Co.  1st  & Coll.  Tr. 

Sinking  Fund  5s,  1954  106  110 

Pleasant  Val.  Coal  Co...  1st  5s.  1928  88  90 

Pocohontas  Consol.  Collterles  1st 

5s,  1957  80  31 

Somerset  Coal  Co.  1st  5s,  1932....  92  9b 

Sunday  Creek  Co.  Coll.  Tr.  5s,  1944  64  67 

Vandalla  Coal  1st  5s.  1930  100  ... 

Victor  Fuel  1st  5s.  1963  85  87 

Webster  Coal  A Coke  1st  5s.  1942..  80  83% 

West  End  Coll.  1st  5s.  1913  95 


Bid.  Asked. 


Guanajuato  Power  & El.  Co.  Com.  37  S9 

Bonds,  6 7c.  due  1932  (Int.)  93  9T 

Guanajuato  Power  & Electric  Co. 

Pref.,  6 7o,  cumulative  (ex  com. 

stk.  div.)  75  80- 

Guanajuato  Power  A El.  . Co.  Com  37  39 

Arizona  Power  Co.,  bonds  6%,  due 

1933  85  9* 

Arizona  Power  Co.  pref . 45  60 

Arizona  Power  Co.  com 19  23 

Great  Western  Power  Co.  bonds, 

5 7c.  due  1946  89  90 

Western  Power  Co.  pref 68%  69% 

Western  Power  Co.  com 37%  38% 

Mobile  Elec.  Co.  bds.,  5%,  due  1946  88  90 

Mobile  Electric  Co.  pref.,  7 7o 80 

Mobile  Electric  Co.  com 25  80 

Amer.  Power  A Lt.  Co.,  pref.,  6%..  78  80 

Amer.  Power  A Lt.  Co.  com 47  47% 


FOREIGN  GOVERNMENT  AND  MUNICIPAL 
BONDS. 


Reported  by  Zimmerman  A Forshay,  9-11  Wall 


street,  New  York. 


Bid.  Asked. 


German  Govt.  3%s  .. 

do  3s  

Prussian  Consols  4s  . 
Bavarian  Govt.  4s 
Hessian  Govt.  3%a  ... 

Saxony  Govt.  3s  

Hamburg  Govt.  3s  ... 

City  of  Berlin  4s  

City  of  Cologne  4s  ... 
City  of  Augsburg  4s  . . 
Cityof  Munich  4s 
City  of  Frankfurt  3%s 
City  of  Vienna  4s 

Mexican  Govt.  5s  

Russian  Govt.  4s  

French  Govt.  Rente  3s 
British  Consols  2%s  . 


91% 

82% 

101% 

100% 

90% 

82% 

81% 

100 

99% 

99% 

99% 

92% 

96% 

99% 

91% 

96% 

79% 


92% 

83% 

102% 

101% 

91% 

83% 

82% 

101 

100% 

100% 

100% 

93% 

96% 

100% 

92% 

97% 

80% 


MISCELLANEOUS  SECURITIES. 

Quoted  by  J.  K.  Rice,  Jr.,  A Co.,  brokers  and 
dealers  in  miscellaneous  securities,  33  Wall 
street.  New  York. 

Bid.  Asked. 


American  Brass  120  125 

American  Chicle  com 220  226 

American  Chicle  pref 98  108 

American  Coal  Products  94  97 

American  Gas  A Electric  com....  42  46 

American  Gas  A Electric  pref....  39  42 


Digitized  by  t^ooQle 


686 


THE  BANKERS  MAGAZINE 


Bid.  Asked. 


Adorns  Express  255  275 

American  Express  250  270 

American  Light  & Traction  com.. 275  2S2 

American  Light  & Traction  pref.  .100  103 

American  District  Tel.  of  N.  J...  48  53 

Babcock  & Wilcox  95  100 

BordensCondensed  Milk  com 113  115 

Bordenrs  Condensed  Milk  pref.  ...103  104  % 

Bush  Terminal  92  % 96 

Childs  Restaurant  Co.  com 135  140 

Childs  Restaurant  Co.  pref 105  110 

Cripple  Creek  Central  com 20  30 

Cripple  Creek  Central  pref 41  46 

Del.  Lack.  & Western  Coal 205  215 

Du  Pont  Powder  com 145  150 

Du  Pont  Powder  pref 82  86 

E.  W.  Bliss  com 121  126 

E.  W.  Bliss  pref 125  135 

Hudson  & Manhattan  com 15  20 

International  Nickel  com 135  140 

International  Nickel  pref 88  93 

International  Silver  coin 50  80 

International  Silver  pref 107  114 

Int.  Time  Recording  com 180  200 

Int.  Time  Recording  pref 108  115 

Kings  Co.  E.  L.  & P 122  127 

Oil  Fields  of  Mexico  55  65 

Otis  Elevator  com 46  50 


Bid.  Asked. 

Otis  Elevator  pref 92%  96 

Pacific  Gas  & Electric  com 63%  66 

Pacific  Gas  & Electric  pref 86  90 

Phelps.  Dodge  & Co 200  216 

Pope  Manufacturing  com 69  64 

Pop©  Manufacturing  pref 77  80 

Producers  Oil  143  148 

Royal  Baking  Powder  com 190  196 

Royal  Baking  Powder  pref 104  107 

Safety  Car  Heating  & Lighting. . .128  131 

Sen  Sen  Chiclet  133  138 

Singer  Manufacturing  315  330 

Standard  Coupler  com 32  40 

Texas  & Pacific  Coal  98  103 

Tri-City  Railway  & Light  com....  22  26 

Tri-City  Railway  & Light  pref 87  91 

U.  S.  Express  105  116 

U.  S.  Motors  com 52  66 

U.  S.  Motors  pref 72  76 

Union  Typewriter  com 51  66 

Underwood  Typewriter  pref 98  101 

Underwood  Typewriter  com 56  68 

Virginian  Railway  19  * 24 

Well  Fargo  Express  166  169 

Western  Pacific  24%  26% 

Western  Power  com 38  42 

Western  Power  pref 68  72 

Worthington  Pump  pref.  106  110 


BANK  AND  TRUST  COMPANY  STOCKS 

[Corrected  to  October  20,  1910.] 


NEW  YORK  BANK  STOCKS. 

Reported  by  Hornblower  & Weeks,  members 
New  York  and  Boston  Stock  Exchanges,  42 


Broadway,  New  York. 


Div 

Rate. 

Bid. 

Asked 

Aetna  National  Bank  ... 

8 

175 

. . . 

Amer.  Exchange  Nat.  Bk. . 

10 

230 

Audubon  Bank  

115 

IZo 

Bank  of  America  

26 

680 

600 

Bank  of  the  Manhattan  Co 

12 

320 

335 

Bank  of  the  Metropolis... 

16 

880 

410 

Bank  of  N.  Y.,  N.  B.  A 

14 

810 

325 

Bank  of  Washington  Hts. 

8 

280 

Battery  Park  Nat.  Bank.. 

115 

Bowery  Bank  

12 

380 

. . . 

Bronx  Borough  Bank 

20 

300 

Bryant  Park  Bank  

155 

Butchers  & Drovers  Bank. 

6 

135 

i 4 5 

Century  Bank  

6 

160 

175 

Chase  National  Bank  . . . 

6 

425 

440 

Chatham  National  Bank... 

16 

300 

325 

Chelsea  Exchange  Bank... 

8 

205 

225 

Chemical  National  Bank.. 

15 

425 

435 

Citizens  Central  Nat.  Bk. . 

6 

150 

160 

Coal  & Iron  Nat.  Bank... 

6 

145 

. . . 

Colonial  Bank  

10 

395 

425 

Columbia  Bank  

12 

350 

Corn  Exchange  Bunk  . . . 

16 

308 

w 

East  River  Nat.  Bank.... 

6 

100 

mo 

Fidelity  Bank  

6 

165 

175 

Fifth  Avenue  Bank  

100 

4000 

4500 

Fifth  National  Bank  

12 

300 

. . . 

First  National  Bank  

32 

840 

860 

Fourteenth  Street  Bank... 

6 

150 

160 

Fourth  National  Bank  ... 

8 

184 

190 

Gallatin  National  Bank  ... 

14 

325 

Garfield  National  Bank  . . . 

12 

800 

. « . 

German-Amcrlcan  Bank... 

6 

140 

150 

German  Exchange  Bank... 

20 

460 

. - . 

Germania  Bank  

25 

500 

. . . 

Gotham  National  Bank  . . 

150 

Greenwich  Bank  

io 

260 

Hanover  National  Bank... 

16 

600 

630 

Importers*  & Traders  Nat 

Bank  

24 

540 

660 

Irving  Nat.  Exchange  Bk 

8 

200 

210 

Jefferson  Bank  

10 

175 

Liberty  National  Bank  . . . 

20 

600 

. . . 

Lincoln  National  Bank  . . . 

10 

405 

430 

Market  & Fulton  Nat.  Bk. 

12 

250 

Mechanics  & Metals  Nat 

Bank  

12 

245 

255 

Mercantile  Nat.  Bank.... 

6 

150 

160 

Merchants’  Ex.  Nat.  Bk. . 

6 

160 

... 

Merchants'  Nat.  Bank  . . . 

7 

175 

Metropolitan  Bank  

8 

200 

208 

Mount  Morris  Bank  

10 

250 

Div.  Rate.  Bid.  Asked. 

Mutual  Bank  8 276 

Nassau  Bank  8 240 

Nat.  Bk.  of  Commerce  ....  8 200  203 

Nat.  Butchers  & Drovers..  6 135  146 

National  City  Bank  10  385  395 

National  Park  Bank  16  350  855 

National  Reserve  Bank  ....  6 100  110 

New  Netherlands'  Bank....  5 210  ... 

N.  Y.  County  Nat.  Bank...  40  960  ... 

New  York  Bkg.  Assn 14  310  325 

N.  Y.  Produce  Ex.  Bank..  8 160  170 

Night  & Day  Bank ...  330 

Nineteenth  Ward  Bank ...  260 

Northern  Bank  6 ...  105 

Pacific  Bank  8 230  240 

Peoples  Bank  10  250  280 

Phenlx  National  Bank 8 180  200 

Plaza  Bank  20  600  ... 

Seaboard  National  Bank...  12  400  ... 

Second  National  Bank....  12  400  ... 

Sherman  National  Bank 125  ... 

State  Bank  10  ...  *0* 

Twelfth  Ward  Bank  6 ...  160 

Twenty-Third  Ward  Bk...  6 185 

Union  Ex.  Nat.  Bank 8 165  ... 

Washington  Heights  Bank.  ..  275  ... 

West  Side  Bank  12  600 

Yorkville  Bank  20  626 


NEW  YORK  TRUST  COMPANY  STOCKS. 

Div.  Rate.  Bid.  Asked. 


Astor  Trust  Co 8 330  345 

Bankers'  Trust  Co 16  625  660 

Broadway  Trust  Co 140  150 

Brooklyn  Trust  Co 20  435 

Carnegie  Trust  Co.  8 100  110 

Central  Trust  Co 45  1000 

Columbia  Trust  Co 8 270 

Commercial  Trust  Co 115 

Empire  Trust  Co 10  300  310 

Equitable  Trust  Co 24  460  475 

Farmers’  Loan  & Trust  Co. 

(par  $25)  50  1625  1675 

Fidelity  Trust  Co 6 200  210 

Flatbush  Trust  Co 8 210 

Franklin  Trust  Co 8 ? v0  230 

Fulton  Trust  Co 10  290 

Guaranty  Trust  Co 32  795  805 

Guardian  Trust  Co 175 

Hamilton  Trust  Co 12  270 

Home  Trust  Co 4 105 

Hudson  Trust  Co 6 150  170 

International  Bank’g  Corp. . ..  90  101 

Kings  Co.  Trust  Co 16  500 


1 


Digitized  by  ^.ooQle 


INVESTMENTS 


687 


Dlv. 

Rate. 

Bid. 

Asked. 

Knickerbocker  Trust  Co. . . . 
Lawyers'  Title  Insurance  & 

12 

285 

296 

Trust  Co 

12 

250 

260 

Lawyers’  Mortgage  Co 

12 

235 

240 

Lincoln  Trust  Co 

130 

145 

Long  Isl.  Loan  & Trust  Co. 

12 

800 

... 

Madison  Trust  Co 

210 

Manhattan  Trust  Co.  (par 

$30)  

12 

880 

Mercantile  Trust  Co 

30 

725 

. . . 

Metropolitan  Trust  Co 

24 

515 

Mutual  Alliance  Trust  Co. . 

115 

ISO 

Nassau  Trust  Co 

8 

175 

National  Surety  Co 

8 

260 

270 

N.  Y.  Life  Ina  & Trust  Co. 

45 

1100 

1125 

N.  Y.  Mtg.  & Security  Co.  . 

12 

190 

206 

New  York  Trust  Co 

82 

650 

People’s  Trust  Co 

12 

285 

Queens  Co.  Trust  Co 

115 

125 

Savoy  Trust  Co.  

... 

100 

Standard  Trust  Co 

16 

... 

400 

Title  Guar.  & Trust  Co 

20 

492 

500 

Trust  Co.  of  America  

10 

320 

880 

Union  Trust  Co 

50 

1270 

1330 

U.  S.  Mtg.  & Trust  Co 

24 

475 

United  States  Trust  Co.... 

50 

1185 

1210 

Van  Norden  Trust  Co 

. . . 

210 

Washington  Trust  Co 

i6 

375 

Williamsburg  Trust  Co 

80 

ioo 

Windsor  Trust  Co.  

6 

100 

125 

BOSTON  BANK  STOCKS. 

Reported  by  Hornblower  & Weeks,  members 
New  York  and  Boston  Stock  Exchanges,  60 
Congress  St.,  Boston. 

Name. 


First  Ward  Bank  

Fourth  National  Bank  . . . 
Merchants  National  Bank 


Nat.  Rockland  Bank,  Roxbury.... 


New  England  National  Bank  .... 

Old  Boston  National  Bank  

People's  National  Bank,  Roxbury. . 


Webster  & Atlas  National  Bank... 

Wlnthrop  National  Bank  

* No  public  sales. 


Name. 


Exchange  Trust  Co. 


Old  Colony  Trust  Co. 


1 No  public  sales. 


Div. 

Last 

Rate. 

Sale. 

6 

161* 

4 

102* 

6 

140 

8 

226 

12 

400 

8 

186 

7 

178 

10 

261* 

6 

122 

6 

173* 

6 

116 

8 

167 

10 

875 

7 

196 

12 

• 

6 

162 

5 

124 

5 

124 

10 

261* 

6 

104* 

7 

170 

7 

175 

10 

325 

IES. 

Dlv. 

Last 

Rate. 

Sale. 

8 

825 

7 

• 

8 

185 

14 

869 

12 

458 

5 

120 

6 

205 

5 

105 

*6 

138 

16 

400 

5 

... 

6 

201 

6 

110 

15 

32S 

20 

700 

S 

200 

8 

* 

16 

226 

CHICAGO  8TATE  BANKS. 


Div. 

Rate. 

Bid. 

Asked. 

Ashland 

Exchange  Bank.. 

110 

Austin  State  Bank  

io 

280 

Central 

Trust  Co 

7 

164 

168 

Chicago 

City  Bank  

10 

174 

180 

Chicago 

Savings  Rank  .... 

6 

144 

150 

dtlsens 

Trust  Co 

4 

125 

... 

Colonial 

Tr.  & Sav.  Bank.. 

10 

180 

185 

Div. 

Drexel  State  Bank  

Drovers  Tr.  & Sav.  Bank.. 

Englewood  State  Bank 

Farwell  Trust  Co 

Hibernian  Banking  Assn.  . 
Illinois  Tr.  & Sav.  Bank... 

Kaspar  State  Bank  

Kenwood  Tr.  & Sav.  Bk.. 
Lake  View  Tr.  & Sav.  Bk.. 
Merchants  Loan  & Tr.  Co.. 
Metropolitan  Tr.  & Sav.  Bk 

Northern  Trust  Co 

North  Avenue  State  Bank.. 
North  Side  State  Bank.... 

Northwest  State  Bank  

Northwestern  Tr.  & Sav.  Blc.. 
Oak  Park  Tr.  & Sav.  Bank 
Peoples  Stock  Yards  State 

Bank  

Prairie  State  

Pullman  Loan  & Tr.  Bank. 
Railway  Exchange  Bank... 

Security  Bank  

Sheridan  Tr.  & 8av.  Bank.. 
South  Side  State  Bank.... 
State  Bank  of  Chicago.... 
State  Bank,  Evanston  .... 

Stockmen’s  Trust  Co 

Stock  Yards-  Savings  Bank 

Union  Bank  

Union  Trust  Co 

Wendell  State  Bank  

West  Side  Tr.  & Sav.  Bank 

Western  Trust  

Wilmette  Ex.  State  Bank... 
Woodlawn  Trust  


Rate. 

Bid. 

Asked. 

6 

. . . 

151 

8 

175 

180 

6 

118 

123 

6 

120 

125 

8 

213 

216 

20 

498 

505 

10  * 

260 

7 

135 

140 

5 

140 

145 

12 

423 

435 

6 

119 

123 

8 

314 

318 

6 

138 

142 

6 

135 

• . . 

4 

117 

120 

6 

137 

142 

308 

312 

10 

200 

6 

250 

... 

8 

160 

165 

4 

125 

6 

178 

i85 

6 

110 

112 

140 

150 

12 

340 

10 

290 

6 

115 

iis 

8 

. . . 

216 

6 

134 

188 

8 

275 

110 

• • • 

175 

• • « 

6 

145 

150 

110 

115 

*8 

136 

142 

CHICAGO  NATIONAL  BANK  STOCKS. 


Reported  by  Hornblower  & Weeks,  members 
New  York  and  Boston  Stock  Exchanges,  162 
Monroe  St.,  Chicago. 

Dlv.  Rate.  Bid.  Asked. 


Calumet  National  Bank  ...  6 150 

City  National,  Evanston...  12  800 

Corn  Exchange  Nat.  Bank.  . 16  415 

Drovers  Deposit  Nat.  Bank.  10  220 

First  National  Bank  16  425 

First  Nat.  Bk.  of  Englewood  10  250 

Fort  Dearborn  Nat  Bank. . 8 170 

Live  Stock  Exchange  Nat. 

Bank  10  280 

Monroe  National  Bank  ....  4 130 

Nat.  Bank  of  the  Republic.  8 190 

National  City  Bank  6 218 

National  Produce  Bank....  4 145 


420 

226 

428 

i80 

235 

185 

198 

221 

160 


J.  RUTHERFORD  McALLISTER 

President  Franklin  National  Bank  of 
Philadelphia 

A NOTABLE  instance  of  splendid 
achievement  resulting  from  the  infu- 
sion of  young  blood  into  a business 
enterprise  of  great  strength  is  afforded  by 
the  rapid  rise  of  J.  Rutherford  McAllister 
from  a clerical  position  to  the  presidency 
of  the  Franklin  National  Bank  of  Philadel- 
phia. 

His  management  has  been  distinguished 
by  a forceful,  energetic  and  yet  conservative 
policy,  by  which  the  bank  has  forged  to  the 
front  like  a young  giant. 

Mr.  McAllister,  with  the  responsibility  of 
management  upon  him,  has  the  knack  of  ad- 
justing the  burden  so  that  it  does  not  chafe, 
and  the  esprit  de  corps  that  pervades  the 
Franklin  National  Bank  is  but  the  natural 
reflection  of  his  own  intense  energy,  vigor 
and  good  will. 

A very  good  portrait  of  Mr.  McAllister 
appears  as  a frontispiece  in  this  issue  of 
The  Bankers  Magazine. 


Digitized  by  t^ooQle 


ANNUAL  CONVENTION  OF  THE  AMERICAN 
BANKERS’  ASSOCIATION  WELL  ATTENDED 

SOME  MOMENTOUS  QUESTIONS  TAKEN  UP  AND  DISCUSSED  - FRANK 
O.  WATTS,  OF  NASHVILLE,  THE  NEW  PRESIDENT 


Newly  Elected  President  American  Bankers’  Association 


PRINTED  records  and  delightful  mem- 
ories are  all  that  remain  of  the 
thirty-sixth  annual  convention  of  the 
American  Bankers’  Association.  For  at- 
tendance and  interest  this  convention 
eclipsed  all  former  ones.  Fully  1,500  dele- 


gates were  present  from  Monday,  October 
third,  to  Friday,  October  seventh,  and  for 
every  delegate  there  was  at  least  one  visit- 
or bringing  the  total  attendance  up  to  three 
thousand.  Los  Angeles,  the  scene  of  the 
convention,  put  on  gala  attire  to  welcome 


Digitized  by  LjOOQle 


ANNUAL  CONVENTION  OF  THE  A.  B.  A. 


689 


those  who  journeyed  there  from  every  cor- 
ner of  this  country.  The  railroads,  hotels 
and  telephone  companies  extended  unusual 
courtesies  to  the  visitors,  while  the  hospitality 
of  the  Los  Angeles  bankers  was  unbounded. 


by  the  results  accomplished,  the  Los  An- 
geles convention  was  noteworthy  in  many 
respects  other  than  for  its  record-breaking 
attendance.  This  fact  is  emphasized  by 
noting  the  various  reports  and  resolutions 


Newly  Elected  Vice-President  American  Bankers*  Association 


Along  the  route  to  and  from  the  conven- 
tion, and  especially  where  long  stops  were 
made,  attentions  were  showered  upon  the 
travelers  to  such  an  extent  that  the  trip 
across  the  continent  was  minded  not  at  all 
by  those  compelled  to  make  it.  Measured 


submitted  and  accepted  by  the  convention. 

The  first  day's  session  was  taken  up 
mostly  with  preliminary  w'ork  and  com- 
mittee meetings.  There  were  seventeen  of 
these  meetings  scheduled  for  the  day,  and 
the  work  was  completed  by  evening. 


Digitized  by 


Google 


690 


THE  BANKERS  MAGAZINE 


President  Lewis  E.  Pierson  called  the 
convention  to  order  on  Tuesday  morning. 
The  invocation  was  delivered  by  Rev. 
Robert  J.  Burdette,  pastor  emeritus.  Tem- 
ple Baptist  Church  of  Los  Angeles,  and  the 
addresses  of  welcome  wfcre  delivered  by  Hon. 
James  N.  Gillet,  governor  of  California, 
Hon.  Geo.  Alexander,  mayor  of  Los  An- 


CHARLES  H.  HUTTIG 
Made  Chairman  Executive  Council  American 
Bankers'  Association 


geles,  and  W.  H.  Holliday,  president  Los 
Angeles  Clearing  House  Association.  Geo. 
H.  Russel  of  Detroit,  Mich.,  an  ex-president 
of  the  association,  responded  to  their 
cordial  greetings.  The  remainder  of  the 
forenoon  was  devoted  to  the  annual 
address  of  President  Pierson  and  reports 
of  General  Secretary  Farnsworth,  Treas- 
urer Kauffman,  General  Counsel  Patten  and 
the  Executive  Committee,  William  Living- 
stone, chairman. 

At  12.15  o'clock,  Irving  T.  Bush,  of  New 
York,  chairman  National  Currency  League, 
delivered  an  address  on  “Needed  Banking 
and  Currency  Reforms  from  the  Standpoint 
of  the  Commercial  Interests  of  the  Coun- 
try.’’ Others  who  spoke  the  first  day 
(Tuesday)  were:  Dr.  Benj.  Ide  Wheeler, 
president  of  the  University  of  California; 
R.  G.  Rhett,  president  People's  National 
Bank,  Charleston,  S.  C. 

One  of  the  big  events  of  the  week  was 


the  grand  ball  given  in  the  A1  Maiaikah 
Shrine  Coliseum,  on  Tuesday  night. 

Wednesday  the  trust  company  men  oc- 
cupied the  center  of  the  stage.  A com- 
plete resumd  of  their  deliberations  will  be 
found  in  the  department  of  this  magazine 
devoted  to  trust  companies. 

Likewise  the  proceedings  of  the  savings 
banks  section  will  be  found  reviewed  else- 
where in  this  issue  of  The  Bankers  Maga- 
zine. 

The  executive  council  report  as  read  was 
as  follows: 

Since  the  last  convention  of  this  associa- 
tion, which  was  held  In  Chicago,  September 
1S-19,  1909,  the  Executive  Council  has  held 
two  meetings;  one  immediately  following 
the  adjournment  of  the  Chicago  Convention, 
and  the  other  was  held  at  Atlantic  City, 
May  3 and  4,  1910.  The  details  of  these 
meetings  were  published  in  the  “Journal” 
of  October,  1909,  and  May,  1910. 

At  the  meeting  of  the  Council  at  Atlantic 
City,  N.  J.,  a committee  of  local  bankers 
and  hotel  representatives  extended  to  this 
association  an  invitation  to  hold  our  1911 
convention  in  that  city. 

Mr.  Charles  H.  Huttig,  president  Third 
National  Bank,  St  Louis,  Mo.,  was  unani- 
mously elected  to  fill  the  vacancy  on  the 
Executive  Council  caused  by  the  resigna- 
tion of  Mr.  J.  Fletcher  Farrell,  he  having 
removed  to  Chicago. 

The  special  committees  appointed  at  our 
May  meeting  were  as  follow’s: 

Committee  on  printed  forms  for  national 
and  State  banks: 

John  M.  Miller,  Jr.,  vice-president  and 
cashier  First  National  Bank,  Richmond. 
Va.,  chairman:  Pierre  Jay,  vice-president 
Bank  of  Manhattan  Company,  New  York 
City,  N.  Y. ; J.  Fletcher  Farrell,  vice-presi- 
dent Fort  Dearborn  National  Bank,  Chi- 
cago, 111. 

Committee  on  false  statements: 

Sol.  Wexler,  vice-president  Whitney- 
Central  National  Bank,  New  Orleans,  La., 
chairman. 

E.  J.  Buck,  president  City  Bank  and  Trust 
Company.  Mobile,  Ala. 

William  A.  Law,  first  vice-president  First 
National  Bank,  Philadelphia,  Pa. 

A resolution  embodied  in  the  report  of 
the  American  Institute  of  Banking,  which 
was  offered,  which  referred  to  the  consoli- 
dation of  the  Journal  of  the  . American 
Bankers’  Association  and  the  Bulletin  of 
the  American  Institute  of  Banking,  wrhich 
was  in  the  form  of  a motion  by  Mr.  Ralph 
C.  Wilson,  and  the  same  was  adopted.  In 
part  the  resolution  called  for  the  subject- 
matter  referred  to  the  Institute  Committee 
in  conjunction  with  the  officers  of  the  asso- 
ciation, with  pow’er  to  arrange  details,  and 
at  a later  date  the  arrangements  were  per- 
fected for  this  consolidation,  the  first  issue 
being  under  date  of  July,  1910. 

A resolution  was  offered  by  Mr.  Wexler 
and  adopted,  which  resolution  was  to  the 
effect  that  it  w*as  the  sense  of  the  Execu- 
tive Council  of  this  association  that  a 
World’s  Panama  Exposition  be  held  at  the 
most  fitting  place  In  1915  to  commemorate 


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the  completion  of  the  Panama  Canal,  and 
the  resolution  recommending  the  passage 
of  proper  resolutions  in  favor  of  same  at 
this  meeting. 

The  executive  officers  have  held  fre- 
quent meetings  during  the  past  year  in 
New  York  City  to  thoroughly  consider  as- 
sociation matters  with  the  general  secretary. 

Our  association  Is  to  be  congratulated 
upon  the  most  excellent  work  of  its  several 
committees  during  the  past  year.  Their 
efforts  have  been  continuous  and  as  a 
whale  successful.  Their  reports  will  be 
found  to  contain  a fund  of  valuable  in- 
formation, full  of  interest  to  all  of  our 
members,  and  a careful  stuGy  of  their  re- 
ports cannot  fail  to  prove  both  interesting 
and  profitable. 

To  the  members  of  our  association  we 
commend  most  highly  the  efficient  wrork  of 
your  secretary  and  his  subordinates  during 
the  past  year.  Their  efforts  have  been  un- 
ceasing, full  of  energy,  effective  in  results 
and  are  entitled  to  great  credit. 

A feature  of  the  closing  session  was  the 
address  of  Senator  Theodore  S.  Burton  of 
Ohio,  outlining  the  work  and  scope  of  the 
United  States  Monetary  Commission  and 
asking  the  cooperation  of  the  American 
Bankers'  Association. 

Invitations  for  the  convention  in  1911 
were  presented  from  New  Orleans,  Atlantic 
City,  San  Antonio,  Richmond,  Niagara 
Falls  and  St.  Louis,  but  the  matter  of  mak- 
ing a selection  was  left  to  the  executive 
council  to  decide  next  May. 

The  convention  went  on  record  as  indors- 
ing a plan  to  hold  an  exposition  in  1915 
in  commemoration  of  the  opening  of  the 
Panama  canal,  but  no  indorsement  for  a 
site  w’as  made. 

A resolution  asking  Congress  to  appro- 
priate sufficient  funds  to  defray  the  cost 
of  transporting  silver  free  of  charge  in  the 
United  States  was  adopted. 

Officers  for  the  ensuing  year  were  elected 
as  follow’s:  For  president:  Frank  O.  Watts, 
president  First  National  Bank,  Nashville, 
Tenn. ; for  vice-president:  William  Living- 
stone, president  Dime  Savings  Bank  of  De- 
troit; for  treasurer,  Arthur  Reynolds,  presi- 
dent Des  Moines  National  Bank  of  Des 
Moines,  Iowa. 

At  a meeting  of  the  executive  committee 
Charles  H.  Huttig,  president  Third  National 
Bank  of  St.  Louis  was  chosen  chairman  for 
the  ensuing  year  and  Col.  Fred  E.  Farns- 
worth of  New  York  was  re-clected  general 
secretary  of  the  association. 

The  Trust  Company  Section  elected  O.  C. 
Fuller,  of  Milwaukee,  president;  L.  L.  Gil- 
lespie, of  New  York,  vice-president,  and 
F.  II.  Fries,  of  Winston-Salem,  N.  C., 
chairman  of  the  executive  committee. 

The  Savings  Bank  Section  elected  Edward 
L.  Robinson,  Baltimore,  president,  and  Al- 
fred L.  Aiken,  Worcester,  Mass.,  vice-presi- 
dent. 

W.  F.  Kevser,  of  Sedalia,  Mo.,  was  re- 


elected secretary  of  the  organization  of 
secretaries. 

Frank  O.  Watts,  the  president-elect  of 
the  American  Bankers’  Association,  with 
the  exception  of  one  other,  is  the  youngest 
president  the  association  has  ever  had.  His 
rise  in  the  banking  field  has  been  meteoric, 
and  due  to  a great  extent  to  his  interest 


FRED.  E.  FARNSWORTH 
Re-elected  General  Secretary  American 
Bankers*  Association 


in  state  and  national  bankers’  associations. 

He  was  made  cashier  of  the  First  Na- 
tional Bank  of  L:nion  City,  Tenn.,  before 
reaching  his  majority,  a procedure  that 
required  special  permission  from  the  govern- 
ment at  Washington. 

After  fifteen  years  of  service  in  Union 
City,  Mr.  Watts  came  to  Nashville  and 
accepted  the  same  position  with  the  First 
National  of  that  city.  A few  years  later 
he  became  the  president  a position  he  has 
held  for  thirteen  years.  In  1906,  w'hen  the 
national  convention  was  held  in  St.  Louis, 
Mr.  Watts  wras  elected  one  of  five  members 
of  the  executive  council  leading  the  ticket 
by  over  fifty  votes.  At  Denver  he  was 
unanimously  elected  chairman  of  the  ex- 
ecutive council.  Last  year  at  Chicago  he 
was  chosen  vice-president  of  the  association, 
a position  he  has  filled  with  credit. 


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THE  PENNSYLVANIA  RAILROAD’S  NEW  YORK 

IMPROVEMENT 

OPENING  OF  THE  NEW  STATIONS  AND  TUNNELS 


ABOUT  December  first  the  new  station 
of  the  Pennsylvania  Railroad  will 
be  opened  in  New  York  City,  and 
at  the  same  time  the  running  of  trains 
through  the  new  North  River  tubes  will 
begin  (operation  of  the  East  River  tunnels 


the  traffic  existed  already,  waiting  to  be 
properly  handled. 

It  was  Alexander  J.  Cassatt,  the  late 
president  of  the  Pennsylvania  Railroad 
Company,  “whose  foresight,  courage  and 
ability  achieved  the  extension  of  the  Penn- 


Pennsyl vania  Station  in  New  York— Detail  of  Main  Entrance  on  Seventh  Avenue 


having  been  started  several  weeks  earlier). 
This  not  only  means  the  consummation  of 
a remarkable  achievement  in  engineering 
and  architecture,  but  is  a striking  evidence 
of  a wisely  progressive  policy  on  the  part  of 
one  of  America’s  greatest  railroad  systems. 

An  enterprise  of  such  magnitude,  calling 
for  an  enormous  outlay  of  capital,  and  in- 
volving the  solution  of  complicated  engi- 
neering problems,  could  not  have  been  car- 
ried out  without  the  exercise  of  foresight 
amounting  almost  to  daring.  As  to  one 
element  in  the  undertaking — one  which  is 
always  of  the  first  importance  in  trans- 
portation enterprises — there  was  no  doubt; 

692 


syl  vania  Railroad  System  into  New  York 
city.”  These  words  are  inscribed  beneath 
a bronze  statue  of  Mr.  Cassatt,  which  ap- 
propriately occupies  a prominent  place  in 
the  new  station. 

Growing  Traffic  and  Increased 
Population. 

That  President  Cassatt  had  adequate 
grounds  for  beginning  this  great  work  may 
be  inferred  from  the  following  facts  re- 
garding the  growth  of  traffic  and  popula- 
tion in  the  neighborhood  of  New  York  city. 

Railroads  on  the  Western  bank  of  the 
Hudson  river  opposite  New  York  city,  car- 


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ried,  in  1886,  nearly  59,000,000  people.  In 
1890  they  carried  over  72, 000,000,  in  1896 
more  than  94,000,000  and  in  1906  about 
140,000,000  people. 

In  1890  the  population  within  a circle 
of  nineteen  miles  radius,  with  City  Hall, 
Manhattan,  as  the  center,  was  3,326,998;  in 
1900  it  was  4,612,153,  and  five  years  later 
5,404,638,  an  increase  in  ten  years  of  thirty- 
eight  per  cent.  In  1913  it  is  estimated  that 
the  population  of  this  territory  will  ap- 
proximate six  million  people,  and  in  1920 
eight  million. 

This  rapid  growth  of  population  in  the 
New  York  Metropolitan  district  was  of 
itself  sufficient  incentive  for  the  undertaking 
of  these  extensive  improvements.  But  of 
course  these  figures  tell  only  a part  of  the 
story.  They  reflect,  in  a general  way,  the 
growth  in  population  that  has  been  going 
on  throughout  the  territory  served  by  the 
Pennsylvania  System,  and  indeed  throughout 
the  whole  country. 

The  rapid  development  of  New  York  as 
a point  of  manufacture  and  consumption, 
its  evergrowing  import  and  export  trade, 
made  it  imperative  in  these  improvements 
to  take  heed  of  the  enlarged  requirements 
of  freight  traffic  also,  and  while  the  tunnels 
themselves  are  at  present  restricted  to  the 
carrying  of  passengers,  the  freight  facili- 
ties in  New  York  harbor  have  been  vastly 
bettered  by  these  improvements.  As  a re- 
sult of  the  acquirement  of  the  Long  Island 
Railroad  by  the  Pennsylvania  Company, 
the  facilities  for  travel  between  the  city 
and  the  Long  Island  suburbs,  including  the 
numerous  summer  resorts,  have  been  much 
improved,  while  the  water  transportation 
trip  for  freight  for  the  New  England  traffic 
across  New  York  harbor  has  been  shortened 
from  twelve  miles  to  three  and  four-tenths 
miles. 

The  New  Station. 

From  the  illustrations  herewith  presented, 
a better  idea  of  the  new  station  may  be 
had  than  can  be  conveyed  by  description. 
The  building  is  of  the  Roman  Doric  style, 
and  while  its  facades  suggest  the  ancient 
Roman  baths  and  temples,  a fuller  view 
impresses  one  with  the  real  character  of 
the  structure — that  of  a great  railway 
station. 

The  building  covers  the  area  bounded  by 
Seventh  and  Eighth  avenues  and  Thirty- 
first  and  Thirty-third  streets.  The  main 
body  of  the  building  approximates  in 
height  the  Bourse  of  Paris,  reaching  seven- 
ty-six feet  above  the  street  level. 

One  of  the  distinctive  features  is  the 
waiting  room,  which  extends  from  Thirty- 
first  to  Thirty-third  streets,  its  walls  parallel 
to  Seventh  and  Eighth  avenues  for  a dis- 
tance of  314  feet  four  inches.  The  height 
of  this  room  is  150  feet  and  its  width  108 
feet  eight  inches.  The  walls  of  the  waiting 
room  above  the  main  body  of  the  building 


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THE  BANKERS  MAGAZINE 


contain  on  each  side  three  semi-circular 
windows  of  a radius  of  thirty-three  feet 
four  inches,  and  sixty-six  feet  eight  inches 
wide  at  the  base.  There  is  also  a window 
of  like  size  at  each  end  of  the  waiting  room. 

The  dignified  design  of  the  interior  of 
the  waiting  room,  while  fully  adapted  to 
modern  ideas,  was  suggested  by  the  great 
halls  and  basilicas  of  Rome,  such  as  the 
baths  of  Caracalla,  Titus  and  Diocletian, 


The  Roman  Travertine  stone  used  in  the 
arcade  and  general  waiting  room  comes 
from  the  quarries  in  the  Roman  Campagna, 
near  Tivoli,  Italy.  It  is  the  stone  of  which 
imperial  and  modern  Rome  is  principally 
built,  these  quarries  having  supplied  the  ma- 
jor part  of  the  building  stone  of  Rome  for 
many  centuries.  Notable  examples  of  its 
use  are  the  Coliseum  and  St.  Peter’s  Cathe- 
dral. It  was  imported  into  this  country 


Detail  of  Thirty-third  Street  Entrance  to  Main  Waiting-room 


and  the  basilica  of  Constantine,  perhaps  the 
greatest  examples  in  history  of  large  roofed- 
in  areas  treated  in  a monumental  manner. 

The  main  waiting  room  on  the  concourse 
level  is  the  largest  in  the  world.  Within  its 
walls  are  located  the  ticket  offices,  baggage 
checking  windows,  and  telephone  and  tele- 
graph offices,  so  conveniently  arranged  that 
a passenger  may  proceed  from  one  to  the 
other  with  a minimum  amount  of  exertion 
and  without  retracing  his  steps.  Adjoining 
the  general  waiting  room  on  the  West  side 
are  waiting  rooms,  each  fifty-eight  by  one 
hundred  feet. 


for  the  first  time  by  the  Pennsylvania  Rail- 
road Company  for  use  in  the  Pennsylvania 
Station  in  New  York. 

The  vast  waiting  rooms  and  concourses 
afford  the  amplest  facilities  for  handling  the 
enormous  passenger  traffic  that  will  hourly 
flow  through  this  gateway  of  the  metropolis, 
with  the  least  possible  chance  of  delay 
and  confusion  and  with  a maximum  of 
safety,  convenience  and  comfort.  Provisions 
for  handling  baggage  and  for  taxicab  and 
carriage  service  are  more  than  liberal,  while 
the  great  restaurant  and  lunch  rooms, 
equipped  according  to  the  last  word,  will 


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PENN.  RAILROAD’S  NEW  YORK  IMPROVEMENT 


695 


be  quite  able  to  feed  the  hungry  and  hurry- 
ing throngs. 

The  area  of  the  station  and  yard  is  twenty- 
eight  acres,  and  in  this  there  are  sixteen 
miles  of  track.  The  storage  tracks  alone 
will  hold  386  cars.  There  are  eleven  pas- 
senger platforms,  with  twenty-five  baggage 
and  express  elevators.  The  highest  point 
of  the  tracks  in  the  station  is  nine  feet 
below  sea  level. 

The  station  building  is  784  feet  long  and 
430  feet  wide.  The  average  height  above 
the  street  is  sixty  feet,  while  the  maximum 


terior  walls  aggregating  2,458  feet — nearly 
half  a mile — in  length,  and  has  required 
490,000  cubic  feet  of  pink  granite.  In  ad- 
dition, there  have  been  utilized  inside  the 
concourse  60,000  cubic  feet  of  stone.  A 
total  of  550,000  cubic  feet  of  “Milford  pink 
granite”  have  thus  been  utilized  in  the  con- 
struction and  ornamentation  of  this  build- 
ing. It  took  1,140  freight  cars  to  trans- 
port these  47,000  tons  of  stone  from  Milford, 
Mass. 

In  addition  to  the  granite,  the  construc- 
tion of  this  building  has  called  for  the  use 


Exit  to  Thirty-third  Street  from  Main  Waiting-room,  showing  Doors  leading  to  Driveway 


is  153  feet.  To  light  the  building  it  will 
take  about  500  electric  arcs  and  20,000  in- 
candescents. 

More  than  150,000  cubic  yards  of  concrete 
were  required  for  the  retaining  walls,  foun- 
dations, street  bridging  and  the  substruc- 
ture. There  are  650  columns  supporting  the 
station  building  and  the  greatest  weight 
on  any  one  of  these  is  1,658  tons. 

The  maximum  capacity  in  trains  per  hour 
of  all  of  the  Pennsylvania  tunnels  is  144, 
and  the  proposed  initial  daily  service  will 
consist  of  about  600  Long  Isiand  Railroad 
trains  and  400  Pennsylvania  trains. 

The  stone  work  of  the  station,  covering 
some  eight  acres  of  ground,  was  completed 
on  July  31,  1909.  To  enclose  this  vast 
area  has  necesitated  the  building  of  ex- 


of  27,000  tons  of  steel.  There  have  also 
been  set  in  place  some  15,000,000  bricks, 
weighing  a total  of  48,000  tons.  The  first 
stone  of  the  masonry  work  on  the  building 
was  laid  June  15,  1908;  the  entire  masonry 
was  thus  completed  in  approximately  thir- 
teen months  after  the  work  was  begun. 

The  New  Tuknels. 

The  river  tunnels  leading  to  the  station 
arc,  all  told,  6.8  miles  long,  and  the  land 
tunnels  have  the  same  length.  From  the 
Bergen  Hill  portal  in  New  Jersey  to  the 
Long  Island  entrance  of  the  tunnels  it  is 
5.3  miles.  It  is  8.6  miles  from  Harrison, 
New  Jersey,  to  the  station  in  New  York, 
while  from  the  latter  point  to  Jamaica  the 
distance  is  11.85  miles. 


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THE  BANKERS  MAGAZINE 


The  New  York  tunnel  extension  of  the 
Pennsylvania  Railroad  running  east  and 
west  from  the  New  York  station  begins  at 
Harrison,  New  Jersey,  a short  distance  east 
of  Newark.  Here  is  located  a transfer  yard 
for  the  huge  electric  locomotives  used  in 
the  tunnels.  At  this  point  through  passen- 
ger trains  from  Southern  and  Western 


the  Pennsylvania  station  uptown  or  con- 
tinue to  Jersey  City  and  lower  New  York. 

The  through  trains  for  New  York  leave 
Harrison  on  rails  crossing  over  the  old 
Pennsylvania  tracks  on  a steel  and  concrete 
bridge.  A double- track  elevated  line  on  em- 
bankments and  bridges  extends  across  the 
Hackensack  meadows  to  Bergen  Hill,  that 


Detail  of  Portion  of  the  West  Wall,  Main  Waiting-room,  looking 
toward  Concourse 


points  will  change  from  steam  to  electric 
power,  and  passengers  whose  destination  is 
in  the  downtown  district  of  New  York  may 
alight  here  and  walk  across  the  transfer 
platform  to  an  electric  train  which  will  run 
into  the  Church  and  Cortlandt  street  station 
of  the  Hudson  & Manhattan  Railroad.  This 
downtown  rapid  transit  electric  train  starts 
from  a new  station  on  Military  Park,  in 
Newark,  thence  by  a new  bridge  over  the 
Passaic  River  at  Centre  street,  to  Harrison, 
where  passengers  may  transfer  to  trains  for 


high  eminence  which  is  a continuation  of  the 
rocky  cliffs  extending  along  the  Hudson 
River.  In  the  western  slope  of  this  hill  are 
found  the  entrances  to  the  tunnels  which 
lead  under  the  North  River,  into  the  station 
in  New  York. 

The  construction  of  the  Pennsylvania 
Railroad  tunnels  under  the  North  and  East 
Rivers  into  New  York  and  New  Jersey,  at- 
taining a maximum  depth  of  ninety-seven 
feet  below  mean  high  water,  and  built  for  a 
heavy  and  high-speed  traffic  of  great  vol- 


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PENN.  RAILROAD'S  NEW  YORK  IMPROVEMENT 


697 


lime,  was  an  undertaking  without  precedent. 

The  tunnels  or  tubes  themselves  consist 
of  a series  of  iron  rings,  and  the  installa- 
tion of  every  ring  meant  an  advance  of  two 
and  a half  feet.  Eleven  segments  and  a key 
piece  at  the  top  complete  the  circumference, 
and  an  entire  ring  weighs  about  fifteen  tons. 
The  cast-iron  plates,  or  sections  of  the  ring, 
have  flanges  at  right  angles  to  the  surface, 
and  it  is  through  these  that  the  successive 
rings  are  held  together  with  bolts.  The  rec- 
ord progress  in  one  day  of  eight  hours  was 
five  of  these  rings,  or  twelve  and  one-half 


system  and  the  thoroughness  of  each  day’s 
work  chiefly  responsible  for  the  accuracy  of 
the  meeting  of  the  tubes. 

Engineers  say,  too,  that  no  project  was 
ever  carried  out  where  emphasis  was  placed 
entirely  upon  the  results — strength,  safety, 
permanency — rather  than  upon  the  money  it 
cost  to  attain  them. 

The  shields  in  the  north  tube  under  Hud- 
son River  met  on  September  17,  1906.  Each 
had  traveled  some  3000  feet  through  a river 
bed,  yet  the  meeting  was  perfect  About  a 
month  later  the  shields  in  the  south  tube 


Corner  of  Loggia  at  the  Head  of  Grand  Stairway 


feet.  Hydraulic  rams,  placed  against  the 
flanges  every  few  inches  around  the  tube, 
were  used  to  push  forward  the  huge  shields 
with  which  the  tunnels  were  bored.  This 
type  of  shield  weighed  194  tons.  It  had  nine 
doors  in  it,  and  through  these  came  the  rock, 
or  sand,  or  silt,  or  whatever  material  the 
tube  penetrated. 

To  insure  that  the  east  and  west-bound 
shields  would  meet  exactly,  the  engineers 
calculated  the  difficulties  closely,  and  a realty 
remarkable  system  of  reports  was  in  effect 
from  the  first  day  work  was  started.  Every 
morning  they  knew  the  progress  made  in  the 
tunnels  the  day  before,  to  the  very  inch,  and 
the  amount  of  rock  and  soil  excavated,  to 
the  cubic  foot.  The  Pennsylvania  Railroad 
officers  and  the  engineers  hold  this  perfect 


met  in  the  same  way.  The  shields -in  the 
south  tube  were  united  by  a tunnel  section, 
consisting  of  eight  rings,  that  had  been  on 
exhibition  at  the  St.  Louis  World’s  Fair. 
The  shields  in  the  four  East  River  tunnels 
met  as  perfectly  as  those  in  the  Hudson 
River  tubes,  and  all  were  completed  at  about 
the  same  time. 

When  the  tubes  were  through  from  end 
to  end,  the  work  of  putting  in  the  twenty- 
two-inch  concrete  lining  was  started  imme- 
diately. On  each  side  of  the  tunnel  there  is 
a so-called  bench  three  feet  wide,  which 
serves  as  a walk,  and  under  which  are  car- 
ried conduits  for  telegraph,  telephone,  sig- 
nal and  power  wires. 

In  the  construction  of  the  tunnels  nothing 
was  left  undone  by  the  railroad  company  to 


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THE  BANKERS  MAGAZINE 


protect  the  lives  and  health  of  the  work- 
men. 

To  make  it  as  safe  under  the  bed  of  the 
river  as  it  is  on  the  land's  surface  was  the 
aim  of  the  Pennsylvania  tunnel  builders. 

The  work  was  performed  so  thoroughly 
and  with  such  skill  that  the  engineers,  their 
assistants  and  the  laborers  have  left  a per- 
manent monument  to  the  mastery  of 
science  over  the  greatest  physical  barriers  of 
nature.  As  a result  of  the  nine  years  of 
thought  and  arduous  labor,  which  made  pos- 
sible the  Pennsylvania  tunnels  and  station, 


main  line.  These  pass  under  the  city  and 
East  River  to  the  Sunnyside  yard  on  Long 
Island,  the  terminus  of  the  tunnel  extension, 
and  the  point  of  connection  with  the  Long 
Island  Railroad. 

From  the  station  the  Manhattan  cross- 
town twin  tunnels,  containing  four  tracks 
in  all,  traverse  a section  of  New  York  city 
second  in  importance  only  to  the  financial 
district,  and  one  that  includes  the  larger 
hotels,  retail  shops  and  theaters,  and  many 
residences.  These  tunnels  end  at  the  river 
shaft,  situated  in  the  block  between  Thirty- 


The  Arcade,  looking  from  the  Seventh  Avenue  Entrance  toward  the  Main  Waiting-room 


the  traveler  can  now  be  carried  straight  into 
the  heart  of  New  York  city  on  tracks  en- 
cased in  tubes  of  the  most  substantial  con- 
struction— tubes  which  from  New  Jersey  run 
without  a curve  to  the  Manhattan  side  of 
the  Hudson  River.  Tubes  equally  free  from 
curves  run  from  the  station  to  the  East 
River,  under  which  they  shoot  almost  in  a 
straight  line  to  Long  Island. 

When  the'  two  tracks  emerge  from  the 
tubes  under  the  Hudson  and  reach  the  en- 
trance to  the  station  yard  at  Tenth  avenue 
they  begin  to  spread  out.  From  this  point, 
and  extending  into  the  station,  the  number 
grows  from  two  to  twenty -one. 

The  number  of  tracks  leading  out  of  the 
station  yard  to  the  east  gradually  decreases 
from  twenty-one  to  a total  of  four  for  the 


third  and  Thirty-fourth  streets  east  of  First 
avenue. 

Sunnyside  yard,  on  Long  Island,  is  to  the 
New  York  improvement  what  the  West 
Philadelphia  passenger  yard  is  to  the  Phila- 
delphia terminal,  or  the  Jersey  City  yard 
to  the  Jersey  City  station.  The  new*  yard 
has  many  unique  features,  how’ever,  such  as 
the  provision  for  running  all  trains  around 
a loop — doing  awray  with  the  use  of  turn- 
tables— pulling  them  into  the  coach-cleaning 
yard  at  one  end  and  departing  from  the 
other  end,  thus  turning  the  entire  train  and 
avoiding  the  necessity  for  switching  baggage 
cars  and  sleeping  cars  to  opposite  ends  of 
the  trains  and  the  turning  of  combination 
cars  separately.  The  arrangement  of  tracks 
on  different  levels  makes  provision  for  cross* 


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PENN.  RAILROAD  S NEW  YORK  IMPROVEMENT 


699 


over  movements  without  grade  crossings  and 
eliminates  interference  with  high-speed 
traffic. 

Sunnyside  yard  is  5500  feet  long  with  a 
maximum  width  of  1550  feet,  embracing 
some  173  acres  of  land.  It  contains  53 
miles  of  tracks,  which  have  a capacity  of 
1387  cars.  There  is  additional  space  for  ex- 
tending the  trackage  of  the  yard  to  provide 
more  car  standing-room  in  the  future. 

From  Sunnyside  yard  there  are  tracks 
leading  to  the  New  York  Connecting  Rail- 
road, which,  when  constructed,  will  form  a 


Ridge,  Long  Island.  Freight  for  New 
England  and  Eastern  points  is  floated  up 
the  East  River  to  the  New  York,  New  Ha- 
ven & Hartford  Railroad’s  Port  Morris 
station.  Later,  when  the  New  York  Con- 
necting Railroad  is  constructed,  freight  will 
be  floated  to  Bay  Ridge  and  run  over  Long 
Island  tracks  to  the  Connecting  Railroad, 
and  thence  to  the  mainland,  where  connec- 
tion will  be  made  with  the  New  York,  New 
Haven  & Hartford  Railroad  system  for 
Boston  and  New  England  points. 

An  important  feature  of  the  Pennsyl- 


Trmck  Level,  showing  Stairways  and  Elevators  leading  to  Exit  Concourse 


junction  with  the  New  York,  New  Haven  & 
Hartford  Railroad  at  Port  Morris,  New 
York.  The  Connecting  Railroad  will  cross 
East  River  by  the  “Hell  Gate”  bridge  over 
Ward’s  and  Randall’s  Islands. 

In  connection  with  its  improvements  in 
and  around  New  York  city,  the  Pennsylva- 
nia Railroad  Company  has  constructed  at 
Greenville,  N.  J.,  an  extensive  freight  trans- 
fer yard.  It  is  the  most  completely 
equipped  yard  for  rapid  and  economic  hand- 
ling of  freight.  From  Greenville  cars  are 
transported  by  floats  and  delivered  to  the 
great  piers  of  New  York  city.  Freight 
destined  to  Brooklyn  or  to  other  points  on 
Long  Island  is  floated  across  the  bay  from 
Greenville  to  the  opposite  shore  at  Bay 


vania  Railroad’s  New  York  tunnel  exten- 
sion is  its  relation  to  the  Long  Island  Rail- 
road— a subsidiary  line  of  the  Pennsylva- 
nia. 

In  addition  to  the  many  millions  the 
Pennsylvania  Railroad  has  spent  for  the 
four  tunnels  under  the  East  River  and  the 
vast  station  and  terminal  in  Manhattan, 
by  which  all  I^ong  Island  will  benefit,  the 
Long  Island  Railroad  is  increasing  its  own 
facilities  in  all  directions  to  take  care  of 
the  present  large  traffic  and  the  larger 
traffic  which  will  come  with  the  use  of  the 
tunnels  into  the  Pennsylvania  station  in 
New  York.  This  will  place  all  parts  of 
Long  Island  and  its  many  seaside  resorts 
within  easy  reach  of  New  York  city. 


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THE  BANKERS  MAGAZINE 


Bergen  Hill  Entrance  to  North  River  Tunnels.  Pennsylvania  Railroad  Company 


In  the  near  future  the  New  York  Con- 
necting Railroad,  crossing  the  East  River 
on  a four-track  arch  bridge,  will  be  com- 
pleted, and  there  will  be  established  the 
first  all-rail  service  between  New  England 
and  the  West  and  South  by  way  of  New 
York  city. 

Significance  of  These  Improvements. 

Reduced  to  their  simplest  form,  these 
betterments  mean  an  increased  capacity  for 
efficient  public  service.  And  while  the  out- 
lay of  capital  has  been  vast,  perhaps  a 


very  short  time  enlarged  earnings  will 
demonstrate  that  it  was  wisely  made.  The 
undertaking  and  carrying  out  of  this  enter- 
prise, which  without  any  exaggeration  may 
be  classed  as  wonderful,  is  a further  evi- 
dence of  the  far-sighted  policy  of  the  Penn- 
sylvania Railroad  Company  and  its  ability 
successfully  to  accomplish  what  it  starts 
out  to  do.  More  than  all  this,  it  evidences 
faith  in  the  country  and  in  the  future  of 
the  railroads — a belief  that  the  people  are 
neither  going  to  harass  nor  destroy  one  of 
the  principal  elements  of  our  national 
prosperity. 


NEW  POSTAL  BANK  RULES 


THE  recommendations  for  the  proposed 
new  postal  savings  bank,  as  drafted 
by  the  committee  in  the  Post  Office 
Department,  have  been  taken  in  hand  by 
Secretary  of  the  Treasury  MacVeagh  for 
fuller  investigation  into  those  features  with 
which  the  Treasury  will  be  more  directly 
concerned.  The  recommendations  were 
turned  over  to  Assistant  Secretary  of  the 
Treasury  Andrew,  with  the  instructions 
to  consult  with  the  officers  of  the  Treas- 
ury who  are  subordinately  concerned  with 
the  w'ork. 


That  part  of  the  recommendations  which 
deals  with  the  depositing  of  the  money  in 
banks  and  the  matter  of  United  States 
bonds  will  receive  careful  study.  Mr.  An- 
drew says  that  he  expects  to  go  over  the 
matter  very  thoroughly  and  to  see  wfiere 
economy  can  be  effected,  because  within  a 
few  years  branches  of  the  savings  bank 
will  be  in  about  every  post  office  and  there 
will  be  millions  of  depositors;  for  whose 
convenience  and  safety  the  government's 
trustees  will  now  have  to  conisder. 


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LATIN  AMERICA 


PUBLIC  CAREER  OF  THE  SECRETARY  OF 
FINANCE  OF  CUBA 


MR.  Francisco  de  P.  Machado,  who  is 
Secretary  of  Finance  of  the  Republic 
of  Cuba,  received  his  early  education 
in  private  schools  of  the  United  States,  and 
while  still  young  in  years  betrayed  those 


and  perseverance  that  he  was  promoted 
rapidly  and  finally  was  admitted  as  a part- 
ner in  the  firm. 

He  organized  and  founded  the  sugar 
plantation  “Esperanza,”  one  of  the  finest 


% 


FRANCISCO  DE  P.  MACHADO 

Secretary  of  Finance  of  the  Republic  of  Cuba.  Formerly  Branch  Manager, 
Banco  Naclonal  de  Cuba,  Head  Office,  Havana 


qualities  which  would  afterward  pave  his 
way  to  a successful  career. 

His  first  experience  in  business  was  in  a 
minor  position  in  the  firm  of  Larrondo  & 
•Co.,  of  Sagua  la  Grande,  wealthy  Cuban 
planters,  in  which  he  displayed  such  ability 


mills  in  the  country  at  the  time,  but  the 
War  of  Independence  of  1895,  which  proved 
so  disastrous  to  the  sugar  industry  of  Cuba, 
brought  about  the  destruction  of  the 
property  when  he  was  about  to  reap  the 
harvest  of  his  untiring  efforts. 

701 


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THE  BANKERS  MAGAZINE 


702 


Banco  Mincro 


CHIHUAHUA,  MEXICO 


Capital  - - - - $5,000,000.00 
Surplus  Fund  - - 1,875,193.65 


Transacts  a General  Line 
of  Banking  Business. 

Drafts  and  Letters  of  Credit  on 
Europe,  United  States  and 
Mexico. 

Collections  on  any  part  of 
Mexico  Given  Prompt  and 
Careful  Attention. 


CORRESPONDENCE  INVITED 


Nexu  York  Correspondent , NATIONAL  PARK  BANK 


E.  C.  CUILTY  P.  MIRAMONTES 

General  Manager  Cashier 


At  the  time  of  the  movement  of  the  sugar 
tariff  reform  in  the  United  States,  he  was 
appointed  chairman  of  the  commission  which 
was  sent  to  Washington  by  the  sugar  plant- 
ers of  Cuba  to  appear  before  the  Committee 
of  Ways  and  Means  to  defend  the  rights 
and  interests  of  the  Cuban  planters  and  the 
results  obtained  are  eloquent  testimonies  of 
his  good  work. 

He  was  appointed  Collector  of  the  Port 
of  Sagua  la  Grande  by  Governor-General 
Wood,  which  position  he  resigned  to  accept 
the  managership  of  the  branch  of  the  Na- 
tional Bank  of  Cuba  in  that  city.  Mr. 
Machado  remained  at  the  head  of  the  bank 
for  many  years,  until  his  services  were  de- 
manded by  President  Gome*.  He  reluctant- 
ly renounced  his  commercial  career,  but  he 
felt  that  his  country,  which  was  in  the  throes 
of  reconstruction  after  the  revolution  of 
August,  needed  his  sendees  and  he  has  sub- 
sequently served  as  Director  of  Commerce 
and  Labor,  Secretary  of  Agriculture  and 
Secretary  of  Finance  in  President  Gomez’s 
Cabinet.  No  appointment  made  in  the  pres- 
ent administration  has  been  received  with 
greater  favor  by  all  classes  than  that  of 
Mr.  Machado. 


URUGUAY’S  FIELD  FOR  TRADE 

Herbert  P.  Coates  and  Consul  General  Richling 
Address  New  York  Manufacturers 

URUGUAY  as  a field  for  the  sale  of 
American  manufactures  was  the  theme 
of  Herbert  P.  Coates,  a large  importer 
and  agent  of  Montevideo,  and  J.  Richling, 
Consul  General  from  Uruguay,  who  ad- 
dressed a representative  audience  of  New 
York  manufacturers  at  the  general  offices 
of  the  National  Association  of  Manufac- 
turers on  October  11. 

The  principal  part  of  Mr.  Coates*  address 
was  directed  along  the  lines  of  international 
commercial  friendship.  He  was  emphatic 
in  his  statement  that  the  American  manu- 
facturer knew  practically  nothing  of  trade 
conditions  in  Uruguay  or  of  the  Uruguay- 
ans themselves.  He  said  in  part: 

“Consider  the  market  which  Uruguay 
represents.  The  exchange  of  commerce  with 
your  republic  in  the  last  three  years  has 
increased  something  like  120  per  cent.,  and 
whereas  three  years  ago  we  were  doing 
business  with  you  in  such  a way  that  we 
had  to  send  you  a check  for  two  and 
one-half  million  dollars  in  order  to  balance 
the  account,  to-day  we  are  receiving  from 
you  three  millions  dollars  which  you  have 
to  send  us  to  effect  the  same  operation. 
Now,  look  at  the  way  in  which  you  ship 
goods  to  us.  You  sometimes  ship  a package 
the  size  of  this  desk.  You  are  utterly 
ignorant  of  our  means  of  transportation, 
and  it  happens  that  this  desk  has  to  he 
transported  part  of  the  way  by  mule-back — 


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Banco  de  Nuevo  Leon 

MONTEREY,  IN.  L.,  MEXICO 

ESTABLISHED  OCT.  1.  1892 

Capital  paid  ap,  $2,000,000  Rasims,  $788, 115.74  Oapasits,  $2,913,303.29 

GENERAL  BANKINC  BUSINESS  TRANSACTED 

Principal  Correspondents : — NEW  YORK.  National  Park  Bank,  Mechanics  <fc 
Metals  National  Bank;  LONDON,  Dresdner  Bank,  Credit  Lyonnais;  BERLIN, 

Deutsche  Bank,  Berliner  HaDdels  Gesellsliaft;  PARIS,  Credit  Lyonnais,  Comp- 
loir  National  d’Kscomte;  HAMBURG,  Deutsche  Bank  Flllale  Hamburg,  Com* 
rnerz  und  Di*conto  Bank;  MADRID,  Banco  Hispano  Americano,  Banco  de 
Castilla;  HABANA,  Banco  de  la  Habana. 

RODOLFO  J.  GARCIA,  Manager 

ARTURO  MANRIQUE,  Accountant  AMADOR  PAZ,  Cashier 


an  impossibility’.  It  is  an  entirely  wrong 
notion  to  think  that  the  moment  you  have 
shipped  the  goods  out  of  your  warehouse 
door  you  have  finished  with  your  end  of 
the  business.  You  have  not  finished  with 
them  until  they  have  been  delivered  at  the 
door  of  the  purchaser  if  you  are  going  to 
fill  your  export  orders  successfully  and 
satisfactorily.” 

Consul  General  Richling  told  very  inter- 
esting facts  in  connection  with  Uruguay’s 
value  as  a market  for  American  goods.  lie 
said  in  part: 

“Foreign  trade  in  Uruguay  ranks  fourth 
in  Continental  Latin  America,  following 
immediately  after  that  of  Argentina,  Bra- 
zil, Chili  and  Mexico.  After  Uruguay,  and 
in  fifth  place,  comes  Peru,  whose  foreign 
trade  for  the  year  1909  amounted  to  $55,- 
000,000,  against  $8^,946,467  of  Uruguay. 
Last  year  Argentina,  Brazil  and  Uruguay 
bought  $40,000,000  worth  of  cotton  goods, 
only  one  per  cent,  of  w'hich  was  exported 
from  the  United  States.  Do  you  see  any 
reason  why  America  should  not  have  had  the 
greater  part  of  this  trade?  It  is  not  be- 
cause the  cost  of  production  abroad  is  less 
than  it  is  here,  for  this  argument  would 
apply  to  all  products  such  as  machinery, 
agricultural  implements,  shoe  and  leather 
goods,  etc.,  the  trade  for  which  is  almost 
wholly  controlled  by  America,  hut  it  is 
simply  due  to  the  ignorance  of  the  American 
traders. 

“Through  the  exemplary  administration  in 
Uruguay  that  country  has  gained  a yearly 
surplus  of  a couple  of  million  dollars  which 
money  is  being  used  for  public  works  and 
in  the  general  development  of  the  country. 
It  ha.d  the  gold  standard  before  the  L’nited 
States  adopted  it.  Since  its  existence  as 
an  independent  country  all  government 
debts  have  been  met  promptly,  and  the  in- 
terest on  foreign  loans  often  paid  in  ad- 
vance; in  fact,  the  government  is  daily  of- 
fered loans  by  prominent  European  bankers 
on  conditions  and  terms  which  would  he  a 
temptation  to  more  than  one  European 
country — and  the  only  guarantee  they  ask 


is  the  signature  of  our  Secretary  of  the 
Treasury.  I know  of  no  country  where 
commercial  honesty  is  so  proverbial,  or  with 
a lowrer  percentage  of  business  failures  as 
in  Uruguay.” 


PROMINENT  BANKER  OF  THE 
CITY  OF  MEXICO  TO  ENGAGE 
IN  THE  BROKERAGE 
BUSINESS 

WH.  WEBB,  one  of  the  best  known 
• bankers  in  Mexico,  has  resigned 
the  position  of  manager  of  the 
Mortgage  and  Loan  Banking  Company,  of 
Mexico  City,  which  he  has  held  for  the  past 
year. 

Mr.  Webb  accepted  the  position  of  man- 
ager of  the  hanking  department  of  the 
Mortgage  and  Loan  Banking  Company 
wfhen  it  first  entered  the  banking  field  here. 
Before  that  time  lie  was  manager  of  the 
Mercantile  Banking  Company.  He  is  one 
of  the  most  popular  men  in  Mexico’s  bank- 
ing circles  and  has  a large  number  of 
friends. 

Mr.  Webb  began  his  business  career  in 
Nashville,  Tennessee,  when  he  was  nine- 
teen years  of  age,  and  two  years  later  was 
promoted  and  made  credit  man  for  one  of 
the  largest  wholesale  concerns  in  the  South. 
Leaving  Nashville  several  years  later,  he 
moved  to  the  West  and  for  a long  time 
was  an  officer  and  director  in  one  of  the 
leading  hanks  of  El  Paso,  Texas.  He  came 
lo  Mexico  several  years  ago  and  became  a 


Vera  Cruz  Banking  Company,  Ltd. 

(Cla.  Banquera  Veracruzana,  8.  A.) 
YERA  CRUZ,  MEXICO 

Capital  and  8urplus  - - $650,000.00 

A General  Banking  Buelneea  Transacted 
Collections  Promptly  Handled 


703 


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704 


THE  BANKERS  MAGAZINE 


stock  broker,  which  business  he  gave  up 
to  accept  responsible  banking  positions. 

When  Mr.  Webb  again  enters  the  stock 
brokerage  business  he  will  be  the  only 
American  in  Mexico  City  engaged  in  a 
similar  pursuit.  He  is  a man  who  in  the 
past  has  handled  many  very  large  trans- 
actions and  is  considered  an  authority  on 
Mexican  securities. 


MINISTER  DAWSON  AT  PANAMA 

HON.  Thomas  C.  Dawson,  the  newly 
appointed  United  States  minister  to 
Panama  arrived  in  the  City  of  Pana- 
ma, September  twenty-third.  He  was  of- 
ficially received  by  acting  President  Men- 
doza the  following  day  w’ith  the  usual  ex- 


HON,  THOMAS  C.  DAWSON 
United  States  Minister  to  Panama 


change  of  addresses  expressive  of  good 
feeling  on  both  sides.  The  members  of  the 
cabinet  and  diplomatic  corps  were  present. 
Mr.  Dawson,  previous  to  his  appointment, 
served  as  chief  of  the  Latin  American  Di- 
vision of  our  government. 


MEXICO’S  BEST  FRIENDS 

COMMENTING  on  the  recent  centen- 
nial celebration  in  Mexico  City,  the 
“Mexican  Herald”  says: 

It  is  an  excellent  idea  on  such  an  occasion 
as  the  present  celebration  to  re-affirm  and 
seek  to  strengthen  the  bond?  which  unite 
Mexico  with  the  mother-country  and  with 
the  kindred  nations  of  Central  and  South 
America. 

But  sentiment  is  one  thing;  business 
another,  and  while  proper  importance  is 
freely  conceded  to  the  former,  the  latter 
shouid  not  be  overlooked.  Sentiment  is  a 
good  thing,  but  cuts  a poor  figure  in  sup- 
plying a people's  urgent,  every-day  wants; 
and  the  friendship  of  the  nations  which 
minister  to  those  wants  should  not  be  neg- 
lected in  the  enthusiasm  aroused  by  the 
reminiscence  of  community  of  origin,  lan- 
guage, religion  and  ideals. 

In  the  present  symposium  of  nations  at 
this  capital,  harmony  prevails  among  all, 
and  Mexico,  the  hostess,  is  on  the  best  of 
terms  w’ith  all;  and  so  there  is  cer- 
tainly no  need  of  any  exhortation  to  cor- 
diality. But,  it  has  seemed  to  us,  on  look- 
ing over  some  of  the  trade  statistics  pub- 
lished the  other  day  in  the  Second  Na- 
tional Edition  of  The  Mexican  Herald,  that 
a few  facts  and  figures  might  with  advan- 
tage be  presented  to  show  which,  among 
the  nations,  arc  Mexico’s  best  friends  from 
a strictly  practical  point  of  view. 

In  the  fiscal  year  1909-1910,  ending  June 
30,  last,  57.93  per  cent,  of  Mexico’s  imports 
came  from  the  LTnited  States  and  75.74  per 


(Jiff  jftpxuan 
jfftnanmr 

Only  Weekly  FirutncUl  Journal 
Published  in  Mexico 

COMPLETE  QUOTATIONS  OF  ALL 
BANK,  INDUSTRIAL  AND  MINING 
STOCKS 

READING  MATTER  OF  VITAL  INTEREST 
TO  ALL  INVESTORS  IN  MEXICO 

$5.00  U.  S.  Currency  per  Annum,  post - 
Age  pAid 

JOHN  R.  SOUTHWORTH,  F.  R.  G.  S. 

Miupnc  Director 

CALLE  DEL  EL1SEO  . MEXICO.  D.  F. 
Cable  AdcW  Cel -South.  P.O.Box  1172. 
Mexico  City 


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THIB3RB3  AB1  TS»E2E2  DKPARTMB31TTS  OF  THB 


Ci.  Baicarta  de  Fmnto  * Bienes  Ralcos,  de  Mexico,  S.  JL 


RIAL  ESTATE 

This  department  buys  and 
aells  all  kinds  of  land  in  every 
part  of  the  Republlo— City  or 
Country.  Houses  bought,sold 
and  constructed.  Ranches 
subdivided  into  smaller  ones. 
T.  HI.  Garees,  Mwnmgmr. 


PUBLIC  WORKS 

This  department,  does  paving 
work,  makes  surveys,  con- 
structs sewerage  systems,  etc. 
It  has  Improved  the  Cities  of 
Mexico,  Puebla,  Guadalajara, 
Durango  and  others. 

Manael  KIgaere,  JfciMvr. 


BANKING 

This  department  finances  the 
other  two  departments  and 
does  all  kinds  of  business  in 
relation  to  banking. 


Xavier  lean  y Landa,  Mgr. 


CORRESPONDENCE  IS  INVITED 


Compania  Bancaria  de  Fomento  y Bienes  Calces,  de  Mexico,  S.  A. 

MEXICO.  D.  r. 

Presidents— F.  PIMENTEL  T FAGOAGA 

1st  Vice- Pre^-P.  MACEDO  2nd  Vlee- Pres. -LUIS  BARROSO  ARIAS 


cent,  of  Mexico’s  exports  went  to  the 
United  States. 

Great  Britain  supplied  11.42  per  cent,  of 
the  imports  and  took  10.97  per  cent,  of  the 
exports. 

Germany’s  percentages  were,  respectively, 
10.33  per  cent,  in  the  imports,  and  3.25  in 
the  exports  of  Mexico. 

Imports  from  France  amounted  to  8.98 
per  cent,  of  the  total  and  exports  to  France 
were  4.72  per  cent,  of  the  total. 

Turning  now  to  Spain  and  the  I^atin- 
American  countries,  we  find  that  their  share 
in  Mexico’s  trade  was  inconsiderable.  Spain’s 
percentages  are  2.71  in  the  imports  and 
0.74  in  the  exports.  All  the  republiquitas 
of  Central  America,  together,  can  only 
muster  .06  per  cent,  in  the  showing  of  im- 
ports and  .48  per  cent,  in  the  showing  of 
exports.  South  America  is  in  no  better 
case,  for  Mexico  drew  from  that  region 
only  1.09  per  cent,  of  her  imports  and  sent 
thither  only  .03  per  cent,  of  her  exports. 

As  customers  of  Mexico,  the  non-Latin 
nations  far  out-class  all  others.  In  the 
fiscal  year  1909-1910,  the  United  States, 
Great  Britain,  Germany  and  Canada  took 
*90.36  per  cent  of  Mexico’s  exports.  If  we 
add  France,  which  is  the  least  Latin  of  the 
Latin  nations,  and  which,  from  an  ethnical 
point  of  view,  is  hardly  a Latin  nation  at 
all,  the  percentage  mounts  up  to  95.08. 

Spain,  the  countries  of  Central  and  South 
America,  and  Cuba,  together,  the  nations 
with  which,  in  the  language  of  current 
oratory,  Mexico  is  united  by  “ties  of  race, 
language,  religion  and  aspirations,”  took, 
in  1909-1910,  the  wholly  insignificant  pro- 
portion of  1.90  per  cent,  of  Mexico’s  ex- 
ports. 

These  percentages,  which  are  based  on 
values,  are,  as  stated,  those  for  last  fiscal 
year  (1909-1910),  though  The  Herald’s 
National  Edition  gives  the  corresponding 
percentages  for  three  fiscal  years,  viz.,  for 
1907-1908,  1908-1909,  and  1909-1910.  But, 
In  reality,  Mexico’s  foreign  trade  statistics 


tell  year  after  year  substantially  the  same 
tale. 

Trade  evidently  does  not  move  along 
racial  or  sentimental  lines  and  common  as- 
pirations and  ideals  furnish  a very  unsatis- 
factory menu  for  an  empty  stomach. 

Those  nations  are  Mexico’s  practical 
friends  who  buy  her  products  and  supply 
her  with  what  she  needs  in  the  line  of  food 
and  raiment  and  appliances  for  the  develop- 
ment of  her  resources. 

Money  speaks  all  languages,  is  very  ortho- 
dox, satisfies  most  aspirations  and  spans 
racial  divisions  with  a bridge  of  gold. 

So,  in  a very  substantial  sense,  it  may  be 
said  that  Mexico  is  united  to  the  non-Latin 
nations,  principally,  the  United  States, 
Great  Britain  and  Germany,  by  ties  of 
language,  religion,  aspirations  and  even  of 
race. 


ENGLISH  SYNDICATE  AFTER 
SOUTH  AFRICAN  TRADE 

A PLAN  of  great  importance,  for  the  de- 
velopment of  South  American  Trade, 
is  being  considered  by  three  large 
shipowning  concerns  in  Great  Britain. 

The  principals  in  the  proposed  enterprise 
are  eminent  men,  and  the  basis  of  the 
project,  which  still  requires  to  be  ratified, 
is  the  building  of  ten  liners  at  a cost  of 
nearly  two  millions  sterling. 

Five  of  these  steamers  will  be  high-class 
passenger  carriers,  to  run  between  Liver- 
pool and  the  River  Plate  in  conjunction 
with  an  old  existing  line,  and  in  further 
conjunction  with  the  new  railway  across 
the  Andes.  The  other  five  steamers  will 
be  of  the  highest  type  of  refrigerating  liners, 
with  great  carrying  capacity  and  high 
speed,  and,  according  to  existing  proposal 
they  will  run  between  the  port  of  London 
and  the  River  Plate. 

705 


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PROMINENT  YOUNG  MEXICAN  BANKER  LOCATES 

IN  NEW  YORK 


WITH  the  rapidly-increasing  commer- 
cial and  financial  relations  between 
New  York  and  the  Latin-American 
countries,  several  bankers  and  financiers 
have  been  attracted  to  the  city  recently  from 
Mexico  and  South  America.  One  of  the 
latest  comers  is  Mr.  Bernardino  Alvarez, 
who  was  until  quite  recently  Stock  Cashier 


ness  coming  to  his  department.  He  was 
also  highly  esteemed  by  the  manager  of  the 
bank,  who  heard  with  regret  of  his  decision 
to  cotne  to  New  York. 

As  the  owner  of  a large  ranch  property 
in  Mexico,  Mr.  Alvarez  has  done  a great 
deal  toward  introducing  improved  methods 
of  agriculture.  He  has  also  been  interested 


Bernardino  E.  Alvarez 


of  the  Compania  Bancaria  de  Fomento  y 
Bienes  Raiccs,  one  of  the  large  and  im- 
portant banks  of  Mexico  City. 

Mr.  Alvarez  was  born  in  that  city  in  1891, 
and  was  educated  there  and  in  St.  Louis. 
His  first  banking  connection  was  with  the 
American  Bank  of  Mexico  City,  which  was 
later  merged  with  the  Compania  Bancaria 
de  Fomento  v Bienes  Raiccs.  Mr.  Alvarez 
v.as  with  this  institution  for  eight  years, 
in  the  capacity  of  stock  cashier,  and  won 
the  respect  of  the  bank's  patrons  by  his 
courtesy  and  careful  attention  to  the  busi- 

706 


in  heating  and  fuel  enterprises,  and  has  ac- 
quired much  special  information  on  these 
subjects. 

Mr.  Alvarez  expects  in  the  near  future  to 
associate  himself  with  some  of  the  large  New 
York  banks  that  are  desirous  of  extending 
their  business  with  Mexico,  Central  and 
South  America.  His  banking  and  commer- 
cial experience,  knowledge  of  the  Spanish 
language  and  character,  as  well  as  his  per- 
sonality, will  make  him  a valuable  acquisi- 
tion to  any  bank  seeking  Latin-American 
business. 


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PROGRESS  OF  MEXICO  WELL  DESCRIBED  BY 
PRESIDENT  DIAZ 

EXCERPTS  FROM  HIS  ANNUAL  MESSAGE 


THE  presence  in  our  midst,  in  connec- 
tion with  the  celebration  of  the  Cen- 
tenary of  our  Independence,  of  dis- 
tinguished special  representatives  of  the 
foreign  nations  with  which  Mexico  has 
diplomatic  relations,  affords  unequivocal 
evidence  that  those  relations  are  in  every 
respect  cordial  and  satisfactory  and  that 
the  efforts  of  our  country  for  years  past 
have  reaped  their  reward  by  winning  for 
her  at  last  that  place  in  the  concert  of 
nations  to  which  she  had  long  been  entitled, 
a resuit  which,  gratifying  as  it  is,  should 
make  us  resolve  to  earn*  still  higher  the 
good  name  of  the  Republic. 

Pan-American  Conference. 

On  July  12,  last,  according  to  agreement 
among  the  nations  concerned,  the  Fourth 
International  Conference  of  American 
States  convened  at  the  City  of  Buenoc 
Aires,  and  its  labors  were  prolonged  into 
the  second  half  of  the  month  of  August. 
Time  enough  has  not  yet  elapsed  for  the 
resolutions  of  the  Conference  to  be  known 
in  detail;  but,  in  view  of  the  spirit  inform- 
ing them  and  the  acknowledged  competence 
of  the  delegates  to  the  assembly,  tnere  is 
every  reason  to  hope  that  those  resolutions 
Mill  be  highly  beneficial  to  the  countries 
of  this  Continent. 

Treaty  With  Denmark. 

A convention  having  for  its  object  the 
development  of  commercial  relations  be- 
tween Mexico  and  the  Kingdom  of  Denmark 
was  signed  in  this  capital  bv  duly  author- 
ized plenipotentiaries  on  April  3,  last.  The 
convention  in  question  has  already  been 


approved  by  the  senate  and  the  ratifications 
will  shortly  be  exchanged. 

Promulgation  of  Russian  Treaty. 

The  special  commercial  convention  be- 
tween Mexico  and  the  Russian  empire,  to 
which  1 referred  in  my  Message  of  April 
1,  last,  was  promulgated  in  this  capital  on 
the  twenty-second  of  last  June. 

Postal  Convention  With  Italy. 

The  convention  concluded  between  Mex- 
ico and  the  Kingdom  of  Italy  on  December 
4,  1909,  for  the  direct  exchange  of  postal 
parcels,  without  declared  value,  was  in  like 
manner  promulgated  on  the  twenty-first  of 
last  May. 

Telegraphic  Convention  With  Belice. 

The  Senate  was  pleased  to  approve  on 
May  28,  last,  the  convention  negotiated  and 
signed  in  this  capital  by  duly  authorized 
plenipotentiaries  on  the  twenty-seventh  of 
the  same  month  of  May,  for  the  connec- 
tion of  the  Federal  telegraph  lines  of  Mex- 
ico with  the  telegraph  lines  of  British  Hon- 
duras. 

Mexico  At  Edward  VIPs  Funeral. 

A special  mission,  consisting  of  two  min- 
isters plenipotentiary,  appointed  to  repre- 
sent the  Government  and  people  of  Mexico 
at  the  funeral  of  King  Edward  VII  of 
England  discharged  satisfactorily  the  duty 
assigned  to  it. 

Centennial  Com3IEMorations  Abroad. 

Instructions  have  been  conveyed  to  the 
Legations  of  Mexico  in  foreign  countries 


MERCANTILE  BANKING  COMPANY,  Ltd. 

Avenlda  San  Franolsoo  No.  12 

CITY  OF  MEXICO  

Capital,  $500,000.00  Surplus,  $100,000.00 

Members  of  the  American  Bankers’  Association 
QEO.  J.  McCARTY,  President  K.  M.  VAN  2ANDT,  Jr.,  Vlce-Pres.  & Mgr. 

H.  C.  HEAD,  Cashier  8HUR  WELCH,  Assistant  Cashier. 

A General  Banking  Business  Traassoted  Foreign  Exohange  Bought  and  Sold 
Telegraphlo  Transfers  Letters  of  Credit 

Unsurpassed  collection  facilities.  Correspondence  solicited.  Accounts  of  Banks,  Bank- 
ers, Merchants  and  Individuals  solicited. 


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MEXICO 

Offers  many  Opportunities  for  Safe  and  Profitable  Investment 

For  p*rticulara  and  descriptive  literature,  address 

W.  C.  CARSON.  General  Eastern  Agent.  Or  V.  M.  GUTIERREZ. 

25  BROAD  ST..  NEW  YORK  Industrial  Agent.  MEXICO  CITY 

NATIONAL  RAILWAYS  OF  MEXICO 


A familiar  scene  on  tne  highways  leading  frcm  Cuautla  out  through  its  banana  groves 


to  hold  suitable  celebrations  in  commemora- 
tion of  the  centenary  of  our  independence. 

New  Consular  Act. 

The  Executive  has  presented  to  the  Cham- 
ber of  Deputies  a new  consular  bill,  of 
which  the  approval  during  the  present  pe- 
riod of  sessions  is  to  be  desired,  as  it  will 
give  a needed  impetus  to  this  important 
branch  of  the  administration. 

New  Consuls  ix  Germany. 

The  ever-growing  cordiality  of  the  rela- 
tions between  Mexico  and  the  German  Em- 
pire has  necessitated  an  increase  in  the 
number  of  our  consular  representatives  in 
that  Empire  and  recently  a new  consul- 
general  was  appointed,  on  which  occasion 
the  former  jurisdiction  of  our  only  consul- 
general  hitherto  residing  in  Germany,  with 
headquarters  at  the  port  of  Hamburg,  was 
divided  into  two. 

Consular  Conventions. 

Consular  conventions  are  being  negotiated 
at  the  present  time  with  Italy,  Holland  and 
Turkey. 

The  Chamizal  Arbitration. 

Our  ambassador  in  the  United  States  of 
America,  acting  under  special  instructions 
from  his  government,  affixed  his  signature 
at  Washington  on  June  24,  last,  to  a con- 


vention for  the  settlement,  by  arbitration, 
of  the  long-standing,  important  and  deli- 
cate Chamizal  question;  and  in  order  that 
this  convention  may  be  carried  out,  it  will, 
in  due  season,  and  according  to  constitu- 
tional precept,  be  submitted  to  the  Senate 
for  consideration  and  discussion. 

The  “Baxcos”  of  the  Bravo  River. 

In  the  course  of  the  investigations  which 
the  International  Boundary  Commission  has 
been  conducting  in  the  lower  Bravo  River, 
twenty-three  new  “bancos”  were  found, 
which  will  be  dealt  with  according  to  the 
stipulations  of  the  convention  between 
Mexico  and  the  United  States  of  March  20, 
1905,  for  the  elimination  of  such  “bancos,” 
in  the  Bravo  and  Colorado  rivers. 

International  Bridge  Convention. 

A convention  was  signed  in  this  city  on 
August  9,  last,  by  the  minister  of  foreign 
relations  and  the  minister  plenipotentiary 
of  the  Republic  of  Guatemala  for  the  erec- 
tion of  an  international  bridge  over  the 
Suchiate  river;  and  this  convention  will 
ulso,  for  constitutional  purposes,  be  re- 
ferred to  the  Senate. 

Agricultural  Development. 

The  Federal  agricultural  services  have 
been  reorganized,  in  accordance  with  the 
laws  of  December  21,  1909. 


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LATIN  AMERICA 


709 


Of  the  eleven  private  associations  for- 
merly operating  under  the  name  of  cham- 
bers of  agriculture,  eight  applied  for  and 
obtained  the  necessary  authorization  for 
conversion  into  national  chambers  of  agri- 
culture and  the  other  three  were  founded 
anew  under  the  terms  of  the  law  [establish- 
ing national  chambers  of  agriculture],  so 
that,  though  the  law  in  question  has  only 
been  in  force  a short  time,  eleven  of  our 
more  important  agricultural  states  already 
have  their  legally-constituted  chambers  of 
agriculture. 

The  new  general  bureau  of  agriculture, 
divided  into  five  departments,  entered,  July 
1,  last,  upon  the  discharge  of  its  duties, 
which  are  to  promote  the  interests  of  farm- 
ing and  stock-breeding  and  to  make  a study 
of  agrarian  problems. 

The  national  school  of  agriculture  and 
veterinary  surgery  and  the  central  agricul- 
tural station  show  uninterrupted  progress 
both  in  the  number  of  their  students  and 
the  scope  of  their  work.  Three  new  courses 
were  recently  added  to  their  curriculum,  viz., 
horticulture,  rural  engineering  and  zootech- 
nics, thus  giving  increased  facilities  for  spe- 
cialization in  technical  training.  An  aque- 
duct has  been  built  for  the  purpose  of  con- 
veying 2,000  liters  per  minute  of  the  waters 
of  the  Rio  Hondo  to  the  San  Jacinto  farm 
[that  of  the  school  of  agriculture],  thus 
enabling  crops  to  be  raised  with  regularity 
and  obviating  the  serious  losses  apt  to  be 
entailed  by  the  lack  of  water.  To  the 
existing  agricultural  experiment  stations, 
a new  one — at  Oaxaca — has  been  added  in 
the  period  under  review,  with  offices,  labora- 
tory and  courses  of  instruction.  The  To- 
basco  station  is  still  in  course  of  installa- 
tion. 


Ixcbease  is  Yield  op  Revenue. 

The  two  principal  sources  of  revenue  to 
the  Federal  exchequer  showed  a marked 
upward  movement  last  fiscal  year  as  com- 
pared with  the  preceding  fiscal  year. 

Thus,  the  custom-house  revenue  yielded  in 
1909-1910  eight  million  pesos  more  and  the 
stamp  revenue  over . a million  and  a half 
pesos  more  than  in  the  preceding  fiscal  year. 

The  other  sources  of  revenue  also  show 
some  improvement,  and  though  the  munici- 
pal receipts  were  statioriary,  this  is  to  be 
attributed  to  the  reduction  of  the  meat-tax. 

The  upward  movement  of  the  custom- 
house revenue  and  the  stamp  revenue  con- 
tinued in  the  first  two  months  of  the  pres- 
ent fiscal  year. 

Results  of  Last  Fiscal  Year. 

The  revenue  and  disbursements  of  the 
fiscal  year  ending  June  30,  last,  have  not 
yet  been  fully  audited,  for,  according  to 
law,  all  government  offices  were  allowed  a 
period  of  time  which  terminated  yesterday 
for  rendering  their  accounts  to  the  treasury 
of  the  federation;  but  judging  from  the 
data  so  far  received,  we  have  every  ground 
to  believe  that  the  year  will  show  a sub- 
stantial surplus,  as  have  other  fiscal  years 
for  some  time  past. 

The  Crop  Outlook. 

Crop  prospects  are  sufficiently  encourag- 
ing in  some  States  of  the  republic;  and 
if,  in  addition  to  this  fact,  it  be  considered 
that  the  volume  of  business  during  the 
course  of  the  present  calendar  year  has  been 
satisfactory,  we  may  conclude  that  the  de- 
pression which  Mexico  suffered  as  a con- 
sequence of  the  recent  world-wide  crisis 
has  disappeared  altogether  or  at  least  that 
only  insolated  vestiges  of  it.  remain. 


BANCO  MERCANTIL  DE  MONTEREY 

MONTEREY,  N.  L.,  MEXIOO  A CORPORATION 

OfltrU]  Depository  for  the  Government  of  the  State  of  Nuevo  Leon 

Capital  Resources,  $2,500,000.  Reserves,  $291,239.06 

Manager,  MR.  JOSE  L.  GARZA 

Cashier.  MR.  ENRIQUE  MIGUEL  Accountant.  MR.  F.  M.  de  la  GARZA 

Buys  and  Sells  Domestic  and  Foreign  Drafts.  Issues  Letters  of  Credit. 

Takes  charge  of  any  collections  entrusted  to  it  on  a moderate 
rate  for  commission  and  remittance. 

Buys  and  sells  for  account  of  others,  government,  municipal,  banking 
and  mining  stocks  and  bonds. 

Principal  Correspondent!*— National  Park  Bank  and  Hanover  National  Bank,  New  York; 
Banco  Htapano  Americano.  Madrid,  Knain;  Credit  Lyonna  a,  Paris,  France;  Credit  Lyonnaiae,  Lon- 
don, England;  Deutsche  Bank  Flliale  Hamburg.  Hamburg.  (Germany. 


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710 


THE  BANKERS  MAGAZINE 


Conversion  of  the  Debt. 

In  strict  accordance  with  the  conditions 
which  Congress  was  pleased  to  approve,  the 
department  of  finance  has  adjusted  with  a 
group  of  European  bankers  a four  per  cent, 
loan  for  the  exclusive  purpose  of  convert- 
ing the  live  per  cent,  loan  of  1899,  and  the 
terms  of  the  transaction  are  such  that,  not- 
withstanding the  fact  that  a substantial  sav- 
ing is  effected  in  interest  and  sinking  fund 
service,  the  new  loan  is  due  to  be  redeemed 
in  precisely  the  same  time  as  that  stipulated 
for  the  redemption  of  the  1899  loan.  So 
far,  the  bankers  have  only  underwritten 
half  of  the  new  loan,  having  an  option  on 
the  balance.  The  department  of  finance 
will,  in  due  course,  inform  Congress  as  to 
the  use  made  by  the  executive  of  the  powers 
granted  to  it  in  this  context  and  will  then  give 
full  particulars  as  to  this  operation,  which, 
as  Congress  will  no  doubt  be  glad  to  hear, 
has  raised  the  credit  of  Mexico  to  an  en- 
viable level. 

New  Organization  of  Treasury. 

As  from  July  1,  last,  both  the  treasury 
of  the  federation  and  the  accounting  and 
auditing  department  have  been  discharging 
their  functions  under  the  new  law  of  May 


93,  last,  the  regulations  for  both  offices  hav- 
ing also  been  duly  issued. 

New  Insurance  Law. 

The  new  life  insurance  law  was  promul- 
gated on  May  25,  last,  and  was  followed  in 
due  course  by  rules  of  practice.  It 
is  to  be  hoped  that  both  home  and  foreign 
companies  will  place  themselves  under  the 
new  legislation  which  affords  ample  safe- 
guards both  to  them  and  to  the  public. 

Surety  Companies. 

Three  companies  have  been  authorized  to 
bond  the  employees  of  the  federation,  in 
accordance  with  the  law  enacted  on  May  24 
of  the  current  year. 

Sale  of  Railway  Interest. 

The  Federal  Executive  deemed  fit  to  sell 
the  shares  which  it  owned  in  the  Veracruz 
and  Pacific  or  Veracruz  and  Isthmus  Rail- 
road, representing  the  total  share-capital 
of  that  company,  to  the  National  Railways 
of  Mexico,  with  a view  to  vesting  in  the 
last  named  corporation  the  management  of 
all  routes  of  communication  in  which  the 
government  is  interested  as  a stockholder. 
The  transaction  was  consummated  on 
satisfactory  terms. 


NATIONAL  RAILWAYS  OF  MEXICO 

EARNINGS  MORE  THAN  SUFFICIENT  TO  MEET  FIXED  CHARGES 

(From  The  Mexican  Herald) 


THERE  appears  in  the  October  number 
of  the  American  Magazine  a further 
article,  by  a new  writer,  of  the  “Bar- 
barous Mexico”  series,  attacking  not  so  much 
Mexico  as  prominent  citizens  of  this  repub- 
lic. 

Of  the  article,  in  general,  we  will  say 
nothing.  * * * 

There  is,  however,  one  concrete  statement 
of  which  it  may  be  worth  while  to  take  no- 
tice. We  refer  to  the  writer’s  gross  misrep- 
resentation of  the  obligations  assumed  by 
the  Mexican  Government  in  the  National 
Railways  of  Mexico,  that  is  to  say,  in  the 
Merger  System. 

The  writer  says: 

Here  are  the  obligations  (in  gold)  with 

which  the  Mexican  Government  has 

burdened  Itself  as  a result  of  this  astounding 
operation: 

$226,000,(100  in  prior  lien  4%  per  cent,  re- 
deemable gold  bonds. 

$160,000,000  In  guaranteed  general  mortgage 
4 per  cent,  redeemable  gold  bonds. 

$30,000,000  In  non-cumulatlve  4 per  cent, 
first  preferred  shares. 

$125,000,000  In  non-cumulatlve  5 per  cent, 
second  preferred  shares. 

$75,000,000  In  common  shares. 

Here  the  writer  is  disingenuous  enough— 
and  we  say  disingenuous,  for  it  seems  in- 


credible that  a person  undertaking  to  write 
for  the  public  in  a magazine  and  inscribing 
F.  R.  G.  S.  after  his  name  does  not  know 
the  difference  between  securities  which  in- 
volve a fixed  charge  and  securities  which  do 
not  involve  a fixed  charge — is  disingenuous 
enough  to  represent  the  first  and  second  pre- 
ferred shares  and  the  common  shares  as 
“obligations”  of  the  Mexican  Government; 
whereas  they  are  not  “obligations”  of  the 
Merger  Company,  let  alone  of  the  govern- 
ment. 

In  other  words,  the  interest  upon  them 
does  not,  with  the  limited  exception  hereaf- 
ter referred  to,  constitute  a fixed  charge 
either  on  the  National  Railways  of  Mexico 
or  on  the  Mexican  Government. 

The  first  preferred  shares  are  contingently 
entitled  to  four  per  cent  interest  per  an- 
num, but  that  interest  is,  as  the  magazine 
writer  himself  states,  non-cumulative;  that 
is  to  say,  it  is  payable  as  and  when  earned, 
and,  in  the  words  of  the  Act  of  Incorpora- 
tion, “with  the  understanding  that  the 
amount  lacking  to  complete  said  four  per 
cent,  in  any  given  year  will  not  be  charge- 
able to  the  net  profits  of  subsequent  years.” 

The  provisions  in  regard  to  the  five  per 
cent,  interest  on  the  second  preferred  shares 


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LATIN  AMERICA 


711 


are,  mutatis  mutandis,  entirely  analogous; 
and  as  for  the  common  shares,  issued  chiefly 
for  the  purpose  of  completing  the  govern- 
ment’s controlling  interest,  carrying  as  they 
do  the  same  voting  power  as  the  two  classes 
of  preferred  shares,  it  is  only  necessary  to 
say  that  they  are  entitled  to  a dividend, 
when  there  is  a balance  of  net  profits  avail- 
able, after  the  four  per  cent,  and  five  per 
cent,  dividends  have  been  paid  on  the  first 
and  second  preferred  shares,  respectively. 

If  the  payment  of  dividends  on  all  classes 
of  the  share  capital  constitute  an  obliga- 


classes  of  bonds  in  question  is  $16,525,000, 
United  States  currency. 

It  would  be,  if  * * * the  amounts  of 
the  two  classes  of  bonds  which  the  writer 
mentions  had  been  issued. 

The  writer  confuses  issues  authorized  with 
issues  made  and  arrives  at  a result  which  is 
a gross  misrepresentation  of  the  facts.  For- 
tunately, all  directly  interested  in  the  mat- 
ter are  better  informed. 

The  amount  of  prior  lien  four  and  one- 
half  per  cent,  bonds  issued  up  to  June  30, 
1910,  or,  in  other  words,  up  to  the  close  of 


The  Pyramid  of  Cholula  and  the  Path  up  which  the  Sacrificial  Procession  moved.  The 
Interoceanic  Railway  has  a Station  at  the  Base  of  the  Pyramid 


tion,  few  railways  would  be  long  out  of  the 
receiver’s  hands. 

For  the  completeness  of  this  exposition 
it  may  be  stated  that  there  exists  a limited 
guarantee  with  respect  to  the  first  preferred 
shares,  a guarantee  given  by  the  company 
for  the  purpose  of  facilitating  the  exchange 
of  securities,  of  two  per  cent,  interest  per 
annum,  for  a period  of  three  years  only, 
counted  from  January  1,  1908. 

Now,  in  regard  to  the  company’s  funded 
debt  and  the  interest  charges  thereon,  the 
misstatements  of  the  American  Magazine 
writer  may  possibly  have  been  made  unin- 
tentionally, though  evidently  he  was  at  no 
pains  to  get  at  the  facts.  * * * 

The  writer  in  question  calculates  interest 
at  four  and  one-half  per  cent,  on  $225,000,- 
000  gold,  prior  lien  bonds,  and  at  four  per 
cent,  on  $160,000,000  gold,  guaranteed  gen- 
eral mortgage  bonds,  and  comes  to  the  con- 
clusion that  the  fixed  charge  which  the 
Merger  Company  has  to  meet  on  the  two 


the  company’s  last  fiscal  year,  was  $199,099,- 
925,  Mexican  currency ; but  as  $29,507,095  of 
these  bonds  were  held  in  the  company's 
treasury,  the  net  amount  outstanding  was 
$169,592,830,  Mexican  currency,  or  $84,796,- 
415  American  currency. 

The  amount  of  guaranteed  general  mort- 
gage four  per  cent,  bonds  issued  up  to  June 
30,  1910,  was  $112,732,150,  of  which  $11,417,- 
700  were  held  in  the  company’s  treasury, 
leaving  an  outstanding  amount  of  $101,- 
314,450,  Mexican  currency,  or  $50,657,225 
American  currency. 

The  interest  charges  (the  sinking  fund 
provision  is  not  yet  in  force)  payable  for 
the  whole  fiscal  year  1909-1910  on  the  four 
and  one-half  per  cent,  prior  liens  were 
$7,558,442.28,  Mexican  currency,  and  on  the 
four  per  cent,  guaranteed  general  mortgage 
bonds  $4,052,461.50,  Mexican  currency. 

In  other  words,  the  fixed  charges  w'hich 
the  company  had  to  meet  in  the  fiscal  year 
1909-1910  on  its  two  classes  of  bonds 


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712 


THE  BANKERS  MAGAZINE 


The  Oldest  Railway  Station  in  the  World— the  Convent  of  San  Diego,  built  in  1657  in  the 
City  of  Cuautla.  It  was  purchased  from  the  Mexican  Government  and  has  been 
converted  into  a Railway  Station  by  the  Interoceanic  Railway 


amounted  to  $11,610,903.78,  Mexican  curren- 
cy, or  $5,805,451.89,  United  States  currency, 
as  against  the  enormous  total  of  $16,525,000, 
United  States  currency,  mentioned  by  the 
American  Magazine  writer. 
«*«***« 

In  regard  to  further  issues  of  bonds  there 
need  be  no  apprehension.  They  are,  accord- 
ing to  the  pre-arranged  plan,  to  be  spread 
over  a number  of  years,  and  will  be  made 
in  accordance  with  the  policy  enunciated  by 
Minister  Limantour,  that  is  to  say,  “further 
issues  of  bonds  will  be  made  on  a scale 
strictly  commensurate  with  the  growth  of 
the  company’s  earnings  and  when  there  is 
every  probability  that  those  earnings  will 
amply  suffice  to  meet  both  old  and  new 
charges.” 

It  is  worth  while  adding  that  the  only 
fixed  charges  w'hich  constitute  an  “obliga- 
tion” on  the  government  are  those  repre- 
sented by  the  interest  on  the  general  mort- 
gage fours  (the  sinking  fund  service  not 
being  as  yet  in  operation),  amounting  last 
fiscal  year  to  $4,052,461.50,  Mexican  curren- 
cy, or  $2,026,280.75,  United  States  cur- 
rency. 


The  guarantee  in  any  case  is  moral  or 
nominal,  as  the  company’s  net  earnings  am- 
ply suffice  to  meet  all  fixed  charges. 
******* 

As  in  a matter  of  such  importance,  the 
whole  truth  ought  to  be  stated,  we  will  say 
that  the  National  Railways  of  Mexico  has 
other  fixed  charges  to  meet  besides  the  in- 
terest on  the  two  classes  of  its  own  bonds. 

The  National  Railways  of  Mexico  took 
over  from  the  companies  entering  the  mer- 
ger various  classes  of  their  funded  and  float- 
ing indebtedness,  which  have  not  yet  been 
converted  into  bonds  of  the  new  company, 
and  these  other  obligations  involved  in  the 
fiscal  year  1909-1910  an  interest  service  of 
$5,128,840,  Mexican  currency. 

So  that  the  total  fixed  charges,  or  charges 
ranking  as  such,  which  the  Merger  Company 
had  to  meet  in  the  fiscal  year  1909-1910  were 
as  follows:  On  its  own  bonds,  $11,610,903.78, 
Mexican  currency;  on  assumed  obligations, 
$5,128,840,  Mexican  currency,  giving  a total 
of  $16,739,743.78,  Mexican  currency,  or  $8,- 
369,871.89,  American  currency. 

It  will  be  interesting,  in  conclusion,  to 


Mexico  City  Banking  Company,  S.  A. 

AVENIDA  8AN  FRANCISCO  No.  14 

Capital  and  Surplus  31*000,000 


IILLEITIORS  AID  ALL  BANKING  NATTERS  6IVEI  PRONPT  AID  CAREFUL  ATTEITIII 


1 


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LATIN  AMERICA 


713 


see  how  the  company  met  those  charges  in 
the  year  1909-1910,  with  entire  ease,  out  of 
its  regular  earnings. 

The  gross  traffic  receipts  in  the  fiscal  year 
1909-1910  were  $52,562,293.39,  Mexican  cur- 
rency, and  adding  $22,793.87,  sundry  inter- 
est, we  get  a total  gross  of  $52,585,087.26, 
Mexican  currency. 

The  operating  expenses  proper  were  $31,- 
593,557.78,  Mexican  currency,  but  including 
taxes,  rentals  and  pending  disbursements 
on  operating  account,  the  total  charged  to 
operation  figures  out  at  $34,171,516.18,  Mexi- 
can currency. 

In  other  words,  the  traffic  results  for  the 
year  1909-1910  may  be  stated  as  follows: 


Mex.  Cy. 

Gross  $52,585,087.26 

Operating  and  other  expenses...  31,174,516.18 


Net  $18,410,571.08 


To  this  amount  has  to  be  added  interest 
on  securities  owned,  amounting  to  $1,163,- 
742.28,  Mexican  currency,  so  that  the  total 


net  revenue,  from  all  sources,  in  the  year 
1909-1910  was  $19,576,313.36,  Mexican  cur- 
rency. 

This  is  the  amount  against  which  fixed 
charges  have  to  be  set,  as  follows: 

Mex.  Cy. 

Total  net  rev.  from  all  sources.  .$19,576,313.36 
Fixed  charges  of  all  kinds 16,739,743.78 


Excess  of  net  revenue  over 
fixed  charges  2,836,569.58 


This  balance  sufficed  for  the  payment  of 
the  full  dividend  of  four  per  cent,  on  the 
first  preferred  shares,  absorbing  $2,306,632, 
as  the  outstanding  amount  of  those  shares  is 
$57,665,800. 

The  regular  addition  of  five  per  cent,  of 
the  excess  of  net  revenue,  or  $141,828.47,  was 
made  to  the  reserve  fund,  and  as  the  sum  of 
$50,469.89  was  brought  forward  from  last 
year’s  profit  and  loss  account,  there  re- 
mained a balance  to  be  carried  forward  to 
the  next  account  of  $438,579. 


THE  CONFERENCE  ON  BILLS  OF  EXCHANGE 


AN  international  conference  on  bills  of 
. exchange,  at- which  Charles  A.  Conant 
of  New  York  was  the  delegate  of  the 
United  States,  was  held  at  The  Hague  in 
June  and  July  last.  The  essential  object  of 
the  conference  was  to  bring  about  as  close 
an  approach  as  possible  to  uniformity  in  the 
laws  of  different  nations  governing  the  issue, 
circulation  and  protest  of  bills  and  to  pro- 
vide rules  to  govern  conflicts  of  law. 

Thirty-nine  powers  were  represented  by 
about  seventy  delegates.  The  outcome  was 
the  adoption  of  a draft  of  a uniform  law 
and  the  adoption  of  a convention  governing 
the  conditions  under  which  such  a law 
should  be  carried  out.  Botli  these  docu- 
ments, which  are  embodied  in  the  final  pro- 
tocol of  the  conference,  will  be  submitted  to 
the  various  powers  ad  referendum , with  the 
object  of  securing  expert  criticism  before 
final  action  is  taken. 

The  delegates  of  the  United  States  and 
of  Great  Britain  took  the  ground  that  they 
could  not  concur  in  recommending  the  uni- 
form law,  because  of  the  time  and  effort 
which  had  been  expended  in  bringing  about 
comparative  uniformity  in  the  laws  of  Great 
Britain  and  her  dependencies  and  the 
American  states.  They  were  willing,  how- 
ever, to  submit  the  draft  of  the  law. 


through  the  proper  diplomatic  channels,  to 
the  law-making  power  for  the  adoption  of 
such  parts  as  might  prove  consistent  with 
Anglo-Saxon  law  and  policy. 

The  government  of  The  Netherlands  was 
authorized  to  call  a second  conference  for 
the  purpose  of  considering  criticisms  of  the 
proposed  uniform  law,  before  it  should  be 
recommended  finally  to  any  of  the  powers 
for  actual  adoption.  It  is  probable  that  after 
the  changes  which  may  be  made  as  the  re- 
sult of  expert  consideration  of  the  pro- 
posed uniform  law,  it  will  be  adoped  by  the 
leading  Continental  powers  of  Europe  and 
by  some  of  the  Latin  American  powers. 
Even  if  no  action  towards  uniformity  is 
taken  by  Great  Britain  or  any  of  the 
American  states,  the  adoption  of  a uniform 
law  in  other  countries  will  tend  to  simplify 
the  business  in  international  bills  and  re- 
move some  of  its  risks. 

It  is  proposed  at  the  next  conference  to 
take  up  the  subject  of  a uniform  law  on  in- 
international  checks.  The  subject  will  be 
considered  of  introducing  more  extensively 
the  system  of  crossed  checks,  which  affords 
s')mc  substitute  in  European  countries  for 
the  protection  afforded  to  legitimate  hold- 
ers of  checks  and  drafts  under  the  Ameri- 
can system  by  identification  of  the  holder. 


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A REVIEW  OF  BANKING  LEGISLATION 

From  the  “ Education  Department  Bulletin,9*  Xew  York  State  Library 

William  A.  Scott,  Ph.  D.,  Director  of  the  Course  in  Commerce  and  Professor  of 
Political  Economy,  University  of  Wisconsin 


THE  chief  tendency  revealed  by  banking 
legislation  during  the  years  1907  and 
1908  was  in  the  direction  of  drawing 
a sharp  line  of  distinction  between  com- 
mercial banking,  the  business  of  receiving 
and  investing  savings  and  that  of  admin- 
istering trusts,  no  matter  whether  these 
lines  of  business  are  carried  on  separately 
by  different  institutions  or  in  conjunction 
with  each  other  in  the  same  institution. 

Heretofore  these  lines  of  business  have 
been  more  or  less  confused  by  being  com- 
bined in  different  ways  in  institutions  sub- 
ject to  different  laws.  Most  banks  in  the 
United  States  receive  both  commercial  and 
savings  deposits.  Many  trust  companies  re- 
ceive both  of  these  kinds  of  deposits  and 
trust  funds  in  addition,  and  some  savings 
banks  receive,  besides  savings,  trust  funds 
and  demand  deposits.  Quite  commonly  the 
laws  governing  these  three  classes  of  insti- 
tutions have  been  so  different  that  a par- 
ticular kind  of  depositor  has  received  dif- 
ferent degrees  of  protection  according  as 
he  has  dealt  with  one  kind  of  institution 
or  the  other,  and  the  rights  and  privileges 
of  these  institutions  have  been  far  from 
the  same  even  with  regard  to  identical  kinds 
of  business. 

The  first  attempts  to  deal  with  this  situa- 
tion took  the  form  of  legislation  which 
aimed  at  drawing  sharp  lines  between  the 
kinds  of  business  permitted  to  each  kind  of 
institution.  The  quite  general  failure  of 
these  attempts  doubtless  accounts  for  the 
change  in  the  methods  of  procedure  noted 
above.  Apparently  our  Legislatures  are  now 
inclined  to  devise  suitable  safeguards  for 
each  kind  of  business  and  to  require  every 
institution,  by  whatever  name  known,  to  ob- 
serve the  laws  relative  to  each  and  every 
kind  of  business  it  transacts.  Fully  carried 
out  in  practice  this  method  of  procedure 
would  require  commercial  and  savings  banks 
and  trust  companies  to  segregate  demand, 
savings  and  trust  deposits,  to  invest  each 
as  the  laws  prescribe  and,  in  case  of  failure, 
to  give  each  class  of  depositors  a first  lien 
on  the  securities  in  which  his  deposits  were 
invested  and  a proportionate  equity  in  the 
other  assets  of  the  institution. 

A good  start  along  this  line  of  procedure 
was  made  in  1907  and  1908  in  several  states. 
In  Massachusetts,  Maine,  Rhode  Island,  Xew 
York,  Pennsylvania  and  Missouri  laws  were 
passed  providing  for  the  segregation  of  de- 
mand and  savings  deposits  in  banks  and 
trust  companies  by  requiring  a different 
percentage  of  reserve  to  be  kept  against 
each  class  of  deposits.  In  Rhode  Island, 

71 1 


Massachusetts  and  Connecticut  it  is  required 
that  savings  deposits,  even  when  in  com- 
mercial banks  and  trust  companies,  must 
be  invested  according  to  the  regulations  pre- 
scribed by  law  for  savings  banks,  and  that 
such  investments  must  be  appropriated  to 
the  payment  of  such  deposits.  The  segre- 
gation of  trust  funds  and  their  separate  in- 
vestment and  administration  is  required  by 
laws  passed  in  Ohio  and  Maine.  In  a law 
passed  in  1907  (’07  ch.  138)  the  Legislature 
of  Oregon  carefully  defined  commercial 
banking  and  required  all  institutions  con- 
ducting that  line  of  business  to  conform  to 
the  regulations  therein  prescribed. 

Other  noteworthy  tendencies  revealed  by 
a review  of  the  legislation  of  1907  and  1908 
are:  (1)  the  requirement  of  stricter  super- 
vision of  these  institutions  by  boards  of 
directors;  (2)  the  establishment  of  some 
proportion  between  the  deposits  and  the 
capital  stock  of  banks,  Rhode  Island  (’08 
ch.  1590)  fixing  it  at  ten  to  one  for  com- 
mercial banks  and  Missouri  (*07  p.  124) 
at  twenty  to  one  for  savings  banks;  (3)  the 
limitation  of  the  amount  that  may  be  ex- 
pended on  building  and  fixtures,  Ohio  plac- 
ing it  at  sixty  per  cent,  of  the  capital  and 
surplus,  and  Oklahoma  at  one-third  of  the 
paid-up  capital;  (4)  the  permission,  under 
restrictions,  of  branch  banking  in  Rhode 
Island,  Montana  and  Washington,  and  of 
the  establishment  of  branches  by  trust  com- 
panies in  Missouri. 

These  and  other  significant  features  of 
the  legislation  of  the  two  years  under  re- 
view will  appear  in  the  following  sum- 
mary. 

General  Laws. 

During  their  1907  sessions  the  Legislatures 
of  Arkansas  (’07  p.  1266),  Rhode  Island 
(’07  r.  43)  and  California  (’07  p.  24)  ap- 
pointed committees  for  the  purpose  either 
of  drafting  new  banking  laws  or  of  ex- 
amining old  ones  with  a view  to  changes. 
The  result  of  these  appointments  and  inves- 
tigations was  the  passage  of  a new  banking 
law  by  Rhode  Island  in  the  session  of  1908. 
Other  new  banking  laws  were  passed  by 
Missouri,  Nevada  and  Oregon  in  1907  and 
bv  Oklahoma  and  Ohio  in  1908.  All  of 
these,  except  the  Oklahoma,  Nevada  and 
Oregon  laws,  comprehend  commercial  banks, 
savings  banks,  trust  companies  and  safe  de- 
posit companies.  In  most  respects  these 
laws  are  much  alike  and  similar  to  those  on 
the  statute  books  of  other  states.  Only 
those  features  which  are  somewhat  or  alto- 
gether peculiar  will  be  noted  here. 


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715 


Missouri. 

The  Missouri  law  (’07  p.  124)  prohibits 
branch  banking  and  fixes  a minimum  capi- 
talization for  commercial  banks  of  $10,000 
for  towns  of  less  than  150,000  inhabitants 
and  of  $100,000  for  larger  towns,  and  a 
maximum  capitalization  of  $5,000,000.  The 
reserve  requirement  of  fifteen  per  cent,  ap- 
plies only  to  demand  deposits.  Reports  to 
the  Bank  Commissioner  are  required  only 
twice  a year  instead  of  five  times  as  in  most 
states,  and  the  limit  of  loans  to  single  in- 
dividuals, firms  or  corporations  is  twenty- 
five  per  cent,  of  the  paid-up  capital,  and 
twenty-five  per  cent,  of  a surplus  fund  which 
shall  equal  or  exceed  fifty  per  cent,  of  the 
capital  and  shall  be  set  apart  as  a perma- 
nent fund  and  be  reported  as  such  perma- 
nent fund  to  the  Bank  Commissioner.  The 
ordinary  surplus  fund,  to  be  accumulated 
by  setting  aside  ten  per  cent,  of  the  net 
earnings  at  each  dividend-paving  period 
until  the  total  shall  equal  twenty  per  cent, 
of  the  capital,  is  not  to  be  counted  in  this 
connection.  Officers  and  directors  are  not 
permitted  to  borrow  in  excess  of  ten  per 
cent,  of  the  capital  and  surplus  without 
the  consent  of  a majority  of  the  directors 
other  than  the  borrower.  Directors  are 
required  to  meet  at  least  once  a month 
and  all  bills  payable  and  discounts  must 
have  their  consent.  Private  bankers  are 
subjected  to  substantially  the  same  re- 
strictions as  incorporated  hanks,  but  the 
proprietor  is  not  permitted  to  be  indebted 
to  his  institution  to  an  amount  in  excess  of 
ten  per  cent,  of  the  capital  and  surplus. 

The  minimum  capitalization  for  trust 
companies  is  fixed  at  $100,000  and  the  maxi- 
mum at  $10,000,000.  Trust  companies  must 
keep  a reserve  of  fifteen  per  cent,  of  their 
demand  deposits  either  in  cash  or  on  de- 
posit with  other  institutions,  deposits  for 
the  withdrawal  of  which  the  company  may 
require  more  than  20  days  notice  not  to  be 
considered  as  demand  deposits.  They  are 
permitted  to  invest  their  funds  in  loans  se- 
cured by  real  estate  or  other  sufficient  col- 
lateral or  in  the  bonds  of  the  United  States, 
the  State  of  Missouri  or  of  the  political 
divisions  of  the  State  of  Missouri.  They 
must  report  to  the  Bank  Commissioner 
whenever  required  so  to  do.  The  require- 
ments regarding  the  frequency  of  meetings 
of  the  board  of  directors  and  regarding 
loans  to  officers  and  directors  are  the  same 
as  for  commercial  banks. 

The  peculiar  features  of  the  provisions 
regarding  savings  banks  concern  their  in- 
vestments, the  relation  between  capital  and 
deposits,  the  surplus  and  the  dividends. 
The  investments  permitted  are  confined  al- 
most exclusively  to  bonds  of  various  classes 
carefully  described  in  the  act  and  to  notes 
or  bonds  secured  by  first  mortgages  on 
real  estate.  No  deposit  is  permitted  to  ex- 
ceed $4,000  and  the  total  deposits  must  not 


exceed  twenty  times  the  paid-up  capital 
stock.  Dividends  can  be  declared  only 
after  at  least  three  per  cent,  interest  has 
been  paid  on  all  savings  and  trust  deposits 
and  then  they  must  not  exceed  six  per  cent. 
Any  surplus  available  after  such  dividends 
have  been  paid  must  either  be  paid  into  an 
indemnity  fund  or  be  distributed  among 
depositors  whose  deposits  have  remained  in 
the  bank  during  at  least  the  preceding 
year  and  in  proportion  to  the  amount  of 
interest  received  during  the  three  preceding 
years.  After  a surplus  fund  has  been  ac- 
cumulated in  the  usual  manner,  one-quarter 
per  cent,  of  the  deposits  must  be  set  aside 
at  each  interest  day  as  an  indemnity  fund 
until  the  total  shall  equal  ten  per  cent,  of 
the  deposits. 

Nevada. 

The  Nevada  law  (’07  ch.  166)  is  very  brief, 
being  only  an  addendum  to  a general  cor- 
poration law  approved  March  15,  1903,  and 
amended  March  14,  1905.  It  merely  pre- 
scribes the  modus  operandi  of  incorporation 
and  of  transferring  stock,  contains  the  usual 
provisions  regarding  real  estate  investments 
and  prohibits  any  officer  or  director  from 
becoming  indorser  or  surety  for  loans  by 
the  bank  to  others  or  from  borrowing  from 
the  bank  without  giving  good  and  sufficient 
security  which  must  be  approved  by  the 
board  of  directors.  Another  act  (’07  ch. 
119),  passed  in  the  same  session,  provides 
for  the  appointment,  by  a board  of  bank 
commissioners  consisting  of  the  governor, 
secretary  of  state  and  state  treasurer,  of  a 
bank  examiner  at  an  annual  salary  of 
$2,750.  The  duties  of  this  officer  are  made 
substantially  the  same  as  those  of  the  officers 
known  in  other  states  as  the  commissioner 
or  superintendent  of  banking. 

Oregon. 

The  Oregon  law  (*07  ch.  138)  defines 
banking  as  the  business  of  opening  credits 
on  “deposit  or  collection  of  money  or  cur- 
rency or  negotiable  paper  subject  to  be 
paid  or  remitted  upon  draft,  receipt,  check 
or  order”  and  subjects  all  concerns  that 
transact  this  kind  of  business  to  the  pro- 
visions of  this  act.  The  minimum  capital 
requirement  is  placed  at  $10,000  for  banks 
in  towns  of  less  than  1,000  inhabitants, 
$25,000  for  banks  in  towns  of  more  than 
1,000  and  less  than  2,000  inhabitants,  $30,000 
for  banks  in  towns  of  over  2,000  and  less 
than  5,000  inhabitants,  and  $50,000  for 
banks  in  towns  of  over  5,000  inhabitants. 
Directors  are  required  to  meet  at  least  once 
in  three  months.  I^oans  to  a single  person, 
firm  or  corporation  must  not  exceed  twen- 
ty-five per  cent,  of  the  capital  and  sur- 
plus of  the  bank,  unless  they  are  secured 
by  real  estate,  personal  property,  ware- 
house receipts  or  bills  of  lading.  Loans 
to  officers,  employees  or  owners  must  not 
be  made  without  the  approval  of  the  di- 


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rectors  or  of  an  executive  or  discount  com- 
mittee. The  reserve  requirement  is  fifteen 
per  cent,  of  the  demand  and  ten  per  cent, 
of  the  time  deposits  for  banks  in  towns  of 
less  than  50,000  inhabitants  and  twenty- 
five  per  cent,  of  demand  and  ten  per  cent, 
of  time  deposits  in  larger  towns.  At  least 
one-third  of  the  reserve  must  consist  of 
cash  on  hand.  * 

Washington”. 

The  Washington  law’  (’07  ch.  225)  pro- 
vides for  a bank  examiner  to  be  appointed 
by  the  governor,  the  only  qualifications  pre- 
scribed being  citizenship  of  the  State  of 
Washington  and  nonconnection  with  any 
bank  as  owner,  officer  or  stockholder.  The 
minimum  capital  requirements  are  practi- 
cally the  same  as  those  prescribed  by  the 
Oregon  law  except  that  the  number  of 
gradations  is  larger,  extending  up  to  $100,- 
000  for  banks  in  tow’ns  of  over  50,000  in- 
habitants. It  apparently  authorizes,  or  at 
any  rate  permits,  branch  banking,  since 
it  does  not  prohibit  the  establishment 
of  branches,  and  it  frequently  mentions 
branch  banks  when  a list  of  institutions  is 
mentioned  to  which  a certain  provision  or 
provisions  apply.  Loans  to  officers  and  em- 
ployees must  have  the  consent  of  the  board 
of  directors,  but  no  limitation  is  placed  on 
the  amount  of  loans  to  be  made  to  single 
firms  or  corporations.  The  reserve  re- 
quirement is  twenty  per  cent,  of  the  demand 
liabilities  and  the  reserve  may  consist  of 
cash  or  balances  with  bamcs  in  such  pro- 
portion as  the  officers  decide.  Only  three 
reports  a year  are  required  but  these  must 
be  made  on  the  dates  of  calls  on  national 
banks  issued  by  the  Comptroller  of  the 
Currency. 

Rhode  Island. 

The  Rhode  Island  law  (’08  ch.  1590) 
prohibits  the  use  of  the  terms,  bank,  savings 
bank  or  trust  company,  to  any  person  or 
persons  not  incorporated,  unless  they  w’ere 
employing  such  terms  previous  to  the  pas- 
sage of  this  act.  It  permits  branch  bank- 
ing provided  the  consent  of  the  Board  of 
Incorporations,  consisting  of  the  bank 
commissioner,  the  treasurer  and  the  attor- 
ney general,  be  first  obtained.  The  reserve 
requirement  of  fifteen  per  cent,  of  deposits 
is  not  to  apply  to  savings  deposits  which, 
however,  must  he  segregated  and  invested 
in  the  form  prescribed  for  savings  banks. 
Such  investments  must  be  set  apart  as  se- 
curity for  the  savings  deposits.  Loans  to 
any  single  individual,  firm  or  corporation 
must  not  exceed  ten  per  cent,  of  the  capital 
and  surplus,  and  loans  to  officers  must  have 
the  approval  of  the  directors  or  of  their 
finance  committee.  In  the  selection  of  re- 
serve agents  banks  are  limited  in  their 
choice  to  banks  and  trust  companies  be- 
longing to  the  Clearing-House  Association 
of  Providence  and  to  banks  and  trust  com- 


panies in  New  York,  Boston,  Philadelphia, 
Chicago  and  Albany.  After  October, 
1908,  the  deposits  of  banks  must  not  exceed 
ten  times  their  capital  and  surplus. 

Trust  companies  are  subjected  to  the 
same  regulations  regarding  reserves,  loans 
to  officers  and  directors,  reports  and  exami- 
nations, as  commercial  banks.  They  are 
also  required  to  set  aside  a portion  of 
their  assets,  other  than  the  assets  of  their 
savings  department  and  equal  in  amount 
to  their  capital  stock,  as  security  for  trust 
funds  held  by  them,  and  an  amount  of  se- 
curities or  mortgages  equal  to  twenty  per 
cent,  of  their  capital  must  be  deposited 
with  the  treasurer  for  this  same  purpose. 

The  provisions  regarding  the  investments 
of  the  funds  of  savings  banks,  and  of  sav- 
ings funds  of  banks  and  trust  companies  are 
too  elaborate  and  extensive  even  to  be  sum- 
marized here.  It  was  evidently  the  inten- 
tion of  the  legislature  to  permit  investment 
in  all  kinds  of  securities  which  can  be 
regarded  as  safe  and  the  purpose  of  the 
particular  sections  of  the  act  here  under 
review’  was  evidently  to  draw  the  safety 
line  in  such  a way  as  to  interfere  as  little 
as  possible  with  the  freedom  of  the  banks. 
Other  sections  of  the  act  provide  for  the 
accumulation  by  savings  banks  of  a guaran- 
tee fund  equal  to  five  per  cent,  of  the  total 
deposits,  such  fund  to  be  used  to  meet 
losses  arising  from  depreciation  of  securities 
or  otherwise.  For  this  purpose  they  are 
required  to  set  aside  each  year  not  less  than 
one-eighth  per  cent,  nor  more  than  one- 
quarter  per  cent,  of  their  net  profits  until 
the  above  mentioned  total  has  been  reached. 

Onio. 

The  Ohio  law  (’08  p.  269)  is  carefully 
draw’ll  with  a view  to  providing  for  all 
possible  combinations  in  the  same  institu- 
tion of  commercial  banking,  and  the  busi- 
ness of  savings  banks,  safe  deposit  com- 
panies and  trust  companies.  The  capital 
requirements  are  different  for  different 
combinations  of  these  lines  of  business,  $?5,- 
000  being  the  minimum  for  any  combination 
of  two  of  the  three  businesses  of  commer- 
cial banking,  savings  banks  and  safe  de- 
posit companies,  $50,000,  if  all  three  of 
these  lines  of  business  are  combined,  $100,- 
000  for  trust  companies  or  for  any  com- 
bination of  trust  companies  with  one  of 
the  other  lines  of  business,  and  $125,000 
for  any  combination  of  trust  companies 
with  two  or  more  of  the  other  lines.  When- 
ever these  different  lines  of  business  are 
combined  separate  books  must  be  kept  for 
each  line. 

The  directors  of  commercial  banks  must 
meet  at  least  once  a month  and  all  loans 
and  investments  must  be  reported  to  them. 
The  buildings  constructed  by  such  a bank 
for  its  use  must  not  exceed  in  value  sixty 
per  cent,  of  the  capital  and  surplus.  Loans 


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to  any  single  person,  firm  or  corporation 
must  not  exceed  twenty  per  cent,  of  the 
capital  and  surplus,  unless  secured  by  first 
mortgages  on  improved  real  estate  exceed- 
ing sixty  per  cent,  of  its  value.  Loans  on 
mortgages  or  other  real  estate  security  must 
not  l>e  made  except  in  pursuance  of  a gen- 
eral resolution  of  the  board  of  directors,  and 
such  loans  must  not  exceed  in  the  aggregate 
fifty  per  cent,  of  the  capital  and  surplus  in 
case  of  a commercial  bank,  or  sixty  per 
cent,  of  the  capital  and  surplus  in  case  of 
an  institution  combining  the  business  of 
commercial  and  savings  banks.  Commer- 
cial banks  are  also  permitted  to  invest  in 
bonds  of  th?  United  States,  any  State  of  the 
Union,  foreign  countries,  in  municipal  and 
local  government  bonds  of  the  United  States 
and  Canada  and  in  mortgage  and  collateral 
trust  bonds  of  any  company  which  has  paid 
dividends  of  at  least  four  per  cent,  on  its 
capital  stock  for  at  least  four  years.  The 
reserves  must  equal  at  least  fifteen  per  cent, 
of  the  total  deposits,  and  at  least  six  per 
cent,  of  the  demand  deposits  and  four  per 
cent,  of  the  time  deposits  must  consist  of 
cash  on  hand.  The  remainder  may  consist 
of  balances  in  other  banks  and  trust  com- 
panies designated  as  depositories  by  reso- 
lution of  the  board  of  directors. 

Savings  banks  are  required  to  keep  the 
same  percentage  of  reserves  as  commercial 
banks,  but  only  one  half  of  the  amount  of 
cash  on  hand.  The  list  of  their  permissible 
investments  includes  everything  in  that  of 
commercial  banks  and  in  addition  stocks 
(except  bank,  safe  deposit  and  trust  com- 
pany stocks)  on  which  dividends  have  been 
paid  for  at  least  five  years.  Any  notes 
taken  must  have  two  or  more  signers,  must 
mature  in  six  months  or  less,  and  the  ag- 
gregate amount  of  them  must  not  exceed 
thirty  per  cent,  of  the  capital,  surplus  and 
deposits.  The  banks  must  not  invest  more 
than  twenty  per  cent,  of  their  capital  and 
surplus  in  any  one  kind  of  security  or  in 
any  one  loan. 

As  security  for  their  customers,  trust 
companies  must  deposit  with  the  State 
Treasurer,  in  cash  or  in  United  States,  Ohio 
state  or  local,  or  first  mortgage  railroad 
bonds.  $50,000,  if  their  capital  is  $300,000 
or  less  and  $100,000,  if  their  capital  is 
more  than  $300,000.  Their  permissible  in- 
vestment list  is  the  same  as  that  for  savings 
banks,  with  ground  rents  in  addition.  How- 
ever, not  more  than  sixty  per  cent,  of  their 
capital,  surplus  and  deposits  may  be  loaned 
on  notes  secured  by  real  estate  collateral, 
and  all  such  loans  must  lie  approved  by  the 
board  of  directors.  Th?  investments  of 
their  capital  and  surplus  must  be  secured 
by  collateral  of  the  kind  they  are  permitted 
to  buy.  The  securities  in  which  trust  funds 
are  invested  must  be  kept  as  a special  fund 
for  the  security  of  such  deposits.  Xo  re- 
serves on  trust  funds  are  required,  but  on 


all  others  the  reserve  requirements  are  the 
same  as  for  savings  banks. 

The  act  also  provides  for  the  appoint- 
ment of  a superintendent  of  banks  with  a 
salary  of  $5,000  per  annum  and  the  usual 
powers. 

Oklahoma. 

The  Oklahoma  law  ('08  ch.  6 art.  1,  3) 
has  attracted  more  attention  than  any  of 
the  others  on  account  of  the  deposit  guar- 
antee innovation  which  it  introduced,  and 
some  of  its  other  features  are  noteworthy. 
The  minimum  capital  requirement  which  it 
imposes  is  $10,000  for  banks  in  cities  of  less 
than  3500  inhabitants,  $15,000  in  cities  hav- 
ing between  3500  and  5000  inhabitants, 
$30,000  in  cities  having  between  5000  and 
10,000  inhabitants,  and  $35,000  in  cities  of 
over  10,000  inhabitants.  The  amount  of  the 
surplus  fund  required  to  be  accumulated’ 
in  the  usual  way  is  fifty  per  cent,  of  the 
capital  instead  of  twenty  per  cent.,  the  rule 
in  most  states.  It  permits  banks  to  borrow 
on  the  security  of  their  assets  to  an  amount 
not  to  exceed  fifty  per  cent,  of  their  paid- 
up  capital,  and  to  loan  to  stockholders  not 
to  exceed  fifty  per  cent,  of  their  capital.  It 
forbids  loans  to  officers.  A reserve  of  twen- 
ty per  cent,  of  deposits  is  required  of  banks 
in  towns  having  less  than  3500  inhabitants, 
and  one  of  twenty-five  per  cent,  in  other 
towns.  All  banks  which  are  not  reserve 
agents  for  other  banks  may  keep  two  thirds 
of  their  reserves  on  deposit  in  other  institu- 
tions. Loans  to  a single  person,  firm  or 
corporation  must  not  exceed  twenty  per 
cent,  of  the  capital  stock  except  in  cases 
in  which  they  consist  of  advances  to  assist 
«n  the  marketing  of  agricultural  products, 
in  which  cases  they  may  amount  to  seventy- 
five  per  cent,  of  the  capital. 

For  the  purpose  of  guaranteeing  depos- 
its a State  board  is  established,  consisting 
of  the  Governor,  Lieutenant  Governor,  pres- 
ident of  the  State  Board  of  Agriculture, 
State  Treasurer  and  State  Auditor,  and  di- 
rected to  make  a levy  on  the  banks  of  one 
per  cent,  oi  their  average  daily  deposits  for 
the  preceding  year,  less  the  deposit  of  State 
funds  properly  secured.  Each  year  there- 
after each  bank  is  required  to  report  to  the 
Bank  Commissioner  the  amount  of  its  ave- 
rage daily  deposits  and  to  pay  into  the  guar- 
antee fund  one  per  cent,  on  the  excess  over 
the  amount  reported  the  preceding  year. 
Tn  case  this  fund  is  depleted  from  any  cause 
Ihe  State  banking  board  is  authorized  to 
levy  special  assessments  sufficient  to  make 
good  the  deficit.  Whenever,  on  account  of 
insolvency  or  for  any  other  cause,  the  Bank 
Commissioner  shall  take  possession  of  a 
bank  for  the  purpose  of  winding  up  its  af- 
fairs, he  is  directed  to  pay  the  depositors  in 
full,  and,  when  the  cash  available  of  said 
bank,  or  that  can  be  made  available,  is  not 
sufficient  for  this  purpose,  he  is  directed  to 
take  the  balance  from  the  guarantee  fund, 


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THE  BANKERS  MAGAZINE 


and,  if  necessary,  from  the  proceeds  of  spe- 
cial assessments.  For  the  replenishment  of 
the  guarantee  fund  the  State  Banking  Board 
is  given  a first  lien  on  the  assets  of  the  bank 
and  on  all  liabilities  against  stockholders, 
officers  and  directors,  and  all  other  persons, 
corporations  or  firms.  Upon  compliance 
with  the  provisions  of  this  law  each  bank 
receives  from  the  Bank  Commissioner  a cer- 
tificate stating  that  it  has  complied  with  the 
provisions  of  the  guarantee  law,  and  that 
the  safety  of  its  depositors  is  guaranteed. 
This  certificate  is  required  to  be  conspicu- 
ously displayed  in  each  bank’s  place  of  busi- 
ness. 

Amendments  to  General  Banking  Laws. 

During  the  two  years  under  review  sev- 
eral States  improved  very  much  their  regu- 
lations regarding  the  supervision  of  the 
banking  business.  Montana  (’07  ch.  190), 
Oregon  (’07  ch.  138),  Florida  (’07  no.  92), 
and  Indiana  (’07  ch.  182)  provided  for  the 
appointment  of  bank  examiners  and  en- 
dowed them  with  the  powers  usually  con- 
ferred upon  such  officers.  Georgia  (’07  p. 
8a)  created  a bank  bureau  in  her  Treasury 
Department,  made  the  Treasurer  Bank  Ex- 
aminer, with  the  usual  powers,  and  author- 
ized him  to  appoint  an  assistant  examiner. 
Vermont  (’06  no.  203)  changed  the  name  of 
her  former  Inspector  of  Finance  to  that  of 
Bank  Commissioner.  Kansas  (’07  ch.  65), 
Missouri  (’07,  p.  23),  Pennsylvania  (’07  no. 
280),  and  New  York  (*08  ch.  57)  provided 
for  increases  in  their  forces  for  inspection 
and  supervision,  and  Kansas  provided  that 
her  banks  should  be  examined  twice  a year. 
The  power  of  the  Commissioner  of  Banking 
was  extended  in  Pennsylvania  (’07  no.  309) 
and  Wyoming  (’07  ch.  68)  so  as  to  include 
private  persons  and  ^unincorporated  compan- 
ies doing  a banking  business;  in  West  Vir- 
ginia (’08  ch.  30)  to  include  savings  banks, 
co-operative  banking  associations,  trust  com- 
panies, building  and  loan  associations  and 
all  associations  of  like  kind  and  character; 
and  in  Massachusetts  (’07  ch.  377)  to  in- 
clude any  person,  other  than  a steamship  or 
express  company  selling  steamship  tickets, 
taking  deposits  of  money  for  safe  keeping 
or  transmission.  For  the  protection  of  the 
same  class  of  persons  aimed  at  in  the  Mas- 
sachusetts law.  New  York  (’07  ch.  185)  and 
New  Jersey  (’07  ch.  106)  require  persons 
who  receive  deposits  for  international  trans- 
portation and  similar  purposes  to  give  bonds 
for  the  honest  and  faithful  conduct  of  their 
business,  and  the  latter  to  receive  from  the 
Commissioner  of  Banking  a certificate  of 
permission  before  they  can  do  business. 

Montana  (’07  ch.  137)  authorized  the  es- 
tablishment within  the  State  of  branches  of 
foreign  banks  on  condition  (1)  that  such  a 
branch  have  a capital  stock  equal  to  that 
required  of  national  banks  in  the  place  in 
which  it  is  located,  (2)  that  it  receive  a cer- 


tificate of  authorization  by  the  State  Au- 
ditor, (3)  that  it  keep  a reserve  of  at  least 
twenty  per  cent,  of  its  deposits,  one  half  of 
which  must  be  cash  on  hand;  (4)  that  its 
loans  to  any  single  firm,  person  or  corpora- 
tion do  not  exceed  ten  per  cent,  of  its  capi- 
tal, and  (5)  that  it  report  regularly  to  the 
Bank  Examiner  and  submit  to  his  inspec- 
tion. New  Jersey  (’07  ch.  35)  provides  that 
banking  corporations  of  other  States  or 
countries  may  transact  business  in  New  Jer- 
sey only  to  the  extent  that  similar  New  Jer- 
sey corporations  are  permitted  to  transact 
business  in  said  foreign  states.  Pennsylva- 
nia (’07  no.  302)  requires  foreign  companies 
and  agents  dealing  in  foreign  securities  to 
be  licensed  by  the  Commissioner  of  Bank- 
ing; to  deposit  with  a Pennsylvania  Trust 
Company  $100,000  in  specified  kinds  of 
bonds  as  security  for  the  proper  conduct  of 
their  business;  to  be  subject  to  inspection 
by  the  Commissioner  of  Banking;  and  not 
to  guarantee  to  their  customers  more  than 
eight  per  cent,  on  their  investments. 

Relative  to  reserves  the  most  important 
amendments  are  the  following:  Pennsylva- 
nia (’07  no.  150)  requires  commercial  banks, 
savings  banks  and  trust  companies  to  hold 
a reserve  of  at  least  fifteen  per  cent,  against 
deposits  subject  to  check  and  one  of  at 
least  seven  and  one-half  per  cent,  against 
time  deposits.  In  the  former  case  at  least 
one  third  of  the  fund  must  consist  of  cash 
or  clearing  house  certificates,  one  third  may 
be  invested  in  specified  bonds,  and  one  third 
be  on  deposit  in  Pennsylvania  banks  and 
trust  companies  approved  as  reserve  agents 
by  the  Commissioner  of  Banking.  In  the 
latter  case  the  fund  may  all  be  on  deposit 
with  approved  reserve  agents  and  one  third 
of  it  may  be  invested  in  specified  bonds. 
Texas  (’07  ch.  37)  authorized  the  use  as 
reserve  agents  for  her  banks,  of  foreign 
banking  or  trust  companies  approved  by 
the  Superintendent  of  Banking.  New  York 
(’08  ch.  151)  increased  her  reserve  require- 
ments from  fifteen  per  cent,  of  deposits  to 
twenty-five  per  cent,  for  banks  in  New  York 
City,  and  from  ten  per  cent,  of  deposits  to 
fifteen  per  cent,  for  other  banks.  The 
amount  allowed  to  be  kept  on  deposit  with 
reserve  agents  was  reduced  from  one  half 
to  two  fifths  for  banks  in  New  York  City 
and  fixed  at  one  half  for  banks  in  villages 
and  at  three  fifths  for  other  banks. 

The  following  amendments  relate  to  Joans 
and  discounts:  Iowa  (’07  ch.  91)  authorizes 
loans  to  directors  not  holding  any  other  of- 
fice, on  condition  that  they  be  made  by  reso- 
lution of  the  remainder  of  the  board  and 
that  they  be  secured  in  the  same  manner  as 
loans  to  outsiders.  Minnesota  (’07  ch.  156) 
modified  the  provision  of  the  law  limiting 
loans  on  real  estate  to  fifteen  per  cent,  of 
the  capital  and  surplus,  hy  authorizing  loans 
to  the  extent  of  twenty  per  cent,  of  the  capi- 
tal and  surplus  on  first  mortgages  on  im- 


Digitized  by  t^ooQle 


A REVIEW  OF  BANKING  LEGISLATION 


719 


proved  farm  lands  of  the  State,  worth  more 
than  double  the  amount  of  the  loan.  Mon- 
tana (‘07  ch.  164)  forbids  loans  to  officers 
unless  they  be  secured  by  good  collateral  or 
otherwise,  and,  if  they  exceed  ten  per  cent, 
of  the  capital,  unless  they  be  approved  by 
the  directors.  Wyoming  (’07  ch.  55)  in- 
creased the  amount  permitted  to  be  loaned 
to  a single  individual,  firm  or  corporation 
from  one  seventh  to  one  fifth  of  the  capital 
stock.  New  York  (’08  ch.  169)  reduced  the 
amount  of  loans  which  banks  in  New  York 
City  are  permitted  to  make  to  single  indi- 
viduals, firms  or  corporations  from  forty 
per  cent,  of  the  capital  and  surplus  and 
thirty  per  cent,  additional,  if  secured  by  col- 
lateral worth  at  least  fifteen  per  cent,  more 
than  the  loan,  to  twenty-five  per  cent,  of 
the  capital  and  surplus  and  fifteen  per  cent, 
additional,  if  secured  by  collateral.  A simi- 
lar reduction  was  made  on  the  amount  of 
bills  of  exchange  or  commercial  paper  al- 
lowed to  be  discounted.  Oklahoma  (’08  ch. 
•6  art.  3)  limited  the  amount  of  loans  run- 
ning longer  than  a year  and  secured  by  real 
estate  mortgages  to  twenty  per  cent,  of  the 
total  loans  authorized,  and  limited  the  value 
■of  the  building  and  fixtures  owned  by  the 
bank  to  one  third  of  the  paid-up  capital, 
and  Ohio  (’08  p.  269)  limited  the  value  of 
the  real  estate  owned  to  sixty  per  cent,  of 
the  paid-up  capital  and  surplus. 

Other  amendments  aim  at  facilitating  the 
process  of  settling  the  affairs  of  insolvent 
banks  and  protecting  the  assets  of  such 
banks  by  giving  the  commissioners  authority 
to  take  possession  as  soon  as  they  suspect 
insolvency.  Methods  of  procedure  after  this 
point  vary  according  to  the  part  played  by 
the  courts  in  the  matter.  Arizona  (’07  ch. 
•96)  and  New  York  (’08  ch.  143)  strengthened 
and  improved  their  laws  pertaining  to  this 
subject.  Indiana  (’07  ch.  7)  and  Nevada 
(*07  ch.  189)  increased  the  penalty  imposed 
upon  officers  of  insolvent  banks  for  receiv- 
ing deposits  after  knowing  their  banks  to 
be  insolvent. 

The  following  states  changed  their  capital 
requirements , the  minimum  fixed  in  all  cases 
being  $10,000:  Colorado  (’07  ch.  140),  Ne- 
braska (’07  ch.  3),  Kansas  (’08  ex.  sess.  ch. 
15),  Mississippi  (’08  ch.  110)  and  Virginia 
(’08  ch.  207). 

Trust  Companies. 

As  noted  above,  the  tendency  of  legisla- 
tion regarding  trust  companies  was  to  cause 
them  to  segregate  their  different  lines  of 
business  and  to  conduct  each  subject  to  the 
laws  governing  institutions  which  make  that 
line  of  business  their  specialty.  For  exam- 
ple, Massachusetts  (’08  ch.  520)  requires 
trust  companies  which  solicit  savings  depos- 
its to  conduct  a special  savings  department 
and  to  invest  such  deposits  in  the  same  man- 
ner as  savings  banks  are  required  by  law  to 
invest  theirs,  such  investments  to  be  appro- 

5 


priated  solely  to  the  payment  of  such  de- 
posits, Maine  (’07  ch.  96)  requires  the  segre- 
gation of  trust  funds  and  their  separate  in- 
vestment and  the  special  appropriation  of 
such  Investments  to  the  owners  of  such 
funds.  North  Carolina  (’07  ch.  829)  makes 
the  same  requirements  of  trust  companies 
as  of  banks  relative  to  investments  in  real 
estate  and  reports  to  the  Corporation  Com- 
missioner. 

Regarding  reserves,  the  tendency  clearly  is 
to  require  the  segregation  of  demand  and 
savings  deposits,  and  in  case  of  the  former, 
to  ret} u ire  the  same  reserves  that  banks  are 
obliged  to  keep.  In  Massachusetts  (’08  ch. 
520)  deposits  payable  on  demand  or  within 
thirty  days  are  subject  to  a reserve  require- 
ment of  twenty  per  cent,  in  Boston  and 
fifteen  per  cent,  in  other  parts  of  the  State, 
of  which  two  fifths  must  consist  of  cash  on 
hand,  one  fifth  may  consist  of  United  States 
or  Massachusetts  bonds,  and  the  remainder 
of  balances  with  other 'banks.  New  York 
(’08  ch.  152)  segregates  demand  and  time 
deposits  in  substantially  the  same  manner 
os  Massachusetts  and  requires  a fifteen  per 
cent,  reserve  in  cities  and  a ten -per  cent, 
reserve  in  villages.  In  New  York  City  the 
reserve  must  consist  entirely  of  cash;  in 
other  cities  at  least  two  thirds,  and  in  vil- 
lages at  least  one  half  must  be  cash.  Mis- 
souri (’07  p.  190)  excludes  from  the  cate- 
gory of  demand  deposits  all  those  for  the 
payment  of  which  a notice  of  more  than 
twenty  days  may  be  required.  The  reserve 
requirement  for  demand  deposits  is  fifteen 
per  cent.,  consisting  either  of  cash  or  bal- 
ances in  other  banks,  the  proportion  being 
left  to  the  discretion  of  the  officers  of  the 
institution. 

Other  noteworthy  amendments  to  laws 
pertaining  to  trust  companies  ar  as  fol- 
lows: Maine  (’07  ch.  96)  includes  nuong  the 
enumerated  powers  of  trust  * comp  inies,  that 
of  conducting  a bapking  business.  The 
minimum  capital  requirement  in  towns  of 
5000  inhabitants  or  less  is  $25,000,  and  $150,- 
000  in  towns  of  over  30,000  inhabitants. 
Branches  are  permitted  with  the  consent  of 
the  Bank  Examiner.  Loans  to  single  per- 
sons or  firms,  unless  secured  by  collateral, 
must  not  exceed  ten  per  cent,  of  the  capital, 
surplus  and  undivided  profits,  except  on  ap- 
proval of  the  investment  board,  and  must 
not  exceed  twenty-five  per  cent,  of  the  capi- 
tal, surplus  and  undivided  profits  even  with 
such  approval,  unless  the  excess  over  this 
amount  is  secured  by  collateral,  the  value 
of  which,  in  the  opinion  of  the  board,  equals 
or  exceeds  such  excess.  Loans  to  officers 
and  directors  must  have  the  approval  of  the 
investment  board  or  of  the  board  of  direc- 
tors. Trust  companies  must  be  examined 
once  a year  by  the  Bank  Examiner  and 
must  report  to  him  whenever  so  required. 
New  York  (’08  ch.  121)  prescribes  that  the 
stocks  and  bonds  of  trust  companies  must 


Digitized  by  t^ooQle 


720 


THE  BANKERS  MAGAZINE 


not  be  valued  in  the  report  of  the  Superin- 
tendent of  Banks  at  a higher  price  than 
their  investment  value  as  determined  by 
amortization  and  that  such  companies  must 
not  own  more  than  ten  per  cent  of  the 
stock  of  any  other  moneyed  corporation, 
unless  it  be  that  of  a safe  deposit  company 
whose  vaults  are  connected  with  or  adjacent 
to  such  trust  company.  Connecticut  (’07 
ch.  180)  forbids  trust  companies  to  engage 
in  any  kind  of  insurance  business,  and 
Washington  (’07  ch.  126)  permits  those  who 
do  not  engage  in  the  banking  business  to 
guarantee  land  titles.  Massachusetts  (’07 
ch.  487)  reduced  her  minimum  capital  re- 
quirement for  trust  companies  in  towns  of 
under  100,000  inhabitants  from  $200,000  to 
$100,000  and  for  others  from  $500,000  to 
$200,000.  California  (’07  ch.  453)  fixed  her 
minimum  capital  requirement  for  trust  com- 
panies at  $100,000. 

Savings  Banks. 

In  1907  the  Legislature  of  Massachusetts 
(’07  r.  24)  appointed  a committee  consist- 
ing of  the  Bank  Commissioner,  the  Treas- 
urer, the  Receiver  General  and  the  Com- 
missioner of  Corporations  to  examine  her 
Jaws  relative  to  savings  banks  and  to  suggest 


changes  therein.  From  their  action  resulted, 
in  the  session  of  1908  (’08  ch.  590)  a codi- 
fication of  the  savings  bank  laws  and  some 
slight  amendments.  In  the  session  of  1907, 
Connecticut  adopted  three  minor  amend- 
ments to  her  laws  pertaining  respectively  to 
payments  to  joint  depositors  and  to  the  or- 
der of  deceased  depositors  and  to  the  du- 
plication of  lost  pass  books.  In  1907  New 
Hampshire  adopted  two  amendments,  one 
prohibiting  the  use  of  the  designation  sav- 
ings bank  by  unauthorized  persons  or  cor- 
porations and  extending  the  power  of  the 
bank  commissioners  to  enforce  the  regula- 
tions, and  a second,  prescribing  that  trust 
funds  and  public  moneys  may  be  deposited 
in  savings  banks  in  unlimited  amounts. 
Maine  and  Texas  also  adopted  slight  amend- 
ments to  their  savings  bank  laws  in  1907, 
the  former  pertaining  to  payments  to  joint 
depositors  and  adding  California,  Oregon 
and  Washington  to  the  list  of  states  in 
whose  securities  investments  are  authorized, 
and  the  latter  making  clearer  and  more 
definite  the  powers  of  savings  banks.  In  the 
session  of  1908  four  slight  amendments  to 
savings  bank  laws  were  passed  by  the  New 
York  Legislature  and  three  by  that  of  New 
Jersey. 


UNITED  STATES  TREASURY  IMPROVED 


WHEN  a small  army  of  architects  and 
artisans  finishes  the  work  now  in 
progress  on  the  United  States 
Treasury  building,  the  beautiful  old  struct- 
ure will  show  the  first  material  changes 
since  1869.  Architecturally  it  still  will  be 
on  the  order  of  a Greek  temple,  represent- 
ing, some  folk  say,  the  American  people’s 
worship  of  money.  But  visitors  to  the 
capital  who  have  not  seen  the  Treasury  in 
recent  years  will  find  many  changes  for 
efficiency  and  economy. 

The  nucleus  of  the  present  building,  lo- 
cated where  President  Jackson,  irritated  by 
the  procrastination  of  Congress  in  choos- 
ing a site,  put  his  hickory  stick  down  with 
a thump  and  exclaimed  “Put  her  there 
on  that  spot!”  will  remain  unchanged,  but 
the  double  stone  staircase  leading  up  to 
the  colonnade  on  the  Fifteenth  street  side 
has  been  torn  away.  Architects  said  it 
spoiled  the  beauty  of  that  side  of  the  build- 
ing. 

The  thirty  granite  monoliths,  each  of 
which  cost  $5,500  and  weighs  thirty  tons, 
now  stand  in  an  unbroken  row.  They  are 
said  to  be  the  finest  examples  of  their 
kind  of  the  stone  cutter’s  art.  It  required 
ten  men,  working  sixty  days,  to  produce 
each  of  them,  and  a solid  train  of  thirty 
flat  cars  brought  them  to  Washington  from 
the  quarries  in  Massachusetts. 

The  appearance  of  the  front  of  the 


Treasury  has  been  marred,  the  artists  sayr 
by  the  commercial  aspect  which  the  scores 
of  trucks  and  wagons  backed  up  to  the 
curbs  gave  to  it.  So  a private  driveway 
has  been  built  into  the  court.  When  it  is 
finished  the  big  three-horse  truck  which 
brings  up  its  rich  cargo  of  currency  every 
day  to  the  vaults  from  the  Bureau  of 
Printing  and  Engraving  will  carry  its 
precious  load  practically  into  the  building, 
instead  of  depositing  it  on  the  sidewalk. 
Express  wagons  which  carry  off  hundreds 
of  valuable  packages  will  do  the  same. 

To  make  more  space  inside  the  building, 
all  the  files  of  letters  and  documents  will 
be  stored  in  the  old  coal  vaults  under  the 
lawn  on  the  Pennsylvania  avenue  side,  and 
new  coal  vaults  are  being  built  on  the  side 
opposite  to  the  White  House. 

The  completed  building  as  it  stands  rep- 
resents three  stages  of  construction.  The 
nucleus,  located  by  Jackson,  was  finished 
in  1842.  The  south  wing  was  finished  in 
1864.  The  north  wing,  finished  in  1869, 
is  on  the  site  of  the  old  State  Department 
building.  The  long  colonnade  of  brown 
stone,  erected  in  1864,  deteriorated  in  the 
Southern  climate  and  was  replaced  by  the 
present  granite  monoliths  a little  more 
than  a year  ago. 


Digitized  by  t^ooQle 


EXPERT  FINANCIAL  SERVICE  AS  APPLIED  TO 
BUSINESS  ENTERPRISES 

HOW  TWO  FORMER  NEW  YORK  BANKERS  HAVE  SUCCESSFULLY 

DEVELOPED  IT 


IF  their  business  were  confined  to  attend- 
ing the  financially  sick,  they  might  be 
called  “financial  doctors,”  but  inasmuch 
as  they  do  like  the  Chinese  physicians — as- 
sist in  keeping  thedr  “patients”  well — a 
more  correct  term  would  probably  be  “fi- 
nancial advisers.” 

That  is  the  new  field  of  business  re- 
cently opened  up  by  Messrs.  Davidson  and 
Robinson,  of  27  William  street.  New  York 
city. 

Both  gentlemen  have  had  much  banking 
experience. 

Harold  A.  Davidson  was  formerly  sec- 
retary of  the  Home  Trust  Company,  presi- 
dent of  the  Lafayette  Trust  Company,  and 
Special  Deputy  Superintendent  of  Banks 
of  the  State  of  New  York. 

Charles  L.  Robinson,  the  other  member 
of  the  firm,  was  formerly  cashier  of  the 
Western  National  Bank,  assistant  cashier 
of  the  National  Bank  of  Commerce,  and 
vice-president  of  the  Guardian  Trust  Com- 
pany. 

By  their  wide  banking  experience,  which 
included  passing  through  the  ordeal  of  the 
panic  and  subsequent  rearrangement  of 
banking  affairs,  they  saw  the  necessity  and 
the  opportunity  of  demonstrating  that  a 
financial  adviser  would  have  prevented  con- 
ditions existing  in  business  houses  caused 
by  bad  financial  management  and  could 
remedy  a faulty  or  an  embarrassing  situation, 
by  the  rearrangement  and  refinancing  of 
affairs  and  a reestablishment  of  credit. 

As  bankers,  these  men  knew  the  require- 
ments of  banks.  They  also  knew  the 
bankers’  feeling  when  a customer  or  bor- 
rower becomes  involved.  They  were  sure 
of  their  own  standing  with  the  banks  as 
to  honesty,  experience  and  intelligence,  and 
were  therefore  able  to  plan  and  perform 
the  readjustment  of  affairs  of  involved 
concerns  to  the  satisfaction  of  the  banker 
and  the  salvation  of  the  commercial  house. 

Scope  of  the  Business. 

After  long  and  careful  consideration,  the 
scope  of  the  business  to  be  undertaken 
outlined  itself  substantially  thus: 

To  examine,  reorganize  and  refinance  the 
affairs  of  business  houses  or  personal  in- 
terests in  need  of  expert  financial  advice 
and  assistance. 

To  make  unalyses  of  new  propositions 
and  verify  financial  statements  along  prac- 
tical lines  not  now  covered  by  mercantile 
agency  reports  or  public  accountants. 

To  investigate  the  personnel,  physical  and 
financial  condition  of  business  houses  de- 


siring loans  or  an  extension  of  existing 
loans,  particularly  in  cases  regarded  as 
doubtfid. 

To  represent  financial  interests  in  con- 
fidential capacities  as  agents,  trustees  or 


Harold  A.  Davidson 


as  directors  in  corporations  where  such  in- 
terests are  of  a temporary  character. 

To  conduct  receiverships  along  construc- 
tive lines  by  conserving  assets  and  effect- 
ing resumptions  where  possible. 

An  interesting  fact  was  developed  early 
in  the  new  firm’s  experience,  viz.,  that 
many  business  establishments  get  to  the 
verge  of  failure  and  finally  go  over  the 
brink  for  the  want  of  a little  expert  as- 
sistance. As  illustrative  of  this  tendency, 
tlie  following  cases  are  reported: 

A long  established  concern  in  Pennsyl- 
vania, whose  products  are  known  through- 
out the  world,  advised  a New  York  bank 
holding  its  notes  of  its  inability  to  retire 
them  at  maturity. 

A personal  call  disclosed  that  the  con- 
cern was  managed  by  two  men  who  had 
grown  old  together,  and  the  refusal  of  their 

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THE  BANKERS  MAGAZINE 


local  bank  to  extend  accommodation  had 
apparently  disheartened  them:  their  state- 
ment showed  assets  of  over  a million  dol- 
lars in  excess  of  liabilities,  with  no  mortgage 
indebtedness  and  it  was  probable  that  the 
difficulty  was  the  bank’s  inability  to  loan 
money  at  that  time.  At  any  rate,  the  fol- 
lowing advice  was  given:  “Your  concern 

only  requires  backbone;  go  to  another  bank 


Charles  L.  Robinson 


and  get  the  money  to  which  your  standing 
entitles  you;  it  would  be  a crime  for  you 
to  fail  under  present  conditions;  the  notes 
must  be  met  at  maturity.”  Payment  of  the 
notes  was  made  and  the  house  is  still  doing 
business. 

A company  manufacturing  agricultural 
implements  in  New  York  State  was  on  the 
verge  of  suspension;  examination  showed 
its  credits  had  been  extended  in  a region 
where  erops  had  failed  that  season  and 
farmers  could  not  pay.  Title  to  the  ma- 
chines remained  with  the  seller  and  if  the 
next  crop  was  good,  the  solvency  of  the 
concern  was  beyond  question;  character  of 
the  management  being  excellent,  time  was 
the  necessary  factor;  an  extension  was  ad- 
vised and  granted  by  the  bank,  which  was 
finally  paid  in  full. 

An  old  manufacturing  concern  in  Mary- 
land, whose  bank  balances  had  been  un- 
satisfactory, was  notified  to  retire  its  notes 
at  maturity,  but  more  time  was  requested. 


Investigation  unearthed  the  curious  situa- 
tion, that  when  the  founder  and  principal 
owner  died,  his  stock  had  been  left  to  a 
daughter  who  was  living  very  extravagently 
and  causing  the  payment  of  dividends  at  a 
rate  that  was  draining  the  concern  of  other- 
wise needed  cash  resources;  this  lady  was 
convinced  of  the  necessity  of  a change  of 
policy,  with  the  result  that  the  bank  ob- 
tained its  money. 

A Arm  having  been  granted  continuous 
renewals  by  a bank,  was  finally  requested 
to  liquidate  its  loans  and  w’as  apparently 
unable  to  comply.  Investigation  developed 
that  the  death  of  the  senior  partner  had 
placed  the  burden  of  financing  the  concern 
on  a strictly  commercial  partner  who  was 
not  qualified  to  handle  the  financial  affairs 
of  the  business.  A plan  of  refunding  the 
debts  was  submitted  which  met  the  approval 
of  all  concerned,  and  the  firm  enabled  to 
emerge  from  its  difficulties  to  the  satisfac- 
tion of  itself  and  the  bank. 

A large  house  had  by  its  neglect  of  bank- 
ing requirements  reduced  its  credit  standing 
to  such  a point  as  to  make  its  account  un- 
desirable. Examination  revealed  an  anti- 
quated system  of  books  and  organization, 
and  after  a complete  audit  and  reorganiza- 
tion, and  changes  in  personnel,  the  standing 
of  the  house  was  regained  with  commercial 
agencies  and  financial  institutions,  and  its 
business  continued  upon  a largely  increased 
basis. 

In  many  instances  it  has  been  found  pos- 
sible to  save  an  old-established  house  from 
failure,  and  to  relieve  banks  of  the  possi- 
bility of  sustaining  losses  had  such  failures 
occurred. 

In  a number  of  cases  consultations  have 
been  requested  by  accountants  and  business 
experts  in  which  conditions  required  a 
working  out  of  a financial  plan  and  the 
practical  fulfillment  of  such  plan.  One 
such  instance  involved  a consolidation  of 
interests  in  which  insolvency  was  imminent 
and  in  which  a greatly  confused  condition 
of  affairs  with  poor  management  was  found 
to  exist.  The  problem  was  satisfactorily 
solved  and  both  houses  after  being  placed 
in  a clean  condition  engaged  in  a new 
career  of  profitable  business.  A second 
case  requiring  temporary  financing  with  a 
permanent  line  of  credit  was  presented  in 
an  attempt  to  purchase  the  entire  stock  of 
a corporation  by  one  of  its  stockholders. 
In  this  instance  a most  ingenious  plan  was 
worked  out  and  being  found  legally  exact 
and  financially  possible  was  pushed  to  a 
successful  termination. 

In  the  experience  of  every  banker,  it  be- 
comes necessary  at  times  to  examine  into 
the  reasons  for  the  dilatory  payments  of 
customers  of  doubtful  credit.  The  experi- 
ence of  both  Mr.  Davidson  and  Mr.  Robin- 
son in  this  regard  is  full  of  curious  situa- 
tions. One  similarity  they  find  in  all  exam- 


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CONSERVING  BUSINESS— AIDING  ENTERPRISES 


723 


inations.  A loss  of  self-confidence  and 
dread  of  impending  failure.  In  several 
cases  handled  all  that,  was  necessary  was 
kindly  advice;  in  others,  threats  of  drastic 
action;  and  others,  a reorganization.  In 
none  of  the  cases  did  they  fail  to  effect  a 
“cure.” 

Sifting  Financial  Propositons. 

No  one  but  a practical  banker  knows  the 
many  occasions  upon  which  the  busy  official 
says,  “I  haven't  time.”  Such  officer  feels 
the  lack  of  time  and  opportunity  probably 
to  a greater  extent  when  he  receives  let- 
ters of  introduction  from  correspondents 
which  ask  personal  attention  to  plans  for 
investment  and  capitalization.  He  must 
recognize  the  claims  of  his  customer,  yet 
takes  the  risk  of  offending  him  because  he  is 
unable  to  devote  the  time  required  for  the 


examination  of  propositions.  The  members 
of  the  firm  in  question  invite  him  to  deliver 
his  burden  to  them,  with  the  assurance  that 
every  attention  will  be  given  to  the  visitor 
as  well  as  to  the  plan  submitted. 

Examination  of  Borrowers’  Statements, 

The  examination  of  borrowers’  statements, 
presented  with  applications  for  loans  or 
purchase  of.paper,  is  one  which  is  recognized 
as  unsatisfactory  by  bankers;  the  vital 
points  are  carefully  scanned,  but  no  actual 
verification  of  such  is  made,  and  as  a re- 
sult millions  of  dollars’  worth  of  paper 
representing  commercial  credits  is  accepted 
by  banks  annually  without  anything  like 
the  care  and  consideration  which  one  would 
give  to  his  own  personal  investment.  Ex- 
aminations of  this  nature,  the  firm  regards 
as  its  particular  duty. 


NEW  YORK  CHAPTER,  AMERICAN  INSTITUTE 
OF  BANKING,  MAKES  LARGE  GAINS 


TO  increase  the  membership  of  an  or- 
ganization forty  per  cent,  in  a single 
month  is  an  achievement  worthy  of 
note;  especially  if  the  organization  is  of 
considerable  size,  so  that  the  additions  run  up 
into  the  hundreds.  This  is  just  what  New 
York  Chapter  has  done  as  a preliminary  to 
the  present  season’s  work;  or  to  speak  sta- 
tistically, starting  with  a membership  of  770 
on  September  1,  over  three  hundred  and 
fifty  new  members  were  added  to  the  ranks 
in  the  course  of  four  weeks.  Such  an  in- 
crease naturally  raises  the  question,  How 
is  it  done? 

Throughout  the  summer,  the  Educational 
Committee  was  diligently  at  work  out- 
lining the  study  courses  for  the  fall  and 
winter,  with  the  result  that  they  were  able 
to  announce  the  following:  (a)  Thirty 

nights  in  English  and  public  speaking,  In 
charge  of  Prof.  H.  N.  Drury  of  the  Stuy- 
vesant  High  School,  New  York.  The  tui- 
tion was  placed  at  $5,  and  the  number 
limited  to  fifty,  which  has  been  raised  to 
70,  and  the  membership  is  now  filled ; (b)  Six 
lectures  on  foreign  exchange  by  Franklin 
Escher,  editor  Investments  Magazine  and 
financial  editor  of  “Harper’s  Weekly”; 
(c)  Ten  lectures  in  banking  law  by  Prof. 
Leslie  J.  Tompkins,  of  New  York  Uni- 
versity. These  lectures  are  to  run  con- 
secutively, one  course  being  concluded 
before  another  is  begun;  (d)  Eight  lectures 
in  practical  banking;  (e)  Seven  “savings 
bank  nights.”  These,  together  with  the 
“open  nights”  proved  a strong  drawing 
card  and  too  good  an  offering  to  pass  by. 
Backed  by  such  a program,  the  new  officers 
started  out  on  a systematic  campaign  for 
new  members.  The  large  number  of  banks 


in  New  York  and  Brooklyn  offered  an  at- 
tractive field  for  energetic  work.  The  city 
was  divided  into  districts  and  each  district 
placed  in  charge  of  a “district  consul”  and 
several  meetings  of  these  district  leaders 
were  held.  The  idea  in  mind  was,  first  to 
increase  the  representation  in  banks  al- 
ready connected  with  the  chapter,  and 
second,  to  canvass  those  banks  (and  these 
are  many)  in  which  the  chapter  is  not  now 
represented.  Enthusiasm  ran  high.  Print- 
er’s ink  and  personal  letters  were  freely 
used,  and  as  a result  the  membership  ap- 
plications came  swarming  in,  nearly  a hun- 
dred at  one  consuls*  meeting. 

The  opening  meeting  was  held  October 
6 with  the  hitherto-sufficient -meeting-place 
crowded  to  the  doors.  James  G.  Cannon, 
president  of  the  Fourth  National  Bank, 
formally  opened  the  season's  work.  The 
sight  of  five  hundred  men  on  such  a mis- 
sion was  an  impressive  one  and  Mr.  Cannon 
aptly  remarked  that  “he  wished  every  bank 
president  in  New  York  could  sit  on  the 
platform  urnl  look  these  men  In  the  face. 
They  would  have  no  fears  as  to  the  future 
of  banking  in  New  York.”  The  chapter’s 
old  and  always  welcome  friend,  Dr.  C.  B. 
Meding  (one  of  the  few  men  who  can  talk 
on  moral  subjects  without  preaching)  gave 
an  admirable  address  on  “Character.”  Wil- 
liam E.  Knox,  comptroller  of  the  Bowery 
Savings  Bank,  and  Professor  Drury,  com- 
pleted the  list  of  speakers.  It  was  a most 
auspicious  beginning  of  what  promises  to 
be  New  York’s  most  successful  year.  The 
membership  is  now  1,065.  Who  can  beat 

it?  W.  H.  Knipfijt,  Jh., 

Secretary. 


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HON.  WM.  B.  RIDGELY 

Former  Comptroller  of  the  Currency;  President  National  Brnk  Audit  Company 


4 


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THE  BICENTRAL  BANKING  SYSTEM 

A METHOD  DESIGNED  TO  STABILIZE  THE  COUNTRY’S  BANKING 

AND  CREDIT 

By  P.  C.  Wad 8 worth 


THE  suggestions  given  below  offer  a 
definite  method,  shortly  to  be  put  into 
practical  operation  by  a company 
now  organizing,  for  accomplishing  the  fol- 
lowing objects: 

First — A system  of  the  most  careful  and 
thorough  bfmk  inspection  and  audit. 

Second — Banks  so  inspected  and  audited 
may,  if  they  choose,  avail  themselves  of  a 
guaranty  feature  assuring  the  sufficiency  of 
their  assets  to  meet  liabilities,  thus  render- 
ing certain  the  payment  of  all  depositors  in 
full. 

Third — The  inspection,  verification  and 
guaranty  of  legitimate  commercial  paper. 

Fourth — The  establishment  of  a redis- 
count system  that  will  tend  to  make  it 
possible  for  solvent  borrowers  always  to 
receive  the  credits  to  which  they  may  be 
justly  entitled. 

Improving  the  Present  Financial  Organ- 
ization. 

The  nation’s  foremost  bankers  and  econ- 
omists agree  that  some  new  system  of  plan 
is  needed  to  remedy  the  weaknesses  of  our 
present  financial  organization.  The  passing 
of  the  Aldrich-Vreeland  bill  permitting  the 
Issue  of  more  paper  currency,  the  laws 
guaranteeing  the  funds  of  State  banks  as 
adopted  by  some  of  the  Western  States, 
and  the  widespread  discussion  of  the  cen- 
tral bank  question,  all  serve  to  indicate  a 
recognition  of  the  urgent  need  of  some 
remedy,  and  to  illustrate  the  various  solu- 
tions of  this  problem  that  are  being  sug- 
gested and  attempted. 

Confidence  Must  Be  Assured. 

It  is  a fundamental  principle  that  the 
success  of  any  banking  system  depends 
upon  the  confidence  of  the  public.  The 
money  loaned  and  invested  by  banks  is 
largely  the  money  of  the  depositor,  who  has 
the  right  to  call  for  it  at  any  time.  If, 
therefore,  the  confidence  of  the  depositor 
(who  represents  the  public)  is  shaken  and 
he  makes  a demand  for  his  money,  the  bank 
must  call  its  loans  or  sell  its  investments, 
at  a loss  usually;  hence,  the  banks  and  the 
entire  business  world  are  seriously  affected 
by  any  loss  of  confidence. 

On  the  other  hand,  the  great  industrial 
development  of  the  country  has  demanded 
an  increasing  lending  power  on  the  part 
of  the  banks. 

Therefore,  the  question  that  this  country 
now  has  to  solve  is,  how  can  the  depositor 
be  made  secure,  without  restricting  the 


legitimate  and  proper  lending  power  of 
the  banks? 

The  attempts  at  solution  of  the  problem 
have  been  numerous  and  persistent.  Since 
the  trying  times  of  190T  the  search  for  the 
right  remedy  has  been  particularly  earnest, 
although  inaugurated  long  before. 

The  Remedies  Proposed. 

Let  us  consider  briefly  the  three  principal 
attempts  at  solution,  which  have  been 
adopted  or  suggested,  as  possible  remedies: 

First — The  establishment  through  legisla- 
tion of  a guarantee  fund  for  national  banks, 
insuring  the  prompt  payment  of  the  de- 
positors of  any  insolvent  national  bank 
under  an  equitable  system  available  to  all 
State  banking  institutions  wishing  to  use  it. 

The  platform  of  one  of  the  leading  par- 
ties in  the  last  Presidential  campaign  con- 
tained a plank  which  incorporated,  in  sub- 
stance, the  above  plan.  When  the  question 
came  to  a vote  in  November  of  that  year, 
the  party  advocating  it  was  defeated,  there- 
by ending  such  a national  attempt  at  solu- 
tion of  this  important  problem. 

Some  banking  authorities  maintain  that  a 
government  guaranty  of  deposits  is  wrong 
in  principle;  primarily,  because  it  places 
all  banks,  good,  bad  and  indifferent,  on  a 
parity.  It  has  been  declared  that  the  adop- 
tion of  a general  government  guaranty,  ap- 
plicable to  all  banks,  would  put  a premium 
on  reckless  banking. 

Second — The  bank  deposit  guaranty  law 
as  adopted  by  some  of  the  Western  States, 
such  as  Oklahoma,  Texas,  etc.,  in  which  h 
fund  contributed  by  the  banks  is  used  for 
the  purpose  of  guaranteeing  the  funds  of 
State  banks. 

One  of  the  most  noticeable  results  of 
this  law,  in  the  State  of  Oklahoma,  for 
instance,  has  been  the  increase  in  the  de- 
posits, and  the  drawing  forth  of  money 
from  deposit  vaults  and  other  hoarding 
places  and  bringing  it  into  circulation.  The 
deposits  of  Oklahoma’s  State  banks  have 
increased  200  per  cent,  in  two  years,  and 
over  ninety  national  banks  have  been  dena- 
tionalized to  come  under  State  law.  What- 
ever may  be  the  sound  objections  to  the 
principle  of  guaranteeing  deposits,  the 
operation  of  the  Oklahoma  law  would  seem 
to  show  that  the  guaranty  idea  has  quite 
an  important  effect  upon  the  public  mind 
and  purse. 

Third— The  third  remedy  that  has  been 
suggested  is  the  establishment  of  a central 
bank  of  issue. 

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THE  BANKERS  MAGAZINE 


This  proposal  has  aroused  widespread 
discussion  among  the  leading  bankers  and 
financiers  of  this  country. 

Experience  has  shown*  that  the  central 
banks  of  Europe  perform  satisfactorily  the 
functions  necessary  to  the  smooth  and  effi- 
cient working  of  the  financial  and  commer- 
cial operations  of  the  several  countries 
where  they  are  located.  Whether  legislative 
sanction  can  be  obtained  for  a bank  of  like 
character  in  the  United  States,  and  whether 
if  such  a bank  were  actually  created  it 
would  under  the  different  conditions  work 
as  efficiently  here  as  in  the  European  coun- 
tries are  matters  yet  to  be  determined. 
\V  ith  the  existing  political  conditions,  it 
cannot  be  said  with  any  degree  of  certainty 
that  a satisfactory  charter  for  a central 
bank  can  be  had  in  the  near  future. 

The  difficulties  in  the  wav  of  securing 
early  legislative  sanction  for  a central  bank, 
though  in  no  wise  affecting  the  merits  of 
such  a solution  of  our  banking  problems, 
do  render  it  an  unavailing  remedy  for  the 
present  and  possibly  for  an  indefinite  period. 

Ax  Alternative  Plan,  Immediately 
Available. 

That  effective  action  looking  toward 
banking  reforms  is  possible,  even  without 
new  legislation,  has  been  long  recognized 
by  thoughtful  students  of  our  banking  and 
financial  situation.  This  view  was  well  ex- 
pressed in  an  address  delivered  before  the 
recent  convention  of  the  American  Bankers’ 
Association  by  Hon.  Theodore  E.  Burton, 
a distinguished  financial  and  economic  au- 
thority, a member  of  the  National  Monetary 
Commission,  and  United  States  Senator 
from  Ohio.  Mr.  Burton  said: 

I think  it  appropriate  to  impress  you 
with  the  great  possibilities  which  may*  be 
made  actualities  by  personal  initiative*  and 
by  cooperation  among  yourselves  without 
political  action  or  the  passage  of  any  law.’* 

Since  both  the  Government  and  State 
guaranty  of  deposits  have  been  found  open 
to  serious  objections,  and  as  the  central 
bank  plan  is  at  present  unavailable,  it  re- 
mains to  be  seen  whether  the  advantages 
sought  for  in  each  of  the  above  remedies 
may  not  be  had  without  encountering  any 
of  the  difficulties  that  have  hindered  their 
effectiveness. 

rl  his,  it  is  believed,  bicentral  banking,  de- 
scribed below,  will  accomplish.  It  can  be 
put  into  operation  at  once  without  waiting 
for  any  legislative  enactment  whatsoever. 
It  would  not  foster  reckless  banking,  but 
on  the  contrary  its  very  life  principle  rests 
upon  the  maintenance  of  the  soundest  bank- 
ing attainable,  and  the  wide  distribution  of 
its  shareholdings  makes  it  impossible  for 
any  clique  to  obtain  control. 

After  years  of  careful  study  and  close 
observation  of  our  banking  system,  it  is 


believed  that  a simple,  effective  and  work- 
able plan  has  been  devised,  based  upon  prin- 
ciples tested  by  successful  experience,  and 
calculated  to  insure  public  confidence  in  the 
banks  and  commercial  credits  of  the  coun- 
try- 

Essence  of  the  Proposals. 

In  plain  language,  the  plan  means  simply 
this: 

First,  it  will  give  a depositor  the  absolute 
confidence  that,  at  any  time,  he  can  get  his 
money  from  his  bank. 

Second,  it  will  give  a legitimate  borrower 
the  confidence  that  lie  can  get  money  from 
a bank  whenever  he  needs  it  for  legitimate 
and  proper  purposes. 

Thus  a double  feeling  of  confidence,  es- 
tablished at  both  ends  of  the  banking  busi- 
ness, will  tend  to  create  a perfect  system 
of  banking. 

How  can  this  be  done?  How  can  a de- 
positor be  made  absolutely  sure  of  his  de- 
posits, and  how  can  a borrower  be  made 
certain  that  he  can  always  secure  money 
for  legitimate  business  purposes? 

The  plan  by  which  this  double  feeling  of 
confidence  may  be  established  is  this: 

First — The  National  Bank  Audit  Com- 
pany, organized  in  accordance  with  the  laws 
of  the  District  of  Columbia,  and  under 
the  supervision  of  the  Comptroller  of  the 
Currency,  will  guarantee  the  assets  of  banks 
which,  upon  examination,  are  proven  to  be 
in  good  solvent  condition. 

Second — This  company  will  guarantee 
that  the  commercial  paper  offered  for  re- 
discount by  the  banks  it  has  examined  and 
found  solvent  will  be  paid  when  due. 

These  are  the  underlying  principles  of 
“Bicentral  Banking” — to  guarantee  that  the 
assets  of  duly  inspected  banks  will  be  suffi- 
cient to  meet  liabilities,  and  thus  assure  the 
depositor  against  loss  of  his  deposits,  and 
to  guarantee  that  the  legitimate  commer- 
cial paper  of  the  borrower  will  be  paid  when 
due. 

“Bicextrai.  Banking” — What  It  Means. 

The  following  plans  and  methods  of  the 
Bicentral  Banking  System  as  proposed  by 
the  National  Bank  Audit  Company  of 
Washington,  D.  C.,  are  herein  submitted  for 
consideration,  with  the  belief  that  Bicen- 
tral Banking  will  furnish  a sane,  practi- 
cable and  efficient  means  of  remedying  some 
of  the  chief  deficiencies  in  our  banking  and 
credit  systems. 

The  system  of  Bicentral  Banking  is  based 
upon  conditions  peculiar  to  our  country  and 
our  form  of  government.  It  recognizes  the 
vast  territorial  area  of  the  United  States, 
the  diversity  and  dissimilarity  of  interests, 
and  even  the  territorial,  sectional  and  par- 
tisan prejudices  of  the  people. 

The  term  “Bicentral  Banking”  in  reality 


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The  Company’s  Emblem 


means  the  operation  of  banking  through  two 
renters,  the  first  renter  being  the  National 
Bank  Audit  Company  and  the  second  cen- 
ter the  banks  acting  as  reserve  agents  in 
the  central  reserve  cities  and  reserve  cities, 
and  the  Company’s  client  banks. 

The  Bicentral  Banking  system,  as  inau- 
gurated by  the  National  Bank  Audit  Com- 
pany, therefore,  has  two  chief  functions: 

First — The  auditing,  insuring  and  guar- 
anteeing of  bank  assets  in  order  to  create 
confidence  on  the  part  of  depositors  in  the 
bank. 

Second — The  certification,  classification 
and  guaranteeing  of  commercial  paper,  to 
create  confidence  in  such  paper  offered  by 
legitimate  borrowers. 

In  creating  this  double  confidence,  there- 
fore, our  present  banking  methods  will  be 
greatly  improved. 

The  National  Bank  Audit  Company  will 
commence  business  when  subscriptions  have 
been  received  to  the  amount  of  $1,000,000 
capital  and  $500,000  surplus. 

This  amount  of  paid-in  capital  and  sur- 
plus will  be  steadily  increased  and  main- 
tained at  or  above  one  per  cent,  of  the 
deposits  of  banks  holding  the  Company’s 
certificates. 

FUNCTIONS  OF  THE  NATIONAL  BANK  AUDIT 

Company. 

1st.  It  will  make  careful,  accurate  and 
complete  examinations  of  banks  of  all  kinds, 
national.  State  and  private. 

2nd.  Will  make  full  report  of  such  ex- 
aminations to  the  directors  and  officers,  or 
others,  when  authorised  by  the  bank  under 
examination  to  do  so. 

3rd.  Will  issue  certificates  of  such  exam- 
inations to  banks  found  in  a satisfactory 
condition. 

4th.  Will  guarantee  all  banks  to  which 
these  certificates  are  issued  that  their  assets 


shall  be  sufficient  to  pay  all  their  creditors 
in  full. 

5th.  Will  organize  and  conduct  Exam- 
ination Bureaus  for  clearing  houses,  with  or 
without  the  guarantee  feature. 

6th.  Will,  at  the  request  of  client  banks, 
tabulate  credit  information,  investigate  and 
verify  statements  of  industrial,  commercial 
and  other  concerns  seeking  credit. 

7th.  Will  do  general  auditing  for  firms, 
individuals  or  corporations,  especially  of 
firms  offering  commercial  paper  for  sale  to 
banks  through  note  brokers  or  otherwise. 

8th.  The  client  banks  of  the  National 
Bank  Audit  Company  will  transact  their 
rediscount  business  through  banks  in  the 
reserve  center  cities  and  will  keep  on  de- 
posit with  these  reserve  center  banks  bal- 
ances commensurate  with  the  amount  of 
business  done  by  them. 

These  Reserve  Banks  may  buy  from 
clients  of  the  National  Bank  Audit  Com- 
pany bills  of  exchange  and  trade  paper. 

9th.  Will  certify  as  to  the  genuineness 
of  such  paper  offered  for  discount  by  its 
client  banks  and,  under  special  arrange- 
ments limiting  the  amount  for  any  one 
bank,  guarantee  that  it  will  be  paid  when 
due. 

Advantages  of  This  System. 

A threefold  result  would,  therefore,  be 
accomplished  under  this  system. 

1st.  The  Audit  Company,  by  means  of  its 
audit,  establishes  and  certifies  the  fact  that 
the  paper  offered  is  genuine. 

2nd.  It  establishes  and  certifies  that  the 
bank  holding  such  paper  is  sound  and  sol- 
vent. 

3d.  It  becomes  obligated,  through  its 
guarantee,  to  pay  the  amount  due  at  mar 
turity,  should  maker  and  bank  fail  to  do  so. 

The  special  methods  which  the  Audit 
Company  will  use,  perhaps  for  the  first  time 


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THE  BANKERS  MAGAZINE 


in  the  history  of  this  country,  to  identify 
and  classify  banking  paper  will  be  of  such 
a character  that  there  will  be  no  question 
as  to  the  exactness  of  the  identification. 
Certain  definite  and  exacting  rules  and  regu- 
lations will  positively  have  to  be  followed 
by  each  client  bank  in  determining  the  value 
and  status  of  the  banking  paper  that  will 
be  guaranteed  by  the  Audit  Company. 
These  rules  and  regulations  will,  of  course, 
be  largely  determined  by  the  local  conditions 
in  each  community. 

Endorsement  and  Guarantee  of  Commer- 
cial Paper. 

The  copyrighted  seal,  or  emblem,  of  the 
Audit  Company,  “Bieentral  Banking,”  will 
be  stamped  on  all  the  cheeks,  notes,  drafts, 
etc.,  that  will  be  handled  by  its  client  banks. 

Any  one  receiving,  buying  or  selling  bank- 
ing paper  guaranteed  by  the  National  Bank 
Audit  Company  will  have  confidence  that 
such  paper  is  good,  because  he  will  know  that 
it  has  met  the  exacting  requirements  of  the 
National  Bank  Audit  Company. 

This,  indeed,  constitutes  one  of  the  most 
valuable  features  of  the  Bicentral  Banking 
system — the  absolute  confidence  of  the  pub- 
lic in  the  security  of  the  commercial  paper 
identified,  classified  and  guaranteed  by  the 
Audit  Company’s  system. 

As  has  been  previously  stated,  such  com- 
mercial paper  as  will  be  identified  and  guar- 
anteed by  the  National  Bank  Audit  Com- 
pany, when  it  enters  the  discount  market 
will  then  have  for  its  security,  first,  the 
name  of  the  original  maker;  second,  the 
endorsement  of  the  client  bank  accepting 
the  paper,  and  third,  the  absolute  guarantee 
of  the  National  Bank  Audit  Company. 

Commercial  Paper  Will  Have  a Wider 
Market. 

Such  three-name  paper,  known  and  recog- 
nized throughout  the  United  States  as  cer- 
tain of  fulfillment  at  maturity,  is  sure  of  a 
much  wider  market  than  is  possible  under 
present  conditions.  This  paper  thus  be- 
comes a highly  liquid  security  and  can  be 
freely  dealt  in  by  the  client  banks  of  the 
National  Bank  Audit  Company,  even  though 
these  banks  are  hundreds  of  miles  apart. 

For  example:  A note  made  by  an  obscure 
citizen  in  a small  town  in  Ohio,  and  held  by 
a local  bank  practically  unknown  outside  of 
its  home  community  (but,  nevertheless,  one 
of  the  client  banks  of  the  Audit  Company), 
can  be  readily  sold  to  another  client  bank, 
say,  in  New  York  or  Boston. 

COMMERCIAL  PAPER  GUARANTEED  BY  THE 

Audit  Company. 

Under  the  system  adpoted  by  the  Na- 
tional Bank  Audit  Company  an  investor  in 
commercial  paper,  of  its  constituent  banks, 
will  not  have  to  inquire  as  to  the  maker  of 


a note,  nor  as  to  the  solvency  of  the  bank 
offering  it  for  sale.  The  National  Bank 
Audit  Company  itself,  having  made  the 
necessary  investigation,  stands  back  of  it 
by  guaranteeing  the  endorsement  of  the 
bank. 

Banks  will,  therefore,  be  able  promptly 
and  safely  to  transfer  capital  and  credits 
from  one  part  of  the  country  to  another, 
with  a tranquilizing  effect  upon  finance  and 
business  hardly  to  be  estimated. 

Bills  of  exchange  and  genuine  trade  paper 
form  the  most  scientific  basis  of  secondary 
reserve  for  banks. 

Genuine,  identified  and  proven  trade 
paper  forms  the  basis  of  the  credit  systems 
of  every  civilized  nation  of  the  world  except 
the  United  States. 

Foreign  Systems  of  Discount. 

In  Germany,  the  Reichsbank  may  redis- 
count such  paper  and  make  its  payments  in 
bank  notes,  using  such  trade  paper  as  the 
basis  for  two-thirds  of  its  entire  note  issue. 

By  reason  of  the  peculiar  conditions  pre- 
vailing in  the  banking  system  of  America, 
it  has  been  impossible  to  establish  a general 
discount  or  rediscount  market,  because  no 
one  can  know  to  which  class  the  short-time 
paper  held  by  American  banks  belongs,  and 
all  knowledge  of  its  value  is  local,  or  chiefly 
so. 

Back  of  all  genuine,  proven  and  guaran- 
teed trade  paper  there  must  be  convertible 
values  as  security  for  such  paper. 

Advantages  of  Commercial  Paper. 

Bills  of  exchange  and  proven  and  guaran- 
teed trade  paper  are  the  only  forms  of 
short-time  paper  of  which  it  may  be  said 
that  the  element  of  doubt  as  to  payment 
when  due  has  been  practically  eliminated. 
The  bank,  therefore,  having  the  largest 
percentage  of  its  loans  in  this  kind  of  secu- 
rity, is  in  the  best  position  to  meet  any  un- 
usual demand  on  the  part  of  its  depositors, 
for  it  can  get  currency  quickly  for  short- 
time  paper  certain  to  be  paid  when  due. 

Banks  will  be  encouraged  to  employ  as 
much  of  their  funds  as  possible  in  making 
such  loans,  and  the  tendency  will  be  to  en- 
courage trade  transactions  and  to  discour- 
age speculation. 

Bankers  Realize  the  Need  of  a Closes 
Inspection  of  Commercial  Paper. 

The  large  sales  of  commercial  paper  to 
banks  widely  separated  from  the  place 
where  such  paper  originates*  and  with  im- 
perfect means  for  ascertaining  its  value  or 
even  its  genuineness,  have  introduced  a new 
element  of  danger  into  the  conduct  of  the 
banking  business,  which,  however,  would  be 
effectually  guarded  against  by  the  system 
of  inspection,  verification  and  guaranty  es- 
tablished by  the  National  Bank  Audit  Com- 
pany. 


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As  to  the  need  of  some  improved  method 
of  ascertaining  the  validity  and  worth  of 
commercial  paper,  I can  not  do  better  than 
to  quote  the  views  expressed  by  Mr.  Lewis 
E.  Pierson  in  his  recent  annual  address  as 
president  of  the  American  Bankers’  Asso- 
ciation : 

“In  recent  years  the  sale  of  commercial 
paper  and  its  purchase  by  the  bankers 
through  brokers  has  grown  to  vast  propor- 
tions. 

“The  purchase  is  made  upon  the  represen- 
tation of  brokers,  on  statements  of  condi- 
tion of  the  makers  and  upon  credit  infor- 
mation obtained  by  purchasers  from  various 
sources,  all  tending  to  show  the  ability  of 
the  makers  to  pay  their  borrowings  prompt- 
ly at  maturity. 

“Banks  in  the  reserve  cities  also  are  asked 
to  make  large  purchases  for  the  account  of 
correspondents,  and  much  paper  is  sold  on 
option,  by  travelling  salesmen  of  the  brokers, 
direct  to  the  country  banks. 

“The  large  banks  in  the  cities  maintain 
for  the  benefit  of  themselves  and  their  cor- 
respondents extensive  investigating  bureaus, 
which,  in  many  directions,  are  steadily  work- 
ing closer  with  each  other  in  the  exchange 
of  credit  impressions,  so  that  nearly  every 
name  is  always  under  a glaring  searchlight. 

“This  method  of  determining  the  good- 
ness of  each  name,  while  it  has  many  ad- 
vantages, is  never  surely  correct,  and  on 
the  other  hand,  out  of  the  free  exchange 
of  opinions  unjustified  prejudice  often 
creeps  in  to  the  detriment  of  solvent  con- 
cerns. 

“It  would,  therefore,  seem  to  be  a decided 
advantage  to  devise  a regular  system  where- 
by true  conditions  may  be  absolutely  ascer- 
tained to  justify  both  the  sale  and  the 
purchase  of  commercial  paper  and  add  to 
its  availability  as  a desirable  bank  invest- 
ment. 

“The  failure  of  several  large  concerns  in 
recent  years  has  revealed  statements  of  con- 
dition upon  which  the  purchase  of  their 
paper  was  largely  made  to  be  erroneous,  to 
say  the  least,  and  as  a result  losses  aggre- 
gating millions  and  millions  of  dollars  have 
been  sustained  by  the  banks,  although  scat- 
tered in  moderate  amounts  among  a large 
number  of  institutions. 

“The  question,  therefore,  of  regulating  and 
making  safer  in  some  fair  wav  the  growing 
amount  of  commercial  paper  has  been  a live 
topic  among  bankers  for  some  time.  Many 
suggestions  for  the  purpose  of  ascertaining 
true  conditions  have  been  made,  ineluding 
the  registry  by  clearing  houses  of  the  notes 
sold  and  examinations  of  the  affairs  of  the 
makers  by  public  accountants  of  known 
standing. 

“These  requirements  would  seem  to  be 
greatly  desired  and  perhaps  would  best  be 
accomplished  through  a committee  organised 
for  the  specific  purpose  of  recommending 
accountants,  the  method  of  their  examination 


and  form  of  report  and,  with  assistants,  per- 
forming the  function  of  registering  each  and 
every  note  issued  by  concerns  selling  their 
paper  in  the  open  market.” 

It  is  confidently  believed  that  a long  step 
toward  furnishing  the  machinery  necessary 
for  doing  this  work  of  investigation  has 
been  provided  by  the  organization  of  the 
National  Bank  Audit  Company. 

Capital  of  the  National  Bank  Audit 
Company. 

The  field  for  such  an  institution  as  the 
National  Bank  Audit  Company  is  a wide 
one.  There  are  in  the  United  States  ap- 
proximately 26,000  banking  institutions,  with 
total  individual  deposits  of  about  $14,000,- 
000,000.  The  National  Bank  Audit  Company 
contemplates  at  the  outset  admitting  to  its 
system  banks  with  deposits  of  a moderate 
amount,  so  distributed  in  different  States  as 
to  divide  and  limit  any  possible  risk.  As 
the  system  attracts  an  increasing  number  of 
banks,  the  capital  of  the  Audit  Company 
will  be  increased  in  proportion. 

Large  National  Banks  Will  Act  as  Re- 
serve Banks. 

The  client  banks  of  the  National  Bank 
Audit  Company  will  transact  their  redis- 
count business  through  banks  in  the  reserve 
center  cities  and  will  keep  on  deposit  with 
these  reserve  center  banks  balances  com- 
mensurate with  the  amount  of  business  done 
by  them. 

These  reserve  banks  may  buy  from  clients 
of  the  National  Bank  Audit  Company  bills 
of  exchange  and  trade  paper. 

Tends  to  Prevent  the  Hoarding  of  Money. 

The  National  Bank  Audit  Company  and 
the  Bicentral  Banking  System  will  enable 
client  banks  to  transform  cash  credits  into 
actual  cash  with  ease  and  certainty,  and  will 
tend  to  prevent  the  hoarding  of  money. 

Aiding  Banks  in  Times  of  Pressure. 

The  National  Bank  Audit  Company  will 
be  able  to  aid  its  member  banks  in  several 
ways  in  meeting  any  unusual  pressure  for 
currency  or  credit,  even  if  such  pressure 
develops  into  acute  panic. 

A considerable  part  of  the  capital  and 
surplus  will  be  kept  in  first-class  negotiable 
securities.  A portion  of  these  will  be  of  a 
character  which  can  be  lent  to  a bank  as  a 
basis  for  additional  note  circulation  under 
the  A Id  rich- V reeland  law  of  May  30,  1908. 

The  Aldrich-Vreeland  law  provides  two 
methods  of  obtaining  additional  circulation. 
One  of  these  requires  the  formation  of  cur- 
rency associations,  which  have  thus  far  been 
formed  only  in  the  large  cities.  The  other 
method  permits  a bank  to  act  directly,  pro- 


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THE  BANKERS  MAGAZINE 


viding  it  has  already  notes  outstanding  se- 
cured by  United  States  bonds  to  an  amount 
not  less  than  forty  per  cent,  of  its  capital 
stock,  and  has  a surplus  of  not  less  than 
twenty  per  cent.  Such  banks  may  apply  to 
the  Comptroller  of  the  Currency  for  addi- 
tional circulation,  which  may  be  secured  by 
bonds  or  other  interest-bearing  obligations 
of  any  State  of  the  United  States,  or  any 
legally  authorized  bonds  issued  by  any  city, 
town,  county,  or  other  legally  constituted 
municipality  or  district  in  the  United  States 
which  has  complied  with  certain  conditions 
of  solvency. 

The  law  provides  that  banks  complying 
with  the  requirements  above  set  forth  may 
increase  their  circulation,  in  case  of  emer- 
gency, to  an  amount  equal  to  the  total  of 
the  unimpaired  capital  and  surplus.  Prior 
to  the  act  of  1908  they  could  not  in  any 
case  issue  notes  in  excess  of  capital. 

It  will  be  the  aim  of  the  National  Bank 
Audit  Company,  as  soon  as  it  begins  opera- 
tions, to  confer  with  the  Secretary  of  the 
Treasury  as  to  the  classes  of  municipal 
bonds  most  acceptable  to  him  as  security 
for  notes  under  the  above  provisions.  A 
sufficient  portion  of  the  capital  to  meet  de- 
mands of  member  banks  will  be  invested  in 
such  securities  and  will  be  kept  among  the 
assets  of  the  company,  subject  to  immediate 
use.  In  case  a bank  finds,  as  the  result  of 
pressure  during  the  crop-moving  season  or 
for  other  reasons,  that  it  needs  additional 
notes  and  has  not  the  class  of  securities 
acceptable  to  the  Secretary  of  the  Treasury 
under  the  law,  the  National  Bank  Audit 
Company  will  be  prepared  to  lend  such  se- 
curities in  exchange  for  assets  of  the  bank 
which  have  been  ascertained  by  its  audit  to 
be  good — either  commercial  paper,  railway 
bonds  or  other  classes  of  bonds  not  falling 
strictly  within  the  law. 

Arrangements  can  be  made,  in  the  case 
of  banks  which  are  in  close  touch  with  the 
Audit  Company,  for  the  direct  transfer  of 
the  necessary  securities  at  once  to  the  Treas- 
ury at  Washington,  where  an  officer  of  the 
Audit  Company  will  attend  to  the  details 
necessary  to  hasten  the  prompt  delivery  of 
the  new  currency. 


The  Audit  Company  will  also  be  in  a 
position  to  convert  its  securities  promptly 
into  cash. 

'Thus  no  solvent  bank  which  is  a regular 
client  of  the  Audit  Company  need  have  any 
occasion  to  fear  that  it  will  be  embarrassed 
by  a currency  famine  or  forced  to  even 
temporary  suspension  for  lack  of  means  for 
meeting  the  legitimate  demands  of  its  bor- 
rowers and  depositors. 

A Practical  Endeavor  to  Help  in  Solving 
Some  of  Our  Banking  Problems. 

Whatever  may  be  the  cause  of  panics, 
they  are,  in  this  country,  almost  invariably 
marked  by  a distrust  of  the  banks.  This 
does  not  imply  that,  in  the  ordinary  sense, 
the  people  believe  the  banks  to  be  misman- 
aged. The  loss  of  confidence  becomes  more 
or  less  general,  the  public  fearing  that  the 
banks  as  a body  will  be  forced  to  suspend 
payments,  either  entirely  or  partially.  Ex- 
perience has  shown  this  fear  to  be  well 
founded. 

It  is  the  hope  of  the  National  Bank  Audit 
Company,  under  its  system  of  Bicentral 
Banking,  to  take  a step  in  the  direction  of 
removing  the  causes  of  distrust  which  un- 
doubtedly tend  to  aggravate  the  ill  effects 
of  panics.  This  will  be  done,  first,  by  a 
system  of  bank  examination  such  as  will,  it 
is  hoped,  command  the  respect  of  the  banks 
and  enhance  their  confidence  in  one  another: 
second,  by  an  assurance  of  the  quality  of 
the  bank's  assets,  thus  gaining  the  well-jus- 
tified confidence  of  the  depositor;  third,  by 
the  inspection,  verification  and  guarantee  of 
banking  paper,  thus  tending  to  stabilize 
the  country’s  credits;  fourth,  bv  establishing 
a rediscount  fund,  where  legitimate  commer- 
cial paper,  after  proper  inspection  and  guar- 
antee, may,  in  case  of  need,  be  converted 
into  cash. 

The  principles  upon  which  the  National 
Bank  Audit  Company  will  establish  its 
business  are  almost  as  old  as  banking  and 
commerce  themselves,  though  some  novel 
methods  of  applying  them  have  been 
adopted. 

A study  of  the  practicability  and  efficien- 
cy of  these  methods  is  confidently  invited. 


NEW  $10  COUNTERFEIT  BILL 


ONE  of  the  best  counterfeit  ten-dollar 
bills  of  recent  years  has  been  discov- 
ered by  the  secret  service.  The  note 
is  such  a fine  piece  of  workmanship  that 
Chief  Wilkie  declares  the  bill  will  give  the 
public  a great  deal  of  trouble,  particularly 
on  the  Pacific  coast. 

The  bill  is  a counterfeit  national  bank 
note  on  the  Pasadena  National  Bank  of 
Pasadena,  Cal,  It  is  composed  of  two 
pieces  of  paper,  a front  and  a back  stuck 
together  with  the  silk  fibers  between.  It 


has  the  portarit  of  President  McKinley, 
and  one  of  the  marks  which  will  identify 
it  to  the  public  is  a bad  break  in  the  back- 
ground under  McKinley's  left  shoulder. 
The  face  of  the  note  is  a little  lighter  than 
the  genuine. 

The  etching  and  rough  work  on  the  back 
are  badly  done. 

It  is  of  the  series  of  1908,  bearing  the 
check  letter  “F.”  Chief  Wilkie  advises  that 
notes  of  that  issue  be  carefully  examined 
before  acceptance. 


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BANKING  PUBLICITY 

Conducted  by  T.  D.  MacGregor 


HOW  BANKS  ARE  ADVERTISING 

Note  and  Comment  on  Current  Financial  Publicity 


THE  Ithaca,  (Mich.)  Commercial  Bank 
conducts  an  annual  “Corn  Contest/’ 
offering  prizes  for  the  best  ears  of 
corn  raised  by  the  farmers  in  its  territory. 


The  National  Hudson  River  Bank  of 
Hudson,  N.  Y.,  advertises:  “For  the  con- 
venience of  our  customers  we  have  a place 
in  the  bank  for  private  conversations,  letter 
writing  or  other  business  matters.  This 
room  is  at  your  service.” 


Halley's  comet  is  an  old  story  now,  but 
it  is  not  too  late  to  refer  to  some  advertis- 
ing done  at  the  time  of  the  comet’s  visit 
by  the  First  National  Bank  of  Stevens 
Point,  Wis.  Cashier  J.  W.  Dunegan  sent 
us  copies  of  these  ads.,  which  received  con- 
siderable attention  locally.  One  of  the 
clever  ads.  reads  as  follows: 

Halley’s  Comet  passed  between  the  earth 
and  sun  today.  During  the  time  the  comet 
was  in  transit  across  the  sun’s  disc,  the 
earth  was  swept  by  the  celestial  search- 


TUs  Bank  Enters  Upon  Its 
40th  Year  Today 


7W.  U.  tho.  pttap  rnm  tttac  U~  to 


At  Regards  Safety 


The  Merchants  & Clerks  Savings  Bank 


What  Will  You  ' 
Do  With  the  Proceed* 
From  the  Sale  of 


WUl  Toe  Centbue  to  Astern*  the 
t Akooe  Risk  When  This  Street  Book  t 
bodes  Toot  Account  end  Ofers  \ 
You  Etery  Protection? 

1 Plan  ten  National  Bank, 


Start  Y our  Savings  Account 

or  transfer  Your  Balance  to  this  Big  Bank  before  July  10 
biH fl  It  wifr  eertr  Four  per  cent  Imeeaei  from.  July  1st 


The 

Union 

National 

Bank 


The  Columbus  Savings  & Trust  Go 


o/tknr  rfc,  Jin 


A Collection  of  Special  Ads. 


731 


Digitized  by  t^ooQle 


732 


THE  BANKERS  MAGAZINE 


light.  There  was  no  danger  to  the  earth 
from  the  “tail”  of  diffused  sunlight,  as  we 
are  still  moving  along  through  space  at  the 
usual  rate. 

Getting  back  to  earthly  things,  how  about 
your  finances?  If  your  opportunity  came 
today,  would  you  be  ready?  If  you  would 
get  along  in  the  world  you  must  have  money, 
and  the  only  way  to  have  money  is  to  save 
it.  You  can  start  a savings  account  here 
with  one  dollar.  We  pay  3 per  cent,  on  sav- 
ings and  certificates. 

You  intend  to  save— start  now. 

All  business  confidential. 


The  First  Mortgage  Guarantee  and  Trust 
Company,  of  Philadelphia,  naturally  uses 
Benjamin  Franklin’s  thrift  sayings  as  much 
as  possible  in  its  advertising.  A mailing 
enclosure  slip  contains  this; 

The  “Thrift  Family”  In  America  is  found- 
ed on  the  Philosophy  of  Benjamin  Franklin. 
Hear  him: 

“The  art  of  getting  riches  consists  very 
much  in  thrift.” 

“If  you  would  be  wealthy,  think  of  saving 
more  than  of  getting.” 

“If  you  know  how  to  spend  less  than  you 
get,  you  have  the  philosopher’s  stone.” 

“He  who  waits  upon  fortune  is  never  sure 
of  his  dinner.” 

“Theret,  are  three  faithful  friends— an  old 
wife;  an  old  dog,  and  ready  money.” 

You  should  join  our  “Thrift  Family.”  We 
pay  four  per  cent  (4%)  on  savings,  and  al- 
low withdrawals  without  notice. 


“A  Story  of  Growth,  A City  and  a 
Savings  Bank,”  is  the  title  of  an  interesting 
folder  issued  by  the  Security  Savings  Bank, 
illustrating  graphically  the  remarkable 
growth  in  territory  and  population  of  the 
city  of  Los  Angeles  and  the  bank  itself.  It 
is  a most  effective  piece  of  advertising 
literature. 


The  advertising  manager  of  the  First  Na- 
tional Bank  of  Montgomery,  Ala.,  is  a real 
live  wire,  and  one  of  the  best  things  he  has 
done  is  a booklet  entitled,  “The  Business  of 
Getting  Along  and  How  a Good  Bank  Helps 
Out.”  It  is  most  attractively  printed  in  vest- 
pocket  size  and  is  full  of  just  the  short, 
snappy  stuff  that  busy  people  like  to  read. 


The  Continental  and  Commercial  Na- 
tional Bank  of  Chicago  has  issued  its  very 
valuable  book  of  Crop  Reports  and  General 
Business  Conditions  being  a review  of  con- 
ditions os  they  exist  to-day  as  seen  by  some 
7,000  bankers  and  business  men.  This  is  the 
tenth  annual  report  of  this  kind  issued  by 
the  bank.  On  the  whole  the  business  outlook 
is  considered  favorable. 


The  Wisconsin  National  Bank  of  Mil- 
waukee has  issued  its  handy  pocket  “Wis- 


consin Bank  Directory,”  which  it  distributes 
gratuitously.  It  contains  a very  full  state- 
ment of  the  bank  issuing  it  and  this  is  the 
only  advertising  matter  in  the  book. 


The  Naugatuck  Savings  Bank,  Nauga- 
tuck, Conn.,  makes  a specialty  of  furnishing 
industrial  concerns  in  its  parish  with  pay 


envelopes  which  carry  some  very  strong  ar- 
guments for  starting  and  maintaining  a 
savings  account  in  the  bank.  H.  A.  Dalby 
looks  after  the  advertising  of  this  bank. 
We  reproduce  some  of  his  newspaper  ads., 
showing  a rather  unusual  combination  real 
estate  and  bank  advertisement  idea. 


The  First  National  of  Hood  River,  Ore., 
issues  a good  booklet,  containing  its  very 
satisfactory  statement  and  ornamented  with 
cuts  of  its  President  Fred  S.  Stanley  and 
of  the  interior  and  exterior  of  the  bank. 


A booklet,  entitled  “Your  Bank  Rela- 
tions,” gotten  out  by  the  Lake  County  Bank 
of  Madison,  S.  D.,  is  one  of  the  most  con- 
fidence-inspiring bank  booklets  we  have  seen. 


Digitized  by  t^ooQle 


BANKING  PUBLICITY 


733 


ANY  DEPOSITOR 

la  -oar  Banking  Department  can  ar- 
range to  do  banking  basinets  in  any 
of  ojt  branch  banking  offices.  It  Is 
something  of  an  advantage  to  have 
banking  facilities  whether  yon  are  in 
Jamaica— Long  Island  ctty-Brookiyn 
* or  on  Broadway,  Manhattan. 

There  la  convenience  as  well  as  pres- 
tige in  dotngBaaklag  business  with  the 
Title  Goarantee  and  Treat  Company. 

The  teat  of  a Bank’s  strength  Is  the 
proportion  of  its  resources  to  Its 
deposit  obligations.  This  Company, 
iaclndlng  stockholders’  liability,  has 
behind  Its  deposits  more  than  $19,- 
000,000  of  its  own,  besides  the  se- 
curities and  lotim  In  which  it  has  in- 
vested the  deposits.  There  are  but 
few  large  beaks  in  this  country  that 
have  so  large  a ratio  of  capital  and 
surplus  to  deposits. 


IS  YOUR  HOUSE  IN  ORDER? 

Most  men  leave  their  boose  and 
their  affairs  in  disorder.  That  is,  they 
die  intestate.  Their  property  Is  at 
once  involved  and  the  aid  of  the  Conrts 
is  often  Invoked  to  straighten  matters 
cut. 

Some  men  leave  dlrect'ons  with  a 
personal  friend.  Sometimes  the 
friend  dies  or  makes  a mistake,  and 
the  widows  and  orphans  suffer  the 
consequences. 

It  win  cost  yon  co  more  to  have 
this  great  institution  draw  your  Will 
and  carry  ont  its  provisions,  when  the 
t’rae  comes,  than  it  wonld  to  have  an 
individual  do  the  same  thing. 

The  life  of  th's  institution  ft 
penxtusL  It  has  large  resources  and 
a wen  trained  organization  of  special- 
ists. This  safeguards  your  interests 
and  guarantees  you  against  mistakes 
or  dishonesty. 

TiTlE  GUARANTEE 
AND  TRUST  C9 

Capital  and  Surplus,  - $14,000,000 


'CONSTRUCTIVE 

BANKING 


Jtty,  therefore  wa  do  an  in 
to  serve  them. 

We  often  go  ont  of  our  way  to  help 
depoattors,  knowing  that  If  their  profits 
increase,  onr  business  win  be  hunt  op. 

It  is  worth  while  to  have  a bank 
account  with  as. 

mE  GUARANTEE 
AND  TRUST  C9 

Capital  and  Surplus,  . $14,000,000 
asorauonnr,  Jamaica 
iMr«n,ET.  mat— mat. 


Supplemented  by  Form  Letters 


This  bank  gets  out  very  attractive  printed 
matter,  a recent  statement  folder  with  a 
tipped  on  photographic  cut  of  the  bank’s 
building  being  an  especially  good  one.  Vice- 
President  John  W.  Wadden  looks  after  the 
advertising. 


The  First  National  Bank  of  Northfork, 
W.  Va.,  going  on  the  principle  that  know- 
ledge begets  confidence,  issues  its  statement 
in  such  a detailed  and  explanatory  manner 
that  it  is  readily  comprehensible  by  the 
layman. 


North  & Company,  bankers,  Unadilla,  N. 
Y.,  announce  to  their  depositors  a change 
of  plan  in  regard  to  the  bank’s  investments 
as  follows: 

To  Our  Depositors: 

In  order  to  further  safeguard  your  de- 
posits, we  beg  to  announce  that  because  of 
changed  conditions  and  increased  risks  in 
lending  money  on  notes,  we  will,  beginning 
with  January  1st.  1911,  invest  less  in  notes 
and  more  In  bonds — safety  of  principal  being 
preferable  to  high  interest  income. 

No  promiscuous  outside  loans  will  be  made 
— and  only  good  commercial  paper  and  col- 
lateral loans  accepted  from  our  depositors, 
to  such  extent  as  their  balances  warrant. 

With  the  increased  number  of  banks  in 
this  section,  there  is  danger  of  “double  dis- 
count lines’*  by  some  borrowers  getting  all 
they  can  at  several  banks. 

We  have  our  demand  deposits  in  U.  S. 
bonds  and  cash  on  hand  and  in  reserve  banks; 
other  deposits  in  New  York  State  bonds 
and  high  grade  securities. 

The  high  quality  and  convertibility  of  our 


assets  render  our  bank  an  unusually  strong 
one.  It  is  our  aim  to  keep  it  in  such  con- 
dition that  there  can  be  no  safer  place  In 
which  to  deposit  your  money. 

Very  respectfully, 

NORTH  & CO. 


The  Jamaica  office  of  the  Title  Guarantee 
& Trust  Company,  New  York,  Robeson  L. 
Low,  manager,  sends  out  form  letters  to  a 
large  list  of  names  every  month.  Simul- 
taneously advertisements  covering  the  same 
topics  appear  in  local  Long  Island  papers. 

Mr.  IjOW  says  that  this  advertising  is 
proving  resultful.  We  reproduce  three  of 
the  advertisements  issued  this  fall  and  fol- 
lowing are  the  three  form  letters  that  were 
used  in  connection  with  them; 

Dear  Sir: — 

When  you  deposit  money  you  should  be 
sure  that  the  bank  will  be  in  a position  to 
pay  it  back  when  you  want  It. 

The  test  of  a bank’s  strength  is  the  pro- 
portion of  capital  and  surplus  to  its  deposit 
obligations.  This  company,  including  stock- 
holders’ liability,  has  behind  its  deposits 
more  than  $19,000,000  of  its  own,  besides  the 
deposits  themselves.  There  Is  no  other  bank 
of  Long  Island  that  can  make  such  a show- 
ing. 

You  are  invited  to  call  at  350  Fulton  Street 
when  we  will  be  pleased  to  furnish  any  fur- 
ther information  you  may  desire. 

Yours  very  truly, 

R.  L.  LOW, 

Mgr.  Banking  Dept. 

Dear  Sir: — 

Last  July  a friend  of  ours  was  taken  ill. 
but  his  condition  was  not  considered  at  all 


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7 34 


THE  BANKERS  MAGAZINE 


dangerous.  He  had  been  moderate  in  his 
habits  and  lived  an  active  out-door  life. 
While  he  was  confined  to  his  room  he  had 
time  to  think  of  many  things  which  the 
rush  of  affairs  previously  had  prevented.  He 
decided  to  make  a will,  so  he  sent  for  a 
lawyer  and  explained  that  he  wanted  certain 
properties  to  go  to  a favorite  nephew,  who 
had  recently  married.  Also  what  he  wanted 
done  with  other  portions  of  his  estate  and 
how  the  family  heirlooms  were  to  be  dis- 
tributed. 

Mr.  S.  was  still  sick  in  bed  when  the  will 
was  finished,  but  he  and  the  lawyer  went 
over  it  together  and  it  was  pronounced  sat- 
isfactory and  witnesses  were  called  in.  Mr. 
S.  said.  “Wait  a minute  till  I change  my 
position  so  that  I can  write  more  comfort- 
ably and  I will  sign  the  will.”  He  gave  his 
pillow  a push,  sat  up  in  bed,  reached  for  tne 
pen,  but  before  he  could  put  the  pen  to  pa- 
per, he  fell  back  dead.  He  had  no  idea  of 
going  then  or  for  years  to  come.  His  wishes 
as  expressed  in  the  will  were  not  carried  out 
because  it  was  not  “executed.”  He  waited 
too  long. 

Why  not  make  provision  while  you  are 
strong  and  well  for  the  care  of  your  estate? 


If  an  accident  happens,  or  if  you  are  111, 
you  will  not  then  be  worried  about  things 
that  might  have  been  provided  for.  A will 
is  not  irrevocable.  Its  provisions  can  be 
changed  by  the  maker  whenever  he  wishes. 
Wo  have  a booklet  about  trust  and  executor- 
ships that  may  interest  you.  We  will  send 
it  to  you  for  the  asking. 

Yours  truly, 

R.  L.  LOW, 

Manager  Banking  Department. 

Dear  Sir: — 

Eighteen  months  ago  one  of  our  depositors 
came  into  our  Jamaica  office  and  said 
he  was  worried  about  his  business — that  his 
sales  w’ere  satisfactory,  but  that  apparently 
he  did  not  have  enough  working  capital.  We 
went  over  the  situation  together.  Some 
changes  were  made  in  methods  of  financing 
the  business.  We  loaned  him  some  money. 
To-day  he  is  doing  twice  as  much  business 
and  is  in  easy  circumstances  and  making  a 
good  profit. 

Another  instance:  Last  July  “Mr.  X.” 

came  in  and  asked  for  an  increased  line  of 
discount.  The  standing  of  “Mr.  X.”  was 


We  Recommend  for  Investment 


At  the  Present  Price* 

Americas  Light  A Traction  PM.  Oti*  Elevator  PM. 

Behcocfc  & WUcox  Com.  Phalp*.  Dodge  Co. 

Bordea’e  Condensed  Milk  PM.  Royal  Baklag  Powder  PM. 
Do  Poof  Powder  PM.  Uoderwood  Typewriter  PM. 


WE  BUY  AND  SELL  Tf 


J.  HATHAWAY 

67  Exchange  Place  Basil 


The  Investment  Field 


la  .act  eon  fined  to  Uw  ooearttUo  trad**  I*  ••  0*  Mow  Tw>  B 

KTTT  BwKSK*  i~~. 

Light  * Traction  eonpwlN  art  Mar  parehaaeS  btoaaa*  tho  dly* 
hi e»<U  returned  and  dividend  record  at  tktoa  coatpaslea  arc  each  aa  to 
convince  the  moot  skeptical  that  ttar  will  bo  conllMMd. 

We  are  specialist*  la  inactive  otoefca  and  boado  and  are  oaaataaUv 
*1- — the  Inveotment  field. 


Our  descriptive  booklet  of  taeu  will  bo  mailed  upon  reqaeat  to  later, 
rated  In  rest  ora. 


J.  HATHAWAY  POPE  & CO. 

167  Exchange  Place 

New  York  City* 


Fundamental  Investments 


That  I*  the  term  we  u*e  in  describing  die  aecuritiea  we  handle. 
The  securities  of  s corporation  haring  s monopoly  of  s neces- 
sity are  rightly  considered  very  desirable  from  an  investment 


standpoint. 

We  have  for  sale  particularly  go< 
we  recommend  to  Investors. 

Write  for  full  information. 

J.  HATHAWAY 

67  Exchange  Place  p*°~  ^ 


Helping  the  Small  Investor 


The  moderate  or  small,  investor  is  entitled  to  m much  con- 
sideration from  aa  investment  broker  se  a larger  oae. 

We  are  specialism  In  inactive  stocks  and  hoods  and  at  present 
have  some  offerings  of  particular  interest  and  value  to  the 
•mall  investor. 

We  will  be  pleased  to  give  full  description  upon  request. 

J.  HATHAWAY  POPE  & CO. 

67  Exchange  Place  New  York  City 


Good  Investment  Ads. 


Digitized  by  G.oooLe 


BANKING  PUBLICITY 


7 35 


Excellent  Display  and  Argument 


beyond  question.  We  analyzed  the  situa- 
tion with  him  and  he  decided  he  would  be 
better  oft  not  to  increase  his  line.  He  came 
In  last  week  and  said  it  turned  out  as  the 
analysis  had  shown. 

The  foregoing  might  be  called  Construc- 
tive Banking.  The  Constructive  Banker 
aims  to  make  not  only  “good  loans" — but  to 
lend  money  in  such  a manner  as  to  help 
his  depositors  to  the  best  advantage. 

We  offer  you  in  our  Jamaica  office  the  ad- 
vantages of  Constructive  Banking  and  re- 
mind you  that  you  are  dealing  with  the 
stiongest  financial  institution  on  Long 
Island. 

Very  truly  yours, 

R.  L.  LOW, 

Mgr.  Bk.  Dept. 

The  advertising  of  this  company,  the 
largest  of  its  kind  in  the  country,  is 
handled  by  The  Siegfried  Company,  New 
York,  an  agency  specializing  in  high-grade 
financial  advertising. 

The  Ladd  & Tilton  Bank,  Portland,  Ore., 
sends  out  a little  portfolio  of  views  of 
Portland  with  concisely  stated  facts  about 
the  “Rose  City.” 

Mr.  John  W.  Wadden,  vice-president  of 
the  Lake  County  Bank,  Madison,  S.  D., 
writes:  * 

I am  sending  you  to-day  under  separate 
cover  for  your  inspection  and  criticism,  a 
few  newspapers  containing  some  of  the  ad- 
vertisements u>ed  in  our  daily  newspaper 
campaign. 


We  occupy  the  same  position  in  the  paper 
from  day  to  day,  and  change  our  copy,  to- 
gether with  the  form  and  border  twice  a 

The  trade  mark  we  are  using  was  adopted 
only  a short  time  ago,  and  as  soon  as  possi- 
ble it  is  our  intention  to  have  It  appear  on 
all  the  stationery  used  in  the  bank. 

Your  good  magazine  has  been  of  Invaluable 
assistance  to  us  In  our  advertising. 

We  reproduce  a group  of  these  adver- 
tisements which  appeared  in  liberal  space, 
“next  to  reading  matter.”  The  white  space 
for  display  and  the  use  of  the  trade-mark 
emblem  are  commendable.  The  copy  of 
the  advertisements  is  quite  appropriate  and 
to  the  point.  This  is  good  advertising  and 
ought  to  bring  results. 

The  Granite  Savings  Bank  and  Trust 
Company  of  Barre,  Vt.,  is  distributing  some 
very  effective  leaflets,  two  of  which  are, 
“The  Margin  of  Safety,’  and  Why  Start 
n Savings  Account?” 

In  sending  its  advertisements  to  the  news- 
papers the  Fidelity  Title  and  Trust  Com- 
pany of  Pittsburgh  furnishes  the  printer 
with  a model  ad.  set-up,  with  these  instruc- 
tions: 

Please  set  this  advertisement  in  spice 
two  columns  wide,  alx  inches  deep.  Follow 
the  type-an angement  shown,  with  close  at- 
tention to  detail,  using  the  same  type-fares.. 
This  advei  tisement  for  style  only.  New 
copy  attached. 


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THE  BANKERS  MAGAZINE 


A Few  Good  Ones 


“The  New  Era”  is  the  subject  of  a leaflet 
issued  by  the  Franklin  Society  for  Home 
Building  and  Savings,  New  York.  It  quotes 
favorable  remarks  of  the  State  Superin- 
tendent of  Banking  in  regard  to  good  build- 
ing and  loan  associations.  This  society  re- 
cently sent  out  a very  successful  form  let- 
ter, as  follows: 

Your  account  indicates  that  you  are  in- 
terested in  the  Society.  And  the  Society 


has  always  tried  to  deserve  the  excellent 
good  will  of  all  its  patrons. 

Many  changes  have  been  made  in  the 
twenty -two  years  of  its  existence,  always 
with  the  intent  to  further  safeguard  the  in- 
terests of  the  investor  and  to  create  methods 
of  greatest  convenience  to  its  members. 

With  each  change  for  the  better,  there  has 
been  a new  impetus  in  its  business  and  in 
spite  of  the  hard  times  the  Society  is  en- 
joying a most  healthy  growth. 

October  is  a savings  bank  month.  Yon 


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BANKING  PUBLICITY 


737 


know  that  deposits  made  up  to  Monday,  Oc- 
tober 3rd,  will  earn  from  October  1st.  Build 
up  your  own  account.  Tell  your  friends 
about  the  Franklin  Society,  and  induce  them 
to  open  an  account  with  it. 

Yours  very  truly, 

HENRY  A.  THEIS, 
Second  Vice-President. 

“The  way  to  wealth  is  as  plain  as  the 
way  to  market;  It  chiefly  depends  on  two 
words,  industry  and  frugality.” — BEN 

FRANKLIN. 

Mr.  Theis  writes  about  this  letter  as 
follows: 

The  enclosed  letter  was  sent  to  about 
two  thousand  of  our  depositors,  at  a total 
cost  of  about  $60.  Up  to  date  I have  been 
able  to  trace  twelve  accounts  whose  initial 
deposits  total  $1,750.  Besides  that  it  brought 
forth  one  deposit  of  $2,500  from  an  old  mem- 
ber, It  is  impossible  to  tell  how  many  fur- 
ther deposits  were  instigated  by  this  letter. 


The  Bentley ville  National  Bank,  Bentley- 
ville,  Pa.,  writes: 

Your  department  of  Banking  Publicity  is 
the  most  interesting  part  of  your  Magazine 
to  us  and  we  would  be  pleased  to  see  it  in- 
creased in  usefulness  to  the  country  banker. 

We  do  want  to  help  the  country  banker 
and  can  do  so  to  more  purpose  if  the  coun- 
try bankers  themselves  will  help  by  sending 
us  samples  of  their  advertising  matter  and 
telling  us  about  their  experience  in  getting 
new  business  by  advertising.  We  would  like 
to  make  an  “experience  meeting”  of  this 
department. 

2*-* 

ILLUSTRATED  ADVERTISEMENTS 

The  Value  of  Pictures  in  Driving  Home  an 
Advertising  Point 

MR.  C.  E.  Zimmerman,  who  has  drawn 
a good  many  designs  for  illustrated 
bank  advertisements  writes  as  fol- 
lows on  the  value  of  illustration  in  adver- 
tising: 

The  ticking  of  the  ever  faithful  clock  is 
steady,  but  its  monotony  soon  makes  it  In- 
audible. 

When  advertising  is  the  same  thing  over 
and  over  again  or  is  commonplace  in  any 
particular  it  soon  becomes  as  monotonous 
as  the  tick  of  a clock  and  attracts  as  little 
attention. 

With  your  advertising  in  the  paper,  you 
are  In  competition  with  three  things  for  the 
reader’s  attention:  with  the  news  end  of 
the  paper,  the  editorial  part,  as  well  as  the 
other  advertisers.  The  readers  do  not  take 
the  paper  or  magazine  to  read  the  ads,  so 
you  must  in  some  way  gain  their  attention 
in  order  to  influence  them.  At  the  present 
time,  attention  is  considered  to  be  at  least 
seventy  per  cent,  of  the  value  of  an  adver- 
tisement. 

You  can  readily  prove  this  yourself  by 
simply  picking  up  some  magazine,  turning 
through  the  pages  and  marking  some  ads 
that  you  stop  to  read.  You  will  see  that 
every  one  of  them  has  a good  illustration. 
An  illustration,  however,  must  do  more 


Th«  aluK  <*  0MM17 

EumVrrla*  JW»  to  O' 
jtmt  Itto  oared 

401  tcooniinr  t»  tto  tpM 

Bur«M  4 Utcr.  fcital  •*»  to  rr**T 

dollar  «oni«d  and  Orawta*  0*  toWM*  «* 

U*r  weld  tor,  tod  I1UM4U.U  ■»  «*• 

„ RnsMtor  ttot  it  only  » to****  » * 

Or.  conu  to  dollar  to  **  thin  (ret  M* 

C*«  At  court— <%  CortpcnmiH  Twko  a f* t 

M'to  Uo%*  To*  ProtH*. 


Class”  Appeal 


than  simply  obtain  the  reader’s  attention. 
Advertising  is  only  another  form  of  sales- 
manship, and  you  know  that  a merchant 
who  would  attract  people’s  attention  by 
getting  upon  a barrel  on  a street  corner 
would  not  sell  many  goods. 


Digitized  by  t^ooole 


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THE  BANKERS  MAGAZINE 


In  the  same  way  a grotesque  illustration 
or  for  that  matter  an  illustration  of  any  na- 
ture may  be  striking  and  still  if  it  fails  to 
carry  home  the  idea  of  the  advertisement 
little  good  will  be  accomplished. 

While  the  reader  realizes  the  truth  of  thi» 
text  it  would  not  have  the  same  meaning  to 
him  without  an  illustration  which  carries 
home  the  idea. 

Although  attention  is  by  far  the  most  im- 
portant part  of  any  advertisement,  an  il- 
lustration does  even  a great  deal  more  than 
securing  it.  It  would  take  many  times  the 
amount  of  space  to  make  a reader  understand 
what  he  can  see  at  a glance  when  it  is 
placed  right  before  him.  It  is  the  same  old 
story  of  seeing  is  believing. 

People  furthermore  like  to  look  at  pictures 
and  they  demand  to  be  interested.  As  a 
race  we  are  too  busy  to  read  anything  that 
is  not  clear  and  plain  or  to  give  attention 
to  anything  that  requires  an  effort  on  our 
part. 

If  many  an  advertiser  who  knows  he  is 
not  securing  results  would  read  his  own  ad- 
vertisements from  an  unprejudiced  stand- 
point, he  would  see  in  an  instant  there  was 
nothing  to  interest  him,  let  alone  anything 
to  attract  his  attention. 

A merchant  who  has  a line  of  regular  and 
permanent  patronage  may  consider  at  first 
that  they  are  naturally  interested  in  hl& 
advertising  and  will  be  inclined  to  read 
them. 

Elbert  Hubbard  says  that  the  best  way  to 
keep  the  old  customers  is  to  go  after  the 
new  ones.  A strong  point  of  this  statement 
overlooked  by  most  advertisers  is  the  fact 
that  the  thing  that  will  attract  the  new 
trade  will  be  pretty  sure  to  hold  the  old. 
Comparatively  few  advertisers  are  without 
competition.  Often  this  being  equal,  they 
have  to  be  different  in  their  advertising 
from  their  competitor  before  they  can  ex- 
pect to  attract  trade  away  from  him. 

FUNDS,  FACTS  AND  SPACE 

Essentials  of  a Successful  Advertising  Campaign 

HENRY  DIMSE,  vice-president  of  the 
Century  Bank  of  New  York  in  an 
address  recently  said: 

The  question  of  what  constitutes  good 
bank  advertising,  if  it  had  been  presenteo 
to  the  “good  old  stock”  in  the  banking  busi- 
ness of  years  gone  by,  would  no  doubt  have 
brought  forth  the  reply  that  he  was  not  In- 
terested. because  to  him  it  was  considered 
undignified  for  the  banker  not  only  to  ad- 
vertise his  institution  but  to  solicit  accounts. 
To  the  banker  of  the  present  time  who  is 
giving  considerable  attention  to  advertising, 
his  thought  on  this  question  would  be  that 
good  advertising  means  not  what  is  morally 
good,  but  how  can  the  business  of  the  insti- 
tution show  healthful  growth  through  this 
mea  ns. 

To  obtain  this  lesult  be  recognizes  that 
through  publicity  lie  has  seen  successful 
mei  chants  and  tiadrsmen  increase  their 
business  by  lining  the  newspapers  to  biing 
> efore  the  public  what  is  to  be  offeied. 

What  the  nature  of  the  ad\ei  Using  should 
be.  and  in  what  tonn  it  should  be  presented. 


requires  careful  consideration.  The  adver- 
tisement should  be  attractive,  so  it  will 
catch  the  attention  of  the  reader,  and  It 
should  emphasize  the  strength  of  the  insti- 
tution by  showing  its  capital,  surplus,  un- 
divided profits,  and  the  reserve  carried  for 
the  security  of  depositors,  with  a statement 
of  what  the  bank  can  do  for  its  prospective 
customers.  Such  an  advertisement  should 
not  be  continued  for  any  great  length  of 
time  without  change,  so  that  new  features 
of  Interest  to  the  proposed  patron  of  the 
bank  will  be  brought  to  his  attention. 

The  position  of  the  advertisement  Is  of 
great  importance.  It  should  be  so  placed 
that  it  will  attract  the  eye  of  the  reader. 
The  double  column  quarter  page,  or  the 
single  column  half  page,  usually  bring  the 
best  results  In  this  direction. 

Funds,  Facts  and  Space  tiie  Elements. 

To  carry  on  a successful  campaign  of  ad- 
vertising the  essentials  are:  Funds,  Facts 
and  Space.  WCh  this  ammunition  there  is 
no  reason  why  an  effectual  growth  of  the 
bank's  business  should  not  be  obtained. 

As  to  funds:  There  should  be  a sufficient 
appropriation  allotted  for  judicious  adver- 
tising, which  should  not  be  considered  as  an 
expense,  but  rather  as  an  Investment,  Just 
as  rent  may  be  considered  for  location.  Too 
often  the  question  of  how  much  it  will  cost 
is  considered,  rather  than  what  will  be  the 
results. 

Regarding  facts:  They  should  be  educa- 
tional instead  of  the  stereotyped  statement 
of  a bank  with  its  list  of  officers  and  direc- 
tors, which  so  often  is  published.  The  pub- 
lic should  be  made  acquainted  with  the 
growth  of  the  institution  in  every  direction 
from  time  to  time,  explaining  that  Its  man- 
agement is  alert  and  progressive,  and  that 
its  policy  is  up  to  the  times.  The  compo- 
sition should  be  in  the  nature  of  a talk  with 
business  men,  and  should  be  changed  fre- 
quently, so  that  new  thoughts  of  interest 
will  be  presented. 

Consideration  of  space:  As  results  are 
looked  for,  the  matter  should  attract  atten- 
tion so  that  the  reader  may  be  convinced. 
Display  type  should  not  be  sparingly  used  so 
that  the  important  features  of  the  advertise- 
ment may  be  brought  out. 

The  experienced  advertiser  knows  that 
persistency  is  required  to  obtain  publicity, 
and  that  while  immediate  results  may  not 
be  shown,  eventually  the  results  looked  for 
will  be  obtained,  and  the  amount  expended 
in  the  direction  of  advertising  will  be  fully 
compensated. 


PRACTICAL  BANKING  CONTRI- 
BUTIONS WANTED 

HELPFUL  articles  relating  to  the  every- 
day work  of  banks  savings  banks 
and  trust  companies  are  desired  for  publi- 
cation in  The  Bankers  Magazine. 

Short,  bright  paragraphs,  telling  in  a clear 
and  interesting  w^av  of  some  of  the  methods, 
systems  and  ideas  employed  in  the  most 
progressive  banks  of  the  country,  will  be 
especially  welcome. 

Contributions  accepted  by  the  editor  will 
be  paid  for  on  publication. 


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THE  BELLAMORE  ARMORED  MOTOR  BANK  CAR 

AN  IMPROVED  MEANS  OF  COLLECTING,  TRANSPORTING  AND 
DISTRIBUTING  MONEY  AND  SECURITIES 


WITH  the  growth  of  banking  and  the 
general  adoption  of  modern  ideas  in 
the  business  world,  a demand  has 
sprung  up  for  the  more  rapid  transfer  of 
money  and  securities  between  local  points. 
This  demand  for  a quicker  movement  of  val- 
uables has  been  met  by  the  use  of  the  auto- 


remote as  to  be  inaccessible  with  the  fa- 
cilities heretofore  at  their  command. 

This  is  a progressive  age,  and  in  order  to 
keep  up  with  the  times  banks  must  find 
a way  of  removing  obstacles  that  hinder 
wise  progress.  At  first  sight,  many  of  the 
innovations  introduced  into  the  banking 


Armored  Steel  Motor  Bank  Car.  Type  11  VC.  Side  View 


mobile,  adapted  to  banking  needs  in  such 
a clever  manner  as  to  justify  the  title, 
“A  Bank  on  Wheels.” 

The  success  achieved  by  this  “travelling 
bank”  in  England  and  elsewhere  illustrates 
afresh  the  tendency  of  the  banks  to  get 
in  closer  touch  with  the  people  with  whom 
they  deal,  indicating  the  removal  of  bar- 
riers that  have  heretofore  prevented  ft 
better  understanding  between  the  banks  and 
the  public. 

No  doubt  the  improved  service  the  banks 
will  be  able  to  give  by  employing  this 
new  invention  will  encourage  savings,  and 
w'ill  serve  as  one  of  the  great  factors  of 
education  in*  economy  and  conservation. 

Not  only  will  it  benefit  the  people,  but 
it  will  broaden  the  banks'  field  of  opera- 
tions, enabling  them  to  establish  and  cul- 
tivate business  relations  in  districts  so 


business  seem  contrary  to  the  conservative 
spirit  which  should  undoubtedly  character- 
ize the  conduct  of  banking.  But  often 
a closer  study  shows  that  these  innovations 
are  but  an  evolution  made  necessary  by 
changing  conditions,  and  instead  of  being 
opposed  to  conservatism  are  an  indispen- 
sable part  of  it. 

In  all  matters  pertaining  to  transpor- 
tation, time  and  safety  are  elements  of  the 
grentest  importance.  The  earlier  genera- 
tions could  not  imagine  the  marvellous 
progress  that  has  resulted  from  swifter 
transportation  and  the  rapid  means  of 
communication  made  possible  by  the  tele- 
graph and  telephone.  Quite  in  line  with  the 
economy  of  time  effected  by  these  great 
inventions,  with  their  consequent  inestima- 
ble benefits,  is  the  Motor  Bank  Car,  or 
Bank  on  Wheels,  which  is  not  only  an  im- 

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THE  BANKERS  MAGAZINE 


i 

Armored  Steel  Motor  Bank  ( ar  Type  11  VC.  Rear  view  showing  car  readyLfor  service 


mense  saver  of  time,  but  also  eliminates 
risk  as  a factor  in  moving  money  or  valu- 
ables from  place  to  place. 

Besides  these  strictly  utilitarian  features, 
it  serves  a higher  function.  It  brings  home 
to  the  people  a better  knowledge  of  bank- 
ing, thus  educating  them  to  become  savers. 
The  wage-earner  or  small  merchant,  who 
thought  his  savings  too  insignificant  to 
carry  to  the  bank,  is  given  a new  sense  of 
importance  by  the  bank  sending  a safe  con- 
veyance to  take  his  money  to  the  bank. 
Thus  many  new  avenues  of  business  arc 
opened  up  which  never  could  be  availed 
of  without  this  banking  auxiliary. 

By  making  regular  trips  to  manufactur- 


ing plants  and  organizations  employing 
large  numbers  of  people,  the  Motor  Bank 
Car  will  turn  the  attention  of  the  wage- 
earners  towards  saving,  thus  diminishing 
wasteful  expenditures,  preventing  hoarding, 
and  placing  the  surplus  money  of  the  coun- 
try where  it  belongs— in  the  banks. 

Improved  Service  to  Customers. 

From  this  standpoint  the  Motor  Bank 
offers  many  advantages.  Too  often  the 
newspapers  are  filled  with  • accounts  of 
robberies  of  bank  messengers.  Such  oc- 
currences will  be  impossible  to  banks  using 
the  Motor  Bank.  It  also  offers  speedy 
service  in  getting  money  to  customers  for 


Digitized  by  t^ooQle 


THE  BELLAMORE  ARMORED  MOTOR  BANK  CAR 


741 


payroll  or  other  purposes  or  for  bringingpanies  and  safe  deposit  companies,  ever  since 
money  and  securities  to  the  bank.  the  motor  car  reached  a perfected  state. 

It  will  be  found  that  the  bank  which  Bankers  faced  with  the  problem  of  dis- 
adopts  this  means  of  improving  its  service tribu ting  money  to  their  various  branches; 
to  the  public  will  benefit  its  business  exactlysafe  deposit  companies,  and,  hundreds  of 
as  the  great  mercantile  establishments  dobusiness  houses,  have  been  forced  into  using 
in  keeping  their  facilities  up  to  the  highest  the  automobile  for  rapid  delivery  and  col- 
possible  standard.  The  advertising  value  lection. 

alone  of  such  an  evidence  of  progress  can  This  method,  while  being  an  improve- 
hardly  be  measured.  And  in  these  times  banks ment  on  the  old  way  of  simply  allowing  a 
must  and  do  advertise.  What  better  form  messenger  to  travel  as  best  he  might,  is  by 
of  advertising  could  there  be  than  some- no  means  satisfactory.  It  certainly  does 


thing  that  conveys  to  the  public  mind  that 
a bank  is  taking  the  best  available  means 
for  protecting  the  money  and  valuables  of 
its  dealers  and  at  the  same  time  offering 
them  the  latest  and  most  modern  facilities? 

As  the  name  implies,  the  Bank  cn 
Wheels  is  a veritable  perambulating  bank. 
In  its  design  and  construction  all  die  con- 
veniences and  safeguards  are  employed  that 
are  found  in  the  most  modern  and  best- 
equipped  banking  offices.  The  body  is 
built  of  steel  and  ft  protected  by  electric 
burglar  alarms,  thus  giving  a greater  degree 
of  safety  equal  to  that  found  in  the  average 
up-to-date  bank  vault.  It  is  moreover 
equipped  with  a burglar-proof  safe  of  the 
latest  design,  and  all  the  devices  for  giving 
an  alarm  should  an  attack  occur.  Pro- 
vision is  made  for  the  convenient  transaction 
of  business  both  by  the  customer  and  the 
representative  who  accompanies  the  car. 
No  feature  has  ben  overlooked  in  providing 
for  comfort,  privacy  and  security. 

Use  op  the  Automobile  Heretofore  in 
Banking. 

The  automobile  is  not  a new  element  in 
the  banking  Acid,  having  been  used  exten- 
sively in  England,  Germany,  Canada  and 
United  States,  by  bankers,  trust  com- 


afford  greater  speed,  but  falls  far  short  of 
assuring  safety. 

The  risk  attending  the  operation  of  a 
pleasure  car  in  the  carrying  of  valuables — 
from  burglarious  attack  and  hold-ups  on 
the  road — has  been  a serious  consideration. 
The  character  of  the  construction  of  a 
pleasure  car  does  not  lend  itself  to  the 
transportation  of  any  degree  of  concen- 
trated weight,  thus  making  it  impossible  to 
equip  such  cars  in  a manner  necessary  to 
assure  safety. 

To  meet  the  requirements  of  safe  trans- 
portation of  money  and  valuables  of  differ- 
ent kinds,  the  motor  bank  car  has  been  de- 
signed, so  constructed  and  equipped  as  to 
give  practically  the  same  protection  as  the 
strong  rooms  or  vaults  of  a bank. 

— Description  of  the  Car. 

The  motor  bank  car  is  an  armored  steel 
vehicle  protected  by  a patented  system  of 
electric  alarms.  Should  the  car  be  attacked 
at  any  point,  either  by  drilling,  wedging, 
cutting  or  annealing  the  steel  walls,  or  the 
steel  grille  work  protecting  the  windows,  a 
powerful  alarm  is  instantly  set  in  motion 
which  can  be  heard  at  a great  distance.  This 
electric  burglar  alarm  is  constructed  on  the 


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THE  BANKERS  MAGAZINE 


same  lines  and  principles  as  the  electric 
alarm  protection  used  on  the  largest  hanks 
and  safe  deposit  vaults  in  this  country. 
Apart  from  the  security  given  by  the  elec- 
tric alarm,  the  construction  of  the  car  pro- 
vides ample  resistance  from  any  burglarious 
or  mob  attack.  The  walls  and  roof  are  built 
of  steel,  hardened  insulating  material  and 
hard  wood.  The  body  is  also  fireproof  and 


being  equipped  with  a heavy  bolt  work  sys- 
tem, checked  by  a Yale  bank  combination 
lock,  capable  of  100,000,000  changes.  The 
interior  of  the  safe  is  built  to  suit  the  uses 
the  car  will  be  put  to.  A desk  or  counter 
extending  the  full  width  of  the  car,  under 
the  cashier's  window,  contains  the  money 
drawers.  To  the  right  and  left  underneath 
is  arranged  a series  of  compartments,  which 


i 


Armored  Steel  Motor  Bank  Car,  Type  11  VC.  Rear  view 


would  not  burn  in  any  fire  that  might  occur 
in  a garage,  etc. 

The  car  is  an  enclosed  structure  divided 
into  two  distinct  sections.  The  front  com- 
partment for  the  driver  and  a passenger, 
the  rear  containing  the  banking  room.  Two 
doors,  one  on  each  side  of  the  car,  give  ac- 
cess to  the  driver’s  section,  and  one  door  on 
the  right  hand  side,  opening  inwardly,  gives 
entrance  to  the  banking  room.  At  the  rear 
of  the  car  a handsomely  designed  vestibule 
is  found  which  serves  to  give  privacy  and 
protection  to  the  customers  while  transact- 
ing business.  The  windows  on  the  banking 
room  are  equipped  with  electrified  steel 
grille  work,  also  the  dividing  partition  be- 
tween the  two  sections. 

The  Banking  Room. 

The  interior  arrangement  of  the  banking 
room  includes  a large  steel  safe,  the  door 


can  be  used  for  the  storage  of  books  and 
other  articles  necessary  in  the  transaction 
of  the  business  which  will  be  conducted  from 
the  car. 

An  electric  lighting  system  rim  from  stor- 
age batteries  is  part  of  the  equipment,  and  a 
series  of  signal  devices  are  arranged  be- 
tween the  two  compartments  so  that  the 
messenger  can  communicate  with  the  driver, 
giving  instructions  without  leaving  his  seat. 
The  walls  and  floor  are  finished  with  pol- 
ished hard  wood.  The  door  of  this  com- 
partment is  equipped  with  a special  dupli- 
cate key  latch  lock  with  alarm  bell  attach- 
ment. A powerful  check  spring  is  fur- 
nished which  automatically  closes  the  door 
at  all  times.  The  windows  are  fitted  with 
bevel  plate  glass. 

The  vestibule  is  so  designed  as  to  allow 
but  one  person  on  it  at  a time.  Folding 
gates  opening  inwardly  are  provided  at  the 
rear.  The  platform  is  approximately  four- 


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THE  BELLAMORE  ARMORED  MOTOR  BANK  CAR 


743 


Armored  Steel  Motor  Bank  Car,  Type  11  VC.  Front  view 


teen  inches  from  the  ground,  bringing  the 
customers  within  easy  reach  of  the  cashier’s 
window.  The  roof  of  the  car  extends  over 
this  vestibule,  giving  protection  from  the 
weather  and  lending  symmetry  to  the  gen- 
eral design  of  the  car.  An  automatic  device 
operated  from  the  inside  of  the  car  opens 
and  closes  the  gates,  locking  them  securely 
when  the  vehicle  is  in  motion. 

The  cashier’s  window  is  located  at  the  back 
of  the  car  at  a convenient  height  from  the 
floor.  Steel  shutters  electrically  protected 
cover  the  window  on  the  outside,  opening 
and  closing  automatically  by  means  of  a 
device  operated  from  the  inside  of  the  car. 
A steel  grille  is  fitted  into  the  window 
opening,  leaving  a space  of  four  inches  at 
the  lower  part,  through  which  business 


transactions  and  the  handling  of  money  can 
be  made. 

Safety  Features. 

Xo  loop-hole  has  been  overlooked  in  the 
perfect  protection  and  safety  of  the  car,  its 
contents  and  of  those  who  are  in  charge  of 
the  vehicle. 

The  body  structure  of  the  car  is  complete- 
ly and  thoroughly  protected  by  a patent  sys- 
tem of  electric  alarms,  giving  instantaneous 
warning  of  attack  either  by  drilling,  wredg- 
ing,  cutting  or  annealing  the  linings  of  the 
steel  grille  work  protecting  the  windows, 
partitions,  etc.  The  frame  work  is  made  of 
armored  wood  re-enforced  with  a finishing 
plate  of  hard  wood  on  the  inside.  The  lin- 


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THE  BANKERS  MAGAZINE 


ings,  constructed  of  alternate  layers  of 
tempered  steel,  hardened  insulating  material 
and  electrified  plates,  are  attached  to  the 
armored  frame.  The  sides,  dividing  parti- 
tion between  the  two  compartments,  back 
and  roof,  are  all  constructed  in  this  man- 
ner, giving  absolute  protection  and  great 
strength.  The  floor  of  the  banking  room  is 
further  re-enforced  with  a heavy  tempered 
steel  plate,  lending  stability  and  rigidness 
to  the  car.  Over  this  plate  is  a flooring  of 
hard  wood. 

The  steel  grille  work  protecting  the  win- 
dows and  dividing  partition  between  the 


A valuable  feature  in  connection  with  the 
transportation  of  large  sums  of  money  be- 
tween branch  institutions  is  the  arrangement 
of  special  locks  on  the  steel  safe.  The 
money  can  be  placed  in  the  car  under  the 
supervision  of  an  officer  of  the  institution 
and  it  cannot  be  touched  by  the  messengers 
on  the  car  until  arrival  at  its  destination, 
when  the  manager  or  representative  of  the 
branch  is  present  and  inserts  the  proper 
key.  The  messenger  on  the  car  carries  the 
master  key,  requiring  his  presence  when  the 
safe  is  locked  up  and  when  opened,  and  by 
this  means  a positive  check  is  had  on  the 


driver’s  and  banking  compartment,  is  of  a 
special  construction  which  insures  absolute 
protection,  instantaneously  giving  warning 
of  an  attack  either  by  cutting,  bending  or 
burning. 

The  car  affords  the  banker  the  same  de- 
gree of  security  as  can  be  found  in  the 
strongest  burglar-proof  vaults  built.  One 
of  the  many  devices  is  an  arrangement 
whereby  the  car  can  be  locked  up  and  left 
standing  without  attendance  and  should  a 
person  other  than  those  in  charge  of  the 
vehicle  attempt  to  tamper  with  or  operate 
it,  he  would  not  only  fail  to  gain  entrance, 
but  immediately  set  the  alarms  and  warn 
the  owners  and  the  surrounding  neighbor- 
hood. 

To  guard  against  the  success  of  any  in- 
terference or  hold  up  while  the  car  is  in  ser- 
vice, the  messenger  can,  without  leaving  his 
seat,  press  a foot  switch  located  in  the  floor 
beneath  the  cashier’s  window,  which  action 
automatically  releases  the  folding  shutters 
over  the  teller’s  window,  closing  them  in- 
stantaneously, and  setting  the  electric  alarm 
gongs  ringing.  A similar  device  is  provided 
in  the  driver’s  compartment  beside  the  steer- 
ing wheel. 


handling  of  the  money  from  the  moment  it 
is  shipped  to  point  of  its  arrival. 

The  Safe. 

The  safe  with  which  this  car  is  equipped 
is  made  of  the  highest  grade  steel  and  em- 
bodies the  latest  ideas  and  improvements  in 
safe  construction. 

The  interior  arrangement  of  the  safe  con- 
sists of  a heavy  steel  cross  shelf  about  eight 
inches  from  the  floor,  two  large  cash  drawers 
with  duplicate  key  Yale  locks,  document 
spaces,  etc.  The  finish  of  this  work  is  ma- 
hogany, to  match  the  interior  of  the  car. 

Four  heavy  round  cross  bolts  checked  by 
combination  lock  with  special  anti-dynamite 
trigger  device  constitute  the  locking  mech- 
anism. A duplicate  master  key  lock  is  also 
attached  for  special  uses  when  the  car  is 
used  for  carrying  large  sums  of  money  be- 
tween branch  institutions. 

Types  and  Finish  of  Cabs. 

There  are  three  distinct  models  of  these 
cars,  each  being  built  to  fill  the  require- 
ments of  the  service  for  which  it  may  be 


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Old  Colony  Trust  Co. 

BOSTON,  MASS. 

Capital  and  Surplus  - - $12,500,000 
Deposib  - - - - 65,000,000 

OFFICERS 

T.  JEFFERSON  COOLIDGE,  JR.,  Chairman  Executive  Committee 
, GORDON  ABBOTT,  Chairman  Board  of  Directors 

FRANCIS  R.  HART,  Vice-Chairman  Board  of  Directors 
PHILIP  STOCKTON,  President 

WALLACE  B.  DONHAM,  Vice-President 
J.  R.  WAKEFIELD,  Vice-President 

FREDERIC  G.  POUSLAND,  Treasurer 
E.  ELMER  FOYE,  Manager  Credit  Department 
GEORGE  W.  GRANT,  Cashier 

CHESTER  B.  HUMPHREY,  Secretary 

JOSEPH  G.  STEARNS,  Assistant  Secretary 
F.  M.  HOLMES,  Trust  Officer 

F.  M.  LAMSON,  Manager  Temple  Place  Office 

DIRECTORS 

Charles  F.  Adams.  2d  Wllmot  R.  Evans  Robert  T.  Paine.  2d 

Oliver  Ames  Frederick  P.  Fish  Henry  Parkman 

F.  Lothrop  Ames  Reginald  Foster  Andrew  W.  Preston 

C.  W.  Amory  Georg*  P.  Gardner  Richard  S.  Russell 

William  Amory  Edwin  Farnham  Greene  Philip  L.  Saltonstall 

Charles  F.  Ayer  Robert  F.  Herrick  Herbert  M.  Sears 

John  S.  Bartlett  Henry  S.  Howe  Quincy  A.  Shaw 

Samuel  Carr  Walter  Hunnewell  Howard  Stockton 

B.  P.  Cheney  Henry  C.  Jackson  Charles  A.  Stone 

T.  Jefferson  Cooltdge  George  E.  Keith  Galen  L.  Stone 

Charles  E.  Cottlng  Gardiner  M.  Lane  Nathaniel  Thayer 

Alvah  Crocker  Thomas  L.  Livermore  Lucius  Tuttle 

Philip  Y.  DeNormandle  Arthur  Lyman  H*  O.  Underwood 

Philip  Dexter  Charles  S.  Mellen  Eliot  Wadsworth 

George  A.  Draper  Lawrence  Minot  Stephen  M.  Weld 

Frederic  C.  Dumalne  Maxwell  Norman  Sidney  W.  Winslow 

William  Endicott.  Jr.  Richard  Olney  Charles  W.  Whittier 

The  OLD  COLONY  TRUST  COMPANY  is  in  every  sense 
of  the  word  an  independent  trust  company,  interested  only  in 
the  welfare  of  its  depositors  and  its  stockholders,  and  the 
development  of  New  England’s  business  interests. 

Resources  in  excess  of  $75,000,000  make  this  Company 
one  of  the  largest  and  strongest  financial  institutions  in  the 
country,  and  insure  to  every  depositor,  large  or  small,  absolute 
security  combined  with  the  highest  type  of  banking  service. 


Digitized  by  t^ooQle 


BANKS 

yifiPi, 

DESICNED  BUILT  • REMODELED 
DECORATED  * EQUIPPED  BY  THE 
HOGGSON  BUILDINC  METHOD 

ii 

We  Build  from 
Coast  to  Coast 


A BOOK  that  covers  the  subject  of 
bank  building  from  the  view-point 
of  the  bank.  It  contains  definite 
information  of  value  to  any  bank 
which  contemplates  a building  or  remod- 
eling operation.  Some  of  the  specific  sub- 
jects treated  are : 

The  Building  Appro-  Supervision 
priation  Decorations  and 

Architectural  Plans  Equipment 
Materials  Remodeling 

Changes  in  Plans 

The  Hoggson  Single  Contract  Method  of 
Bank  Building  is  fully  described,  with 
140  illustrations  of  bank  interiors  and 
exteriors  executed  by  us. 

This  book  will  be  sent  on  request  to  any 
bank  interested  in  the  subject  it  covers. 


HOGGSON  BROTHERS 

7 East  44th  St.,  New  York 


A NOTABLE  BOOK 

The  Economic  Causes  of 
Great  Fortunes 

By  ANNA  YOUNGMAN 


This  is  a thorough  study  of  this  important  subject.  Miss  Young- 
man,  who  is  connected  with  the  department  of  economics  at 
Wellesley  College,  has  given  her  subject  careful  study  and  close 
research.  Her  book  will  be  read  with  interest  and  profit  by  all 
students  of  economic  subjects. 

The  New  York  “Times”  said  editorially:  “There  is  noth- 
ing feminine  about  this  book.  Dr.  Youngman  may  take 
her  seat  beside  Ida  Tarbell,  who  knows  how  to  impress 
herself  upon  her  times  even  without  voting/* 

“The  Nation”,  May  12,  1910,  said:  “Marked  by  intellectu- 
al balance  in  discussion  and  judicial  care  in  the  state- 
ment of  facts.” 

The  book  is  issued  in  attractive  and  readable  form,  making  a 
volume  of  200  pages,  bound  in  red  cloth,  with  title  In  gold.  The 
price  is  21.50  net. 

The  Bankers  Publishing  Company 

253  Broadway,  New  York 


Digitized  by  G.ooQle 


MODERN  FINANCIAL  INSTITUTIONS 


745 


used,  and  can  be  had  equipped  either  on  a 
twenty  or  forty  horse  power  chassis. 

The  standard  color  for  the  outside  of  the 
car  is  steel  gray,  highly  varnished  and 
rubbed  down  to  a coach  finish.  The  steel 
grille  work,  vestibule  and  all  metal  trim- 
ming burnished  and  heavily  nickel  plated. 

Interior  of  banking  compartment  golden 
ouk  or  mahogany,  with  silver-plated  trim- 
mings. The  steel  .safe  painted  with  alumi- 
num bronze  and  neatly  striped  with  gold 
leaf.  Interior  of  driver’s  compartment  to 
match  the  general  finish  of  the  banking 
room. 

Raised  metal  lettering  giving  the  name  of 
the  bank  will  be  furnished  as  part  of  the 
•equipment. 

Uses  of  the  Car- 

The  motor  bank  car  enlarges  the  field  of 
the  bankers’  operations,  the  possibilities  of 
its  uses  being  manifold.  It  is  not  only  a 
portable  safe  deposit  vault,  but  is  so  ar- 
ranged that  actual  banking  business  can  be 
transacted,  making  it  no  longer  necessary 


to  be  bound  by  the  limitations  of  a local 
neighborhood.  Clients  living  at  a distance, 
who  find  inconvenience  in  keeping  in  touch 
with  the  bank  itself,  can  be  brought  into  im- 
mediate personal  contact  with  the  institu- 
tion through  the  service  afforded  by  the 
motor  bank  car,  providing  all  the  conven- 
iences and  facilities  that  can  be  found  in  the 
offices  of  the  bank. 

Some  of  the  many  uses  this  car  can  be 
put  to  is  in  the  delivery  of  pay-rolls  to  fac- 
tories, the  collection  of  heavy  deposits,  de- 
livery of  large  sums  of  money  to  customers, 
the  transportation  of  bullion,  carrying  of 
money  and  securities  between  branch  insti- 
tutions, collection  and  delivery  of  valuables 
for  safe  deposit  companies,  etc. 

The  motor  bank  car  may  also  be  used  as 
a pay-car  by  corporations  who  employ  large 
numbers  of  hands  scattered  in  different  sec- 
tions of  the  city,  such  as  street  railway  com- 
panies, electric  lighting  and  gas  companies, 
contractors,  builders,  etc.,  and  also  by  gov- 
ernment and  city  departments  as  a paymas- 
ters’ car. 


MODERN  FINANCIAL  INSTITUTIONS 

AND  THEIR  EQUIPMENT 


A SMALL  BANK  AND  OFFICE  BUILDING 

By  Charles  E.  White,  Jr„  Architect,  A.  A.  I.  A. 


MORE  and  more  it  is  getting  to  be 
the  practice  of  banks  to  build,  not 
an  exclusive  bank  building,  but  a 
building  containing  the  banking  quarters 
in  the  first  story,  with  offices  and  other 
quarters  for  renting  purposes  above.  In 
this  way,  the  rents  from  the  floors  above 
will  pay  sufficient  interest  on  the  invest- 
ment to  provide  the  bank  with  its  own 
quarters  at  very  low  cost. 

In  addition  to  the  financial  value  of 
such  an  arrangement,  there  is  an  adver- 
tising value.  A building  of  this  char- 
acter, if  it  be  well  built,  and  dignified  in 
design,  imparts  an  air  of  soundness  to  the 
banking  institution.  It  is  invariably  found 
by  bankers  that  a new  building  increases 
deposits  immediately.  There  have  been 
many  instances  where  a new  building  has 
lifted  a very  small  banking  business  into  a 
much  higher  class  as  soon  as  the  new  build- 
ing was  open,  and  without  any  decided  in- 
crease in  the  capital  stock.  This  is  part  of 
the  psychology  of  banking.  The  building, 
40x110  feet,  illustrated,  is  for  a bank 
with  a capital  of  $200,000  and  deposits 
close  to  one  million.  This  bank  was  or- 


ganized in  a thriving  commercial  section  of 
a large  city,  about  five  years  ago.  It  is 
figured  that  the  profit  on  the  new  building 
investment,  deducting  repairs,  depreciation, 
interest  and  the  like,  will  bring  the  rent 
of  the  bank’s  own  rooms  on  the  first  floor, 
down  very  nearly  to  the  price  paid  in  the 
old  building.  In  addition,  the  new  building 
will  undoubtedly  increase  deposits  at  least 
fifty  per  cent,  faster  in  the  next  five  years, 
because  of  the  convenience  it  affords  to 
clients,  present  and  prospective. 

Some  Innovations. 

In  the  plan  shown,  it  was  decided,  for 
several  reasons,  not  to  adopt  the  frequent 
custom  of  placing  the  banking  department 
along  the  window  side,  with  the  public 
space  on  the  dark  side. 

With  the  former  method,  the  tellers  stand 
with  their  backs  to  the  light,  hence  they  have 
to  resort  to  artificial  light  immediately 
over  the  window  wickets.  Then,  in  such  a 
scheme,  the  windows  must  be  high  up,  to 
avoid  the  possibility'  of  the  public  viewing 
the  entire  interior  behind  the  screen,  from 
the  sidewalk,  outside. 


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Front  View 


MODERN  FINANCIAL  INSTITUTIONS. 


747 


The  arrangement  shown  in  the  accom- 
panying illustration,  is  better.  With  the 
banking  quarters  on  the  dark  side,  the  light 
from  the  windows,  shines  directly  on  the 
teller^’  wickets,  making  artificial  light  un- 
necessary, except  on  dark  days.  As  a mat- 
ter of  fact,  there  is  no  dark  side,  for  with 
large  windows  and  open  screens,  the  light 
is  well  diffused.  In  addition,  the  possi- 
bility of  very  large  windows  obtained,  gives 
a splendid  view  of  the  bank  from  the  side- 
walk. This  view  of  the  banking  floor,  visi- 
ble to  casual  passers-by,  is  very  important, 
as  many  new  clients  are  attracted  in  this 
way. 

Another  new  idea  in  this  bank  plan,  is 
the  arrangement  of  the  tellers’  cages.  It 
has  been  found  in  a moderate  sized  bank 
like  this,  that  it  is  not  necessary  to  give 
each  teller  a separate  cage.  In  the  plan 
shown,  one  large  cage,  open  from  end  to 
end,  contains  all  the  tellers’  wickets.  A 
semi-screen  subdivides  each  man’s  counter, 
to  keep  the  different  papers,  cash  and  the 
like  from  getting  mixed  up,  and  one  stand- 
ing space  or  aisle  is  used  by  all.  Such 
arrangement  saves  a great  deal  of  valuable 
space,  and  permits  of  greater  convenience 
in  the  handling  of  business  between  tellers. 
Of  course,  for  a large  bank,  such  a system 
would  not  be  practical.  In  use  with  this 
method,  is  a cash  truck,  which  is  trundled 
into  the  vaults  every  night.  This  truck 
holds  the  cash,  and  is  in  the  charge  of  one 
man,  who  is  made  responsible  for  it. 

In  a building  of  this  size  it  is  well  to 
provide  coupon  rooms  of  different  sizes.  The 
small  ones  are  used  by  individuals,  the 
larger  ones  by  parties  of  two  or  more.  In 
this  plan,  the  two  coupon  rooms  next  the 
street  are  connected  by  a rolling  partition, 
which  can  be  removed,  thus  turning  them 
into  one  large  room. 

In  a moderate  sized  bank  it  is  not  nec- 
essary to  have  separate  safety  deposit  and 
cash  vaults.  It  is  perfectly  practical  to 
rail  off  one  end  of  the  safety  deposit  vault 
with  a snap-lock  gate,  and  keep  the  bank 
cash  in  a small  separate  cash  safe. 

The  bank  plan  shown  in  the  illustration 
was  devised  to  provide  the  maximum  of 
convenience  and  service,  with  a minimum 
of  labor.  For  instance,  the  teller  at  the  last 
wicket  also  acts  as  custodian  of  the  safety 
deposit  department.  The  gate  to  the  vault 
is  directly  under  his  eye,  and  he  can,  by 
means  of  an  electric  lock,  admit  depositors. 

A bank  building  ought  to  be  dignified 
above  all  things  in  exterior  design.  The 
building  advertises  the  business.  You  can- 
not expect  the  people  to  intrust  their  funds 
to  bankers  who  do  not  demonstrate  by  the 
appearance  of  everything  connected  with 
their  institution  that  they  are  progressive, 
conservative,  honest  financiers.  A bank  build- 
ing ought  to  be  as  substantial  in  appear- 
ance as  a public  building.  In  fact,  it  is 
a public  building. 


STREET 
Floor  Plan 


Digitized  by  t^ooQle 


L. WHITE  JR.  ARCHITECT  CMtCAOO 


WILLIAM  PRICE 

President  Diamond  National  Bank  of  Pittsburgh 


Digitized  by  t^ooQle 


GROWTH  OF  THE  DIAMOND!  NATIONAL  BANK 

OF  PITTSBURGH 


SEPTEMBER,  1910,  marked  the  end  of 
the  seventh  year  the  present  officers 
of  the  Diamond  National  Bank  have 
had  that  institution  under  their  guidance 
and  it  is  interesting  and  gratifying  to  note 
the  remarkable  record  the  bank  has  had 


Capital  $500,000.00  $600,000.00' 

Surplus  and  profits.  1,294,815.99  1,674,553.31 

Circulation  200,000.00  298,500.00- 

Deposits  1,769,366.85  5,240,028.88 


$3,764,182.84  $7,813, 082.19> 


f ff  \ 

V-v-  Ha 

\ . *«  ■ E* 


#aT 


mSS 


Kff»7f 


9e  * 

it'#  ' t‘ 

1^. 

I * - 

1 41,  V 


D.  C.  WILLS 

Cashier  Diamond  National  Bank  of  Pittsburgh 


during  that  period.  A comparison  of  fig- 
ures is  appended: 

Sept.,  1903.  Sept.,  1910. 

Loans  A discounts.  .$2,797,215.67  $4,396,263.00 

U.  S.  bonds  203,281.30  305,093.75 

Banking  house  176,641.23  1,025,407.51 

Cash  and  due  from 

banks  587,044.64  2,086,317.93 


$3,764,182.84  $7,813,082.10 


The  figures  speak  for  themselves  and  it 
will  be  remembered  that  the  Diamond’ 
Savings  Bank,  organized  at  about  the  be- 
ginning of  the  period,  has  now  over  a mil- 
lion and  a half  in  assets,  the  splendid  Dia- 
mond Bank  Building,  admitted  to  occupy 
one  of  the  best  corners  for  commercial 
business  in  the  city,  was  erected  by  the 
present  administration  and  dividends  of 

749 


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Home  of  the  Diamond  National  Bank  of  Pittsburgh 

75f» 


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MODERN  FINANCIAL  INSTITUTIONS 


751 


Office  of  the  President 


seven  hundred  and  eightv-eight  thousand  mark  of  this  progressive  bank;  the  aim 

dollars  were  paid  to  shareholders  in  the  of  the  officers  and  directors  is  that  this 

seven  years.  “trade-mark”  shall  stand  for  both  progress- 

The  Diamond  National  Bank  is  a strictly  iveness  and  conservatism  in  banking.' 
■commercial  one,  having  a well  balanced  William  Price,  the  president,  who  occu- 
business  consisting  of  fifty  per  cent  local  pies  the  same  position  with  the  Diamond 

deposits  and  fifty  per  cent,  bankers’  balances.  Savings  Bank,  was  vice-president  previous 

The  black  diamond  with  white  letters  is  to  becoming  the  head  of  both  banks.  He 

known  all  over  the  country  as  the  trade-  is  a native  Pittsburgher  of  the  self-made 


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753 


type  possessing  a strong  personality  and 
his  success  as  a banker  was  presaged  by 
his  building  up  one  of  the  best  known  re- 
tail mercantile  establishments  in  Greater 
Pittsburgh. 

Mr.  Price  is  interested  in  several  of 
Pittsburgh’s  industries  as  stockholder  and 
director  and  therefore  keeps  in  close  touch 
with  the  business  conditions  of  the  “Steel 
City.”  It  is  he  who  shapes  the  policies  of 
the  Diamond  National  Bank  and  its  affili- 
ated institution,  the  Diamond  Savings 
Bank,  and  it  is  his  dominating  personality 
and  good  name  that  have  made  them  suc- 
cessful. 

D.  C.  Wills,  the  cashier,  has  spent  his 
life  in  the  banking  business,  beginning  in 
the  Mechanics  National  Bank  of  Pittsburgh 
twenty-two  years  ago.  He  is  well-known 
as  an  American  Institute  of  Banking  man, 
having  been  the  first  president  of  Pitts- 
burgh Chapter.  He  has  been  active,  too, 


W.  O.  PHILLIPS 
Assistant  Cashier 


in  the  Bankers’  Association  of  Pennsyl- 
vania, being  now  chairman  of  Group  VIII. 

W.  O.  Phillips,  assistant  cashier,  is  one 
of  the  popular  younger  bankers  of  Pitts- 
burgh. He  has  risen  from  the  ranks  in 


his  own  bank,  being  in  his  fourteenth  year 
of  service  and  combines  with  his  ability 
as  a bank  official  a pleasing  personality 
and  a wide  acquaintanceship. 

The  Diamond  Savings  Bank  was  or- 


L.  S.  HUSEMAN 
Cashier  Diamond  Savings  Bank 


ganized  to  provide  a strictly  safe  depository 
for  savings  accounts  and  this  purpose  it 
fulfils  admirably. 

Under  the  management  of  L.  E.  Huse-  • 
man,  the  cashier,  who  has  been  in  charge 
almost  the  whole  period  of  its  existence, 
tlie  savings  bank  has  secured  $1,914,469  of 
deposits.  At  the  close  of  business  Septem- 
ber 1,  1910,  it  reported  a surplus  and 
profits  fund  of  $152,321,  a capital  stock  of 
$125,000  and  total  resources  of  $1,503,045. 

Although  representing  diversified  inter- 
ests the  directors  of  the  Diamond  National 
Bank  are  as  one  man  when  the  welfare  of 
the  institution  they  serve  is  at  stake.  The 
present  board  is  made  up  of  the  following 
prominent  men: 

W.  B.  Rodgers,  J.  P.  McKinney,  A. 
G.  Barnett,  J.  D.  Callery,  John  W.  Robin- 
son. D.  C.  Wills,  A.  M.  Stewart,  A.  C. 
Wettengel,  S.  A.  Pickering,  W.  G.  Rock* 
E.  E.  Slick  and  William  Price. 


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Continental  Bank  Building— Home  of  the  Continental  Bank  and  Trust  Company 
of  Shreveport.  Louisiana 


FOUR,  years  ago  when  the  Continental  When  the  . bank's  charter  was  drawn  up  a 

Bank  and  Trust  Company  of  Shreve-  provision  was  inserted  to  the  effect  that 

port,  La.,  was  in  process  of  organiza-  no  loans  should  be  made  to  any  officer  un- 

tion,  the  management  determined  upon  a less  the  application  be  approved  by  the  di- 
policy of  progressiveness  and  conservatism  rectors,  nor  should  any  loan,  if  made, 

which  has  been  strictly  adhered  to  from  the  exceed  ten  per  cent,  of  the  capital  stock 

opening  day  down  to  the  present  time.  and  surplus.  This  action  suggested  the 

754 


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MODERN  FINANCIAL  INSTITUTIONS 


755 


slogan  “Not  a Dollar  Loaned  tc  Any  Officer 
of  This  Bank,”  that  has  been  used  with 
telling  effect  in  the  statements  and  other 
literature  prepared  for  general  circula- 
tion. 

When  it  first  became  known  that  a new 
bank  and  trust  company  would  be  organ- 


The  opening  day,  when  deposits  of  $300,- 
000  were  received,  proved  an  auspicious  be- 
ginning. By  the  first  of  January,  1908,  the 
Continental  Bank  and  Trust  Company  had 
gained  deposits  of  $560,000  and  resources 
of  more  than  a million  dollars. 

At  the  beginning  of  1909  the  annual 


HON.  L.  E.  THOMAS 

President  Continental  Bank  and  Trust  Company,  Shreveport,  La. 


ized  to  operate  in  Shreveport,  the  subscrip- 
tions for  stock  that  came  in  w’ere  so 
numerous  they  could  not  all  be  filled.  How- 
ever, more  than  two  hundred  prominent 
citizens  of  the  State,  professional  men, 
tradesmen  and  others,  were  able  to  secure 
an  allotment  of  the  three  hundred  thousand 
dollars  of  capital  stock. 


report  read:  Deposits,  $631,081;  resources, 
$1,187,063.  These  figures  were  bettered  by 
the  January,  1910,  report  so  as  to  read: 
Deposits,  $1,177,517;  resources,  $1,678,134. 
On  the  eighth  day  of  last  March  the  de- 
posits totaled  $1,300,007  and  the  resources, 
$1,749,770. 

But  these  figures  do  not  tell  the  whole 


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Main  Banking  Room 


Ladies'  Parlor 


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MODERN  FINANCIAL  INSTITUTIONS 


757 


story.  Up  to  October  first,  the  total  net 
earnings  amounted  to  $100,000  and  during 
the  life  of  the  institution  six  dividends  that 
total  $55,000  have  been  paid. 

When  it  became  apparent,  soon  after  the 
opening  day,  that  the  original  banking 
rooms  would  admit  of  no  expansion  of 
business,  negotiations  were  opened  where- 
by a desirable  site  was  secured  on  Market 
street.  To-day  there  stands  on  this  site 
a modern  seven-story,  fireproof  bank  and 


L.  M.  HOWARD 
Vice-President 


office  building,  built  and  owned  by  the  Con- 
tinental Bank  and  Trust  Company. 

The  first  floor  is  devoted  entirely  to  the 
interests  of  the  bank,  and  no  expense  has 
been  spared  that  might  increase  the  ap- 
pearance and  efficiency  of  the  equipment  of 
the  banking  room. 

The  Continental  appreciates  the  business 
of  lady  customers  and  has  provided  a 
beautifully  furnished  reception  parlor  for 
them.  Adjacent  to  the  resting  room  is  a 
retiring,  or  dressing  room,  with  lavatory, 
dressing  table,  toilet  articles,  etc. 

Another  feature  to  which  particular  at- 
tention was  paid  when  plans  for  the  new 
building  were  drawn  up,  is  the  safe  de- 
posit department,  located  in  the  basement. 
The  vault  is  constructed  of  concrete  and 
steel,  twenty-two  inches  thick,  with  fire 
and  burglar-proof  doors  that  weigh  over 
fourteen  thousand  pounds  each.  There  are 
the  usual  safeguards  for  box  renters. 

Following  its  progressive  policy  the  Con- 


J.  C.  TRICHEL 
Cashier 


tincntal  Bank  and  Trust  Company  has  es- 
tablished two  branch  banks;  one  is  located 
in  Mooringsport,  with  W.  H.  B.  Croom 
as  manager  and  J.  E.  Croom  as  cashier. 
Mooringsport  is  in  the  heart  of  the  Caddo 


J.  D.  YOUNGBLOOD 
Assistant  Cashier 


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THE  BANKERS  MAGAZINE 


oil  and  gas  fields  and  the  branch  bank 
therefore  fills  a genuine  need.  The  second 
branch,  known  as  the  West  End  branch,  is 
in  the  city  of  Shreveport.  It  is  managed 
by  J.  W.  Peyton,  and  being  near  the  rail- 
road shops,  has  been  very  successful  and 
productive  of  much  new  business. 

L.  E.  Thomas,  the  president,  for  sev- 


at  that  place,  the  affairs  of  which  institu- 
tion have  always  been  conservatively  and 
well  managed.  He  is  also  secretary-treas- 
urer of  Hearne  Dry  Goods  Co.,  of  Shreve- 
port, La. 

J.  C.  Trichel,  the  cashier,  was  formerly 
connected  with  the  Exchange  Bank  at 
Natchitoches,  La.,  an  institution  that  he 


Vault  Door  Closed— Weight  14,000  Pounds 


eral  years  occupied  the  position  of  Bank 
Commissioner  and  Examiner  of  the  State 
of  Louisiana,  and  achieved  an  enviable 
record  for  ability  in  discharging  the  duties 
of  that  important  trust.  Since  his  resigna- 
nation  to  accept  the  presidency  of  the 
Continental  Bank  and  Trust  Company,  he 
has  given  his  whole  attention  to  the  work 
of  making  his  institution  successful. 

L.  M.  Howard,  vice-president,  was  for 
years  a prominent  merchant  of  Coushatta, 
La.,  and  later  became  president  of  the  bank 


materially  assisted  to  build  up  from  a small 
beginning  to  one  of  the  strong  banks  of 
the  State. 

J.  D.  Youngblood,  the  assistant  cashier, 
served  an  apprenticeship  in  the  First  Na- 
tional Bank  of  Arcadia,  I^a.,  and  later  be- 
came cashier  of  the  Bank  of  Jackson, 
Jackson,  La. 

With  these  experienced  officials,  housed  in 
its  modern  home,  the  Continental  Bank  and 
Trust  Company  of  Shreveport,  Louisiana, 
has  before  it  a promising  future. 


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BANKING  AND  FINANCIAL  NOTES 


NEW  YORK  CITY 

— The  Knickerbocker  Trust  Company  is 
about  to  enlarge  its  office  building  on  the 
Northeast  corner  of  Broadway  and  Ex- 
change place,  known  ns  GO  Broadway,  by 
adding  the  necessary  fourteen  stories  to  the 
present  eight-storv  structure  to  carry  out 
the  original  plan  of  a twenty-two-story 
building.  By  waiting  two  years  the  direc- 
tors expect  to  save  fully  $300,000  from  the 
original  estimate  of  cost.  When  the  build- 
ing was  planned,  in  1907,  the  cost  was  placed 
at  $2,000,000. 

— The  Royal  Bank  of  Canada  (head  office 
Montreal)  has  taken  a lease  of  the  ground- 
floor  offices  and  basement  of  the  building 
at  68  William  street,  corner  of  Cedar  street. 
The  bank  has  had  offices  in  another  part  of 
this  building  for  some  years.  The  new 
quarters  were  formerly  occupied  by  Fisk 
& Robinson.  The  bank’s  lease  is  for  sixteen 
years  and  seven  months,  beginning  Oct.  1. 

— Nathaniel  D.  Putnam,  Jr.,  has  been 
elected  assistant  secretary  of  the  Guaranty 
Trust  Company. 

— Workmen  are  at  present  engaged  on  the 
First  National  Bank  building  located  at  the 
corner  of  Broadway  and  Wall  street.  Two 


Bronze  and  Iron  Work  for  Banks 


Cast  Bronze  Signs  and  Tablets 
BRONZE  COUNTER  SCREENS 
Wire  Mesh  Enclosures 

To  Special  Dexiffn 

JNO.  WILLIAMS  INC.  Bronze  Foundry, 

266  Wwt  27th  Btreet,  New  York,  publishes  the 
Magazine  “ American  Jrt  Jn  Bronze  and  Iron”  11- 
lnstraflna  Bank  Counter  Hcrecua,  Tablets,  SiguA, 
etc.  Copies  free  to  Bankers. 

“ Tour  Architect  knoice  Jno . William  § Inc** 


Merchants  National  Bank 

RICHMOND,  VA. 

Capital  $200,000 

Surplus  and  Profits,  920,000 

This  bank  is  the  largest  depository  for 
banks  between  Baltimore  and  New  Orl- 
eans. It  is  Virginia’s  most  successful 
National  Bank.  It  has  the  best  facilities 
for  handling  items  on  the  Virginias  and 
Carollnas.  Collections  carefully  routed. 

Correspondence  Solicited 


full  stories  are  to  be  added,  and  the  new 
floor  space  thus  provided  will  be  taken  by 
the  bank’s  bookkeepers.  When  the  build- 
ing was  erected  in  1882  it  was  at  that  time 
one  of  the  tallest  structures  in  the  city. 

— The  Union  Exchange  National  Bank  of 
New  York,  of  which  Henry  S.  Hermann  is 
president,  has  been  admitted  to  the  New 
York  Clearing-House  Association,  and  will 
be  know’n  in  the  clearing-house  as  No.  100. 
It  began  business  in  June,  1903,  as  the 
Union  Exchange  Bank  and  did  not  enter 
the  national  system  until  last  year.  Albert 
H.  Wiggin,  vice-president  of  the  Chase  Na- 
tional Bank,  was  recently  elected  a director 
of  the  Union  Exchange  National  Bank. 

- The  National  Park  Bank  declared  dur- 
ing the  latter  part  of  September  the  first 
dividend  since  the  increase  of  its  capital 
from  $2,000,000  to  $5,000,000.  It  was  the 
same  ns  that  paid  on  the  old  capitalization, 
namely , four  per  cent. 

— Mention  was  made  last  month  of  the 
organization  of  the  firm  of  Colt,  Hartshore 
& Picabia,  dealers  in  bonds.  Unfortunately 
Mr.  Picabia’s  name  was  misspelled  through- 
out. We  regret  the  error  and  desire  to 
make  the  correction  at  this  time. 


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BINDERS 

AND 

BLANKS 


OF  UNIFORM  EXCELLENCE 

FOR  ALL  DEPARTMENTS  OF  BANK  ACCOUNTING 

BAKER -VAWTER  COMPANY 


CHICAGO 


HOLYOKE,  MASS. 


— James  G.  Cannon,  president  of  the 
Fourth  National  Bank,  has  been  elected 
a director  of  the  Metropolitan  Trust  Com- 
pany to  succeed  the  late  J.  Edward  Sim- 
mons. 

— The  report  of  the  Yokohama  Specie 
Bank,  submitted  to  the  general  meeting  at 
Yokohama,  shows  that  the  gross  profits  of 
the  bank  for  the  half  year  ended  June  30, 
including  1,167,407  yen  brought  forward 
from  last  account,  amounted  to  13,064,236 
yen,  of  w'hich  10,101,059  yen  have  been  de- 
ducted for  interest,  taxes,  current  expenses, 
rebate  on  bills  current,  bad  and  doubtful 
debts,  bonus  for  officers  and  clerks,  etc., 
leaving  a balance  of  2,963,177  yen  for  ap- 
propriation. The  directors  propose  that 
350,000  yen  be  added  to  the  reserve  fund, 
and  recommended  a dividend  at  the  rate  of 


SAVOY  TRUST 
COMPANY 

(Formerly  the  Italian- American  Trust  Co.) 

52#  BROADWAY  - NEW  YORK 


Capital  - $500,000.00 


This  company  has  a thoroughly  equipped 
Foreign  Department,  under  the  personal 
supervision  of  an  officer  of  the  bank.  We 
transact  a general  banking  business,  and 
have  the  best  facilities  for  collecting 
checks — domestic  or  foreign. 


ACCOUNTS  OF  BANKS  SOLICITED. 


EMANITL  GRRLI, 
C.  PIVA. 

T.  K.  SANDS, 
ARTHUR  DAY. 
ARTHUR  BAUR, 


President 

- - Vice-President 

- - Vlce-Preeident 

- - Vlce-Preeident 

Secretary  and  Treasurer 


760 


twelve  per  cent,  per  annum,  w'hich  will  ab- 
sorb 1,440,000  yen.  The  balance,  1,173,177 
yen,  will  be  carried  forward  to  the  credit 
of  next  account. 

— S.  S.  Campbell,  president  of  the  Night 
and  Day  Bank,  has  been  elected  a vice- 
president  of  the  Fourth  National  Bank  of 


S.  S.  CAMPBELL 

Vice-President  Fourth  National  Bank  of 
New  York 

New  York  to  fill  the  vacancy  caused  by 
the  election  of  James  G.  Cannon  to  the 
presidency.  Charles  H.  Patterson,  for 
many  years  cashier  of  the  Fourth  National, 
was  also  made  a vice-president,  and  Daniel 
J.  Rogers,  heretofore  assistant  cashier  was 
elected  cashier  to  succeed  Mr.  Patterson. 


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BANKING  AND  FINANCIAL  NOTES 


761 


— The  Chamber  of  Commerce  on  Nov.  3 William  A.  Nash,  president  of  the  Corn 

elected  A.  Barton  Hepburn,  president  Chase  Exchange  Bank,  was  elected  chairman  of 

National  Bank,  its  president,  to  succeed  the  clearing-house  committee,  which  also 

J.  Edward  Simmons,  who  recently  died.  includes  Francis  L.  Hine,  president  of  the 

James  G.  Cannon  was  chosen  a member  of  First  National  Bank;  William  H.  Perkins, 

the  Board  of  Trustees  of  the  chamber.  president  of  the  Bank  of  America;  Frank 


HON.  A.  BARTON  HEPBURN 

President  Chase  National  Bank  of  New  York  ; President  New  York  Chamber  of 
Commerce;  President  New  York  Clearing-House  Association 


At  the  recent  annual  meeting  of  the  New  A.  Vanderlip,  president  of  the  National 

York  Clearing-House  Association,  Mr.  City  Bank,  and  James  G.  Cannon,  presi- 

Hepburn,  was  elected  president  to  sue-  dent  of  the  Fourth  National  Bank, 

cecd  William  H.  Porter,  president  of  the  The  report  of  the  association  for  the 
Chemical  National  Bank.  Edward  Earl,  year  ended  Sept.  30,  showed  total  transac- 

president  of  the  Nassau  Bank,  was  elected  tions  of  $106,749,253,036,  of  which  $1,195,- 

secretary,  to  succeed  Samuel  Woolverton.  293,997  were  balances  and  $1 02,553,959,060 


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THE  BANKERS  MAGAZINE 


exchanges.  The  total  exchanges  were  greater  seven  years  ago  have  been  $2,230,144,291,996, 

than  in  1909  by  $3,296,296,658.  The  average  consisting  of  $2,132,059,754,829  in  exchanges 

daily  clearings  were  $338,461,911,  against  and  $98,081,537,166  balances. 

$326,505,468  in  1909.  Mr.  Earl,  the  newly  elected  secretary  of 

The  largest  transactions  on  any  one  day  the  New  York  Clearing-House  Association, 

were  on  Nov.  3,  1909,  when  the  {otal  was  and  president  of  the  Nassau  Bank,  has 

$764,133,942,  and  the  largest  clearings  were  advanced  steadily  since  his  entrance  into  the 


PHOTO  BY  OLIVER  LIPPINCOTT,  N.  V. 


EDWARD  EARL 

President  Nassau  Bank  of  New  York;  Secretary  New  York 
Clearing-House  Association 

also  made  on  that  day,  the  total  being  banking  field  twenty-three  years  ago.  Start- 

$736,461,549.  The  largest  balances  were  ing  as  assistant  bookkeeper  in  the  Nassau 

on  Dec.  21  and  totaled  $30,936,377.  The  Bank,  he  received  one  promotion  after  an- 

smallest  clearings  on  any  one  day  were  on  other,  arriving  at  the  position  of  cashier  in 

March  26,  when  the  total  was  $130,436,161,  1907.  While  filling  this  office  Mr.  Earl, 

the  total  transactions  on  that  day  being  owing  to  the  disability  of  the  president, 

$138,027,036.  acted  as  president. 

Total  transactions  since  the  organization  His  election  to  the  presidency  in  No- 
of  the  Clearing-House  Association  fifty-  vember,  1908,  was  in  recognition  of  Ms 


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MARWICK 

MITCHELL  & CO. 

CHARTERED  ACCOUNTANTS 

79  WALL 

STREET,  NEW  YORK 

NEW  YORK 
PHILADELPHIA 
WASHINGTON 
NEW  ORLEANS 

PITTSBURG  8T.  J08EPH 

CHICAGO  ST.  PAUL 

MILWAUKEE  MINNEAPOLIS 

KANSAS  CITY  SPOKANE 

MONTREAL 

WINNIPEG 

GLASGOW 

LONDON 

ability  as  an  executive  and  of  the  masterful 
way  in  which  he  guided  the  Nassau  Bank 
through  the  trying  times  of  1907  and  1908. 
Under  his  leadership  the  Nassau  Bank  has 
increased  its  deposits  fifty  per  cent. 

— E.  J.  Stalker,  who  was  elected  vice- 
president  of  the  Union  Bank  of  Brooklyn 
on  its  organization  in  1908,  and  who  before 
that  had  been  cashier  of  the  Chase  National 
Bank,  has  become  cashier  of  the  New  York 
County  National  Bank.  James  C.  Brower, 
who  has  been  vice-president  and  cashier,  will 
continue  in  the  office  of  vice-president. 

— Cornelius  N.  Bliss,  Jr.,  of  Bliss,  Fabyan 
& Co.,  has  been  elected  a director  of  the 
Fifth  Avenue  Bank. 

NEW  ENGLAND  STATES 

— A dividend  at  the  rate  of  lour  per  cent, 
per  annum,  payable  January  16,  1911,  has 
been  declared  by  the  board  of  trustees  of 
the  Providence  (R.  I.)  Institution  for  Sav- 
ings. The  officers  and  those  who  comprise 
the  board  are:  President,  Edward  D.  Pearce; 
first  vice-president,  Robert  H.  I.  Goddard; 
second  vice-president,  Howard  O.  Sturges; 
third  vice-president,  Frank  W.  Matteson; 
board  of  trustees,  Edward  D.  Pearce,  Robert 
II.  I.  Goddard,  Howard  O.  Sturges,  Royal 
C.  Taft,  Samuel  R.  Dorrancc,  Robert  Ives 
Gammcll.  William  B.  Weeden,  Horatio  N. 
Campbell,  John  W.  Danielson,  William 
Gammell,  Edward  F.  Child,  Robert  W.  Taft, 
Henry  D.  Sharpe,  Robert  H.  I.  Goddard, 
Jr.,  Frank  W.  Matteson;  treasurer,  LeB. 
Bradford;  clerk,  John  H.  Ormsbee. 

— In  accordance  with  a vote  of  the  stock- 
holders of  the  Arlington  National  of  Law- 
rence, Mass.,  the  business  of  the  bank  has 
been  turned  over  to  a new  institution  known 
as  the  Arlington  Trust  Company,  which  has 
been  formed  with  a capital  of  $200,000  and 
a surplus  of  $50,000.  The  Arlington  Trust 
Company  will  occupy  the  rooms  formerly 
occupied  by  the  national  bank,  and  the  of- 


ficers and  clerical  force  of  Ihe  bank  will 
occupy  the  same  positions  with  the  trust 
company. 

The  board  of  directors  of  the  trust  com- 
pany will  consist  of  the  directors  of  the 
Arlington  National,  with  the  addition  of 
eleven  members,  all  of  whom  are  local  busi- 
ness men.  The  officers  of  the  Arlington 
Trust  Company  are  as  follows:  President, 
Thomas  M.  Cogswell;  vice-president,  James 
F.  Lanigan,  Jr.;  treasurer,  James  Houston. 

— The  Merchants  Trust  Company,  a new 
* institution,  will  commence  business  in 
Waterbury,  Conn.,  November  15.  J.  E. 
Smith,  a prominent  lumber  dealer  of  Water- 
bury, will  be  president,  and  John  E.  Bulger, 
secretary  and  treasurer.  Mr.  Bulger  has 
been  connected  with  the  Commercial  Trust 
Company  of  New  York  as  credit  man.  The 
capital  of  the  new  institution  will  be 
$100,000. 

EASTERN  STATES 

— Charles  L.  Gilliland  has  resigned  as  as- 
sistant cashier  of  the  Western  National 
Bank  of  Philadelphia  to  become  treasurer 
of  a large  manufacturing  concern  in  Chester. 
The  vacancy  in  the  bank  will  not  be  filled 
at  present,  the  institution  still  having  a 
capable  assistant  cashier— John  Baumgart- 
ner— who  has  long  been  connected  with  the 
institution.  Charles  F.  Wignall  is  cashier. 

— The  Fourth  Street  National  Bank  of 
Philadelphia  has  increased  its  dividend  rate 
from  twelve  to  fourteen  per  cent,  in  the 
declaration  of  a semi-annual  payment  of 
seven  per  cent.,  payable  Nov.  1,  against  six 
per  cent,  previously.  The  sum  of  $500,000 
has  been  added  to  the  surplus,  making  it 
$6,000,000. 

— Charles  S.  Cal  well  has  been  selected  to 
succeed  Benjamin  Githens  to  the  presidency 
the  Corn  Exchange  National  Bank  of 
Philadelphia;  he  thus  becomes  the  youngest 
bank  president  in  the  Quaker  City.  While 

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THE  BANKERS  MAGAZINE 


in  session  the  directors  of  the  Corn  Exchange 
National  Bank  also  elected  William  W. 
Supplee  first  vice-president  and  chairman 
of  the  board,  made  Thomas  J.  Jeffries  sec- 
ond vice-president,  and  elected  M.  N.  Wil- 
lits,  Jr.,  cashier  and  secretary  of  the  board 
of  directors. 

Mr.  Calwell  is  a native  Philadelphian  and 


— The  Girard  National  Bank  of  Philadel- 
phia, in  addition  to  declaring  the  regular 
semi-annual  dividend  of  seven  per  cent.,  has 
added  $500,000  to  its  surplus  fund,  which  is 
now  $4,000,000. 

— At  a regular  meeting  of  the  board  of 
directors  of  the  Franklin  National  Bank  of 


CHARLES  S.  CALWELL 

President  Corn  Exchange  National  Bank  of  Philadelphia 


came  to  the  Corn  Exchange  National  in  1891 
in  the  capacity  of  an  assistant  to  the  receiv- 
ing teller.  His  advancement  from  one  de- 
partment to  another,  and  from  the  position 
of  cashier  to  that  of  cashier  and  vice-presi- 
dent, and  first  vice-president,  has  been  rapid 
and  due  solely  to  his  natural  aptitude  for 
the  work  of  banking.  In  honor  of  his  ad- 
vancement and  to  express  their  regard,  about 
seventy  clerks  of  the  Corn  Exchange  Na- 
tional Bank  have  presented  Mr.  Calwell  with 
a valuable  loving  cup.  Cashier  M.  N.  Wil- 
lits  and  Assistant  Cashier  Newton  W.  Cor- 
son, both  of  whom  were  moved  to  higher 
posts  as  a result  of  Mr.  Calwell’s  promotion, 
were  also  remembered  by  the  clerks,  who 
presented  them  with  beautiful  floral  tokens. 


Philadelphia,  J.  William  Hardt  was  elected 
an  assistant  cashier  to  succeed  Charles  V. 
Thackara,  who  has  resigned  to  accept  a po- 
sition as  general  manager  of  the  up-town 
branch  office  of  the  Philadelphia  Trust  Com- 
pany. Mr.  Thackara  has  been  an  assistant 
cashier  of  the  Franklin  National  for  several 
years,  having  been  with  the  bank  since  its 
organization  more  than  ten  years  ago.  Mr. 
Hardt  is  promoted  from  the  head  of  the 
general  ledger  department,  where  he  has 
been  for  some  years,  and  before  going  to  the 
F ranklin  he  was  assistant  national  bank  ex- 
aminer with  his  father,  William  M.  Hardt, 
now  the  clearing-house  bank  examiner  of 
Philadelphia. 

By  declaring  a semi-annual  dividend  of 


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When 
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attractive  to  clients  by 
doubling  the  amount 
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ity of  the  illumination. 
This  is  the  season  of  the 
year  when  there  is  not 
enough  daylight  even 
for  banking  hours,  not 
to  mention  before-time 
and  over  - time  work. 

Insure  having  an 
abundance  of  brilliant 
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crease the  working  effi- 
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employees  by  installing 
G-E  MAZDA  LAMPS 


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Type  of  Electric 
Incandescent  . . . 


For  four-fifths  of  the  electricity  required 
by  an  ordinary  16  candle-power  lamp  a G-E 
MAZDA  will  give  twice  as  much  light, 
whiter,  more  brilliant,  more  attractive  and 
more  like  actual  sunlight. 

Representative  banks  everywhere  are 
substituting  G-E  MAZDA  Lamps  in  place  of 
older  and  less  powerful  lamps.  Our  illus- 


trated booklet,  “Dawn  of  a New  Era  in 
Lighting,”  gives  conclusive  facts  why  you 
should  do  the  same.  Its  22  pages  contains 
chapters  on  modern  lighting  requirements, 
lamp  economy,  metal  filament  lamps,  cost  of 
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THE  BANKERS  MAGAZINE 


THE 

GARFIELD 
NATIONAL  BANK 

Fifth  Avenue  Building 

Corner  Fifth  Ave.  and  Twenty-Third  Street 

NEW  YORK 

CAPITAL  SURPLUS 

$1,000,000  $1,000,000 

OFFICERS 
RUEL  W.  POOR,  President 

JAMES  McCUTCHEON,  Vice-Pres. 
WILLIAM  L.  DOUGLASS,  Cashier 
ARTHUR  W.  SNOW,  Asst.  Cash. 

DIRECTORS 

James  McCntcheon  Samuel  Adams 
Charles  T.  Wills  William  H.  Getshenen 
Ruel  W.  Poor  Morcitn  J.  O'Brien 

Thomas  D.  Adams 


eight  per  cent,  the  directors  of  the  Franklin 
National  have  placed  their  hank  on  an  an- 
nual basis  of  sixteen  per  cent.  This  action 
was  taken  October  20. 

— T.  M.  Jones,  who  has  been  assistant 
cashier  of  the  Columbia  National  Bank  of 
Pittsburgh  for  a number  of  years,  has  been 
forced  to  resign  his  position  on  account  of 
ill  health.  Mr.  Jones  is  one  of  the  best 
known  young  bankers  in  Pittsburgh  and 
vicinity,  and  has  made  many  friends  among 
the  bankers,  not  only  in  Pittsburgh,  but 
throughout  the  State,  and  it  was  with  great 
regret  that  the  directors  accepted  Mr.  Jones' 
resignation,  as  he  was  extremely  popular 
with  the  employes  and  customers  of  the 
bank.  J.  N.  Thompson,  formerly  discount 
clerk  of  the  bank,  has  been  elected  to  take 
Mr.  Jones'  position.  Mr.  Thompson  has  also 
been  connected  with  the  banking  affairs  in 
Pittsburgh  for  many  years,  being  formerly 
connected  with  the  old  Tradesmen’s  National, 
which  was  consolidated  with  the  Columbia 
several  years  ago. 

— The  City  Deposit  Bank  of  Pittsburgh 
has  added  $100, OCX)  to  surplus,  increasing 
that  fund  to  $600,000,  or  three  times  the 
capital  stock. 

Baltimore  hankers  have  formed  a na- 
tional currency  association  under  the  pro- 
visions of  the  A Id  rich- V reeland  act.  The 
officers  of  the  new  organization  are:  Presi- 
dent, C.  C.  Homer,  president  of  the  Second 
National;  vice-president,  J.  B.  Ramsay, 
president  of  the  National  Mechanics’  Bank; 


secretary,  Charles  E.  Rieman,  president  of 
the  Western  National;  and  treasurer,  Waldo 
Newcomer,  president  of  the  National  Ex- 
change Bank.  The  executive  committee  is 
made  up  of  Messrs.  Homer- Ram. say ; D.  H. 
Thomas,  president  of  the  Merchants  Na- 
tional; Eugene  Levering,  president  of  the 
National  Bank  of  Commerce;  William  Win- 
chester, president  of  the  National  L'nion 
Bank  of  Maryland;  Charles  T.  Crane,  presi- 
dent of  the  Farmers  and  Merchants  Na- 
tional, and  H.  B.  Wilcox,  president  of  the 
First  National. 

— General  John  Gill,  president  of  the  Mer- 
cantile Trust  and  Deposit  Company  of  Bal- 
timore, has  resigned  and  was  elected  chair- 
man of  the  board  of  directors.  A.  H.  F. 
Post  was  elected  president.  A.  Wilton 
Snowden  resigned  as  first  vice-president,  to 
take  effect  on  the  election  of  his  successor. 

— Walter  B.  Johnson  has  been  elected  to 
succeed  William  F.  Drain  as  cashier  of  the 
National  Bank  of  Cambridge,  Md.  Mr. 
Johnson  has  been  for  many  years  connected 
with  the  Farmers  and  Merchants  National 
of  that  city  as  assistant  cashier. 

— Michael  G.  McCormick,  first  vice-presi- 
dent. has  been  elected  president  of  the  Mer- 
chants and  Mechanics  Savings  Bank  of 
Washington,  D.  C.,  in  place  of  Eldridge  E. 
Jordon,  who  was  not  a candidate  for  re- 
eketian. 

— An  election  of  directors  was  recently 
held  by  the  Dime  Savings  Bank  of  Wash- 
ington, D.  C.,  with  the  following  results: 
Directors  for  ensuing  .vear,  John  C.  Wine- 
man,  John  H.  Ontrich,  Philip  King,  Joseph 
H.  Milans,  Ross  P.  Andrews,  William  A. 
Bennett,  Max  Cohen,  Floyd  E.  Davis,  Rich- 
ard J.  Earnshaw,  William  A.  Engel,  Harry 
Friedlander,  Albert  S.  Gatley,  Ashley  M. 
Gould,  John  F.  Collins,  Louis  J.  Jackson, 
Harry  King,  Maurice  J.  Rosenberg,  Joseph 
Sanders,  Harry  Standi  ford,  M.  Edward 
Swing,  Clarence  A.  W’eaver,  Alexander  W'olf, 
Elie  Shcetz,  Harry  E.  Mayer,  A.  Brylawski, 
John  C.  Letts,  Samuel  Hart,  Louis  Bush  and 
George  E.  Barber. 

— -The  Citizens  Bank  of  Buffalo  was  estab- 
lished October  1,  1890,  and  therefore  this 


ATLANTIC  NATIONAL  BANK 


Providence,  R.  I. 


Send  Us  Your  Rhode  Ishnu  f c’l 


Digitized  by  i^ooQte 


Capital  - $6,000,000 
Surplus  - $6,000,000 


Depository  of  the 
United  States,  State 
and  City  of  New  York 


The  Mechanics  and  Metals  National  Bank 


OF  THE  CITY  OF  NEW  YORK 


GATES  W.  McGARRAH.  President. 

ALEXANDER  E.  ORR,  Vice-President  WALTER  P.  ALBERTSEN,  VIce-Pres. 

NICHOLAS  F.  PALMER,  Vice-President.  JOSEPH  S.  HOUSE,  Cashier. 
FREDERIC  W.  ALLEN.  Vice-President.  ROBERT  U.  GRAFF,  Asst.  Cashier. 

ANDREW  A.  KNOWLES,  Vice-President.  JOHN  ROBINSON,  Asst.  Cashier. 
FRANK  O.  ROE,  Vice-President.  CHARLES  E.  MILLER,  Asst.  Cashier. 


year  fittingly  celebrated  its  twentieth  anni- 
versary. During  the  twenty  years  this  bank 
has  grown  rapidly.  Its  present  assets  will 
approximate  $3,500,000. 

SOUTHERN  STATES 

— The  Gulf  National  Bank  of  Beaumont, 
Tex.,  by  its  absorption  of  the  Commercial 
National  Bank  of  Beaumont,  has  greatly  in- 
creased its  size  and  strength.  In  planning 


P.  B.  DOTY 

Vice-President  and  Cashier  The  Gulf  National 
Bank  of  Beaumont,  Texas 

the  deal  provision  was  made  whereby  the 
accounts  of  the  Commercial’s  depositors  were 
transferred  to  the  Gulf  National  Bank. 
The  Commercial  National  was  organized 
about  one  year  ago  and  had  for  its  officers 


the  following:  T.  W.  Garrett,  president; 
George  W.  Carroll,  vice-president;  T.  L. 
Coplin,  cashier,  and  J.  D.  Proctor,  assistant. 

P.  B.  Doty,  the  vice-president  and  cashier 
of  the  Gulf  National,  whose  portrait  is  re- 
produced herewith,  is  the  ruling  spirit  in  the 
enlarged  bank.  When  he  entered  the  Gulf 
National  Bank  as  a teller,  back  in  1903,  the 
deposits  did  not  exceed  $500,000;  to-day 
they  are  something  over  $1,500,000. 

— Messrs.  Wesley  Drane,  John  J.  Conroy, 
Frank  T.  Hodgson,  Martin  L.  Cross  and  C. 
W.  Bailey  have  incorporated  the  Southern 
Trust  Company  of  Clarksville,  Tenn.;  Mr. 
Drane  is  president  and  Mr.  Bailey,  cashier. 
The  capital  stock  is  $50,000,  which  will  be 
increased  as  the  business  warrants. 

— Winston-Salem,  N.  C.,  will  soon  have 
another  banking  institution  established  in  its 
midst.  The  Merchants  National  is  the  name 
decided  upon.  It  will  have  a capital  stock 
of  $100,000. 

— H.  A.  Williams,  assistant  cashier  of  the 
National  Bank  of  Virginia,  Richmond,  Va., 


Albany 

®mat  (Enmpang 

ALBANY,  N.  Y. 

j^CTIVE  And  'Reserve  cAccounts 
are  solicited  And  interest  pAid 
on  dAily  balAnces . 'DesignAted 
depository  for  reserve  of  &(e*w 
York  St  Ate  cBAnks  And  Trust 
CompAnies  : : : : : : : 

Capital  and  Surplus,  $725,000 


767 


Digitized  by  ^.ooQle 


768 


THE  BANKERS  MAGAZINE 


| ESTABLISHED  IMS  J 

National  Bank 


of  Virginia 

RICHMOND,  VA. 

Capital  . . $1,200,000.00 

Surplus  ....  600,000.00 

Depoab  OVER  EIGHT  MILLION  DOLLARS 

WM.  M.  HABLISTON,  President 
JOHN  SKELTON  WILLIAMS.  Vice-Prea. 
WILLIAM  T.  REED,  Vlce-Pres. 

W.  MEADE  ADDISON,  Cashier 
O.  S.  MORTON,  Asst.  Cashier 
JOHN  TYLER.  Asst.  Cashier 
W.  H.  SLAUGHTER,  Asst.  Cashier 
JAMES  M.  BALL,  Asst.  Cashier 

Accounts  of  Banks,  Bankers.  Corporations, 
Firms  and  Individuals  solicited  on  favorable 
terms.  Correspondence  invited. 


LARGEST  CAPITAL 
of  Any  Bank  in  Virginia 


has  resigned,  to  give  his  entire  time  to  his 
private  business.  Mr.  Williams  has  exten- 
sive farming  interests  in  Tidewater  that  re- 
quire personal  attention. 

Mr.  Williams  was  cashier  of  the  Bank  of 
Richmond  before  its  consolidation  with  the 
National  Bank  of  Virginia,  and  was  re- 
tained as  an  assistant. 

As  there  are  several  assistant  cashiers  in 
the  National  Bank  of  Virginia,  no  one  will 
he  appointed  to  fill  the  vacancy  caused  by 
the  resignation  of  Mr.  Williams. 

— Under  the  name  of  the  Sullivan  Bank 
and  Trust  Company,  a new  banking  institu- 
tion began  business  in  Montgomery,  Ala., 
on  October  3.  The  institution  is  owned  and 
controlled  by  Martin  H.  Sullivan  of  New 
Orleans  and  Pensacola;  his  son,  Russell  Sul- 
livan, and  John  P.  Kohn  and  Frank  D. 
Kohn  of  Montgomery.  The  officials  are: 
John  P.  Kohn,  president;  Frank  D.  Kohn, 
vice-president,  and  Russell  Sullivan,  cashier. 
The  company  reports  a paid-in  capital  of 
$100,000. 

— H.  N.  Tinker,  who  recently  resigned  as 
president  of  the  Bankers’  Trust  Company 
of  Houston,  Tex.,  has  leased  the  quarters 
and  the  fixtures  at  210  Main  street,  formerly 
used  by  the  American  National  Bank  of 
Houston,  and  has  opened  up  for  business  as 
a private  banker.  He  will  conduct  a general 


investment  business,  looking  after  insurance, 
banking,  collections,  real  estate,  rentals, 
loans,  stocks  and  bonds,  land  titles,  ap- 
praisements and  vendor's  lien  notes. 

Mr.  Tinker,  prior  to  his  connection  with 


H.  N.  TINKER 

Banker  and  Broker,  Houston,  Texas 


the  Bankers’  Trust  Company,  was  vice- 
president  of  the  Union  Bank  and  Trust 
Company. 

— H.  M.  Wilkins  has  been  made  assistant 
cashier  of  the  Lumberman’s  National  Bank 
of  Houston,  Tex.  Increased  business  made 
it  necessary  for  the  bank  to  have  the  third 
assistant  cashier. 


MIDDLE  STATES 

— Organization  of  the  National  Currency 
Association  of  the  City  of  Chicago  was  com- 
pleted October  14,  at  a meeting  of  repre- 
sentatives of  eleven  of  the  national  hanks. 
The  certificate  of  organization  was  filed  with 
William  Boldenweck,  assistant  treasurer, 
who  was  present  at  the  meeting  as  the  rep- 
resentative of  Secretary  of  the  Treasury 
MacVeagh. 

The  officers  of  the  association  are;  Presi- 
dent, George  M.  Reynolds;  vice-president, 
David  R.  Forgan;  secretary,  William  A. 
Heath;  treasurer,  William  A.  Tilden;  ex- 


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*T  If  you  are  in  the  market  for  new  BANK 
FIXTURES  and  FURNITURE  it  will  be  very  much 
to  your  advantage  to  get  our  ideas.  The 
name  ANDREWS  stands  for  all  that  is  modern 
in  every  detail  of  office  equipment,  and  the 
ANDREWS  produce  has  been  the  standard  for 
nearly  half  a century. 

T We  make  only  the  best  that  skill  and  un- 
equalled manufacturing  facilities  can  pro- 
duce, and  charge  you  only  a fair  price  for  it. 
T One  of  our  experienced  traveling  men  will 
be  glad  to  call  on  you  at  your  convenience. 
Illustrated  Booklet  Upon  Request 

THE,  A.  H.  ANDREWS  CO. 

174-176  Wabash  A™.  CHICAGO  1161-1173  Broadway.  NEW  YOBH 


ecutive  committee,  Ernest  A.  Hamill,  James 
B.  Forgan,  John  A.  Lynch,  George  M.  Rey- 
nolds and  D.  II.  Forgan;  membership  com- 
mittee, Ernest  A.  Hamill,  James  B.  Forgan, 
John  A.  Lynch,  George  M.  Reynolds  and 
William  A.  Heath. 

The  banks  represented  at  the  meeting  and 
their  representatives  were  as  follows:  Conti- 
nental and  Commercial  National,  Alexander 
Hobertson,  vice-president;  Corn  Exchange 
.National,  B.  C.  Sammons,  vice-president; 
Drovers’  Deposit  National,  John  Fletcher, 
vice-president;  First  National,  Frank  O. 
Wetmore,  vice-president;  First  National  of 
Englewood,  J.  J.  Nichols,  president;  Fort 
Dearborn  National,  William  A.  Tilden,  presi- 
dent; LaSalle  Street  National,  William  Lori- 
mer,  president;  Live  Stock  Exchange  Na- 
tional, William  A.  Heath,  president;  Na- 
tional Bank  of  the  Republic,  William  T. 
Fenton,  vice-president;  National  City,  David 
R.  Forgan,  president;  National  Produce, 
Edwin  L.  Wagner,  president. 

The  officers  chosen  were  nominated  by  a 
committee  appointed  at  a meeting  some  time 
ago  and  including  F.  O.  Wetmore,  W.  T. 
Fenton  and  B.  C.  Sammons.  Naturally  the 
principal  officers  are  representatives  of  the 
largest  national  banks  in  the  city.  The  as- 
sociation was  formed  at  the  earnest  solicita- 
tion of  Secretary  MacVeagh.  not  that  he 
expected  the  situation  would  require  the  issue 
of  emergency  currency,  such  as  the  associa- 
tion is  empowered  to  put  out,  but  because 
he  believed  the  organization  of  such  asso- 
ciations in  New  York,  Chicago  and  other 
cities  would  tend  to  strengthen  confidence 
in  the  general  financial  position  of  the  coun- 
tiy. 

— The  following  new  members  have  been 
added  to  the  directorate  of  the  Harris  Safe 
Deposit  Company  of  Chicago:  W.  M. 

Pelouse,  Robert  M.  Wells,  G.  P.  Hoover  and 
N.  C.  Kingsbury.  The  issuance  of  $375,000 
of  additional  capital  stock  has  been  ordered 
by  the  stockholders,  making  the  total  out- 
standing amount  of  $1,625,000.  The  author- 
ized capital  was  recently  increased  from 
$1,250,000  to  $2,000,000.  The  directors  have 


declared  the  regular  dividend  of  three  per 
cent.,  payable  October  1. 

— Charles  S.  Castle,  president  of  the  Stand- 
ard Trust  and  Savings  Bank  of  Chicago,  an- 
nounced October  6 that  the  deposits  of  the 
institution  had  passed  $1,000,000.  The 
amount  contains  no  public  funds  and  no  re- 
ciprocal deposits.  The  bank  was  a month 
old  on  that  date. 

— John  T.  Shaw  has  been  elected  president 
of  the  First  National  Bank  of  Detroit,  Mich., 
succeeding  Morris  L.  Williams,  deceased. 
Prior  to  the  consolidation  of  the  First  Na- 
tional and  Commercial  National  Banks  in 
1908,  Mr.  Shaw  was  president  of  the  First; 
in  the  enlarged  bank  he  became  first  vice- 
president;  Mr.  Williams,  "who  had  been  head 
of  the  Commercial,  becoming  president  of 
the  consolidated  bank. 

---The  national  banks  of  Detroit,  Mich., 
and  other  cities  have,  under  the  provisions 
of  the  Aldrich  law,  formed  the  National 
Currency  Association  of  Detroit.  Those 
comprising  the  association  are  the  four  na- 
tional banks  of  Detroit,  two  of  Saginaw,  two 
of  Lansing,  one  each  in  Ypsilanti,  Ann 
Arbor,  Bay  City,  Lapeer,  Flint,  Romeo  and 
Port  Huron.  The  officers  of  the  associa- 
tion are:  John  T.  Shaw,  vice-president  of 
the  First  National  of  Detroit,  president; 


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Alexander  McPherson,  president  of  the  Old  dent  of  the  American  Exchange  National  of 
Detroit  National,  vice-president;  Richard  P.  Detroit. 

Joy,  president  of  the  National  Bank  of 

Commerce,  secretary  and  treasurer.  The  ex-  — A very  good  reproduction  of  the  new 
ecutive  committee  is  as  follows:  B.  F.  Davis,  building  just  completed  by  the  Citizens’ 


Citizens  State  Bank  of  Sheboygan,  Wis. 


president  of  the  City  National  of  Lansing;  State  Bank  of  Sheboygan,  Wis.,  is  published 

George  B.  Morelev,  president  of  the  Second  here.  The  structure  has  been  designed  for 

National  ot  Saginaw;  H.  G.  Barnum,  presi-  the  bank’s  exclusive  occupation  and  a great 

dent  of  the  First  National  Exchange  Bank  deal  of  expensive  material  has  gone  into  its 

of  Port  Huron,  and  James  N.  Wright,  presi-  construction.  The  main  banking  room  has 

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BERGER’S  STEEL  OFFICE  FURNITURE 

operates  perfectly  —is  absolutely  sanitary — vermin  and  rodent  proof 
-protects  your  records  like  a vault — replaces  any  wooden  cabinet  or 
desk — Is  the  most  economical  furniture  you  can  buy. 

Have  you  our  new  catalogue!  Better  write  for  it  immediately. 

The  Berger  Mfg.  Co.,  Canton,  Ohio 

Ayencies  in  nil  Principal  Cities 


En*tern  Display  Boom* 
lllli  Ave.  and  v!*i«l  Si. 
New  York,  N.\ . 


WcMtern  Dinplay  Doom* 
33  Dearborn  Si. 
Chicago,  111. 


a ceiling  twenty-six  feet  high  and  is  finished 
in  mahogany  and  marble.  Screen  work  is  of 
bronze  and  the  floor  of  gray  marble.  Con- 
tained in  the  building  are  rooms  for  cus- 
tomers and  a specially  appointed  ladies’ 
apartment.  The  directors  have  a beautiful 
room  finished  in  stained  oak  and  furnished  in 
the  same  material. 

Modern  vaults  have  been  built  on  the  main 
floor  opposite  the  entrance  to  the  banking 
room.  They  contain  boxes  for  renting  pur- 
poses and  also  supply  the  security  for  the 
bank’s  own  papers  and  cash. 

The  Citizens’  State  Bank  of  Sheboygan, 
Wis.,  was  organized  in  1896.  On  July  1, 
1907,  the  present  management  came  into  con- 
trol. Since  that  time  the  capital  stock  has 
been  increased  from  $50,000  to  $100,000,  the 
surplus  from  $2,000  to  $30,000,  the  deposits 
from  $200,000  to  $575,000,  and  total  re- 
sources from  $250,000  to  $700,000.  Since 
moving  into  its  new  building  six  months  ago 
the  deposits  have  increased  over  twenty- five 
per  cent.  The  president  is  Henry  Jung, 
who  is  also  president  of  the  Jung  Shoe  Com- 
pany and  one  of  the  leading  manufacturers 
of  Sheboygan.  J.  W.  Hansen  is  cashier  and 
the  active  head  of  the  bank.  He  came  to 
the  institution  three  years  ago  from  the 
First  National  Bank  of  Portage,  Wis.,  where 
he  had  been  cashier  for  several  years. 

-J.  E.  Burniister,  formerly  cashier,  has 
been  elected  president  of  the  Iowa  National 
Bank  of  Davenport,  la.,  to  succeed  the  late 
A P.  Doc.  F.  B.  Yetter,  formerly  assistant 
cashier,  has  been  made  cashier. 


— J.  D.  Dana  has  been  elected  treasurer 
of  the  Commonwealth  Trust  Company  of 
St.  Louis  and  in  the  future  will  devote  his 
entire  attention  to  the  conduct  of  his  office 
at  Broadway  and  Olive  street.  Mr.  Dana 
has  been  in  St.  Louis  since  1905,  when  he 
engaged  in  business  with  Holla  Wells  and 
Edward  F.  Goltra  as  secretary  and  treas- 
urer of  the  Missouri  Iron  Company.  He 
was  also  made  president  of  the  West  End 
Light  and  Power  Company,  which  was  or- 


ganized as  a competitor  to  the  Union  Elec- 
tric Company,  with  which  company  litiga- 
tion is  yet  pending  in  the  courts.  He  was 
also  at  the  head  of  the  St.  Louis  Gas  Light, 
Heat  and  Power  Company,  that  proposed 
supplying  St.  Louis  with  natural  gas  from 
the  Oklahoma  fields. 

— The  Commercial  National  Bank  of 
Waterloo,  la.,  is  capitalized  for  $200,000 


Commercial  National  Bank.  Waterloo.  Iowa 


and  has  a surplus  of  $50,000.  It  recently 
reported  deposits  of  $1,988,900. 

— The  last  official  statement  distributed  by 
the  Black  Hawk  National  Bank  of  Water- 
loo, la.,  places  the  deposits  at  $1,066,744  and 
the  resources  $1, 128,383.  This  institution  has 
adopted  for  its  slogan  the  phrase,  “The 
Bank  of  Stability  and  Progress.” 

— Our  last  issue  contained  mention  of  the 
very  good  report  of  the  Mercantile  Trust 
Company  of  St.  Louis.  But  in  quoting  the 
figures  we  stated  that  the  deposits  were 
$5,747,623,  and  the  total  resources,  $8,417,- 
926.  These  figures  were  taken  uninten- 
tionally from  the  statement  of  the  Mer- 

771 


Digitized  by  t^ooQle 


772 


THE  BANKERS  MAGAZINE 


cantile  National  Bank.  On  the  date  of 
the  last  call  the  Mercantile  Trust  Com- 
pany reported  total  deposits  of  $22,687,919 
and  total  resources  of  $32,415,445. 

— From  the  “Old  Reliable”  Leavitt  & 
Johnson  National  Bank  of  Waterloo,  la., 
comes  a statement  of  conditions  that  shows 
the  institution  to  be  capitalized  for  $200,000 
and  to  have  deposits  of  $1,308,064. 

— The  Park  Junction  Bank  in  Kansas 
City,  Kan.,  is  to  be  known  in  the  future  as 
“The  Night  and  Day  Bank  of  Kansas 
City.”  The  bank,  now  four  years  old,  has 
been  reorganized  under  the  new  name  and 
has  moved  from  Fifth  street  and  Virginia 
avenue  to  new  quarters  at  Fifth  street  and 
Minnesota  avenue.  It  will  be  open  from 
8 o'clock  in  the  morning  to  9 o'clock  at 
night  five  days  of  the  week,  and  Saturday 
the  closing  hour  will  be  10  o’clock  at  night. 
The  officers  are:  J.  M.  McDonald,  presi- 
dent; J.  W.  Yardley,  vice-president,  and 
E.  G.  Wolf,  cashier. 

— James  B.  Brown,  president  of  the  First 
National  Bank  of  Louisville,  Ky.,  and  other 
officials  of  the  institution,  recently  held  an 
informal  reception  at  the  new  quarters  of 
the  bank  in  the  Kentucky  Title  building  at 
Fifth  street  and  Court  place.  The  recep- 
tion was  attended  largely  by  leading  busi- 
ness men,  who  regarded  the  move  as  of  es- 
pecial interest  on  account  of  the  fact  that 
the  First  National  is  breaking  away  from 
traditions  by  leaving  Main  street  and  the 
wholesale  center. 


The 

Berlitz  School 

Of 

Languages 

MADISON  SQ,,  1122  BROADWAY 


Harlem  Branch,  343  Lenox  Are., 
abort  S27th  Si. 

Brooklyn  Branch.  218  Livingston  St. 
Branches  in  over  250  leading  cities 
Summer  School  A* bury  Park,  N.  J. 


Hotel  Touraine  Annex 
Fifth  Av.  near  Grand 


Teachers  sent  all  points  within  50  miles 
Day  and  Evening  Lessons,  in  Classes  or 
Privately,  at  8chool  or  at  Residence. 


AWARDS 


Paris  exposition, 

1900, 

Lille 

1902, 

Zurich  •• 

1902, 

8t.  Louis  “ 

1904, 

Liege  m 

1905. 

Lokdox 

1908, 

2 GOLD  MEPAI.8 
Gold  Medal 
gold  Medal 
Gbaed  PRIZE 
grajid  prize 
Grand  prize 


AMERICAN 

NATIONAL  DANK 

RICHMOND,  VIRGINIA 


(Organized  Nov.  1,  1899) 

Capital,  - - • $500,000.00 
Surplus  and  Profits,  300,000.00 

Located  in  the  capital  and  metrop- 
olis of  the  state  and  fully  equipped 
in  every  respect  for  prompt  and 
efficient  service,  this  bank  seeks  the 
Richmond  and  Virginia  business  of 
Banks,  Firms,  Corporations  and  In- 
dividuals everywhere. 

The  large  number  of  this  institu- 
tion’s present  correspondents  and  de- 
positors is  ample  proof  of  the  satis- 
factory service  rendered. 


UNITED  STATES  AND  STATE  DEPOSITORY 


The  First  National  is  the  oldest  national 
bank  south  of  the  Ohio  River.  It  was  made 
a national  institution  during  the  Civil  War, 
and  was  a government  depository  during 
that  period.  It  was  the  successor  of  the 
Jefferson  Savings  Institute,  and  has  always 
been  located  on  Main  street.  The  present 
location  is  only  temporary,  however,  as 
plans  are  being  made  for  the  erection  of  a 
handsome  fifteen-storv  building  at  Fifth 
and  Jefferson  streets,  and  the  first  floor  of 
this  is  to  be  occupied  by  the  First  National. 

— The  Fidelity  Trust  Company  of  Louis- 
ville, Kv.,  has  received  a check  for  $10,000 
from  the  Guarantee  Company  of  North 
America  of  Montreal,  in  payment  of  the 
full  amount  of  its  Tionds  of  suretyship  on 
August  ltopke,  ex-secretary  and  bookkeep- 
er, who  recently  defaulted  for  over  $1,400,- 
000. 


WESTERN  STATES 

— The  Oklahoma  Stock  Yards  National 
Bank,  with  a paid-up  capital  of  $250,000 
and  a surplus  of  $25,000,  was  organized  at 


rank  pictures 

Large  portraits  of  past  officers,  etc., 
made  from  any  good  photograph.  Splen- 
did for  directors’  room  or  bank  offices. 
Write  fr  particulars. 

Oliver  Llpplncott,  Photographer  of  Men 
Singer  Bldg.,  149  B’way,  New  York 
Reference*— The  Bankers  Magazine 


Digitized  by  t^ooQle 


Capital,  - - $2,500,000.00 
Surplus  & Profits,  1,250,000.00 
Deposits,  - - 27,000,000.00 


FIRST 

NAT  'ON  Ai. 

BANK 


Cleveland,  Ohio 


ACCOUNTS  SOLICITED. 
CORRESPONDENCE  INVITED. 
COREftllQNS  A SPECIALTY. 


Oklahoma  City,  September  24,  and  has 
opened  for  business  at  the  Oklahoma  Stock 
Yards  in  what  is  said  to  be  one  of  the  finest 
banking  rooms  of  the  South.  Officers 
elected  were  as  follows:  T.  P.  Martin,  Jr., 
president;  E.  F.  Bisbee,  vice-president;  R. 
J.  Robb,  cashier. 

The  president  of  this  bank  is  a former 
Texas  bov,  who  came  to  Oklahoma  about 
ten  years  ago  with  a few  dollars  and  much 
determination,  and  who  has  made  a success 
in  every  venture  he  has  so  far  undertaken. 
He  was  secretary  of  Group  I,  Oklahoma 
Bankers’  Association,  for  several  years,  and 
now  stands  as  president  of  that  organiza- 
tion also,  although  having  removed  from  the 
jurisdiction  of  the  Group. 

— The  Conrad  Trust  and  Savings  Bank, 
the  latest  banking  institution  in  Helena, 
Mont.,  has  thrown  open  its  doors  for  busi- 
ness. The  president  of  the  bank  is  W.  G. 
Conrad,  ex-president  of  the  Montana  Bank- 
ers' Association  and  widely  known  through- 
out the  State.  The  other  officers  are:  J.  H. 
Longmaid,  vice-president;  P.  B.  Bartley, 
cashier;  C.  R.  Clarke,  assistant  cashier;  A. 
D.  Prouty,  secretary.  In  addition  to  a sav- 
ings department,  the  bank  will  do  a general 
commercial  banking  business. 


— H.  I,.  Pittock,  connected  with  the  Ore- 
gonian for  the  past  fifty  years,  and  vice- 
president  of  the  Portland  Trust  Company 
of  Oregon  since  the  spring  of  1887,  has 
been  elected  to  fill  the  vacancy  caused  by 
the  death  of  the  late  president  of  that  in- 
stitution, Benjamin  I.  Cohen.  B.  Lee 
Paget,  secretary  of  the  company,  said  in 
regard  to  the  action  of  the  directors:  “The 
election  of  Mr.  Pittock  will  add  greatly  to 
the  prestige  of  the  bank,  because  of  his 
well-known  reputation  as  a financier  and 
business  man.” 

The  last  official  statement  of  this,  the 
oldest  trust  company  in  Oregon,  issued 
September  1,  1910,  shows  a capital  stock 
paid  in  of  $300,000,  a surplus  fund  of  $54,- 
000;  loans,  $1,427,298.62;  cash  and  exchange, 
$391,873.65,  and  totals  of  $1,990,172.27.  The 
officers  are:  H.  L.  Pittock,  president;  N.  U. 
Carpenter,  vice-p resident;  A.  S.  Nichols, 
vice-president;  B.  I^ee  Paget,  secretary;  C. 
W.  De  Graff,  assistant  secretary;  A.  L. 
Fraley,  assistant  secretary,  and  Harriet  E. 
Moorehouse,  superintendent  woman’s  de* 
partment. 


— At  a recent  meeting  of  the  board  of  di- 
rectors of  the  City  National  Bank  of  Oma- 
ha, Neb.,  John  A.  Miller,  president  of  the 
Citizens  National  Bank  of  Mt.  Sterling.  O., 
was  elected  cashier  of  the  bank.  He  is  a 
man  of  ability  and  in  addition  to  seven- 
teen years’  experience  in  the  banking  busi- 
ness has  been  connected  with  large  manu- 
facturing interests  in  the  East  and  South 
in  an  executive  capacity.  Mr.  Miller  is  a 
member  of  the  executive  council  of  the 
Ohio  Bankers’  Association  and  has  a large 
acquaintance  with  eastern  as  well  as  west- 
ern bankers. 

The  City  National  Bank  is  about  to  move 
into  a new  building. 

— A new  bank  is  being  organized  at  Far- 
go, N.  D.,  to  be  known  as  the  Scandinavian- 
American  Bank  of  Fargo.  It  will  have 
$50,000  capital.  The  list  of  stockholders  is 


ASK  YOUR 

STATIONER 

FOR 

BANKERS 

LINEN 

AND  BANKERS  LINEN 
BOND 

Made  la  flat  papers.  Typewriter 
papers  and  envelopes 

They  are  fully  appreciated  by 
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sols  Aourrs 

F.  W.  ANDERSON  & CO. 

34  BEEKMAN  STREET,  NEW  YORK 


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THE  BANKERS  MAGAZINE 


a long  one  and  contains  the  names  of  all 
Scandinavians  of  prominence  in  and  near 
Fargo.  The  directors  are  as  follows:  R. 
O.  Belland,  H.  A.  Hagen,  N.  C.  Eggan, 
Prof.  H.  Aaker,  Attorney  B.  G.  Teneson, 
M.  A.  Hagen,  Lars  Christianson,  Judge 
Edward  Engrud,  Emil  J.  Headland,  and 
II.  A.  Hagen  is  the  president.  He  has  been 
connected  with  the  banking  institutions  of 
North  Dakota  for  the  last  twenty  years 
and  is  interested  in  several  banks  at  this 
time.  They  have  secured  as  a location  one 
of  the  prominent  corners  of  the  city. 

PACIFIC  STATES 

— Senator  R.  C.  McCroskey,  perhaps  the 
most  successful  farmer  in  Whitman  County, 
Wash.,  now  president  of  the  Pullman  State 
Bank  of  Pullman,  Wash.,  has  purchased  a 
large  interest  in  the  National  Bank  of 
Palouse,  Wash.,  which  was  organized  about 
one  year  ago.  Mr.  McCroskey  has  been 
elected  a member  of  t’* ' board  of  directors 
and  also  vice-p reside?  1. 

— Stockholders  of  the  First  National 
Bank  of  Los  Angeles  have  voted  to  increase 
the  capitalization  of  their  institution  $250,- 
000,  making  it  $1,500,000.  When  the  sub- 
scriptions have  all  been  paid  in,  another 
formal  action  will  be  taken  for  the  increase 
of  the  capital  of  the  Los  Angeles  Trust  and 
Savings  Bank,  which  is  owned  by  the  First 
National. 

— At  the  meeting  of  the  board  of  direct- 
ors of  the  Scandinavian- American  Bank  of 
Seattle,  Knute  Ekman,  who  recently  came 
West  from  Minneapolis,  was  elected  vice- 
president.  Mr.  Ekman  was  cashier  of  the 
Scandinavian-American  National  of  Min- 
neapolis until  about  a year  ago,  when  he 
came  West  to  investigate  conditions  on  the 
coast.  He  was  assistant  cashier  of  the 
Swedish-American  Bank  prior  to  the  or- 
ganization of  the  Scandinavian-American 
Bank  of  Minneapolis. 

— The  Bank  of  Italy  in  San  Francisco 
has  purchased  the  assets  of  the  Bank  of 
San  Francisco  and  Mechanics  Savings  Bank 
and  within  a few  weeks  will  open  a Market 
street  branch  of  the  Bank  of  Italy  in  the 
premises  at  Market  and  Mason  streets,  now 
occupied  by  the  Mechanics  Savings  Bank. 
In  these  quarters  will  be  assembled  the 
banking  and  safe  deposit  business  of  the 
Bank  of  San  Francisco,  now  being  con- 
ducted at  Market  and  Seventh  streets  (to- 
gether with  the  Polk  street  branch) ; the 
banking  and  safe  deposit  business  of  the 
Mechanics  Savings  Bank  and  the  business 
of  the  present  Mission  street  branch  of  the 
Bank  of  Italy. 

The  plan  contemplates  the  increase  of 
the  capital  of  the  Bank  of  Italy  from  $750,- 
000  to  $1,000,000.  The  officials  will  remain 


the  same,  with  the  exception  that  George 
F.  Lyon,  vice-president  of  the  Mechanics 
Savings  Bank,  will  become  vice-president 
and  a director  of  the  Bank  of  Italy.  W. 
Frank  Pierce,  president  of  the  Bank  of  San 
Francisco,  will  also  affiliate  with  the  Bank 
of  Italy. 

•-^Tohn  Clausen  has  been  appointed  man- 
ager of  the  foreign  exchange  department 
of  the’Crocker  National  Bank,  San  Fran- 
cisco. . 

CANADA 

— Following  the  death  of  F.  X.  St 
Charles,  president  of  the  Banque  d’Hochela- 
ga,  head  office,  Montreal,  the  Hon.  J.  D. 
Rolland  becomes  his  successor.  The  thirty- 
fifth  annual  report  of  the  bank  discloses  an 
authorized  capital  of  $4,000,000,  a capital 
paid  up  of  $2,500,000,  a reserve  fund  of 
$2,300,000,  and  total  assets  of  over  $2,300,- 
000. 

— The  latest  intelligence  from  Nome, 
Alaska,  reports  the  consolidation  of  the 
Nome  Bank  and  Trust  Company  and  the 
Miners  and  Merchants’  Bank  of  Alaska, 
with  a combined  capital  of  $235,000.  The 
names  of  the  new  officials  have  not  been 
given  out,  but  those  of  the  first  of  the 
above  institutions  were:  R.  D.  Adams, 
president;  Felix  Brown,  vice-president,  and 
A.  E.  Todd,  manager.  And  those  of  the 
other:  J.  E.  Chilberg,  president,  J.  S.  Kim- 
ball, vice-president;  W.  L.  Collier,  manager; 
C.  G.  Cowden,  cashier.  And  it  is  from 
among  these  that  the  new  executives  will  be 
chosen. 


DETROIT  ENTERS  THE  ADVER- 
TISING FIELD 

WE  have  received  a copy  of  the  first 
number  of  the  “Bulletin  of  the  De- 
troit Board  of  Commerce”  which  will  be 
published  monthly  in  the  interest  of  that 
city. 

That  Detroit  has  entered  the  list  of  ad- 
vertising cities  is,  no  doubt,  largely  due  to 
the  personal  efforts  of  the  editor  of  the 
Bulletin,  Mr.  E.  St.  Elmo  Lewis,  the  well- 
known  advertising  manager  of  the  Bur- 
roughs Adding  Machine  Company,  and 
president  of  the  National  Association  of  Ad- 
vertising managers,  who  together  with  four 
of  the  advertising  managers  of  Detroit 
concerns,  constitute  the  publicity  committee 
of  the  board. 

Mr.  Lewis  has  addressed  many  commer- 
cial bodies  over  the  countrv  on  this  hobby 
of  his  and  his  influence  has  been  potent 
in  the  establishment  by  many  of  these 
bodies  of  publicity  boards  which  have  ac- 
complished much  good  for  their  respective 
municipalities. 


Digitized  by  t^ooQle 


THE 

BANKERS  MAGAZINE 

ELMER  H.  YOUNGMAN.  Editor 


SIXTY -FOURTH  YEAR  DECEMBER,  1910  VOLUME  LXXXI.  NO.  6 


A CENTRAL  BANK  WITH  BRANCHES,  OR  A 
SYSTEM  OF  REAL  RESERVE  BANKS— 
WHICH  WOULD  BEST  SUIT  OUR 
NEEDS  AND  CONDITIONS  ? 


T^THILE  we  believe  that  the  root  of 
our  banking  and  currency  diffi- 
culties is  to  be  found  in  inflation  of  the 
paper  currency  and  in  the  inflation  of 
bank  credit,  and  that  there  will  be  no 
permanent  or  adequate  improvement  un- 
til this  fact  is  recognized  and  effectually 
dealt  with,  we  realize  fully,  and  have 
pointed  out  for  many  years,  that  the 
question  of  bank  reserves  is  hardly  less 
important,  and  that  our  banking  ma- 
chinery, and  our  reserve  banks  espe- 
cially, should  be  overhauled  and  made 
to  flt  the  needs  of  the  times. 

Two  or  three  ways  of  doing  this 
have  been  suggested: 

First,  by  a central  bank  of  issue, 
modeled  to  some  extent  on  the  great 
European  institutions. 

Second,  by  some  form  of  district  as- 
sociation among  the  banks,  resulting  in 
more  or  less  centralization  of  authority. 

Third,  this  Magazine  has  suggested 
that  the  existing  reserve  banks  be  im- 
proved so  that  they  might  be  equipped 
to  fulfill  the  real  functions  of  reserve 
institutions. 

Probably  all  who  have  given  thought 
to  these  proposals  would  readily  con- 
cede that  if  an  institution  like  the  Bank 
of  France  could  be  established  and 
maintained  in  this  country,  and  pro- 
vided it  would  be  as  efficient  here  as  the 
French  institution  has  been  in  that  coun- 


try, no  better  solution  of  our  banking 
problem  could  be  found. 

It  may  be  that  this  result  is  attain- 
able, but  there  are  some  good  grounds 
for  doubt. 

In  the  present  state  of  opinion  with 
regard  to  currency  and  banking  mat- 
ters, could  a charter  be  obtained  for 
a central  bank  with  anything  like  the 
powers  such  an  institution  should  have 
if  it  is  really  to  be  an  efficient  aid  to 
commerce  and  industry? 

That  this  is  a real  difficulty  may  easily 
be  ascertained  by  the  disclaimers  put 
forth  by  those  who  propose  a central 
bank.  They  tell  you  invariably  that 
they  do  not  mean  to  have  an  institution 
like  the  great  central  banks  of  Europe. 
What  they  propose  is  4 'a  modified  cen- 
tral bank/’  or  “a  central  bank  of  lim- 
ited scope,”  etc.,  etc.  This  hedging  in- 
dicates a proper  conception  of  the  rough 
road  the  central  bank  will  have  to  travel. 

The  probabilities  are  that  if  a char- 
ter lor  a central  bank  can  be  obtained 
at  all,  it  will  be  shorn  of  several  of  the 
privileges  essential  to  its  effectual  work- 
ing. This  will  follow  in  conformity  to 
political  prejudices  and  to  the  hostility 
arising  from  jealousy  on  the  part  of  the 
existing  banks. 

And  even  could  a satisfactory  charter 
be  obtained,  what  guaranty  have  we  that 
it  will  outlast  the  short  life  of  a single 
Administration  ? 


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No  student  of  American  banking  his- 
tory can  have  failed  to  note  the  ease 
with  which  successful  political  attacks 
can  be  stirred  up  against  the  banks. 

Let  us  suppose  that  the  session  of 
Congress  that  has  recently  convened 
should  pass  a bill  for  the  chartering  of 
a central  bank,  and  that  President  Taft 
should  sign  it.  After  March  4 there 
will  be  an  important  change  in  the 
political  complexion  of  Congress,  the 
House  becoming  Democratic  and  the 
Senate  at  least  “insurgent/' 

Does  anybody  suppose  that  under 
these  changed  political  conditions  the 
new  bank  would  escape  attack?  Why, 
the  Democratic  majority  would  no  doubt 
consider  it  a bounden  duty  to  destroy 
an  institution  set  up  by  its  rival  “as  a 
means  of  perpetuating  plutocracy/* 
Should  the  Senate  take  a similar  view, 
and  pass  a bill  repealing  the  bank’s 
charter.  President  Taft  would  no  doubt 
veto  the  bill,  but  nevertheless  great 
harm  would  have  been  done  the  new 
bank  by  the  attack  upon  it,  and  the  pos- 
sibility of  more  success  next  time. 

The  national  banks  are  free  from 
these  attacks,  because  there  are  so  many 
of  them,  with  widespread  local  connec- 
tions. 

But  a single  big  bank  will  almost 
certainly  encounter  them. 

Furthermore,  no  one  knows  exactly 
how  a central  bank  would  work  here, 
even  could  it  be  established  under  the 
most  favorable  conditions. 

The  extent  of  our  territory  is  vastly 
greater  than  that  of  most  of  the  Eu- 
ropean countries  having  central  banks. 

Besides,  the  central  banks  of  Europe, 
within  the  borders  of  their  own  country, 
have  to  deal  with  a few  hundred  banks 
at  most.  Here  there  are  nearly  25,000 
independent  banks. 

Nor  are  the  habits  of  business  men, 
and  of  the  banks,  like  those  in  Europe, 
and  even  the  commercial  paper  upon 
which  the  banking  business  depends  is 


not  like  that  the  European  banks  are 
accustomed  to  handle. 

Notwithstanding  all  these  difficulties, 
however,  which  are  real  and  not  imag- 
inary— a central  bank  might  be  estab- 
lished and  might  work  with  a consider- 
able degree  of  success. 

It  is  a grave  question,  however,  and 
one  which  the  advocates  of  a central  bank 
should  carefully  consider,  whether  it  is 
wise  to  run  the  risk  of  the  dangers  we 
have  indicated.  Banking  and  credit 
operations  are  extremely  sensitive  to 
attack,  even  to  the  possibility  of  it.  A 
central  bank  once  established  and  in 
operation  would  soon  assume  tremendous 
importance  in  the  economic  life  of  the 
nation.  Successful  political  attack  upon 
it,  or  the  threat  of  it,  could  not  fail  to 
be  disastrous  to  the  business  interests  of 
the  country. 

It  would  be  an  ill  beginning  of  the 
work  for  bettering  our  banking  ma- 
chinery by  setting  up  a big  machine 
liable  to  be  smashed  at  the  first  oppor- 
tunity, with  immeasurable  damage  to 
banking  and  to  business  generally. 

If  a central  bank,  for  the  reasons 
stated,  would  become  a menace  to  busi- 
ness stability,  we  should  deliberate  very 
carefully  before  seeking  to  establish 
such  an  institution  here,  however  suc- 
cessful it  may  have  been  on  foreign  soil. 

The  second  plan  of  banking  reform, 
mentioned  at  the  commencement  of  this 
article,  seeks  to  gain  the  desired  cohe- 
sion of  our  disjointed  banking  units  by 
an  organization  of  some  kind  that  would 
unite  the  banks  of  each  district  for  their 
common  welfare  and  protection. 

A union  of  this  character  seems  highly 
desirable,  and  that  it  would  accomplish 
tremendous  good  if  formed  and  con- 
ducted on  the  right  lines,  can  hardly 
be  questioned. 

Is  it  practicable?  We  do  not  know. 
This  much  may  be  said.  The  intense 
individualism  of  the  banks  appears  to 
be  giving  way  to  a considerable  extent 
in  favor  of  closer  cooperation.  This  has 


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been  due  in  part  to  the  necessities  of  the 
situation  as  emphasized  in  the  panics  of 
1893  and  1907.  It  has  been  due,  also, 
very  largely  to  the  more  intimate  asso- 
ciation of  bankers  in  their  national  and 
State  associations,  breaking  down  many 
of  the  traditions  and  prejudices  of  the 
past. 

Bankers  are  working  together  now 
for  their  common  good  as  they  never 
were  working  before. 

If  a practicable  method  of  coopera- 
tion could  be  devised,  democratic  in 
form,  that  would  centralize  banking  au- 
thority for  laudable  purposes,  the  weak- 
nesses of  our  whole  banking  system 
might  soon  be  rendered  harmless. 

But  while  admitting  that  the  central 
bank  plan  and  the  plan  of  district  or- 
ganization both  contain  many  excellent 
possibilities,  it  will  be  seen  that  the 
adoption  of  either  plan  involves  the  cre- 
ation of  a new  piece  of  machinery  with 
which  the  bankers  of  the  present  day 
are  not  familiar. 

They  may,  in  time,  be  willing  to 
adopt  this  new  machinery ; but  that  they 
will  do  so  in  the  near  future,  may  well 
be  questioned. 

Should  this  view  prove  correct,  does 
any  way  yet  remain  open  for  remedying 
the  weaknesses  of  our  banking  system? 

We  believe  the  answer  must  be  de- 
cidedly in  the  affirmative. 

What  are  the  weaknesses  referred  to? 
It  would  require  too  much  space  to  dis- 
cuss them  all,  but  a few  of  the  more 
obvious  may  be  pointed  out. 

1.  — Lack  of  adequate  capital  equip- 
ment, especially  upon  the  part  of  the 
reserve  banks. 

2.  — The  absence  of  any  institutions 
properly  fitted  to  perform  reserve  func- 
tions. 

8. — Lack  of  cooperation  among  the 
banks. 

The  want  of  sufficient  capital  on  the 
part  of  most  of  the  banks  is  one  of  the 
greatest  sources  of  banking  inflation. 
Banks  are  creating  credits  out  of  all 


proportion  to  their  means  of  making 
these  credits  good.  A study  of  the 
Reports  of  the  Comptroller  of  the  Cur- 
rency, showing  the  relative  ratio  of  de- 
posits to  capital  for  a series  of  years, 
will  establish  the  truth  of  this  asser- 
tion. We  have  seen  the  statement  of  a 
bank  (of  course,  not  a national  bank) 
whose  capital  was  $5,000  and  deposits 
$140,000! 

A mere  increase  of  capital,  however, 
would  not  be  wholly  effectual,  although 
it  would  do  some  good.  But  it  is  neces- 
sary that,  whatever  their  capital  may  be, 
the  banks  should  limit  their  deposit  lia- 
bilities to  some  conservative  ratio  of 
capital.  If  they  will  not  do  this  vol- 
untarily, legislation  may  be  necessary, 
and  some  States  have  already  limited 
the  deposit  liability  to  a certain  propor- 
tion of  capital. 

This  tendency  to  multiply  credit  ob- 
ligations without  much  regard  to  capital 
is  not  confined  to  our  banks.  The  banks 
of  Great  Britain  have  been  criticised 
recently  by  no  less  an  authority  than 
Sir  R.  H.  Inglis  Palgrave  for  a sim- 
ilar tendency. 

But  if  this  inadequacy  of  capital  in 
proportion  to  deposit  liabilities  works 
harm  among  the  smaller  banks,  it  is  a , 
source  of  far  more  serious  weakness 
with  the  reserve  banks. 

The  capital  of  nearly  every  one  of 
our  reserve  banks  is  pitif ully  inadequate. 

Reserve  banks,  by  the  very  magnitude 
of  their  credit  obligations,  the  payment 
of  which  may  be  demanded  at  any  mo- 
ment, ought  to  have  a very  large  cap- 
ital. It  is  incumbent  upon  them  also  to 
hold  heavier  reserves  than  are  required 
of  other  banks.  This  they  can  not  well 
do  without  adequate  capital. 

Taking  up  the  second  obvious  defect 
in  our  banking  system — the  lack  of  any 
banks  properly  equipped  for  perform- 
ing reserve  functions,  we  come  upon 
what  seems  to  us  one  of  the  things  of 
greatest  importance. 

With  the  experiences  of  1893  and 


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THE  BANKERS  MAGAZINE 


1907  so  fresh  in  our  minds,  no  one 
would  claim  that  the  reserve  banks  of 
the  country  are  properly  fulfilling  their 
functions. 

The  reserve  banks  made  a heroic 
struggle  in  both  these  crises,  and  did  all 
they  could  to  relieve  the  situation,  but 
they  broke  down  under  the  strain  and 
had  to  suspend  payment  to  a consider- 
able extent. 

It  is  unnecessary  to  dwell  upon  the 
weaknesses  of  the  reserve  banks.  That 
they  are  actual  and  not  imaginary  every 
banker  in  the  country  knows  by  experi- 
ence. 

To  make  the  reserve  banks  what  they 
should  be,  their  capital  and  reserve  must 
be  largely  increased.  They  must  have 
the  power,  under  proper  regulations,  to 
employ  their  credit  in  the  form  of  note 
issues,  and  a way  must  be  found  to  dis- 
entangle the  reserve  banks  from  the  un- 
certainties of  the  stock  market  and  make 
them  what  their  name  implies — a reserve 
of  strength  to  the  entire  banking  and 
commercial  system  of  the  country. 

And  it  must  never  be  forgotten  that 
a wise  use  of  reserve  power  implies  the 
ability  to  check  expansion,  and  to  hold 
in  abeyance  a lending  capacity,  whether 
in  the  form  of  notes  or  other  credits, 
for  use  in  time  of  need. 

As  the  final  obvious  defect  in  our 
banking  system,  we  have  mentioned  lack 
of  cooperation  among  the  banks.  This 
has  been  discussed  at  some  length  al- 
ready, and  little  remains  to  be  said  in 
regard  to  it.  But  whether  we  have 
a central  bank,  or  a system  of  reserve 
banks,  this  cooperation  is  essential  to 
the  safety  of  our  banking  system.  The 
banks  must  pull  together  and  not 
against  each  other. 

To  double  or  treble  the  present  cap- 
ital requirements  of  the  reserve  banks, 
and  to  double  their  reserves,  would 
seem  to  be  the  immediate  duty  of  Con- 
gress. 

The  reserve  city  banks  should  also  be 


required  to  hold  all  their  reserves  in 
their  own  vaults. 

Reserve  banks,  under  proper  regula- 
tions, should  be  authorized  to  issue 
credit  notes. 

The  reserve  banks  should  be  regu- 
lated by  legislation  so  as  to  get  them 
out  of  the  stock  market. 

To  compensate  the  reserve  banks  for 
keeping  larger  reserves,  some  conces- 
sions should  be  made  to  them,  in  the 
form  of  reduced  taxation  or  otherwise. 

These  suggestions  call  for  absolutely 
no  new  banking  machinery.  They  sim- 
ply require  that  the  existing  banks  be 
properly  equipped  to  perform  the  func- 
tions that  reserve  banks  must  perform 
if  we  are  to  escape  a repetition  of  the 
disasters  of  1893  and  1907. 

This  would  not  be  setting  up  a spe- 
cial privileged  class  of  banks.  The 
necessary  amendments  to  the  National 
Banking  Act  for  carrying  these  pro- 
posals into  effect  would,  of  course,  ap- 
ply to  all  banks  in  the  central  reserve 
and  reserve  cities. 

Nor  need  these  changes  seriously  in- 
terfere with  existing  banking  relations, 
for  if  thought  preferable,  the  increased 
capital  requirements  could  be  limited  to 
banks  that  desire  to  carry  reserve  ac- 
counts. Other  banks  in  the  reserve  and 
central  reserve  cities  might  retain  their 
present  capital,  if  they  desired  to  do  so. 

We  have  said  elsewhere  that,  in  our 
opinion,  inflation  of  currency  and  credit 
was  the  chief  cause  of  our  present  bank- 
ing and  financial  difficulties. 

Inflation  of  the  currency  may  be 
stopped  by  the  discontinuance  of  the 
issue  of  bond-secured  bank  notes.  We 
already  have  $700,000,000  of  this  form 
of  Government  paper  money,  not  based 
upon  coin,  but  upon  the  public  debt. 
Such  bank  notes  as  are  required  here- 
after should  be  supported  by  a coin 
reserve  of  one-half  or  one-third,  and 
subject  to  daily  commercial  redemption. 

The  improvements  in  our  banking  ma- 
chinery suggested  above  call  for  very 


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slight  modifications  of  the  present 
Banking  Law.  They  do  not  require  the 
creation  of  a central  bank  or  anything 
else  new  to  our  present  banking  system. 
They  can  be  carried  out  by  taking  the 
existing  banks  just  as  they  are,  and  by 
very  slight  changes  in  the  National 
Banking  Act  adapting  these  banks  to 
perform  the  duties  they  must  fulfill  if 
the  banking  and  commercial  structure  is 
to  be  saved  from  going  through  experi- 
ences like  those  of  18jJ3  and  1907. 

The  feasibility  and  practicability  of  a 
central  bank  may  well  be  challenged. 

Will  anybody  deny  that  our  reserve 
banks  can  be,  and  ought  to  be,  adequate- 
ly equipped  to  perform  the  functions  re- 
serve banks  should  perform? 

Were  they  so  equipped,  is  there  any 
doubt  about  their  ability  to  meet  our  pe- 
culiar banking  and  financial  needs 
equally  well  as  a central  bank  could  do  ? 


THE  SOIL  AS  A BANK 

lO  EFERENCE  was  made  recently  to 
the  highly  valuable  work  being 
carried  on  by  the  State  bankers*  associa- 
tions of  the  country.  It  was  stated  also 
that  many  of  the  valuable  papers  and 
addresses  presented  at  the  conventions 
of  these  association  did  not  deal  with 
purely  banking  matters,  but  included 
topics  of  wide  general  interest  to  the 
community,  and  concerned  bankers  only 
as  a part  of  the  community.  An  excel- 
lent example  of  a paper  of  this  charac- 
ter is  found  in  an  address  before 
Group  Four  of  the  Illinois  Bankers*  As- 
sociation by  Professor  Cyril  G.  Hop- 
kins of  the  University  of  Illinois.  His 
subject  was,  “The  Soil  as  a Bank.** 
Many  misguided  persons  have  used 
the  soil  as  a bank  in  which  to  bury  their 
money  for  safe-keeping.  And  despite 
the  giewth  in  the  number  of  banks  and 
the  greater  safety  afforded  by  them  in 


caring  for  money  and  valuables,  many 
persons  yet  continue  to  use  the  soil  as  a 
bank. 

Of  course,  it  was  not  to  a use  of 
this  character  that  Professor  Hopkins 
referred  in  his  address  on  “The  Soil 
as  a Bank.**  He  dealt  with  the  subject 
of  agriculture  as  affected  by  present- 
day  farming  methods,  and  began  by 
saying: 

“I  could  not  give  you  any  better  il- 
lustration regarding  the  soil  and  its 
function  than  to  consider  the  soil  as  a 
bank  in  which  we  may  have  a fair  bank 
account  and  can  withdraw  from  it  only 
a small  percentage  each  year  of  what  it 
contains.** 

Now,  we  believe  that  Professor  Hop- 
kins is  entirely  right  in  saying  that  the 
average  farmer  thinks  quite  too  much  of 
what  he  can  get  out  of  the  land,  and  far 
too  little  of  what  he  must  put  into  it. 
To  quote: 

“At  the  present  time,  I think  there  is 
a bill  before  the  United  States  Congress 
asking  for  a bond  issue  of  $20,000,000 
for  extending  the  irrigation  projects  in 
the  West.  It  is  in  harmony  with  the 
whole  movement  in  this  country — ex- 
ploitation. That  is  the  factor  we  have 
worked  in  the  United  States.  If  there 
is  any  land  anywhere,  let  us  exploit  it 
and  get  out  of  it  what  is  in  it.  This  is 
what  the  American  calls  ‘development.* 
But  do  you  suppose  you  could  get  a 
bond  issue  of  $20,000,000  passed  for 
the  restoration  of  the  fertility  of  mil- 
lions of  acres  of  abandoned  land  around 
Washington  and  all  along  the  Atlantic 
coast  ? Why  not  ? All  that  those  lands 
need  is  to  put  back  into  the  soil  the 
stuff  out  of  which  our  crops  are  made. 

****** 

“Not  all  farmers  and  landowners 
have  trained  minds,  you  know.  They 
are  trained  on  other  lines.  They  know 
the  art  of  agriculture,  but  do  you  know 
what  the  art  of  agriculture  consists  of? 


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It  consists  in  working  the  land  for  all 
that  is  in  it.  That  is  American  agri- 
culture. Working  the  land  for  all  there 
is  in  it.  And  when  it  is  worked  out,  go 
and  get  some  more  land.  Take  in  land 
somewhere.  ‘Go  West,  young  man.’  " 
But  the  advice,  “Go  West,  young  man," 
does  not  now  have  the  meaning  that  it 
did  in  Greeley's  time.  The  “West"  in 
that  sense  no  longer  exists.  There  are 
no  more  large  bodies  of  fertile  watered 
land  waiting  only  to  be  tickled  with  the 
plow  to  yield  abundant  stores  of  grain. 

As  the  consumption  of  food  stuff  in 
this  country  now  equals  ninety  per  cent, 
of  our  production,  and  with  the  popula- 
tion increasing  relatively  much  faster 
than  the  production  of  food  supplies, 
Professor  Hopkins  does  not  exaggerate 
when  he  states  that  the  maintenance  of 
the  productive  power  of  our  land  is  the 
most  fundamental  problem  that  con- 
fronts the  American  people. 

The  grains  and  grasses  grown  on  the 
farms,  and  which,  of  course,  comprise 
the  principal  materials  for  fattening  the 
cattle,  hogs  and  sheep  that  make  up  so 
important  a part  of  our  food  products, 
require  certain  chemical  elements  for 
their  vitality.  These  elements,  in  large 
part,  exist  in  the  soil  itself  and  some  of 
them  in  practically  inexhaustible  quan- 
tities. Others  must  be  supplied  by  crop 
rotation  or  by  the  use  of  artificial  ferti- 
lizers. Professor  Hopkins  says  that 
some  of  the  Illinois  farmers,  and  we 
suppose  the  same  might  be  said  of  the 
farmers  of  other  States,  “take  120 
pounds  of  nitrogen  out  in  a crop  of 
corn,  then  they  grow  another  crop  of 
corn  and  take  out  1 00  pounds  more,  and 
then  they  take  out  fifty  pounds  in  a 
crop  of  oats  of  this  element  of  nitrogen, 
and  then  they  grow  a little  clover  and 
plow  it  under  next  spring  and  add 
twenty  pounds  of  nitrogen,  and  then 
they  come  back  and  repeat  their  rota- 
tion; and  they  wonder  after  awhile  why 
their  land  gets  less  productive."  In 
other  words,  they  are  trying  to  with- 


draw from  their  “bank" — the  soil — 
more  than  they  are  willing  to  put 
into  it. 

The  result  of  a policy  of  this  charac- 
ter has  been  seen  in  certain  parts  of  the 
Atlantic  seaboard,  where  much  of  the 
soil  has  become  unproductive  through 
exhaustion  of  the  plant-sustaining  ele- 
ments and  many  farms  have  been  aban- 
doned. France,  a country  of  much 
older  civilization,  keeps  up  the  produc- 
tivity of  its  soil  through  a scientific  sys- 
tem of  fertilization. 

How  wasteful  our  present  policy  is 
may  be  learned  from  what  Professor 
Hopkins  says  in  regard  to  our  treat- 
ment of  phosphate  rock: 

“The  average  of  five  of  the  most  ex- 
tensive types  of  soil  in  Illinois  shows 
1,050  pounds  of  phosphorus  in  two  mil- 
lion pounds  of  surface  soil,  which  repre- 
sents an  acre  of  land  seven  inches  deep. 
And  a one  hundred  bushel  crop  of  corn 
takes  twenty-three  pounds  of  phosphor- 
us out  of  the  land.  Why  should  we 
not  know  those  quantitative  facts? 

“At  the  present  time  we  are  exporting 
from  this  country  more  than  a million 
tons  of  the  liighest-grade  phosphate 
rock  that  we  have,  more  than  a million 
tons  of  a material  that  contains  the  only 
element  of  plant  food  that  we  have  ever 
got  to  buy  in  Illinois.  We  are  shipping 
it  out  of  the  United  States,  and  what  do 
we  get  for  it?  We  get  less  than  five 
million  dollars  at  the  mines,  and  if  ap- 
plied to  our  own  soils,  it  would  be  worth 
to  us  and  to  our  children  not  five  mil- 
lions, but  a thousand  million  dollars  for 
the  production  of  wheat  to  feed  our 
own  people  in  the  oncoming  generation 
of  Americans."  * * * 

“I  do  not  know  that  you  ever  have 
thought  of  the  fact  that  Tennessee  is 
only  thirty-five  miles  from  Illinois;  and 
yet  we  are  shipping  from  west  central 
Tennessee,  within  150  miles  of  Illinois, 
our  best  phosphate  one  thousand  miles 
to  the  Atlantic,  three  thousand  miles 


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across  the  water  and  carrying  it  hun- 
dreds of  miles  inland  for  the  improve- 
ment of  European  soil.” 

Taking  out  of  the  soil  more  of  the 
elements  of  plant  life  than  are  put 
back  will  result,  wherever  the  soil  itself 
does  not  contain  these  elements  in  suffi- 
cient quantities,  in  impoverishment  of 
the  soil,  and  ultimately  in  individual 
and  national  poverty. 

No  doubt  the  lessening  of  our  farm 
products  in  proportion  to  population  has 
been  due  to  some  extent  to  the  drift 
from  the  farms  citywards,  but  it  has 
also  been  due  to  this  impoverishment  of 
the  soil  to  which  Professor  Hopkins  so 
strikingly  invites  our  attention. 

This  is  a problem  that  concerns  every 
business  man,  and  it  concerns  bankers 
especially,  for  the  solvency  of  their  in- 
stitutions in  many  instances  must  be 
dependent  upon  the  continued  pros- 
perity of  American  agriculture. 

It  seems  to  us  that  to  the  considera- 
tion of  problems  like  this  the  bankers 
may  address  themselves  with  great  prac- 
tical benefit  to  themselves  and  to  the 
whole  people. 


USING  THE  PUBLIC  FUNDS  FOR 
THE  CENTRAL  BANK 
PROPAGANDA 

JpORTUXATE  are  those  individuals 
who  can  propagate  their  theories  of 
reform  at  the  public  expense. 

The  central  bank  scheme,  which  until 
a year  or  so  ago  was  discussed  only  by 
college  professors  and  other  doctri- 
naires, and  was  really  regarded  as  a 
corpse  whom  no  one  thought  necessary 
to  attack,  suddenly  showed  signs  of  life, 
and  finally  sprang  to  its  feet  with  some 
show  of  vitality.  Whence  came  the  ani- 
mating force?  We  do  not  know.  One 
of  the  friends  of  a central  bank  said 
that  if  he  had  a hundred  thousand  dol- 


lars he  could  carry  the  scheme  through. 
Was  this  modest  sum  raised?  If  so, 
who  contributed  it?  The  scholars  and 
financial  doctrinaires  who  are  never 
known  to  give  up  anything  except  ad- 
vice as  to  how  the  banking  and  financial 
systems  of  the  country  should  be  con- 
ducted? Or  was  it  those  wealthy, 
benevolent,  philanthropic  gentlemen  who 
are  to  be  the  principal  owners  of  the 
central  bank’s  stock,  and  to  be  satisfied 
with  a return  of  four  per  cent,  on  their 
investment,  taking  their  real  profits  on 
the  side  by  the  manipulation  of  the  vast 
sums  of  money  the  little  country  banks 
will  pour  into  the  central  bank’s  maw? 

Whoever  made  the  initial  contribu- 
tions to  start  the  central  bank  campaign, 
they  were  soon  relieved  of  the  painful 
necessity  of  giving  up  cash  for  a cause 
so  dear  to  their  hearts. 

With  the  disinterestedness  that  char- 
acterizes all  their  actions,  they  kindly 
shifted  this  responsibility  over  to  the 
broad  shoulders  of  “Uncle  Sam,”  the 
gentleman  of  the  long  whiskers,  who  is 
entirely  too  ingenuous  ever  to  suspect 
how  he  is  being  worked  by  the  philan- 
thropic gentlemen  of  Wall  Street. 

As  soon  as  the  Monetary  Commission 
began  to  issue  its  fulminations  showing 
us  the  beauties  of  the  European  bank- 
ing systems,  it  at  once  became  apparent 
to  the  observant  what  a clever  and  cun- 
ning scheme  had  been  devised  to  edu- 
cate the  country  in  favor  of  a central 
bank,  with  the  Government  footing  the 
bills  for  carrying  on  this  educational 
campaign. 

The  publications  of  the  Monetary 
Commission  are  cleverly  and  cunningly 
devised  to  bolster  up  the  central  bank 
scheme.  This  renders  them  practically 
worthless  from  a purely  scientific  stand- 
point. The  authors  of  the  several  vol- 
umes simply  attempt  to  prove  what  they 
already  believe.  And  even  the  inves- 
tigations, though  having  about  them  an 
air  of  candor  and  disinterestedness. 


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782 


THE  BANKERS  MAGAZINE 


really  are  cleverly-arranged  devices  for 
bringing  out  facts  favorable  to  the  cen- 
tral bank  scheme. 

It  is  entirely  legitimate  for  anybody 
to  print  and  publish  his  views  in  favor 
of  a central  bank,  if  he  is  willing  to  pay 
for  such  literature,  or  if  he  can  persuade 
the  friends  of  the  central  bank  scheme 
to  contribute  their  funds  for  the  en- 
lightenment of  the  public. 

But  it  is  not  legitimate  for  the  funds 
of  the  Treasury  to  be  thus  expended, 
and  we  hope  that  a stop  will  soon  be 
put  to  this  misuse  of  the  people’s  money. 


FASTENING  THE  GREENBACKS 
PERMANENTLY  UPON  THE 
COUNTRY 

ANNOUNCEMENT  was  made  re- 
cently of  the  purpose  of  the  Secre- 
tary of  the  Treasury  to  split  the  green- 
backs up  into  denominations  of  one  and 
two  dollars,  the  bulk  of  these  bills  now 
outstanding  being  in  denominations  of 
five  and  ten  dollars. 

The  justification  for  this  step  may 
be  sought  in  the  real  or  supposed  de- 
mand for  more  small  bills.'  But  it  looks 
very  much  like  an  attempt  to  fasten  the 
greenbacks  permanently  upon  the  coun- 
try’s circulation — a device  to  avoid  deal- 
ing squarely  with  this  troublesome  ele- 
ment in  the  currency  when  the  Monetary 
Commission’s  central  bank  scheme  comes 
out.  Possibly,  this  putting  of  the  green- 
backs into  small  denominations  repre- 
sents a fear  upon  the  part  of  the  Gov- 
ernment that  these  notes  may  again  be- 
come a menace  to  the  Treasury,  and  it 
is  better  to  have  them  cut  up  in  small 
pieces  and  absorbed  in  the  general  cir- 
culation than  to  leave  them  in  large 
denominations  easily  available  for  with- 
drawing gold  from  the  Treasury's 
stock.  This  policy  may  prove  well 
enough,  providing  the  whole  mass  of 


silver  certificates  now  in  hand-to-hand 
circulation  should  not  prove  redundant 
and  begin  to  press  upon  the  gold  re- 
serve when  the  greenbacks  once  enter 
into  competition  with  the  silver  certifi- 
cates as  a circulating  medium  in  the 
channels  of  retail  trade. 

Very  little  water  poured  into  a cop 
already  almost  full  will  cause  it  to  over- 
flow. And  very  few  greenbacks  thrown 
into  the  channels  of  a circulation  verg- 
ing on  redundancy  may  cause  trouble. 
Perhaps  Secretary  MacVeagh  may  be 
able  to  change  the  denominations  so 
gradually  as  to  avoid  this. 

As  was  shown  in  the  crisis  of  1898, 
the  greenbacks  contain  potent  elements 
of  danger.  They  are  unlike  a gold  cer- 
tificate which,  when  once  redeemed,  is 
not  paid  out  again  until  an  equivalent 
amount  of  gold  is  received,  and  they  are 
not  backed  by  100  per  cent,  of  gold,  as 
are  the  gold  certificates. 

At  present,  owing  to  the  large  in- 
crease of  gold  in  the  Treasury  and  in 
general  circulation,  the  greenbacks  are 
far  less  of  a menace  than  they  were  in 
1898,  although  even  now  they  are  not 
without  mischievous  possibilities.  But 
they  are  an  anomaly  in  our  currency. 
They  are  no  longer  necessary,  and 
should  either  be  disposed  of  altogether 
or  converted  into  gold  certificates. 

Of  course,  the  Secretary  of  the 
Treasury  is  not  responsible  for  the  con- 
tinued existence  of  the  greenbacks  as  a 
part  of  the  country’s  circulation.  The 
law  does  not  permit  him  to  reduce  the 
present  volume  of  these  notes.  Doubt- 
less, in  changing  a portion  of  the  green- 
backs into  smaller  denominations,  he 
has  acted  from  a sense  of  public  duty, 
in  the  light  of  experience.  But  it  may 
be  considered  unfortunate  that  a policy 
has  been  adopted  which  would  seem  to 
fasten  the  greenbacks  permanently 
upon  the  paper  circulation  of  the 
United  States. 


Digitized  by  t^ooQle 


BANK  ATMOSPHERE 

By  Herbert  G.  Stockwell 


A MAN  stood  on  the  steps  of  a bank 
waiting  for  a friend  with  whom 
he  had  an  engagement.  Looking  to- 
wards the  bank  he  saw  in  large  gold 
letters  and  figures  on  the  window,  "Cap- 
ital $500,000,  Surplus  $500,000,  United 
States  Depository.”  This  sign  could  be 
seen  plainly  across  the  street,  and,  in 
fact,  could  hardly  have  escaped  the  at- 
tention of  any  one  glancing  in  the  di- 
rection of  the  bank  for  some  distance 
up  and  down  the  street. 

Among  the  people  passing  in  and  out 
of  the  bank’s  front  door  he  recognized 
some  friends  whom  he  knew  might  have 
used  a bank  nearer  to  their  several 
places  of  business,  and  he  wondered 
why  they  had  come,  some  actually  past 
their  nearby  bank,  to  deposit  their 
money  in  this  one. 

On  the  street  at  the  same  moment,  he 
noticed  other  men  passing  by  the  bank, 
and  he  knew  that  they  were  doing  busi- 
ness with  banks  further  away. 

Why  do  men  travel  squares — yes, 
even  miles,  away  from  one  bank  to  de- 
posit their  money  in  another?  Perhaps 
this  running  about  is  desirable  but  it 
would  be  interesting  to  know  who  is 
benefited. 

Human  reasoning  of  the  average  man 
is  not  scientifically  conducted.  We  are 
ail  affected  more  than  we  know,  by  the 
little  things  of  life;  so  many  different 
causes,  big  and  little,  can  easily  be  as- 
signed to  a man’s  selection  of  a bank; 
some  purely  accidental,  while  others  no 
doubt  are  the  results  of  careful  thought 
and  premeditated  action. 

A Question  of  Atmosphere. 

All  banks  suffer  in  popularity  to  a 
greater  or  less  degree  through  the  un- 
natural, not  to  say  uncanny,  mystery 
surrounding  the  business  itself.  An 
atmosphere  more  or  less  agreeable  is 
associated  with  every  bank.  To  the 
quality  of  the  atmosphere  permeating 
the  hank,  outside  and  inside,  may  be  at- 
2 


tributed  a large  proportion,  at  least  in 
number,  of  its  deposits. 

The  outside  appearance  of  many 
banking  houses  has  more  of  the  appear- 
ance of  a jail  than  that  of  any  other 
recognized  type  of  structure.  Money 
must  be  safely  guarded.  Superfluous 
bolt  and  bar  does  not  add  to  the  secur- 
ity,  yet  it  does  detract  from  the  attrac- 
tiveness of  the  place  in  which  we  must 
do  business. 

Men  of  large  business  and  affairs  are 
not  affected  by  the  appearance  of  a 
bank  or  its  atmosphere  to  the  same  ex- 
tent as  are  the  men  or  women  of  average 
business  or  means.  The  important  busi- 
ness men  possess  a force  of  their  own 
which  counteracts  and  sometimes  entire- 
ly overcomes  the  effect  of  the  bank 
mystery. 

When  such  a state  of  mind  is  reached 
the  business  man  knows  that  the  bank 
officers  are  living,  breathing  human 
beings,  whose  character,  habits,  im- 
pulses and  brains  are  similar  to  those  of 
men  in  any  other  calling  in  life. 

But  the  man  of  small  affairs  does  not 
so  often  or  so  readily  come  into  close 
personal  relation  with  the  officers  of  the 
bank.  When  he  goes  in  the  banking 
room  to  deposit  his  money  or  cash  a 
check,  his  eyes  are  filled  with  the  cage- 
like appearance  of  everything.  Clerks 
are  working  in  steel  cages,  and  they 
peek  out  at  him  through  tiny  windows, 
sometimes  with  a word,  but  more  often 
without — and  sometimes  the  word  is  not 
too  pleasantly  spoken.  The  atmosphere 
is  different  from  that  of  other  business 
places. 

The  Prison  Aspect. 

When  you  go  into  a store  to  purchase 
anything,  you  see  the  wares  piled  up  on 
shelves  and  in  cases.  You  are  invited 
to  look  at  and  feel  of  them.  You  can 
see  the  business  as  it  goes  on  and  can 
realize  that  when  you  buy  an  article  of 
merchandise,  the  merchant  is  collecting 

783 


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784 


THE  BANKERS  MAGAZINE 


from  you  something  more  than  the  cost 
to  him.  The  object  of  the  business  and 
the  means  by  which  a profit  is  created 
are  obvious  to  anyone;  everything  is 
familiar,  and  we  have  no  uneasiness; 
but  how  a bank  makes  money  cannot  be 
so  readily  discovered  from  the  outside 
of  the  steel-grated  counters.  Of  course, 
money  must  be  well  protected  from 
burglar  raids,  but  we  cannot  help  feel- 
ing that  if  banks  looked  less  like  prisons, 
we  would  be  more  cheerful  while  in- 
side. 

As  mist  from  the  sea  is  dispelled  by 
the  sun  so  is  this  unnatural  atmosphere 
of  the  bank  melted  and  dissolved  by  the 
big-hearted  officials  of  the  bank  when 
you  have  come  into  close  association 
with  them.  Once  you  have  gained  their 
confidence  and  friendship,  the  bank 
takes  on  an  entirely  different  aspect. 
You  see  it  in  another  light! 

It  would  be  good  for  business  men  if 
they  could  get  better  acquainted  with 
bank  men.  Nothing  would  so  quickly 
dissipate  the  last  vestige  of  unfounded 
mistrust  if  the  bank  man  and  the  mer- 
chant, on  opposite  sides  of  the  counter, 
could  temporarily  exchange  places. 
What  a change  in  the  spectacles  of 
both!  The  blur  would  fade  away  and 
each  would  see  the  other’s  good  qual- 
ities,— and  handicaps. 

Many  modern  bank  officers  fully  real- 
ize the  presence  of  the  stiffness  in  the 
air  of  a bank,  and  use  every  means  to 
overcome  it.  Not  only  do  they  treat 
all  people  coming  into  the  bank  with 
the  utmost  courtesy,  but  they  try  to  get 
their  clerks  to  follow  the  good  example. 

It  is  very  difficult  for  some  bank  men 
and  clerks  to  see  the  occupation  in 
which  they  are  engaged  in  its  right 
light.  Traditionally  the  bank  is  sought 
by  customers  rather  than  customers  by 
the  bank.  It  is  within  the  province  of 
the  bank  officer  to  accept  or  decline  busi- 
ness. This  attitude  toward  the  public 
unconsciously  affects  the  mental  condi- 
tion of  the  banker.  Never  having  been 
obliged  to  seek  business,  he  has  not  been 
trained  in  the  art  of  ingratiating  him- 
self with  customers.  Some  bank  men 
overcome  this  quite  natural  tendency, 
while  others  never  learn  to  look  upon  a 


man  entering  the  bank  as  any  other 
than  a supplicant. 

Promoting*  the  Neighborhood  Idea. 

In  speaking  of  a bank  man  as  one 
who  has  not  been  trained  in  seeking 
business,  we  must  not  overlook  the  ten- 
dency in  banking  circles  at  the  present 
time  to  cultivate  business  getting  means 
— such  as  they  know  them.  Some  of 
the  advertisements  now  appearing  in 
daily  papers  are  very  different  from  the 
ordinary  card  which  has  heretofore  been 
thought  by  bank  men  to  be  as  far  as 
they  could  in  dignity  go  in  the  way  of 
advertising  the  bank. 

While  the  newspaper  and  magazines 
are  proper  means  by  which  to  bring  the 
banks  before  the  public,  there  is  a nat- 
ural clientele  that  should,  in  addition  to 
such  efforts,  be  cultivated  with  more 
particularity.  The  depositors  of  a bank 
should  be  brought  to  feel  that  the  near- 
est bank  to  them  is  the  one  that  they 
must  use  to  obtain  the  greatest  advan- 
tage in  the  banking  transactions  con- 
nected with  their  business. 

No  man  is  totally  immune  from  influ- 
ences going  out  from  the  men  with 
whom  he  comes  in  contact.  Deny  it  as 
strongly  as  he  may,  he  cannot  ultimate- 
ly resist  the  power  of  good  feeling,  just 
treatment  and  the  desire  to  be  of  use  to 
him.  These  form  the  sphere  of  influ- 
ence going  out  f rom  a bank  to  all  within 
reach. 

Uptown,  suburban  and  so-called 
“country”  banks  can  reap  the  benefit  of 
the  “neighborhood  for  the  bank”  idea 
better  than  those  banks  in  the  down- 
town district  where  the  banking  build- 
ings are  side  by  side. 

Even  in  down-town  banks,  there  is 
plenty  of  opportunity  for  each  bank  to 
develop  special  fields,  not  necessarily 
territorial,  and  to  adopt  means  by  which 
their  particular  customers  may  be  best 
served,  wherever  actually  located.  The 
desire  to  best  serve  the  public  will  foster 
cooperation  between  the  down-town  and 
up-town  banks  to  the  extent  that  the 
facilities  of  both  may  be  fully  exer- 
cised; but  the  bank  in  a section  of  the 
city  where  there  are  no  other  banks  in 


Digitized  by  t^ooQle 


BANK  ATMOSPHERE 


785 


the  immediate  neighborhood,  as  its 
special  duty,  ought  to  cultivate  and  de- 
velop all  of  the  people  in  that  neighbor- 
hood in  the  practice  of  using  some  bank; 
and  also  in  the  belief  that  the  neighbor- 
hood bank  can  supply  alone,  or  with  the 
help  of  the  down-town  bank,  all  proper* 
functions  of  banking. 

If  the  atmosphere  of  a good  bank  ex- 
tends into  a sphere  of  good  influence 
enveloping  the  nighborhood,  there  is 
much  power  for  good  that  can  be  ex- 
ercised by  the  bank,  not  sticking  out  on 
the  surface. 

Studying  Local  Conditions. 

When  we  indulge  in  such  thoughts  we 
find  our  minds  groping  for  the  handle 
of  some  tool  by  which  we  can  turn  our 
ideas  into  account.  Before  us  is  painted 
in  imagination  a picture  of  our  bank  in 
the  center  of  a zone — a banking  zone, 
not  necessarily  geometrical,  but  still  an 
inclosed  territorial  district,  inside  of 
which  we  can  serve  the  people  better 
than  any  other  bank,  and  outside  of 
which  we  cannot  profitably  and  safe- 
Iv  go. 

Suppose  we  look  at  that  district  a lit- 
tle closer  and  examine  the  territory  in 
connection  with  our  outlined  zone.  Per- 
haps we  will  find  that  there  are  ten  thou- 
sand, perhaps  twenty  thousand,  people 
all  around  us  in  our  imemdiate  neigh- 
borhood. 

Not  all  of  these  people,  men,  women 
and  children  do  a banking  business.  No, 
but  many  of  them  are  doing  it  in  some 
other  bank.  Why  should  they?  No 
answer  seems  to  come  that  ought  to  be 
allowed  to  remain.  It  is  looked  upon 
as  undesirable  for  one  bank  man  to 
solicit  the  account  of  a business  house 
when  he  knows  that  that  house  has  an 
account  at  another  bank.  Is  the  ob- 
jection to  hold  as  against  the  neighbor’s 
claims?  Most  assuredly  not!  A bank 
is  a public  institution  and  as  such  ought 
to  be  included  in  the  pride  of  the  neigh- 
borhood. That  is  our  bank,  our  neigh- 
bors would  say  to  their  friends  if  they 
felt  it  as  a part  of  the  neighborhood. 
By  all  legitimate  means  let  us  get  the 


people  to  come  and  bring  all  our  neigh- 
bors. 

Wthat  Can  Be  Done. 

First,  let  us  stir  things  up  in  our 
banking  rooms,  let  in  the  sun,  tear  down 
unnecessary  bolt  and  bar,  removing  all 
avoidable  prison  effects;  and  next,  let 
us  cheer  up  personally  and  let  our 
charming  atmosphere  spread  out  over 
the  neighborhood  the  spreading  stimu- 
lated by  means  of  a campaign  of  edu- 
cation of  our  people  in  the  use  that  the 
bank  may  perform  for  them . When  the 
bank  men  once  start  thinking  out  ways 
in  which  they  can  be  of  more  use  to 
people,  they  will  find  springing  to  their 
minds  thoughts  showing  rich,  unde- 
veloped fields. 

Instead  of  rendering  as  little  service 
as  possible  to  hold  some  particular,  or 
many  particular  accounts,  as  unfortu- 
nately some  of  our  friends  seem  to  do, 
they  will  find  plenty  of  opportunity  to 
render  more  service,  vitalizing  and  en- 
larging their  sphere  of  usefulness  and, 
incidentally,  reap  the  accompanying 
emoluments. 


NEW  COUNTERFEIT  $16  NATION- 
AL BANK  NOTE 

ON  the  Home  National  Bank  of  Staun- 
ton, Tex.  Series  of  1902-1908;  check 
letter  “D”;  W.  T.  Vernon,  Register 
of  the  Treasury;  Charles  H.  Treat,  Treas- 
urer of  the  United  States.  Charter  No. 
9053;  bank  No.  405  or  465;  Treasury  No. 
477203;  divisional  letter  “S.” 

This  counterfeit  is  a poorly  executed 
photo-etched  production  printed  on  two 
pieces  of  paper,  and  in  the  specimen  at 
hand  a few  pieces  of  silk  thread  are  dis- 
tributed. The  note  is  so  poorly  printed 
that  a detailed  description  of  it  is  deemed 
unnecessary,  as  it  should  not  deceive  the 
ordinarily  careful  handler  of  money. 
Thanks  are  due  R.  G.  Erwin,  cashier,  First 
National  Bank  of  Ballinger,  Tex.,  for  the 
first  sample  of  this  note.  It  is  doubtless 
the  work  of  the  same  persons  responsible 
for  the  $5 -Carlsbad,  N.  M.,  national  bank 
note  described  in  circular  No.  299. 

John-  E.  Wilkie,  Chief. 


Digitized  by  t^ooQle 


ADJUSTING  BRANCH  BANK  FINANCES 

By  H.  M.  P.  Eckardt 


TN  the  United  States  the  men  in  charge 
**•  of  the  active  operations  of  each 
banking  office  are  accustomed  to  give 
considerable  thought  to  such  matters 
as  the  regulation  of  the  supply  of  cash 
money  on  hand,  the  balances  carried 
with  correspondent  banks,  and  the  meth- 
ods of  conducting  the  accounts  covering 
this  department  of  the  banking  busi- 
ness. Each  institution  orders  its  af- 
fairs to  suit  its  peculiar  circumstances 
and  the  bankers  control  their  loans  and 
discounts  with  an  eye  to  the  maintenance 
of  a suitable  amount  of  cash  on  hand 
and  a suitable  balance  at  the  reserve 
agents  or  in  the  hands  of  other  corre- 
spondent banks.  As  the  various  offices 
of  a large  branch  bank  are  on  a differ- 
ent footing  in  this  respect,  a short  de- 
scription of  the  manner  in  which  those 
particulars  are  attended  to  under  the 
branch  ‘ system  may  have  interest  for 
American  bankers. 

Take  a newly  organized  bank  in  the 
United  States.  The  officers  know  how 
much  capital  they  have  in  hand,  and 
they  can  perhaps  count  with  confidence 
upon  a certain  amount  of  deposits. 
They  will  probably  say,  “We  must  keep 
so  much  of  these  funds  in  hand  as  till 
money  and  reserve  in  vault,  and  carry 
so  much  as  reserve  with  New  York 
agent  and  balance  with  other  corre- 
spondents. That  leaves  so  many  thou- 
sands which  we  can  put  into  loans  and 
discounts.”  The  officers  of  a newly 
established  branch  bank  take  an  entire- 
ly different  course.  Let  us  follow  the 
operations  of  a new  branch  bank,  say, 
in  Western  Canada,  where  branch  offices 
are  being  established  in  large  numbers. 
As  I had  the  pleasure  of  opening  a 
Western  branch  of  one  of  the  large 
Canadian  banks  I can  speak  from  per- 
sonal knowledge  of  the  methods  used. 

In  this  case  there  is  no  fixed  sum  or 
fund  which  the  banker  has  subject  to 
his  call,  or  on  hand  available  for  his 
purposes.  The  branch  has  no  capital  of 
its  own.  It  has  nothing  except  its 
rented  premises,  its  fixtures,  and  outfit 


of  books  and  stationery.  But  it  has  im- 
mense potential  resources.  The  man- 
ager has  the  delightful  feeling  that  for 
taking  up  transactions  which  measure 
up  to  the  standards  set  by  his  head 
office  he  may  draw  upon  the  bank  and 
its  branches  for  amounts  which  are,  in 
his  eyes,  practically  unlimited.  For  the 
loans  and  expenditures  of  the  branch 
you  simply  pay  over  the  proceeds  or 
the  cost  price  as  the  customer  desires, 
drawing  for  the  funds  you  need.  And 
of  course  you  take  all  the  deposits  you 
can  get.  If  they  consist  of  the  bank’s 
own  notes,  you  keep  them  and  pay  them 
out  again  over  the  counter.  If  they 
consist  of  checks  on  or  notes  of  another 
bank  in  town  you  send  them  in  and  get 
the  other  bank’s  draft  on  Winnipeg, 
Montreal,  or  Toronto;  and  this  draft 
you  send  for  credit  of  account  to  the 
branch  in  the  city  upon  which  it  is 
drawn. 

How  Counter  Payments  Are 
Secured. 

First  of  all  a few  thousand  dollars 
will  be  wanted  for  counter  payments. 
They  are  secured  through  sending  a 
“requisition”  to  the  Winnipeg  Branch 
which  happens  to  be  the  supplying 
branch  for  this  district.  The  requisi- 
tion merely  asks  the  manager  of  the 
Winnipeg  Branch  to  send,  say,  $5,000  by 
express  (or  registered  mail  insured)  in 
the  bank’s  own  notes,  in  denominations 
which  are  specified.  It  requires  the 
signature  of  both  manager  and  ac- 
countant of  the  new  branch.  The  requi- 
sition is  filled,  and  Winnipeg  debits  the 
new  branch,  which  we  may  designate 
as  N.  Branch,  with  $5,000,  plus  costs 
of  transportation,  which  are,  let  us  say, 
seventy  cents.  N.  responds  to  Winni- 
peg’s entry  and  appears  in  the  book- 
keeping of  the  whole  bank  as  indebted 
to  Winnipeg  for  $5,000.70. 

Then  business  commences.  At  the 
close  of  the  first  day  there  may  be  on 
hand  a goodly  part  of  the  $5,000  cash 


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ADJUSTING  BRANCH  BANK  FINANCES 


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received  from  Winnipeg,  a parcel  of 
some  400  dollars  odd  for  sending  in  to 
the  other  bank  in  town  next  morning, 
and  a list  of  checks  on  Winnipeg  banks 
received  from  depositors  and  customers. 
The  list  is  sent  to  that  city  at  debit  of 
the  branch  there. 

New  York  Correspondent  Secured. 

Then  the  branch  will  want  a balance 
in  New  York.  The  manager  writes  to 
Montreal  or  Toronto  branch,  saying, 
“Please  transfer  $2,000  to  the  credit  of 
this  branch  with  the  Blank  National 
Bank,  New  York.’*  Montreal  does  so 
and  debits  N.  with  $2,000,  if  New  York 
funds  are  at  par.  In  this  way  the  busi- 
ness goes  on.  All  items  payable  at 
other  points  are  sent  to  the  branches  in 
those  points  at  debit.  And  N.  Branch 
is  every  day  receiving  from  other 
branches  checks  drawn  by  its  customers. 
Also  it  is  continually  drawing  upon  the 
centrally  located  branches  in  settlement 
of  collections  sent  it  by  other  banks. 

In  some  Canadian  banks  an  account 
is  kept  in  the  general  ledger  for  every 
other  branch  with  which  it  has  trans- 
actions. In  others,  just  one  account  is 
kept,  and  in  this  account  the  totals  of 
each  day’s  debits  and  of  each  day’s 
credits  are  entered — the  balance  thus 
representing  the  position  of  the  branch 
as  regards  the  rest  of  the  bank  treated 
as  a unit.  In  this  system  it  is  neces- 
sary to  send  statements  to  the  head 
office,  giving  the  details  of  entries  be- 
tween branches  and  the  adjustments  be- 
tween branch  and  branch  are  made 
there. 

Keeping  the  Head  Office  Account. 

This  consolidated  account  in  the 
branch  general  ledger  will  be  called 
“Head  Office  Account.”  And  the  bal- 
ance shown  in  that  account  will  depend 
on  the  nature  of  the  branch’s  business. 
If  it  happen  that  the  place  is  a great 
borrowing  locality,  as  the  great  ma- 
jority of  Western  branches  are,  then 
the  probability  is  that  as  the  loans  in- 
crease the  balance  at  credit  of  “Head 


office”  will  steadily  rise.  Thus,  sup- 
pose the  loans  get  up  to  $70,000,  de- 
posits $25,000,  cash  on  hand  $8,000  (of 
which  $6,000  will  be  in  the  bank’s  own 
notes),  and  a balance  of  $2,000  lies  in 
New  York.  The  branch’s  investments 
will  be  $70,000  plus  $8,000  plus  $2,000, 
or  $80,000.  Its  liabilities  to  the  public 
being  $25,000,  it  will  owe  head  office 
approximately  $55,000.  But,  as  the 
$6,000  of  the  bank’s  own  unissued  notes 
which  it  has  on  hand  are  not  money,  it 
is  entitled  properly  to  deduct  that 
amount  from  its  indebtedness. 

Adding  a New  Account. 

Suppose  when  it  is  in  that  state  it 
happens  that  the  opposition  bank  man- 
ages in  some  way  to  offend  one  of  its 
good  customers  who  has  a line  of  $20,- 
000,  and  the  man  comes  in  and  offers 
to  transfer  his  account.  If  the  man- 
ager is  quite  satisfied  that  the  would-be 
customer  is  sound,  prosperous,  and  able 
to  meet  his  promises  or  obligations,  an 
application  for  a credit  will  go  to  the 
general  manager,  backed  up  with  the 
branch  manager’s  strong  recommenda- 
tions. 

Assuming  that  the  credit  is  accepted 
or  authorized,  the  branch  manager  pro- 
ceeds to  “take  up”  the  account  as  soon 
as  he  is  acquainted  with  the  decision  of 
the  executive.  He  is  not  required  to 
do  any  financing  at  all  in  the  way  of 
providing  funds  at  the  centers  or  at 
New  York.  If  the  account  is  in  such 
shape  that  it  can  be  transferred  in  one 
sum  the  branch  merely  requires  the 
other  bank  to  send  in  the  borrower’s 
obligations,  and  it  settles  with  it  by  giv- 
ing a draft  on  Winnipeg  or  Montreal. 
It  does  not  concern  itself  in  the  least 
about  how  Winnipeg  or  Montreal  is  to 
meet  the  draft. 

In  the  same  way  if  it  is  necessary,  in 
order  to  take  up  a new  account  or  to 
make  a loan,  to  draw  upon  New  York 
for  $15,000  when  the  branch  has  only 
$2,000  at  credit  with  the  New  York  cor- 
respondents, the  circumstance  does  not 
call  for  any  thought  or  consideration  at 
all  on  the  part  of  the  branch  officials. 


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THE  BANKERS  MAGAZINE 


They  simply  draw  on  New  York  for  the 
necessary  sum  and  write  or  wire  one  of 
the  principal  branches  of  the  bank  to 
transfer  enough  funds  to  cover. 

Heavy  Work  Done  at  Head  Offices. 

This  illustrates  how  the  lending  part 
bf  the  bank’s  business  is  financed  at  the 
branch,  and  gives  some  idea  of  the 
branch  manager’s  freedom  from  worry 
over  the  question  of  cash  holding  and 
correspondent’s  balances.  Of  course  in 
the  case  of  deposits  and  other  receipts 
the  funds  are  not  adjusted  or  guided 
by  the  branch  in  any  way.  If  a check 
on  a bank  in  Vancouver  for  $10,000  is 
received  on  deposit  or  as  payment  of  a 
loan,  the  branch  sends  it  to  the  Van- 
couver branch  and  does  not  bother  any 
more  about  it.  The  Vancouver  branch 
will  collect  and  get  a settlement  in 
legals.  If  its  holding  of  legals  begins 
to  grow  too  large,  it  sells  some  to  other 


banks,  taking  payment  in  Winnipeg  or 
Montreal  funds.  And  if  its  stock  of 
legals  runs  too  low,  it  sells  its  draft  on 
Winnipeg  or  Montreal  to  one  of  the 
other  banks.  In  that  way  the  different 
centers  adjust  their  holdings  of  cash. 
When  the  cash  at  the  principal  center 
accumulates  too  rapidly,  it  will  be  kept 
within  bounds  by  lending  at  call  in  New 
York,  London,  Montreal  or  Toronto. 

As  may  be  supposed,  it  is  no  light 
task  to  adjust  the  accounts  of  150  or 
200  branches.  This  is  done  at  the  head 
office  and  engages  the  attention  of  a 
staff  of  men.  Each  branch  is  required 
to  send  in  statements  of  entries  passing 
between  itself  and  other  branches.  The 
items  on  each  one  of  these  statements 
are  to  be  checked  off  with  the  statements 
of  other  branches  in  order  to  discover 
all  the  outstandings.  When  they  are 
finally  arrived  at  the  balances  of  each 
branch  in  relation  to  head  office  is 
proved  or  reconciled. 


FOREIGN  BANKING  AND  FINANCE 

Conducted  by  Charles  A.  Conant 


THE  MONETARY  REFORM  IN  THE  ARGENTINE 


A MEASURE  to  give  finality  to  the 
^ adoption  of  the  gold  standard  in 
the  Argentine  Republic  was  sent  to 
Congress  by  the  Executive  on  Wednes- 
day, September  14  last.  The  bill  was 
accompanied  by  a message,  explaining 
the  objects  and  methods  of  the  reform. 
It  was  declared  that  the  gold  peso  had 
been  finally  adopted  as  the  unit,  repre- 
senting the  present  actual  value  of  the 
paper  currency,  and  that  the  franc  had 
been  rejected,  after  due  consideration, 
upon  the  ground  that  the  attempts  to 
establish  uniformity  of  coinage  among 
the  nations  had  not  proved  satisfactory. 

The  measure  in  one  sense  only  gives 
final  form  to  a condition  which  has  ex- 
isted since  the  year  1900.  The  Govern- 
ment made  provision  at  that  time  for  a 
conversion  fund  in  gold,  from  which 


paper  was  to  be  issued  for  gold  at  the 
rate  of  forty-four  gold  centavos  to  the 
paper  peso.  This  rate  of  exchange  has 
been  steadily  maintained  and  the  con- 
version fund  has  risen  above  $130,000,- 
000.  The  new  unit  will  be  known  as 
the  peso  and  will  contain  0.709676 
grains  of  gold,  nine-tenths  fine.  A gold 
coin  will  be  issued  of  the  denomination 
of  ten  pesos.  No  provision  is  made  at 
present  for  silver  coins,  but  there  will 
be  nickel  pieces  of  twenty,  ten,  and  five 
centavos,  and  copper  coins  of  two  and 
one  centavos. 

A separate  department  of  issue  is  cre- 
ated in  the  Treasury,  which  will  have 
charge  of  all  matters  pertaining  to  the 
paper  currency.  New  notes  will  be  sub- 
stituted for  those  now  in  circulation  as 
soon  as  the  conversion  fund  reaches  a 


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The  Bankers  Publishing  Company 

253  BROADWAY  - - - NEW  YORK 


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Bellamore 

Armored  Steel  Bank  Car 

A BANK  ON  WHEELS 


Brings  to  the  door  of  every  depositor  all  the  conveniences 
of  a bank.  NO  RISK  for  money  and  seouritles  in  transit 


Armored  Steel  Motor  Bank  Car  Type  11  VC.  Side  View 

Amongst  the  many  uses  of  the  Bellamore  Armored  Steel 
Bank  Car  are  the  following: 

The  collection  of  heavy  deposits. 

The  delivery  of  pay-roll-money  to  factories. 

The  delivery  of  large  sums  of  money  to  customers. 

The  transportation  of  bullion. 

The  carrying  of  money  and  securities  between  branch  institutions. 
The  collection  and  delivery  of  valuables  for  safe  deposit. 

Descriptive  booklet  and  prices  on  application. 

Bellamore  Armored  Car  & Equipment  Company 

286  FIFTH  AVENUE,  NEW  YORK 


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FOREIGN  BANKING  AND  FINANCE 


789 


certain  amount,  but  existing  contracts 
will  be  settled  in  national  currency  of 
a value  equivalent  to  the  gold  value  of 
the  old  contract.  The  conversion  office, 
which  is  made  a part  of  the  issue  de- 
partment, is  to  issue  and  deliver  to 
every  applicant  legal  tender  notes  at 
par  and  to  deliver  gold  to  every  ap- 
plicant in  exchange  for  paper  money 
in  the  same  proportion.  The  gold  can- 
not be  diverted  to  any  other  purpose 
than  the  maintenance  of  the  parity  of 
the  paper  currency.  A special  conver- 
sion fund  is  established  for  issues  prior 
to  November  4,  1899,  when  the  pres- 
ent conversion  fund  for  the  issue  of 
notes  at  forty-four  pesos  was  estab- 
lished. 

If  this  bill  becomes  a law,  as  seems 
to  be  probable,  its  results  will  be 
watched  with  interest.  In  so  far  as  it 
puts  the  stamp  of  finality  on  existing 
conditions,  there  is  little  reason  to  an- 
ticipate disturbance  to  the  money  mar- 
ket. The  present  gold  holdings  of  the 
Government  seem  to  be  adequate  to 
maintain  parity,  and  the  power  is  grant- 
ed by  the  new  law  to  employ  the  con- 
version fund  in  the  purchase  and  sale 
of  drafts  on  foreign  countries.  The 
subsidiary  circulation  does  not  seem  to 
be  very  adequately  provided  for  in  the 
absence  of  provision  for  silver  coins. 
The  elastic  element  in  the  monetary 
circulation  seems  to  depend  upon  the 
inflow  and  outflow  of  gold,  but  may  be 
promoted  by  the  authority  to  sell  drafts 
and  by  the  issues  of  the  Bank  of  the 
Nation. 


MERGER  OF  THE  RUSSO-CHINESE 
BANK 

'T'HE  Russo-Chinese  Bank,  which 
was  founded  in  1895  to  promote 
closer  commercial  relations  between 
Russia  and  China,  has  been  absorbed 
by  the  Banque  du  Nord,  a French  in- 
stitution dominated  by  the  Societe  Gen- 
erate. The  merger  will  result  in  a new 
institution  to  be  known  as  the  Banque 
Russo-Asiaiique,  which  will  combine  the 
business  done  in  Siberia,  India,  China 
and  Persia  by  the  Russo-Chinese  Bank 


with  the  European  business  of  the 
Banque  du  Nord . 

The  Russo-Chinese  Bank  was  openly 
a protege  of  the  Russian  Government, 
and  was  one  of  very  few  European  in- 
stitutions in  the  East  which  operated  to 
any  considerable  extent  outside  the  field 
of  foreign  exchange.  The  bank  was 
aided  by  both  the  Russian  and  Chinese 
governments  by  contributions  towards 
its  capital  and  was  given  authority  to 
engage  in  the  collection  of  duties  in 
China  and  to  coin  money,  with  the  au- 
thorization of  the  Chinese  government. 
It  was  also  authorized  to  acquire  con- 
cessions for  the  construction  of  rail- 
ways in  China.  The  capital  of  the  bank 
was  originally  fixed  at  6,000,000  roubles 
($3,090,000),  but  was  raised  by  suc- 
cessive stages  until  it  stood,  on  January 
1,  1908,  at  24,088,200  roubles  ($12,- 
405,000),  with  reserve  funds  of  9,176,- 
514  roubles.* 

For  some  years  the  bank  was  pros- 
perous and  was  successful  in  extending 
Russian  influence  in  the  East.  It  was 
somewhat  hampered,  however,  by  the 
war  with  Japan,  which  naturally  com- 
pelled the  abandonment  for  the  time 
being  of  the  Japanese  branches.  Then 
came  a series  of  bad  investments,  which 
impaired  the  reserve  funds,  and  the 
theft  of  bonds  by  employees  in  New 
York,  which  aroused  doubt  as  to  the 
wisdom  of  carrying  on  such  widely  scat- 
tered branches.  It  is  intended  to  abol- 
ish the  American  branches  in  New 
York  and  San  Francisco,  retaining  one 
of  the  foreign  exchange  houses  in  New 
York  as  a correspondent.  The  new 
institution  will  have  a capital  of  about 
$25,000,000. 


THE  FINANCES  OF  PORTUGAL 

'T'HE  finances  of  Portugal  have  been 
for  many  years  in  a state  of 
chronic  disorder,  as  the  result  of  large 
deficits  in  receipts.  These  deficits  were 
somewhat  reduced  during  the  period 
from  1903  to  1908,  but  the  provisional 

•Further  details  regarding  the  bank  and 
Its  note  issues  will  be  found  in  Conant’s 
“History  of  Modern  Banks  of  Issue/'  fourth 
edition,  p.  603.  . 


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790 


THE  BANKERS  MAGAZINE 


budgets  for  the  last  two  years  have 
shown  an  estimated  deficit  of  nearly 
80,000,000  francs  per  year,  which  is  a 
large  amount  for  so  small  a country. 
The  burden  of  the  public  debt  has  been 
kept  under  some  degree  of  control  by 
means  of  forced  conversions  of  the  rate 
of  interest.  The  credit  of  the  country 
was  sustained  at  a fair  level  down  to 
1891  by  the  Barings,  but  their  failure 
caused  a crisis,  which  was  followed  by 
a reduction  of  the  interest  on  the  debt 
held  abroad  to  a third  of  its  nominal 
amount.  The  charges  for  the  debt  ab- 
sorbed 43.66  per  cent,  of  ordinary  rev- 
enue as  far  back  as  1878  and  required 
45.9  per  cent,  according  to  the  budget 
for  1910.  The  total  debt  stands  at 
about  $800,000,000  for  an  European 
population  of  5,428,132, 

It  will,  therefore,  be  one  of  the  heav- 
iest tasks  of  the  Republic  to  bring 
order  into  the  financial  regime.  Sev- 
eral efforts  in  this  direction  have  been 
made  from  time  to  time,  including  the 
effort  to  bring  back  the  circulation  of 
the  Bank  of  Portugal  to  a gold  basis. 
The  bank  has  been  weakened  by  con- 
tinual loans  to  the  State,  which  have 
greatly  inflated  the  paper  circulation. 
The  amount  of  bank-notes  in  the  circu- 
lation, which  was  only  48,000,000 
francs  in  1890,  with  a gold  cover  of 
thirty  per  cent.,  reached  392,000,000 
francs  at  the  end  of  1909,  with  a gold 
cover  of  only  eight  per  cent.  In  spite 
of  this  deplorable  condition,  it  is  noted 
by  Professor  Edmond  Th6ry  in 
“L’ficonomiste  Europeen/*  of  October 
14,  that  exchange  has  been  maintained 
at  a level  fairly  steady  during  the 
course  of  the  last  few  years,  because 
of  the  improvement  in  Brazilian  ex- 
change. Many  Portuguese  have  pre- 
served important  interests  in  their 
ancient  colony  and  employ  their  profits 
in  Portugal.  The  result  has  been  to 
keep  exchange  at  a rate  only  about  ten 
per  cent,  below  gold  parity,  and  it  was 
not  essentially  shaken  by  the  recent 
revolution.  The  actual  rate  on  October 
6 was  5.30  francs  to  the  milreis,  which 
represented  a depreciation  of  8.62  per 

cent.  . . 

«*  ; - " 


EXTENDING  USE  OF  DOMICILED 
BILLS 

A SPECIAL  effort  is  being  made  by 
the  Bank  of  France  to  promote 
the  payment  of  bills  of  exchange  at  the 
bank  and  its  branches  rather  than  di- 
rectly by  the  drawee.  The  bill  of  ex- 
change, as  pointed  out  in  an  article  in 
“L’Lconomiste  Europeen/’  on  October 
14  last,  is  much  more  widely  used  in 
Europe  than  in  America,  but  on  the 
other  hand,  payments  of  bills  and  other 
obligations  are  made  much  more  widely 
in  America  than  in  France  by  means  of 
checks.  A great  quantity  of  bills  of 
exchange,  even  down  to  amounts  as  low 
as  ten  francs,  are  payable  by  the  small 
merchants  of  Paris  and  other  towns 
every  day,  but  especially  near  the  end 
of  the  month.  These  merchants  and 
manufacturers,  in  order  to  pay  these 
bills  upon  presentment,  are  compelled 
to  obtain  gold  and  bank-notes,  which 
come  ultimately  from  the  Bank  of 
France.  It  is  estimated  that  on  certain 
days  not  less  than  $40,000,000  in  notes 
and  specie  is  circulating  through  the 
streets  of  Paris  in  the  hands  of  messen- 
gers and  others  representing  the  mer- 
chants, for  this  single  purpose. 

What  the  Bank  of  France  is  pro- 
posing is  that  a larger  proportion  than 
heretofore  of  these  bills  of  exchange 
should  be  “domiciled/* — that  is,  made 
payable  by  the  drawee  at  a bank  when 
accepted  bv  him,  instead  of  payable  at 
his  own  office.  If  he  then  maintains  a 
deposit  account,  his  maturing  obliga- 
tions will  be  charged  to  that  account 
and  the  whole  process  will  be  consum- 
mated by  the  clearing  of  credits,  in- 
stead of  the  transportation  of  great 
quantities  of  currency  through  the 
streets.  The  process  of  domiciliation 
is,  of  course,  already  well  established 
in  Europe,  but  Governor  Pallain,  of 
the  Bank  of  France,  in  a circular  of 
October  7 last,  urges  upon  the  man- 
agers of  all  the  branches  of  the  bank 
an  effort  to  extend  the  system.  He  sug- 
gests that  in  order  to  give  wider  use  to 
the  practice,  the  local  manager  shall 
use  such  persuasion  as  possible  with 
the  clients  of  the  bank,  ascertain  the 


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FOREIGN  BANKING  AND  FINANCE 


791 


deposit  accounts  most  susceptible  to  such 
a process,  and  explain  its  economy  and 
advantages,  in  time  as  well  as  in  money, 
to  the  depositors.  In  order  to  ascertain 
the  progress  made  in  this  respect,  each 
manager  is  requested  to  state  at  the  end 
of  his  monthly  report  the  number  of 
clients  at  his  branch  employing  the  pro- 
cess of  domiciliation  and  the  number  of 
new  adherents  during  the  month. 


FOREIGN  CAPITAL  IN  CANADA 

A RECENT  study  by  the  “Monetary 
-***  Times”  of  the  volume  of  foreign 
investments  in  Canada  arrives  at  the 
conclusion  that  the  total  of  such  invest- 
ments within  the  last  five  years  has 
reached  $962,418,502.  Of  this  amount, 
England  is  calculated  to  have  contrib- 
uted $605,453,852;  the  United  States, 
$279,075 ,000 ; France,  $49,250,000 ; 
Turkey,  $3,000,000,  and  Russia,  $950,- 
000.  The  Russian  investment  is  repre- 
sented by  the  purchase  of  land  for  the 
Doukhobors  in  British  Columbia,  and 
the  Turkish  by  the  purchase  of  some 
public  funds  and  railway  securities  by 
a,  Constantinople  bank.  Belgian  inter- 
ests represent  a total  of  $5,750,000,  of 
which  $3,000,000  is  invested  in  western 
mortgages  and  $1,500,000  in  land  at 
Saskatchewan.  Germany  has  invested 
$2,500,000  in  lands  and  mortgages, 
$6,000,000  in  coal  veins  in  the  west, 
and  $8,000,000  in  railway  securities, 
representing  a total  German  investment 
•of  $16,500,000.  Canadian  bank  shares 
are  held  abroad  to  the  amount  of  $1,- 
439,650. 


STABLE  EXCHANGE  IN  BRAZIL 

HE  recent  effort  of  the  Brazilian 
Government  to  bring  about  a per- 
manent rate  of  exchange  has  caused 
considerable  disturbance  in  operations 
between  Brazil  and  the  gold  standard 
countries.  This  has  been  due  primarily 
not  to  the  effort  itself  to  bring  about 
stability,  but  to  the  fact  that  the  gov- 
ernment is  credited  with  the  purpose  of 
raising  the  exchange  value  of  the 
milreis  to  eighteen  pence.  The  rate 


has  been  for  some  years  at  fifteen 
pence,  and  transactions  have  become  ad- 
justed to  this  basis.  The  raising  of  the 
rate  necessarily  involves  an  increase  in 
the  gold  rate  of  wages  and  for  domestic 
products  whose  prices  remain  un- 
changed in  Brazilian  currency.  The 
credit  of  Brazil  has  been  so  good  since 
the  establishment  of  the  Conversion 
Office,  on  December  26,  1906,  that  ex- 
change has  several  times  threatened  to 
go  considerably  above  fifteen  pence. 
The  policy  of  the  Minister  of  Finance 
would  tend  to  enhance  the  value  of  the 
paper  currency  and  to  that  extent  to  in- 
crease the  credit  of  the  country,  but 
would  be  inimical  to  interests  which  cal- 
culate upon  a narrow  margin  of  profit 
at  the  existing  rate  of  exchange.  The 
Minister  asked  Congress  in  April  last 
for  authority  to  raise  the  rate  to  Six- 
teen pence,  when  the  gold  in  the  con- 
version office  had  reached  the  amount 
of  £20,000,000,  as  provided  by  the  law 
of  1906.  The  result  was  to  cause  vio- 
lent movements  in  exchange,  which  car- 
ried it  for  a time  as  high  as  eighteen 
pence.  The  subject  is  now  in  abeyance 
until  the  meeting  of  the  new  Congress, 
which  will  probably  endeavor  to  put  the 
standard  of  value  upon  a definite  basis. 


MONEY  CONDITIONS  IN 
GERMANY 

/ | ^HE  utterances  of  the  Governor  of 
the  Imperial  Bank  of  Germany 
in  regard  to  money  market  conditions 
usually  presents  a broad  view  of  the 
status  in  Europe  and  derive  interest  from 
the  extent  to  which  an  officer  charged 
with  heavy  responsibilities  is  willing  to 
commit  himself.  The  occasional  guard- 
ed statements  of  Dr.  Koch,  the  former 
Governor  of  the  bank,  who  died  recent- 
ly, always  attracted  attention  through- 
out Europe,  and  the  utterances  of  his 
successor,  Count  Havenstein,  who  has 
now  been  in  office  nearly  three  years, 
are  equally  attracting  notice.  At  the 
meeting  of  the  bank  at  the  close  of  Sep- 
tember, at  which  the  official  rate  of  dis- 
count was  advanced  to  five  per  cent.. 
Count  Havenstein  ma£e  a statement  to 


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792 


THE  BANKERS  MAGAZINE 


the  central  committee,  which  the  Berlin 
correspondent  of  the  “London  Econo- 
mist/* in  its  issue  of  October  1,  trans- 
lated as  follows: 

“The  entire  development  of  money 
market  conditions  during  the  past 
weeks  and  months  indicates  that  the 
present  tension  is  no  merely  temporary 
one  caused  by  the  monthly  settlement, 
but  that  we  are  confronted  by  a pro- 
longed expansion  of  credit  and  a lasting 
stiffening  of  rates.  The  final  weeks  of 
July  and  August  showed  extraordinary 
pressure  for  loans  and  discounts  at  the 
Reichsbank  . . . and  the  pressure 
in  the  past  three  weeks  of  September 
was  considerably  greater  than  in  the 
three  previous  years.  The  status  for 
September  2 8 only  makes  a tolerable 
comparison  with  last  year,  for  the  rea- 
son that  our  holdings  of  Imperial 
Treasury  notes  are  ,£12,500,000  less 
than  then.  . . . Especially  strik- 
ing during  the  past  few  months  has 
been  the  pressure  at  the  head  office  in 
Berlin,  and  the  high  percentage  of 
long-term  bills  handed  in  by  the  banks. 
All  this  shows  heavy  pressure,  and  is 
evidence  of  the  fact  that  the  resources 
of  the  banks  are  tied  up  for  a pro- 


tracted period — a thing  not  to  be  viewed 
without  concern  when  we  remember  that 
the  demands  resulting  from  the  gradu- 
ally improving  position  of  our  business 
life  are  not  very  great  and  are  not 
abnormal ; and  besides  this,  considerable 
sums  of  foreign  money  are  on  hand 
here.  The  pressure  at  the  Reichsbank 
on  the  part  of  the  other  banks  con- 
tinues to  increase  to  a serious  extent. 
It  would  therefore  be  a thankworthy 
task  for  the  German  banking  com- 
munity ...  to  draw  the  reins 
more  tightly  and  to  counteract  the  ex- 
aggerated demands  for  credit.  The 
Reichsbank  cannot  do  this  alone,  and  it 
begs  the  assistance  of  the  banking 
community;  it  is  glad  to  note  that  sev- 
eral of  the  banks  have  already  given 
decisive  warnings  to  their  customers. 
The  pressure  for  credit  already  re- 
ferred to  is  by  no  means  sound  at  every 
point  and  of  economic  advantage.  At 
present  very  many  long-term  credits 
are  in  existence,  and  the  numerous  and 
continuing  speculative  credits  have 
caused  a further  strong  increase  in 
them.  There  are  evidently  more  and 
greater  engagements  for  the  rise  than 
had  probably  been  assumed/' 


WHERE  DOES  THE  GOLD  GO? 


AS  soon  as  most  women  have  a small 
bank  account — and  many  long  be- 
fore— they  begin  to  buy  jewelry. 
Some  men  do  the  same,  for  investment, 
they  usually  claim,  rather  than  for  personal 
adornment.  During  the  past  few  years  the 
general  prosperity  of  everybody  has  devel- 
oped the  jewelry'  fad  to  an  unprecedented 
degree,  with  the  result  that  more  than  $35,- 
000,000  worth  of  gold  has  been  drawn  out 
of  circulation  and  into  the  arts  during  the 
year.  Most  of  the  demand  for  this  enor- 
mous amount  of  gold  has  come  front  man- 
ufacturing jew'elers. 

People  not  only  wants  lots  of  jewelry, 
but  they  demand  the  best  in  the  market. 
Large  dealers  in  jewelry  say  they  can  tell 
the  difference  between  Easterners  and 
Westerners  in  this  country  by  the  demand 
of  the  latter  for  show  and  of  the  former 
for  quality'. 

The  manufacture  of  the  basal  metal  into 
non-currency'  media  in  this  country  is  to- 
day,g°jng  on  at.  tbe  rate  of  about  $35,000,- 


000  a year.  The  subtraction  of  this  enor- 
mous amount  of  gold  for  manufacturing 
purposes  is  bound,  experts  say,  to  have  a 
more  or  less  adverse  effect  on  circulation. 
Not  only  that,  but  it  also  does  away  with 
four  times  the  amount  of  credit.  In  short, 
the  actual  gold  going  into  the  luxuries  of 
the  American  people  is  withdrawing  from 
financial  operations  at  least  $140,000,000. 

The  struggle  to  keep  enough  money  in 
circulation  has  been  a constant  one.  Many 
causes  tend  to  bring  about  a stringency 
that  has  to  be  artificially  relieved.  Whethh- 
er  the  time  will  ever  come  in  this  country 
when  banking  officers  will  be  compelled  to 
restrict  the  amount  of  precious  metals 
used  in  the  arts  no  expert  would  be  willing 
to  say'.  The  present  problem,  they  declare, 
although  it  has  grown  formidably,  will  ad- 
just itself  along  natural  lines  unless  some 
untoward  event  happens  that  will  make  it 
necessary'  for  the  government  to  put  its 
hands  on  every  available  ounce  of  gold  or 
silver  for  immediate  use. 


Digitized  by  t^ooQle 


BANKING  AND  COMMERCIAL  LAW 

Conducted  by  John  J.  Crawford,  Esq.,  Author  Uniform  Negotiable  Instruments  Act 


RECENT  DECISIONS  OF  INTEREST  TO  BANKERS 


NEGOTIABLE  INSTRUMENTS— 
NECESSITY  FOR  USE  OF  WORD 
“ORDER”  OR  “BEARER”— CON- 
STRUCTION OF  NEGOTIABLE 
INSTRUMENTS  LAW . 
WETTLAUFER  vs.  BAXTER  et  a l. 

COURT  OF  APPEALS  OF  KENTUCKY,  MARCH 

2,  1910. 

If  there  is  doubt  about  the  meaning  of 
any  of  the  provisions  of  the  Negotiable 
Instruments  Law,  and  that  doubt  can  be 
solved  by  a reference  to  the  law  merchant 
ns  it  was  administered  before  the  passage 
of  the  act,  this  law  should  be  looked  to, 
and  the  act  if  practicable,  given  such  a 
construction  ns  Mill  make  it  harmonise  with 
the  general  principles  of  commercial  law  in 
force  before  its  enactment. 

An  instrument  is  not  negotiable  either 
under  the  law  merchant  or  under  the  act, 
unless  the  words  “order”  or  “bearer”  or 
equivalent  terms  are  used  in  the  body 
thereof. 

The  character  of  the  paper  is  determined 
by  the  language  used  in  the  body  thereof, 
and  the  form  of  indorsement  cannot  convert 
a non-negotiable  note  into  one  that  is  ne- 
gotiable. 

If  a note  is  not  a negotiable  instrument 
within  the  meaning  of  the  act  the  rights 
and  liabilities  of  the  parties  to  it  are  not 
to  be  determined  by  the  act,  but  by  the 
law  relating  to  non-negotiable  paper. 

ARROLL,  J.:  In  the  State  of  New 
York,  on  July  3,  1905,  the  Buffalo 
Carriage  Top  Company  executed  to 
Newton  J.  Baxter  the  following  note: 
“January  15,  1906,  after  date  we  prom- 
ise to  pay  to  Newton  J.  Baxter  two  hun- 
dred and  fifty  dollars  at  58  Carroll  St., 
Buffalo,  N.  Y.”  On  the  back  of  the 
note  Newton  J.  Baxter  wrote  his  name, 
and  before  its  maturity  it  was  discounted 
by  appellant,  Wcttlaufer,  and  delivered 
to  him  by  Baxter.  When  the  note  fell 
due,  it  was  presented  to  the  Buffalo 
Carriage  Top  Company  for  payment, 
and  payment  refused.  Thereupon  the 
note  was  protested  by  a notary,  and 
notice  of  its  dishonor  mailed  to  Baxter 
at  his  residence,  in  Owensboro,  Ky. 


Baxter  declining  to  pay  the  note,  suit 
was  brought  on  it  against  him  in  the 
Daviess  circuit  court.  A general  de- 
murrer was  sustained  to  the  petition, 
and,  declining  to  plead  further,  the  pe- 
tition was  dismissed. 

The  petition  as  amended,  after  setting 
out  substantially  the  facts  before  stated, 
averred  that  the  note  was  executed  and 
delivered  by  the  payer  to  Baxter  in  the 
State  of  New  York,  and  was  indorsed 
and  delivered  by  Baxter  to  Wettlaufer 
in  that  State;  that  before  the  execution 
of  the  note  the  Legislature  of  the  State 
of  New  York  had  enacted  what  is 
known  as  the  “negotiable  instrument 
law,”  which  was  in  force  when  it  was 
executed  and  transferred;  and  that  its 
provisions  applied  to  the  note.  It  is 
conceded  that  the  negotiable  instrument 
law  of  the  State  of  New  York  is  identi- 
cal with  the  negotiable  instrument  law 
enacted  by  the  Legislature  of  Kentucky 
in  March,  1904,  and  which  is  now  chap- 
ter 90B,  § 3720B,  Ky.  St.  (Russell’s 
St.  §§  1820-2014.)  The  questions  in- 
volved in  the  case  are:  Was  the  note 

before  its  indorsement  by  Baxter  a 
negotiable  instrument  within  the  mean- 
ing of  the  negotiable  instrument  act? 
Or,  if  not,  did  Baxter,  by  signing  his 
name  on  the  back  of  the  note  and  sell- 
ing and  delivering  it  before  maturity 
to  Wettlaufer,  convert  it  into  a negoti- 
able note  and  make  all  the  parties  to  it 
subject  to  the  negotiable  instrument  act 
the  same  as  if  it  had  been  a negotiable 
note  in  the  first  instance? 

The  contention  of  counsel  for  Baxter 
is  that  the  note  was  not  a negotiable  in- 
strument, and  that  Baxter  by  signing  his 
name  on  the  back  of  the  note  became 
merely  an  assignor  and  not  liable,  un- 
less suit  was  brought  on  it  at  the  first 
term  of  the  court  against  the  maker,  the 
Buffalo  Carriage  Top  Company,  and  it 
prosecuted  to  insolvency.  In  other 
words,  the  effort  is  to  apply  to  this  case 
793 


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79* 


THE  BANKERS  MAGAZINE 


the  rule  of  law  announced  by  this  court 
in  Francis  vs.  Gant,  80  Ky.  190,  and 
many  other  cases,  holding  that,  before 
an  assignee  (as  it  is  said  Wettlaufer  is) 
can  recover  of  an  assignor  (as  it  is  con- 
tended Baxter  is),  he  must  institute  his 
action  against  the  payer  of  the  note  at 
the  first  term  of  the  court  after  the  note 
falls  due,  obtain  judgment,  have  execu- 
tion issue,  and  a return  of  no  property 
found,  without  unreasonable  delay.  If 
the  law  as  declared  in  this  line  of  cases 
applies  to  this  note,  it  is  manifest  that 
the  ruling  of  the  lower  court  was  cor- 
rect, as  there  is  no  averment  that  the 
Buffalo  Carriage  Top  Company  was 
prosecuted  to  insolvency,  or  that  any 
action  was  brought  against  it  before 
proceeding  against  Baxter. 

On  the  other  hand,  the  contention  for 
Wettlaufer  is  that  the  liability  of  Bax- 
ter upon  this  note  is  to  be  determined  by 
the  negotiable  instrument  act,  which  re- 
pealed all  former  laws  upon  the  subject 
of  bills  and  notes,  and  the  rights  and 
duties  of  assignees  and  assignors  under 
them,  and  that  by  the  provisions  of  this 
act  Baxter  occupies  the  position  of  an 
indorser  and  not  as  assignor  of  the  note. 
Or,  in  other  words,  that,  although  the 
note  may  not  have  been  negotiable  when 
first  executed  and  delivered,  Baxter  by 
his  indorsement  converted  it  into  a nego- 
tiable note,  and  that,  treating  it  as  such, 
the  liability  of  Baxter  and  the  other 
parties  must  be  controlled  by  the  nego- 
tiable instrument  act. 

In  considering  the  questions  involved, 
we  will  for  convenience  refer  to  the  ne- 
gotiable instrument  act  adopted  in  this 
State.  The  sections  of  the  act  perti- 
nent are: 

3720B.  Section  1.  An  instrument 
to  be  negotiated  must  conform  to  the 
following  requirements:  (1)  It  must 

be  in  writing  and  signed  by  the  maker  or 
drawer.  (2)  Must  contain  an  uncondi- 
tional promise  or  order  to  pay  a sum 
certain  in  money.  (3)  Must  be  payable 
on  demand  or  at  a fixed  or  determinable 
future  time.  (4)  Must  be  payable  to  the 
order  of  a specified  person  or  to  bearer; 
and  (a)  where  the  instrument  is  ad- 
dressed to  a drawee,  he  must  be  named 


or  otherwise  indicated  therein  within 
reasonable  certainty.” 

“Sec.  8.  The  instrument  is  payable  to 
order  where  it  is  drawn  payable  to  the 
order  of  a specified  person  or  to  him  or 
his  order.  It  may  be  drawn  payable  to 
the  order  of : ( 1 ) A payee  who  is  not 
maker,  drawer,  or  drawee;  or  (2)  the 
drawer  or  maker;  or  (3)  the  drawee; 
or  (4)  two  or  more  payees  jointly;  or 

(5)  one  or  some  of  several  payees;  or 

(6)  the  holder  of  an  office  for  the  time 
being.  Where  the  instrument  is  pay- 
able to  order,  the  payee  must  be  named 
or  otherwise  indicated  therein  with  rea- 
sonable certainty. 

“Sec.  9.  The  instrument  is  payable 
to  bearer : ( 1 ) When  it  is  expressed  to 

be  so  payable;  or  (2)  when  it  is  payable 
to  a person  named  thereon  or  bearer; 
or  (3)  when  it  is  payable  to  the  order 
of  a fictitious  or  nonexisting  person,  and 
such  fact  was  known  to  the  person  mak- 
ing it  so  payable;  or  (4)  when  the  name 
of  the  payee  does  not  purport  to  be  the 
name  of  any  person;  or  (5)  when  the 
only  or  last  indorsement  is  an  indorse- 
ment in  blank.” 

“Sec.  30.  An  instrument  is  nego- 
tiated when  it  is  transferred  from  one 
person  to  another  in  such  manner  as  to 
constitute  the  transferee  the  holder 
thereof ; if  payable  to  bearer,  it  is  nego- 
tiated by  delivery;  if  payable  to  order, 
it  is  negotiated  by  the  indorsement  of 
the  holder,  completed  by  delivery.” 

“Sec.  34.  A special  indorsement  spec- 
ifies the  person  to  whom  or  to  whose 
order  the  instrument  is  to  be  payable; 
and  the  indorsement  of  such  indorsee  is 
necessary  to  the  further  negotiation  of 
the  instrument.  An  indorsement  in 
blank  specifies  no  indorsee,  and  an  in- 
strument so  indorsed  is  payable  to  bear- 
er, and  may  be  negotiated  by  delivery.” 

“Sec.  184.  A negotiable  promissory 
note  within  the  meaning  of  this  act  is 
an  unconditional  promise  in  writing 
made  by  one  person  to  another,  signed 
by  the  maker  engaging  to  pay  on  de- 
mand or  at  a fixed  or  determinable  fu- 
ture time,  a sum  certain  in  money  to 
order  or  to  bearer.  Where  a note  is 


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BANKING  LAW 


795 


drawn  to  the  maker’s  own  order,  it  is 
not  complete  until  indorsed  by  him.” 

The  negotiable  instrument  act  is  not 
a new  law.  It  is  with  few  exceptions 
merely  the  codification  of  old  laws  that 
were  in  force  and  effect  by  virtue  of 
judicial  pronouncement  or  legislative! 
enactment,  and  generally  uniform.  In 
many  of  the  States,  including  our  own, 
there  was  very  little  statutory  law  on 
the  subject  of  bills  and  notes  previous 
to  the  passage  of  this  act.  Some  of 
these  statutes  were  not  uniform,  nor  in- 
deed were  the  opinions  of  the  courts  al- 
together in  harmony.  And  so,  to  re- 
move the  confusion  and  uncertainty  that 
was  caused  in  commercial  affairs  by  the 
lack  of  uniformity  in  legislative  enact- 
ments and  harmony  in  judicial  opinions, 
a committee  of  gentlemen  learned  in 
the  commercial  law  prepared  the  negoti- 
able instrument  act,  not  with  a view  of 
making  any  radical  changes  in  the  law 
as  generally  understood  and  adminis- 
tered, but  to  remove  the  doubt  as  well 
as  conflict  that  had  in  some  instances 
come  into  existence  from  difference  in 
statutory  laws  as  well  as  court  opinions. 
The  result  of  their  labors  was  the  pres- 
ent act,  which  has  become  the  law  in  a 
large  majority  of  the  States. 

And  looking  to  the  intention  of  the 
law  and  the  purpose  of  its  preparation 
and  enactment,  if  there  is  doubt  about 
the  meaning  of  any  of  its  provisions, 
and  that  doubt  can  be  solved  by  a ref- 
erence to  the  law  merchant  as  it  was 
theretofore  administered,  this  law 
should  be  looked  to,  and  the  act  if  prac- 
ticable given  such  a construction  as  will 
make  it  harmonize  with  the  general 
principles  of  commercial  law  in  force 
before  its  enactment. 

For  the  purpose  then  of  ascertaining 
what  bills  and  notes  it  was  intended 
should  be  negotiable  within  the  meaning 
of  this  act,  we  may  with  propriety  in- 
quire what  words  were  generally  con- 
sidered necessary  to  make  a note  or  bill 
negotiable  before  this  act  went  into  ef- 
fect, with  a view  of  noting  what  change 
if  any  was  made  in  this  particular.  In 
an  article  in  7 Cyc.,  page  606,  by  a 
well-known  writer  on  commercial  paper, 


it  is  said:  “The  usual  form  of  negoti- 

able paper  is  a provision  for  payment 
to  ‘order’  or  ‘bearer.’  These  or  similar 
words  are  in  general  necessary  to  its 
negotiability,  and  are  often  required  by 
statute,  but  a note  which  is  nonnegotia- 
ble  for  want  of  such  words  is  still  a 
valid  note  and  may  be  declared  on  as 
such. 

“Bills  payable  to  bearer  were  former- 
ly held  to  be  nonnegotiable,  as  being 
without  words  of  transfer;  but  they  are 
n 4^  recognized  as  negotiable  and  trans- 
ferable by  delivery.  Making  the  instru- 
ment payable  ‘to  the  order  of’  a person 
named  is  the  same  as  to  such  person  ‘or 
order’;  and  in  like  manner  to  a person 
named  ‘or  bearer’  is  the  same  in  effect 
as  ‘to  bearer.’  Without  words  of  nego- 
tiability purchasers  take  the  bill  or  note 
subject  to  all  defenses  which  were  avail- 
able between  the  original  parties;  and 
if  it  was  originally  nonnegotiable,  as 
against  the  original  parties,  it  will  not 
be  rendered  negotiable  by  subsequent 
transfer  in  negotiable  form.”  The  same 
rule  is  announced  in  4 Am.  & Eng. 
Ency.  of  Law,  133;  Story  on  Bills  of 
Exchange,  § 60;  Daniel  on  Negotiable 
Instruments,  § 105;  Bank  vs.  Butler, 
113  Tenn.  574;  Westburg  vs.  Chicago 
Lumber  Co.,  117  Wis.  589. 

It  will  thus  be  seen  that  it  was  uni- 
formly held  that,  in  order  to  make  a 
note  or  a bill  negotiable,  the  words  “to 
order”  or  “to  bearer,”  or  equivalent 
words,  must  be  used  in  the  body  of  the 
note.  It  will  be  kept  in  mind,  however, 
that  the  absence  of  these  words  does  not 
affect  the  validity  of  a note  or  render  it 
nontransferable  or  nonassignable.  Their 
only  effect  is  to  make  the  instrument 
negotiable,  and  thereby  cut  off  defenses 
that  the  maker  or  either  of  the  parties 
to  the  paper  might  have  and  make 
against  a holder  in  due  course  if  the* 
note  was  not  negotiable. 

The  negotiable  instrument  act  does 
not  apply  to  or  affect  the  rights  or  lia- 
bilities of  persons  on  paper  that  is  not 
within  its  meaning  negotiable.  But,  if 
a note  is  made  payable  to  a specified 
person  “or  order”  or  to  a specified  per- 
son or  “bearer,”  and  such  a paper  cornea 


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THE  BANKERS  MAGAZINE 


into  the  hands  of  a holder  in  due  course 
— that  is,  a holder  who  has  taken  the  in- 
strument under  the  following  conditions 
mentioned  in  section  52,  “( 1 ) that  the 
instrument  is  complete  and  regular 
upon  its  face,  (2)  that  he  became  the 
holder  of  it  before  it  was  overdue  and 
without  notice  that  it  had  been  previous- 
ly dishonored  if  such  was  the  fact,  (3) 
that  he  took  it  in  good  faith  and  for 
value,  (4)  that  at  the  time  it  was  nego- 
tiated to  him  he  had  no  notice  of  any 
infirmity  in  the  instrument  or  defect 
in  the  title  of  the  person  negotiating 
it” — then  neither  the  maker  of  the  note 
nor  any  other  person  on  it  can  make  as 
against  him  defenses  such  as  fraud,  or 
want  of  consideration,  or  the  like,  that 
they  or  either  of  them  might  have  made 
if  the  note  wras  not  a negotiable  instru- 
ment. In  short,  if  a note  is  not  a nego- 
tiable instrument  within  the  meaning  of 
this  act,  then  the  rights  and  liabilities 
of  the  parties  on  it  are  to  be  determined 
by  the  law  as  administered  with  refer- 
ence to  nonnegotiable  instruments.  If 
it  is  a negotiable  instrument  in  the  mean- 
ing of  the  act,  then  the  rights  and  lia- 
bilities of  the  parties  to  it  are  fixed  and 
determined  by  the  provisions  of  the  act 
alone.  This  note,  in  our  opinion,  which 
was  payable  to  Baxter  alone,  and  did 
not  contain  the  words  “to  order”  or 
“bearer,”  was  not  a negotiable  instru- 
ment. These  words  by  sections  1 and 
184  are  indispensable  to  make  the  pa- 
per a negotiable  instrument  within  the 
meaning  of  the  act. 

But  the  argument  is  further  made  that 
as  Baxter  indorsed  the  note  in  blank — 
that  is,  signed  his  name  on  the  back  of 
it  without  any  other  words — he  thereby 
converted  the  note  into  a negotiable  in- 
strument. It  is  true  that  section  9 of 
the  act  provides  that  “the  instrument  is 
payable  to  bearer  * * * when  the 

only  or  last  indorsement  is  an  indorse- 
ment in  blank”;  but  this  does  not  mean 
that  an  indorsement  in  blank  converts  a 
p note  nonnegotiable  on  its  face  and  by 
its  terms  into  a negotiable  note.  This 
construction  would  enable  the  person 
who  last  signed  his  name  on  the  back 
of  the  note  to  change  entirely  the  con- 


tract as  entered  into  between  the  parties, 
and  have  the  effect  of  making  the  maker, 
payee,  and  all  prior  indorsers  liable 
upon  a negotiable  instrument  when  they 
intended  to  and  only  became  liable  upon 
a note  that  was  not  negotiable,  and  this, 
as  can  readily  be  seen,  would  be  a most 
important  and  material  change  in  the 
obligation  assumed  by  them  when  they 
signed  the  paper. 

To  give  the  act  this  construction 
would  place  it  in  the  power  of  any  in- 
dorser who  chose  to  sign  his  name  in 
blank  to  change  by  this  act  the  entire 
character  of  the  paper  as  well  as  the 
rights  and  liabilities  of  the  parties  to  it. 
It  would  make  the  character  of  the 
paper  depend  upon  the  manner  of  the 
indorsement  and  not  upon  the  terms  ex- 
pressed in  the  paper.  Thus,  if  A.  in- 
dorsed it  in  blank  to  B.,  it  would  be 
negotiable;  but,  if  B.  indorsed  it  spe- 
cially to  C.,  it  would  be  nonnegotiable. 
Manifestly  it  was  not  intended  that  the 
mere  indorsement  of  the  note  by  a re- 
mote or  other  indorser  should  have  this 
effect. 

When  a paper  is  started  on  its  jour- 
ney into  the  commercial  world,  it  should 
retain  to  the  end  the  character  given  to 
it  in  the  beginning  and  written  into  its 
face.  If  it  was  intended  to  be  a negoti- 
able instrument,  and  was  so  written,  it 
should  continue  to  be  one.  If  it  was  in- 
tended to  be  a nonnegotiable  instrument 
and  was  so  written,  it  should  so  remain. 
Then  every  one  who  puts  his  name  on 
it,  as  well  as  every  one  who  discounts  or 
purchases  it,  will  need  only  to  read  it 
to  know  what  it  is  and  what  his  rights 
and  liabilities  are. 

In  our  opinion  section  9 was  merely 
intended  to  describe  or  designate  the 
conditions  under  which  a note  negotia- 
ble on  its  face  might  become  payable  to 
bearer,  and  was  not  intended  to  apply 
to  a note  not  on  its  face  or  by  its  terms 
negotiable.  To  illustrate,  if  this  note 
was  payable  to  “Newton  J.  Baxter  or 
order,”  then  the  paper  upon  its  face 
would  be  a negotiable  instrument,  al- 


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797 


though  payable  only  to  Baxter  or  order, 
and  the  only  effect  of  the  indorsement 
on  the  note  by  Baxter  in  blank  would 
be  to  convert  the  note  from  a note  pay- 
able to  order  into  an  instrument  payable 
to  bearer.  But  this  indorsement  would 
not  in  any  manner  change  the  negotia- 
bility of  the  note,  nor  change  the  atti- 
tude of  any  of  the  prior  parties  on  the 
note,  or  increase  their  liability  or  cut  off 
any  defenses  that  they  might  have 
made,  as  it  was  at  all  times  negotiable 
instrument.  Then,  too,  “when  the  only 
or  last  indorsement  is  an  indorsement  in 
blank/’  the  payee  without  notice  of  any 
defect  in  the  title  of  the  holder  may 
pay  the  same  to  him,  as  it  will  be  pre- 
sumed it  came  into  his  hands  in  due 
course;  no  indorsement  being  necessary. 

Although  the  note  under  our  construc- 
tion of  the  negotiable  instrument  act 
was  not  a negotiable  instrument,  yet 
Baxter  had  the  right  to  indorse  it  and 
transfer  it  by  delivery,  and  pass  what- 
ever title  he  had  to  the  transferee  or 
assignee.  But  the  assignee  would  then 
take  the  note  not  subject  to  the  pro- 
visions of  the  negotiable  instrument  act, 
but  under  the  law  applicable  to  non- 
negotiable  paprer. 

****** 

In  the  absence  of  a pleading  setting 
out  what  the  law  of  New  York  was  at 
the  time  the  note  was  indorsed  by  Bax- 
ter, we  cannot  assume  that  it  was  as 
stated  by  counsel  in  argument,  and  so 
his  liability  must  be  measured  by  our 
law  independent  of  the  negotiable  in- 
strument act.  And  as  under  this  law 
Baxter  would  be  treated  merely  as  an 
assignor  of  the  note,  and  would  not  be 
liable  unless  and  until  the  maker  had 
been  first  prosecuted  with  due  diligence 
to  insolvency,  the  petition  did  not  state 
a cause  of  action.  (Ky.  St.  § 481  [Rus- 
sell’s St.  § 1797];  Campbell  vs.  Farm- 
ers’ Bank  of  Kentucky,  10  Bush,  152; 
Edgewood  Distilling  Co.  vs.  Nowland, 
44  S.  W.  864,  19  Kv.  Law  Rep.  1740.) 

Judgment  affirmed. 


PAYMENT  OF  FORGED  CHECK- 
NOTICE  BY  DEPOSITOR— DE- 
LAY—DEMAND. 

PRATT  vs.  UNION  NATIONAL  BANK. 

SUPREME  COURT  OF  NEW  JERSEY,  DEC. 

21,  1909. 

The  act  of  New  Jersey  approved  April 
13,  1908,  (P.  L.  p.  428),  providing  that  no 
bank  shall  be  liable  to  a depositor  for  the 
payment  by  it  of  a forged  or  raised  check, 
unless  within  one  year  after  the  return  to 
the  depositor  of  the  voucher  of  such  pay- 
ment such  depositor  shall  notify  the  bank 
that  the  check  so  paid  was  forged  or  raised, 
is  prospective  and  not  retroactive. 

Where  a depositor  in  a bank  has  drawn 
upon  his  account  by  a check  which  has 
been  paid  to  some  one  other  than  the  payee, 
by  reason  of  the  forgery  of  the  latter’s 
indorsement,  a demand  for  the  payment 
of  the  canceled  forged  check  is  not  a con- 
dition precedent  to  the  depositor’s  suit  for 
his  deposit. 

The  rule  requiring  demand  on  banks  be- 
fore suit  is  brought  for  deposits  does  not 
extend  to  cases  where  the  bank  has  dis- 
claimed liability,  or  where  for  any  other 
reason  the  demand  would  manifestly  be 
futile. 

A depositor  in  a bank  is  not  precluded 
from  recovery  in  a suit  for  his  deposit  by 
his  failure  to  discover  and  report  that  his 
payee’s  indorsement  on  a check  returned 
to  him  with  the  balanced  passbook,  and 
charged  to  his  account  in  the  passbook,  was 
forged,  when  it  appears  he  did  not  know 
his  payee’s  signature,  and  there  is  no  rea- 
son for  claiming  that  he  ought  to  have 
known  it. 

A depositor’s  delay  in  giving  notice  to 
the  bank  of  the  forged  indorsement  of  his 
check  after  he  discovers  it,  will  not  be  a 
defense  against  his  action  against  the  bank 
to  recover  the  amount  of  the  check,  unless 
the  bank  was  injured  by  the  delay 

r I 'RENCHARD,  J.:  John  Pratt,  the 
A plaintiff  below,  was  a depositor 
in  the  Union  National  Bank  of  Atlantic 
City.  On  August  9,  1906,  he  issued  a 
check  on  that  bank  for  $120.77  to  the 
order  of  George  W.  Nock,  and  mailed  it 
to  Nock  in  Philadelphia  in  part  pay- 
ment of  an  open  account.  The  check 
was  received  at  Nock’s  place  of  busi- 
ness, and  his  indorsement  forged  there- 
on by  some  person  in  his  office.  It  Wus 
negotiated  through  several  hands,  and 
was  finally  presented  to  the  Union  Na- 
tional Bank  and  paid  by  it  September 
11,  1906.  On  November  7,  1906,  the 


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THE  BANKERS  MAGAZINE 


bank  returned  the  canceled  check  to 
Pratt  with  his  balanced  passbook.  It 
appears  by  the  testimony  that  “early 
in  the  spring  of  1908,  it  might  have 
been  later,”  Nock  notified  Pratt  by  let- 
ter of  the  forgery,  and  afterwards,  on 
May  23,  1908,  he  obtained  the  check 
from  Pratt,  giving  him  a receipt  for  it, 
and  presented  it  to  the  bank,  demand- 
ing payment,  which  was  refused,  the 
bank  disclaiming  any  liability.  On  Oc- 
tober 24,  1908,  this  suit  was  brought  in 
the  Atlantic  (Sjjfcy  District  Court,  and 
the  judge,  sitting  without  a jury,  ren- 
dered a judgment  for  the  plaintiff.  The 
defendant  appeals.  At  the  outset,  we 
remark  that  it  may  well  be  that  th£ 
record  before  us  presents  no  legal  ques- 
tions. There  seems  to  have  been  no  re- 
quest to  find  and  no  objection  to  the 
actual  finding.  But,  considering  the 
questions  argued,  we  think  the  judg- 
ment is  right. 

First,  it  is  said  that  there  can  be  no 
recovery,  because  no  notice  was  given 
to  the  bank  of  the  forgery  within  one 
year  after  the  return  to  the  depositor  of 
the  voucher.  It  is  true  that  the  act  of 
April  13,  1908  (P.  L.  p.  428),  provides 
that  “no  bank  shall  be  liable  to  a de- 
positor for  the  payment  by  it  of  a 
forged  or  raised  check,  unless  within 
one  year  after  the  return  to  the  de- 
positor of  the  voucher  of  such  payment 
such  depositor  sh^ll  notify  the  bank 
that  the  check  so  'jpaid  was  forged  or 
raised.”  It  is  also  true  that  the  act  pro- 
vides that  it  shall  take  effect  immedi- 
ately. The  important  question  is 
whether  the  act  has  any  application  to 
the  case  at  bar.  That  depends  upon 
whether  it  is  intended  to  be  retrospec- 
tive, or  prospective  only.  We  think  it 
is  prospective  only.  It  is  a rule  of  con- 
struction that  all  statutes  are  to  be  con- 
sidered prospective,  unless  the  language 
is  express  to  the  contrary,  or  there  is  a 
necessary  implication  to  that  effect. 
(Harvey  vs.  Tyler,  2 Wall.  347;  U.  S. 
vs.  Heth,  3 Cranch,  413;  Washung  vs. 
Hunt,  47  N.  J.  Law,  256,  affirmed  Hunt 
vs.  Washung,  48  N.  J.  Law,  6l3.)‘  The 
statute  in  question  contains  no  express 
language  indicating  that  it  is  to  have  a 


retroactive  effect,  nor  is  there  any  such 
necessary  implication.  The  action  in 
question  accrued  before  the  statute  was 
enacted.  To  give  it  effect  in  this  case 
would  deprive  the  plaintiff  of  his  ex- 
isting remedy,  for  he  did  not  discover 
the  forgery  until  after  the  time  limited 
by  the  statute  had  elapsed.  It  will  be 
presumed  that  such  was  not  the  intent 
of  the  Legislature.  To  avoid  such  a re- 
sult we  should  give  the  statute  a pros- 
pective operation.  We  are  of  the  opin- 
ion, therefore,  that  it  does  not  affect 
this  suit. 

Secondly,  it  is  considered  that  the 
judgment  should  be  reversed  “because 
the  evidence  shows  that  no  demand  was 
ever  made  by  the  plaintiff  or  any  one  in 
his  behalf  upon  the  defendant  for  the 
payment  of  the  check.”  But  it  is  to  be 
observed  that  the  subject-matter  of  the 
action  is  not  the  forged  check,  but  the 
money  of  the  plaintiff  deposited  in  the 
bank.  A deposit  being  a loan  payable 
on  demand,  the  depositor  may  not  as  a 
general  rule  maintain  an  action  to  re- 
cover his  deposit  until  he  has  first  made 
a demand  for  its  payment.  But  where, 
as  in  this  case,  he  has  drawn  upon  the 
account  by  check  which  has  been  paid 
to  some  one  other  than  the  payee,  by 
reason  of  the  forgery  of  the  latter’s 
indorsement,  a demand  for  the  pay- 
ment of  the  canceled  forged  check  is 
not  a condition  precedent  to  the  de- 
positor’s suit  for  his  deposit. 

The  question  which  the  defendant 
probably  intended  to  raise,  and  has 
argued,  was  whether  the  action  for  the 
deposit  could  be  maintained  in  the 
absence  of  a demand  for  its  payment 
We  have  pointed  out  that  as  a general 
rule  demand  must  be  made.  The  rea- 
son for  the  rule  is  that,  when  banks  are 
ready  and  willing  to  pay  on  demand, 
they  shall  not  be  annoyed  by  suit  The 
implied  contract  is  that  the  banks  shall 
keep  a deposit  until  called  for,  and  un- 
til the  bank  refuses  to  pay  on  demand, 
they  are  not  in  default.  (Titus  & Scud- 
der  vs.  Mechanics*  Nat.  Bank,  85  N.  J. 
Law,  588.)  But  where  the  bank  has 
disclaimed  liability,  or  where  for  any 
other  reason  the  demand  would  mani- 


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BANKING  LAW 


799 


festlv  be  futile,  none  need  be  made. 
(Titus  Sc  Scudder  vs.  Mechanics*  Nat. 
Bank,  35  N.  J.  Law,  588;  Sutcliffe  vs. 
McDowell,  2 Nott  & McC.  [S.  C.]  251 ; 
Lilley  vs.  Miller,  2 Nott  & McC.  [S.  C.] 
257;  Farmers*,  etc..  Bank  vs.  Planters* 
Bank,  10  Gill  & J.  [Md.]  422;  Miller 
vs.  Western  National  Bank,  172  Pa. 
197;  State  Bank  vs.  Benoist,  10  Mo. 
520.)  In  the  present  case  the  bank  re- 
peatedly denied  its  obligation  with  re- 
spect to  the  moneys  represented  by  the 
returned  check.  To  make  another  de- 
mand by  check  or  otherwise  would  have 
been  an  absurd  and  useless  form. 

Thirdly,  it  is  urged  that  the  plaintiff 
is  precluded  from  recovery  by  an  ac- 
count stated  between  the  parties.  The 
argument  is  that  the  plaintiff  was  put  in 
possession  of  his  balanced  passbook  and 
vouchers  by  the  bank  on  November  7, 
1906,  and  his  silence  with  respect  to 
the  forged  indorsement  on  the  check 
converted  it  into  an  account  stated,  by 
reason  of  the  plaintiff's  negligence  in 
failing  to  exercise  reasonable  diligence 
in  discovering  the  forged  indorsement. 

But  the  underlying  principle  is  that, 
having  paid  the  check,  the  bank  can- 
not charge  the  amount  against  the  de- 
positor, unless  it  shows  a right  to  do  so 
on  the  doctrine  of  estoppel  or  because 
of  some  negligence  chargeable  to  the 
depositor.  The  return  to  the  depositor 
of  his  check  with  a forged  indorsement, 
together  with  his  balanced  passbook, 
casts  on  him  only  the  duty  of  reason- 
able care  and  diligence  to  examine  the 
vouchers  and  account  as  stated  by  the 
bank,  and  to  inform  the  bank  of  any 
errors  thus  discoverable.  (Harter  vs. 
Mechanics*  National  Bank,  63  N.  J. 
Law,  57SI)  But  reasonable  diligence 
in  the  examination  of  the  passbook  and 
vouchers  may  often  be  entirely  ineffec- 
tual to  discover  forged  indorsements. 
It  will  always  be  so  when  the  depositor 
is  unacquainted  with  the  handwriting 
of  the  payee  or  other  persons  who  in- 
dorse his  checks.  In  the  case  at  bar,  it 
appeared  that  the  plaintiff  was  not  in 
fact  acquainted  with  his  payee's  signa- 
ture, and  there  is  no  ground  for  claim- 
ing that  he  ought  to  have  known  it.  He 


therefore  did  not  fail  in  duty  to  the 
bank  by  not  discovering  the  forgery  on 
the  return  of  the  check.  Indeed,  he  was 
entitled  to  assume  that  the  bank,  before 
paying  the  check,  had  ascertained  the 
genuineness  of  the  payee's  apparent  in- 
dorsement. (Harter  vs.  Mechanics*  Na- 
tional Bank,  63  N.  J.  Law,  578.) 

Lastly,  it  is  said  that  the  plaintiff  is 
estopped  from  recovery  by  his  failure 
to  give  notice  within  a reasonable  time 
to  the  defendant  of  the  forgery  of  the 
payee's  signature  after  the  discovery 
thereof.  It  does  not  appear  at  what 
precise  date  the  plaintiff  first  discov- 
ered the  forgery.  It  may  have  been 
early  in  the  spring  of  1908.  It  may 
have  been  later.  He  notified  the  bank 
on  May  23,  1908.  This  judgment  was 
rendered  by  the  trial  j udge,  sitting  with- 
out a jury,  and  in  order  to  reverse  it  on 
this  ground  we  would  be  required  to 
say  as  a matter  of  law  that  the  delay 
was  an  unreasonable  one.  This  it  seems 
to  us,  considering  the  state  of  the  testi- 
mony, we  cannot  do. 

But  assuming,  without  deciding,  that 
there  was  an  unreasonable  delay  on  the 
part  of  the  plaintiff  in  reporting  the 
forgery  after  discovery,  theife  remains 
for  consideration  the  question  whether 
it  must  appear,  in  order  to  preclude 
plaintiff's  recovery,  that,  because  of 
such  negligent  failure  to  give  notice,  the 
bank  was  prejudiced  in  its  right  of  ac- 
tion against  the  forger  or  other  third 
parties. 

While  there  is  some  conflict  in  the 
cases,  yet  the  rule  established  by  the 
great  weight  of  authority  is  that  a de- 
positor’s delay  in  giving  notice  to  the 
bank  of  the  forged  indorsement  of  his 
check  after  he  discovers  it,  will  not  be 
a defense  to  his  action  against  the  bank 
to  recover  the  amount  of  the  check,  un- 
less the  bank  was  injured  by  the  de- 
lay. (Janin  vs.  London  Sc  S.  F.  Bank, 
92  Cal.  14;  Brixen  vs.  Deseret  Nat. 
Bank,  5 Utah,  504;  Third  Nat.  Bank 
vs.  Merchants’  Nat.  Bank,  76  Hun,  475; 
Wind  vs.  Fifth  Nat.  Bank,  39  Mo.  App. 
72 ; Hardy  vs.  Chesapeake  Bank,  5 1 Md. 
562;  Murphy  vs.  Metropolitan  Nat, 
Bank,  191  Mass.  159;  Weinstein  vs. 


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National  Bank,  69  Tex.  38,  6 S.  W. 
171;  United  States  vs.  National  Bank, 
2 Mackey  [I).  C.]  289.) 

The  doctrine  of  the  responsibility  of 
the  depositor  to  his  bank  for  the  result 
of  failure  promptly  to  notify  it  of  the 
forgery  was  held  in  Hardy  vs.  Chesa- 
peake Bank,  51  Md.  562,  to  rest  upon 
the  principle  of  an  estoppel  in  pais, 
which  may  be  invoked,  to  prevent  in- 
justice only  by  one  who  can  show  that 
he  has  acted,  or  refrained  from  acting, 
by  the  conduct  of  another  which  would 
ordinarily  influence  other  persons;  and 
the  court,  relying  on  this  doctrine,  held 
that  it  was  incumbent  upon  the  bank 
to  show  that  it  had  been  actually  mis- 
led to  its  injury  by  the  conduct  of  the 
depositor.  There  is  no  presumption  of 
disadvantage  to  the  bank;  that  must  be 
affirmatively  shown.  (Wind  vs.  Fifth 
Nat.  Bank,  39  Mo.  App.  72.) 

The  burden  of  proof  that  the  bank 
sustained  damage  or  injury  by  the  neg- 
ligence of  the  depositor  is  upon  the 


bank.  This  it  must  show  by  evidence, 
having  some  reasonable  tendency  to  es- 
tablish such  fact.  Mere  conjecture  or 
surmise  is  not  sufficient.  There  must  be 
evidence  from  which  a rational  mind 
can  reasonably  draw  from  it  the  con- 
clusion that  the  bank  sustained  some 
loss,  or  that  its  position  with  reference 
to  the  check  or  its  right  to  recover 
against  the  forger  or  other  third  parties 
was  in  some  manner  changed  to  its  dis- 
advantage because  of  not  having  earlier 
notice.  In  such  case  a jury  question  is 
presented.  (Janin  vs.  London  & S.  F. 
Bank,  92  Cal.  14;  Weinstein  vs.  Nation- 
al Bank,  69  Tex.  38,  6 S.  W.  171.) 
Since  in  the  present  case  there  was  no 
evidence,  and  no  attempt  to  show,  that 
the  bank  was  injured  or  its  rights  af- 
fected by  the  delay,  clearly  the  plaintiff 
is  not  estopped  from  recovery  because 
of  such  delay. 

The  judgment  of  the  court  below  will 
be  affirmed. 


NOTES  ON  CANADIAN  CASES  AFFECTING  BANKERS 

[Edited  by  John  Jennings,  B,A..  L.L.B.,  Barrister,  Toronto] 


IN  THE  MATTER  OF  THE  ON- 
TARIO BANK  AND  THE  BANK 
OF  MONTREAL . 

r I 'HIS  is  a case  which  was  reported  in 
A the  July  issue  of  The  Bankers 
Magazine,  on  the  delivery  of  judgment 
by  the  Court  of  Appeal  for  Ontario.  An 
appeal  was  taken  to  the  j udicial  commit- 
tee of  the  privy  council,  and  judgment 
was  delivered  on  the  first  inst.  Only 
brief  cable  reports  are  as  yet  available, 
but  the  judgment  of  the  Court  of  Ap- 
peal for  Ontario  was  sustained.  In 
effect  this  judgment  holds  that  the 
transaction,  particulars  of  which  are 
given  in  the  July  number,  was  not  a 
purchase  of  the  assets  of  the  Ontario 
Bank  and  was  a valid  agreement  under 
the  bank  act.  The  result  is  that  the 
shareholders  of  the  defunct  Ontario 
Bank  will  be  required  in  addition  to 
losing  all  their  holdings,  to  pay  the  sum 
of  approximately  one  and  a half  mil- 
lion dollars  under  the  double  liability 


attaching  to  banks*  shares  under  Cana- 
dian law.  A full  report  of  the  judg- 
ment of  the  judicial  committee  of  the 
privy  council  will  appear  next  month. 


CANCELLATION  OF  INSTRU- 
MENT—COMPANY— WINDING- 
UP— MORTGAGE  BY  INSOL- 
VENT COMPANY  TO  BANK  TO 
SECURE  EXISTING  DEBT . 

HAMMOND  VS.  BANK  OF  OTTAWA  (O.  W. 

R.,  p.  121). 

Plaintiff,  liquidator  of  the  New  Ontario 
Brewing  Company,  brought  action  to  set 
aside  a mortgage  by  the  company  to  de- 
fendants, on  the  grounds  (1)  that  it  was 
made  within  three  months  preceding  the 
commencement  of  winding-up  proceedings; 
(2)  that  no  by-law  of  the  company  was 
passed  authorizing  the  mortgage. 

Sutherland,  held  (15  O.  W.  R.  536 
1 O.  W.  N.,  519)  that  the  consideration 
mentioned  in  the  mortgage  was  proved  to 
have  consisted  of  an  existing  debt  from  the 


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company  to  the  bank  and  that  the  bank  was 
endeavoring  to  get  security  therefor.  Plain- 
tiff was  entitled  to  succeed  under  s.  94  of 
the  winding-up  act.  The  by-law  was  not 
properly  ratified  and  was  without  effect  for 
the  purpose  of  making  the  mortgage  valid. 
Judgment  for  plaintiff  as  liguidator  for  the 
New  Ontario  Brewing  Company,  setting 
aside  the  mortgage,  and  the  defendants  to 
execute  a discharge  of  it.  Costs  to  plaintiff. 

Court  of  Appeal  held  that  the  attack  upon 
the  mortgage  failed  and  the  appeal  should 
be  allowed  and  the  action  dismissed,  but 
the  circumstances  were  such  ns  to  invite  en- 
quiry and  costs  should  not  be  allowed  either 
party. 

TTPON  petition  presented  on  Feb- 
^ ruary  11,1 909,  under  the  Domin- 
ion Winding-Up  Act,  the  company  was 
declared  to  be  insolvent  and  liable  to 
be  wound  up.  Subsequently,  the  plaint- 
iff was  appointed  permanent  liquidator, 
and  brought  this  action  with  the  ap- 
probation and  consent  of  the  local 
Master  of  the  Supreme  Court  of  Judi- 
cature at  North  Bay.  The  mortgage  in 
question  was  made  and  dated  Decem- 
ber 22,  1908,  less  than  three  months  be- 
fore, but  more  than  thirty  days  after 
the  commencement  of  the  winding-up. 

It  was  attacked  on  two  grounds: — 

(1)  That  it  was  given  voluntarily  and 
without  consideration  or  for  a merely 
nominal  consideration  when  the  com- 
pany was  insolvent  and  with  intent  to 
give  the  defendants  a preference  over 
the  other  creditors  of  the  company;  and 

(2)  that  no  by-law  of  the  directors  au- 
thorizing the  mortgage  was  passed  or 
confirmed  by  the  shareholders. 

The  defendants,  besides  denying  the 
allegations  of  the  statement  of  claim, 
set  up  that  the  mortgage  was  given  un- 
der pressure  and  for  valuable  consid- 
eration without  knowledge  of  insolvency 
if  such  existed,  and  that  the  mortgage 
was  duly  authorized  and  executed  on 
behalf  of  the  company. 

The  learned  trial  judge  held  against 
the  plaintiff  on  the  first  branch  of  his 
case,  but  decided  the  second  in  his 
favor. 

The  appeal  to  the  Court  of  Appeal 
was  heard  by  judges — C.  Moss,  CJ.O.; 
Garrow,  M a cLare n,  Meredith  and 
Magee. 

Judgment  (Sir  Chas.  Moss,  CJ.O.): 


The  further  evidence  is  now  before  us, 
but  in  dealing  with  the  appeal,  it  may 
be  convenient  to  first  dispose  of  the 
branch  of  the  case  upon  which  the 
plaintiff  succeeded  at  the  trial. 

For  some  time  prior  to  and  on  De- 
cember 8,  1908,  the  brewing  company 
was  indebted  to  the  defendants  to  the 
amount  of  $6,000  for  money  advanced 
in  the  ordinary  course  of  dealing  with 
them.  Frequent  demands  for  payment 
had  been  made  by  the  defendants  upon 
the  company,  with  the  result  that  the 
company  agreed  to  secure  the  amount 
by  mortgage  upon  their  lands.  On  De- 
cember 8,  the  directors  met  and  passed 
a by-law,  undoubtedly  with  the  inten- 
tion and  for  the  purpose  of  implement- 
ing the  agreement.  But  through  some 
misconception,  the  by-law  was  so  drawn 
as  to  contain  much  more  than  was  neces- 
sary to  express  and  give  effect  to  the 
intention.  The  debt  of  the  defendants 
at  that  time  being  an  outstanding  lia- 
bility of  the  company,  and  the  inten- 
tion and  agreement  being  to  mortgage 
its  real  property,  section  78  of  the 
Ontario  Companies  Act  gives  the  di- 
rectors ample  powers  to  do  so,  and  all 
that  was  needed  was  that  they  should 
act  under  the  powers  vested  in  them  by 
that  section.  But  the  by-law  as  passed 
contains  a recital  that  section  73  of  the 
Ontario  Companies  Act  authorizes  the 
directors  of  the  company  to  borrow 
money  for  the  purposes  of  the  company. 

This  assertion  of  the  powers  of  the 
directors  was,  of  course,  wholly  unneces- 
sary and  besides  was  inapplicable,  inas- 
much as  the  directors  were  not  about  to 
borrow  or  give  security  for  a present 
loan;  but  to  secure  by  mortgage  an  ex- 
isting liability.  Putting  aside  this  re- 
cital, the  remainder  of  the  by-law, 
though  not  very  happily  expressed,  is 
not  inapplicable  in  substance  to  the  true 
purpose  with  which  it  was  framed.  It 
contains  all  that  is  necessary  to  au- 
thorize the  preparation  and  execution 
by  the  president  and  secretary,  of  a 
mortgage  to  secure  the  liability  for 
$6,000. 

Is  the  presence  of  the  first  recital  suf- 
ficient to  prevent  the  by-law  from  hav- 


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THE  BANKERS  MAGAZINE 


ing  effect  and  operation  as  authorizing 
a mortgage  under  sec.  78?  To  so  hold 
is  to  completely  nullify  the  by-law;  for, 
by  no  construction  can  it  be  made  to  read 
as  applying  to  any  other  transaction 
then  on  foot  with  the  defendants  requir- 
ing to  be  dealt  with  by  the  by-law.  The 
only  transaction  calling  for  action  by 
the  directors  towards  the  giving  of  a 
security  was  the  agreement  to  give  a 
mortgage  to  secure  the  existing  debt. 
Unless  the  statement  contained  in  the 
by-law  that  the  company  has  borrowed 
$6,000  from  the  defendants  is  to  be  un- 
derstood as  meaning  the  previous  ad- 
vances and  the  liability  for  them,  the 
statement  is  wholly  untrue.  So  also 
with  regard  to  the  further  statement 
that  “the  directors  having  borrowed  the 
sum  of  $6,000  f rom  the  Bank  of  Ottawa, 
upon  the  credit  of  the  company/'  which 
precedes  the  authorization  to  them  to 
mortgage  the  company's  real  property 
for  securing  the  same. 

There  does  not  appear  to  be  any  good 
reason  for  giving  to  a recital  in  a by- 
law of  the  directors  of  a company  any 
greater  force  or  effect  than  is  to  be  given 
to  a recital  in  an  Act  of  Parliament,  and 
with  regard  to  that  it  has  been  said  that 
“a  mere  recital  in  an  Act  of  Parliament 
either  of  fact  or  law  is  not  conclusive; 
and  we  are  at  liberty  to  consider  the 
fact  of  the  law  to  be  different  from  the 
statement  of  the  recital."  (See  Reg 
vs.  Houghton  [1853],  1 El.  & Bl.  501 
at  516.) 

Here  the  first  recital  is  true  in  law 
and  in  fact,  but  it  has  no  relation  to  the 
actual  transaction  aimed  at.  And  the 
other  recitals  are  not  untrue  when  taken 
in  connection  with  the  actual  facts;  but 
they  would  be  treated  as  applying  to  a 
transaction  of  borrowing  under  sec.  73. 
The  company  had  borrowed  $6,000 
from  the  defendants,  not  at  the  time 
when  the  by-law  was  being  passed,  but 
long  previous  thereto,  and  the  directors 
(now  deeming  it  necessary  and  expe- 
dient to  give  the  defendants  a mortgage 
to  secure  the  $6,000)  take  steps  for  the 
purpose.  Under  sec.  78  the  directors 
had  power  to  do  all  the  by-law  author- 
ized, and  it  ought  not  to  be  considered 
that  the  failure  to  refer  to  all  the  pow- 


ers enabling  them  to  do  the  act  should 
render  it  nugatory. 

Further,  there  is  to  be  borne  in  mind 
the  principle  that  this  objection  would 
not  be  open  to  the  company,  and  that  in 
this  respect  the  plaintiff  occupies  no 
higher  position. 

The  defendants  having  received  a 
mortgage,  apparently  duly  executed  on 
behalf  of  the  company,  were  entitled  to 
assume  that  everything  necessary  to  its 
valid  execution  had  been  regularly  and 
properly  done.  There  is  a distinction 
between  what  directors  have  no  power 
to  do  at  all  and  what  they  have  power 
to  do,  provided  certain  conditions  are 
complied  with,  and  whilst  it  is  held  that 
companies  are  not  bound  by  acts  of  the 
former  class,  it  is  held  that  they  may 
be  bound  by  acts  of  the  latter  class 
in  favor  of  all  persons  dealing  with 
them  bona  fide  without  notice  of  ir- 
regularities of  which  they  may  be 
guilty.  (Lindley  on  Companies,  6th 
ed.,  p.  213.)  The  instrument  on  its 
face  appears  to  be  proper  and  regular 
to  effectuate  the  purpose  for  which  it 
was  agreed  to  be  given  and  there  is 
nothing  to  show  that  the  defendants 
were  aware  of  the  so-called  irregulari- 
ties preceding  its  execution.  Upon  this 
branch  of  the  case  the  learned  trial 
judge's  conclusion  should  be  reversed 
and  the  instrument  upheld. 

Then  comes  the  question  upon  which 
the  learned  trial  judge  held  in  the  de- 
fendants' favor.  The  mortgage  having 
been  made  within  three  months  next 
preceding  the  commencement  of  the 
winding  up,  there  is  a presumption  that 
it  was  made  with  intent  to  defraud  the 
company's  creditors.  But  the  presump- 
tion is  not  a conclusive  or  irrebuttable 
presumption.  It  places  upon  persons, 
whether  creditors  or  not,  to  whom  a 
mortgage  is  given  within  the  prescribed 
limit  of  time,  the  onus  of  showing  the 
absence  of  intent  to  defraud  the  credit- 
ors of  the  company.  So  far  as  the  sec- 
tions of  the  Winding  Up  Act,  relating 
to  voluntary  and  fraudulent  conveyances 
and  other  dealings  are  concerned,  the 
law  remains  as  enunciated  in  the  case  of 
Lawson  vs.  McGeoch  (1893)  20  A.  R. 
111.  It  was  open  to  the  defendants  to 


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overcome  the  statutory  presumption  of 
intent,  and,  as  the  authorities  have  set- 
tled, the  intent  of  the  debtor  alone  to 
defraud  is  not  sufficient.  It  must  be 
the  conjoint  intent  of  the  debtor  and 
creditor;  and  the  intent  to  prefer  is  in 
general  overcome  when  it  is  shown  that 
the  giving  of  the  mortgage  or  other  se- 
curity was  not  the  mere  voluntary  act  of 
the  debtor. 

The  learned  trial  judge  was  of  opin- 
ion, upon  the  evidence,  that  the  de- 
fendant had  sufficiently  discharged  the 
onus  of  rebutting  the  presumption  of 
intent  to  defraud.  This  conclusion  is 
greatly  strengthened  by  the  further  evi- 
dence. The  result  of  the  whole  testi- 
mony is  that  the  mortgage  was  the  out- 
come of  repeated  demands  made  upon 
the  company  by  the  defendants — who 
were  dissatisfied  with  the  state  of  the 
account — accompanied  on  more  than  one 
occasion  by  a threat  of  proceedings, 
which  were  held  in  abeyance  in  conse- 
quence of  the  promise  on  behalf  of  the 
company  that  a mortgage  would  be 
given. 

There  is  some  conflict  between  the 
testimony  of  the  plaintiff  and  the  de- 
fendants' manager  at  North  Bay  with 
regard  to  a conservation  between  them 
after  the  company  was  put  into  liquida- 
tion. The  plaintiff  deposed  that  at  an 
interview  between  them  the  manager 
stated  that  the  defendants  did  not  want 
the  mortgage;  that  it  was  thrust  upon 
them  by  the  company  of  its  own  accord, 
or  words  to  that  effect.  The  manager 
denied  having  had  any  conversation  with 
the  plaintiff  concerning  the  mortgage. 

The  testimony  of  Mr.  C.  Eaton,  who 
gave  his  evidence  with  great  fairness 
and  candor,  while  going  to  prove  the 
fact  of  a conversation,  makes  it  evident 
that  the  statement  attributed  to  the 
manager  by  the  plaintiff  that  the  mort- 
gage was  thrust  upon  the  defendants, 
or  given  of  the  company's  own  accord, 
was  not  made.  All  that  can  be  said  is 
that  very  likely  the  manager  expressed 
indifference  as  to  whether  or  not  the 
defendants  were  entitled  to  retain  the 
mortgage  as  a security.  However,  the 
discrepancies  between  the  testimony  of 
these  gentlemen  are  not  sufficient  to  dis- 


place the  positive  evidence  of  the  man- 
ager and  Mr.  McGaughey,  as  to  the  cir- 
cumstances leading  to  and  attending 
the  giving  of  the  security. 

The  attack  upon  the  mortgage  fails, 
and  the  appeal  should  be  allowed  and 
the  action  dismissed,  but  the  circum- 
stances were  such  as  to  invite  inquiry 
and  we  may  properly  say  that  it  is  not  a 
case  in  which  any  of  the  costs  of  the 
litigation  should  be  awarded  to  either 
party. 

Hon.  Mr.  Justice  Garrow,  Hon.  Mr. 
Justice  MacLaren  and  Hon.  Mr.  Justice 
Magee  concurred. 

Hon.  Mr.  Justice  Meredith:  The 

learned  judge  erred,  I think,  in  holding 
that  the  transaction  in  question  came 
within  the  provision  of  secs.  73  and  74 
of  the  Ontario  Companies  Act.  Those 
sections  relate  to  borrowing  money  and 
issuing  bonds,  debentures  or  other  secu- 
rities; and  the  creating  and  issuing  of 
preference  stock,  and  the  conversion  of 
preference  shares  into  common,  etc.,  in 
certain  companies. 

Section  78  of  the  Act  gives  power  to 
the  directors  to  mortgage  the  company's 
property  to  secure — among  other  things 
— “any  liability  of  the  corporation." 

At  the  trial,  it  was  admitted  that  the 
debt  which  the  mortgage  was  given  to 
secure  was  a valid  liability  of  the  com- 
pany. The  mortgage  having  been  given 
for  a liability  of  the  company,  section 
78  applies,  and  there  is  nothing  in  sec- 
tions 73  or  74  affecting  it.  If  the  pro- 
visions of  sections  73  an<}  74  had  not 
been  observed  in  borrowing  the  money 
which  created  the  liability,  there  might 
be  no  liability,  but  no  such  case  was 
made,  a valid  liability  was  admitted, 
that  is  an  admission  in  effect  that  if 
sections  73  and  74  applied  to  such  bor- 
rowing they  had  been  complied  with. 

The  by-law  properly  interpreted  does 
not  purport  to  have  been  passed  under 
section  73;  but,  if  it  had,  the  right 
which  the  directors  had,  not  that  which 
they  may  have  thought,  or  asserted,  that 
they  had,  ought  to  prevail. 

The  case  is  not  one  within  section  94 
of  the  Winding-Up  Act;  there  was 
valuable  consideration,  the  existing  lia- 
bility and  “pressure." 


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Since  the  foregoing  opinion  was  writ- 
ten, further  evidence  has  been  adduced, 
which  not  only  confirms  the  finding  that 
the  mortgage  was  not  a voluntary  con- 
veyance and  security,  but  proves  that  it 
was  the  outcome  of  a very  considerable 
pressure  and  that  a further  considera- 
tion, a new  “line  of  credit,”  was  given 
for  it. 


BILL  OF  EXCHANGE— ACCEP- 
TANCE FOR  ACCOMMODATION 
OF  THIRD  PERSON  — EVI- 
DENCE — ADMISSIBILIY  — RE- 
JECTION AT  TRIAL— ADMIS- 
SION BY  AFFIDAVITS  ON  AP- 
PEAL—INDEMNITY— IMPLIED 
CONTRACT— COUNTY  COURT 
— JURISDICTION  — REMOVAL 
OF  ACTION  INTO  HIGH  COURT 
—COSTS. 

FARROW  VS.  MCPHERSON  (2  O.  W.  N., 

p.  70). 

' I 'HIS  was  an  appeal  from  the  judg- 
ment  of  the  County  Court  of 
Carleton  in  favor  of  the  plaintiff  in  an 
action  to  recover  $525,  brought  by  the 
acceptor  of  a Bill  of  Exchange,  who 
alleged  that  lie  had  accepted  the  bill  at 
the  request  and  purely  for  the  accom- 
modation of  the  defendant.  The  ap- 
peal was  heard  by  the  Divisional  Court 
and  the  facts  are  fully  set  out  in  the 
judgment  of  Mr.  Justice  Riddell. 

Judgment  (Falconbridge,  C.J.; 
Britton  and  Riddell,  JJ.):  The 

plaintiff  resided  in  Ottawa.  One  Mil- 
lar, brother-in-law  of  the  defendant 
(who  resides  in  Stratford),  came  down 
with  a stock  proposition  and  asked  the 
plaintiff  to  help  him  to  start  a com- 
pany. The  plaintiff  did  so,  and  intro- 
duced him  to  another  person,  who  sup- 
plied $1,000,  apparently  to  float  the 
company.  Millar  then  asked  the  plaint- 
iff to  allow  him  and  the  defendant  to 
make  a draft  on  the  plaintiff  for  $1,500. 
Millar  said  that  “he  and  McPherson 
were  in  together.”  The  plaintiff  did 
not  accede  to  this  request.  He  then 
said:  “You  know  McPherson  is  good; 

allow  me  to  put  through  one  for  $750, 
and  McPherson  for  $750.”  The  plaint- 


iff knew  both  Millar  and  the  defendant, 
and  knew  that  they  had  been  in  deals 
before  this  together — and,  without  mak- 
ing any  inquiry  of  or  any  communica- 
tion to  the  defendant,  but  accepting 
Millar’s  statement,  he  agreed  to  accept 
the  drafts.  The  plaintiff  denies  at  first 
that  he  had  business  dealings  with  Mil- 
lar, and  says  that  he  was  only  helping 
him  as  a friend,  but  subsequently  says 
that  he  was  to  get  $1,000  (at  first  he 
thought  in  cash)  for  introducing  Millar 
to  various  gentlemen  to  whom  he  might 
sell  stock.  As  he  did  not  get  cash,  he 
got  $1,000  in  stock,  but  this  apparently 
was  after  the  acceptance  of  the  drafts. 

There  is  no  evidence  that  the  defend- 
ant and  Millar  were  in  this  deal  to- 
gether, and  the  defendant  specifically 
denies  it — of  course  the  statements  of 
Millar  to  the  plaintiff  are  not  evidence 
against  the  defendant.  At  the  trial  the 
defendant  was  not  allowed  to  give  evi- 
dence of  the  circumstances  under  which 
he  made  the  draft  upon  the  plaintiff. 
This  ruling  was  clearly  wrong;  and  we 
have  received  evidence  upon  affidavit, 
without  objection,  showing  what  the 
facts  were.  The  defendant  was  aware 
that  Millar  and  the  plaintiff  were  act- 
ing together  in  the  sale  of  stock,  and 
in  January,  1908,  he  was  informed  by 
Millar  that  the  plaintiff  was  collecting 
considerable  sums  of  money  on  joint 
account  for  the  stock,  and  Millar  asked 
him  to  assist  him  financially.  Millar 
told  him  to  draw  on  the  plaintiff  for 
$500,  which  he  did;  and  he  gave  all  the 
proceeds  to  Millar;  and  this  draft  was 
paid  at  maturity. 

Then  in  February,  1908,  Millar  asked 
the  defendant  again  to  help  him.  At 
Millar’s  direction  the  defendant  drew 
on  the  plaintiff  for  $750,  and  gave 
Millar  the  proceeds,  $748.15;  the  draft 
was  not  paid,  but  to  retire  the  unpaid 
draft,  a new  draft  was,  at  Millar’s  di- 
rection, made  at  one  month;  this  was 
accepted,  but  not  paid;  and  on  March 
31,  at  the  instance  of  Millar,  the  draft 
in  question  was  made  to  retire  the  pre- 
vious renewal  draft.  This  was  unpaid. 

The  bank  claimed  from  the  plaintiff, 
and,  after  some  negotiations,  the 
plaintiff  settled  with  the  bank  for  $500, 


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BANKING  LAW 


805 


and  sued  the  defendant  for  this  amount 
and  twenty-five  dollars  paid  to  his  own 
solicitor. 

This  action  was  brought  in  the 
County  Court  of  Carleton,  and  was 
tried  before  His  Honor  Judge  Gunn, 
junior  judge  of  that  court,  without  a 
jury,  on  June  24,  1910.  The  learned 
judge  found  for  the  plaintiff,  and  di- 
rected judgment  to  be  entered  for  the 
plaintiff  for  $500,  interest  and  costs. 
No  written  reasons  were  given,  and  we 
are  informed  that  no  reasons  were 
given  by  the  learned  judge  for  his 
decision. 

Upon  the  appeal  it  was  agreed  by  all 
parties  that  the  case  should  be  removed 
nunc  pro  tunc  into  the  high  court  and 
treated  as  though  it  had  been  tried  by 
the  county  court  judge  for  a high  court 
judge. 

The  right  of  action  is  in  such  a case 
upon  the  implied  contract  of  the  party 
for  whose  accommodation  a bill  of  ex- 


change was  accepted,  to  indemnify  the 
accommodation  acceptor  in  case  he  is 
obliged  to  pay. 

It  is  necessary  to  prove  that  the  bill 
was  accepted  for  the  accommodation  of 
the  defendant;  and  it  is  not  sufficient 
that  it  be  accepted  for  the  accommoda- 
tion of  some  one  else.  Here  not  only 
the  evidence  of  what  took  place  when 
the  arrangement  was  made  between 
Millar  and  the  plaintiff  for  the  drawing 
of  the  bill  by  the  defendant,  but  also 
the  letters  of  the  plaintiff  subsequently, 
show  clearly  that  it  was  for  the  accom- 
modation of  Millar,  and  not  of  the  de- 
fendant, that  the  bill  was  accepted. 

I am  of  opinion  that  the  judgment  is 
wrong,  and  should  be  reversed  with 
costs  and  the  action  dismissed  with 
costs.  As  the  point  as  to  the  jurisdic- 
tion of  the  county  court  to  deal  with 
this  action  was  not  raised,  the  costs 
should  be  on  the  county  court  scale. 


REPLIES  TO  LAW  AND  BANKING  QUESTIONS 

QnMtioni  in  Banking  Law— submitted  by  subscribers— which  may  be  of  sufficient  general  interest 
to  warrant  publication  will  be  answered  in  this  department 


OBLIGATION  OF  INDORSER  OF 
CHECK  WHERE  DISCREPANCY 
BETWEEN  WORDS  AND  FIGURES 
OF  AMOUNT  PAYABLE 

Editor  Bankers  Magazine: 

Sm:  A check  properly  dated  is  drawn  on 
The  National  Bank  of  I^ong  Beach  by 
“John  Doe,”  in  favor  of  “Richard  Roe.” 
The  figures  read  “$800.00;”  the  body  of  the 
check  in  writing  reads  “Eight  Dollars.” 
“Richard  Roe”  writes  across  the  back  of 
the  check,  “The  amount  of  this  check  guar- 
anteed to  be  $800.00,”  and  signed  it  “Rich- 
ard Roe.”  The  check  is  passed  on  to  his 
bank  in  the  East  and  through  a series  of 
banks  it  finally  readies  us. 

Do  the  endorsing  banks,  by  the  mere  act 
of  endorsement,  guarantee  the  amount  of 
the  check  as  guaranteed  by  “Richard  Roe,” 
and  if  we  pay  the  check,  have  we  recourse 
on  the  banks,  provided  our  customer  shows 
that  the  check  should  only  be  for  $8.00,  or 
must  we  look  direct  to  “Richard  Roe”? 

Wm.  M.  Cook, 

Assistant  Cashier. 

Answer:  An  indorser  who  indorses 

without  qualification,  engages  that  if 
the  paper  shall  not  be  paid  by  the 


maker  or  acceptor,  he,  the  indorser,  will 
pay  it  according  to  its  tenor;  that  is  to 
say,  according  to  its  terms.  (See  Benn 
vs.  Kutzschan,  24  Oregon,  28.)  But 
the  figures  in  the  margin  of  the  instru- 
ment are  regarded  as  simply  a memo- 
randum or  abridgement  for  convenience 
or  reference  and  form  no  part  of  the 
instrument.  (Smith  vs.  Smith,  1 R.  I. 
388;  Norwich  Bank  vs.  Hyde,  13  Conn. 
281 ; Schreyer  vs.  Hawkes,  22  Ohio  St., 
308.)  The  history  of  the  use  of  such 
figures  was  explained  in  the  English 
case  of  Garrard  vs.  Lewis  (L.  R.  10 
Q.  B.  Div.  30,  32)  as  follows:  “They 

do  not  seem  in  general  to  have  been  con- 
sidered among  merchants  as  of  the  same 
effect  and  value  as  the  mention  of  the 
sum  contained  in  the  body  of  the  bill. 
The  history  of  these  marginal  figures 
may  perhaps  be  shortly  summarized  as 
follows: — The  first  model  of  a bill  of 
exchange  preserved  to  us,  and  which 
dates  from  1381,  does  not,  I believe, 
possess  them,  though  it  does  possess  the 


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THE  BANKERS  MAGAZINE 


nature  or  vocation  with  which  mer- 
chants’ bills  used  generally  to  com- 
mence, and  which  usually  preceded  the 
figures.  The  marginal  figure  at  the 
head  of  a bill  was  probably  added  at  a 
very  early  date,  in  order  that  the 
amount  of  the  bill  might  strike  the  eye 
immediately,  and  was  in  fact  a note,  in- 
dex or  summary  of  the  contents  of  the 
bill  which  followed.” 

Hence,  in  the  case  stated,  if  nothing 
more  appeared,  each  indorser  would  be 
bound  to  pay  the  sum  named  in  the  body 


of  the  check,  viz.,  eight  dollars.  Nor  is 
the  case  altered  by  the  fact  that  one 
indorser  has  seen  fit  to  extend  his  ob- 
ligation beyond  this;  for  each  indorse- 
ment is  a separate  contract,  standing 
apart  from  that  made  by  the  drawer  or 
any  other  indorser.  (Chemical  Nat. 
Bank  vs.  Kellogg,  183  N.  Y.  92,  94.) 
In  other  words,  the  contract  by  one  in- 
dorser is  the  express  obligation  assumed 
by  him,  while  the  obligations  of  the 
other  indorsers  are  only  those  that  the 
law  implies. 


TRUST  COMPANIES 

Conducted  by  Clay  Herrick 


NEW  YORK  TRUST  COMPANIES 


' I 'HE  combined  reports  of  the  trust 
companies  of  New  York  City,  as 
of  August  31,  1910,  show  a loss  in  ag- 
gregate resources  of  $137,670,042,  as 


compared  with  the  statements  of  a year 
before,  September  14,  1909.  The  prin- 
cipal items  compare  as  shown  in  the 
following  table: 


Liabilities. 


Capital  

Surplus  and  profits,  market  value 

Surplus  and  profits,  book  value 

Preferred  deposits — Due  State  savings  banks  

Due  State  savings  and  loan  associations 

Trust  deposits  not  payable  within  30  days 

Due  as  executor,  administrator,  guardian,  receiver,  trus- 
tee, committee,  etc 

Deposits  preferred  because  secured  by  unmatured 

bonds  of  the  State 

Other  deposits  preferred  because  of  pledge  of  part 

of  trust  company  assets  

Deposits  otherwise  preferred  

Deposits  subject  to  check  (not  preferred) 

Certificates  of  deposit  on  time  and  demand  (not  pref.).. 
Time  deposits  not  payable  within  30  days,  represented 

by  certiAcates,  etc 

Due  trust  companies  

Due  banks  and  bankers  


Total  of  all  deposits 


Borrowed  money  

Preferred  liability  os  executor,  etc. 
Other  liabilities  

Grand  total 


Sept.  14, 1909 

$61,675,000 

163,089,689 

Aug.  31, 1910 
$65,656,000 
172,728334 

35,624,695 

434,789 

28,200,691 

33,214,117 

377,958 

33,149,595 

22,974,213 

35,740,996 

4,378,623 

6,102,000 

6,442,245 

4,944,837 

814,808,739 

81,136,510 

3,855398 

1,4633-* 

762,442,532 

61,866,402 

133,925,128 

112,647,019 

70,425,130 

92,743,726 

$1,245,517,486 

$1,101,381311 

$672,460 

944,000 

41,867,332 

35,043,380 

$1,513,421,967 

$1,375,751,995 

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TRUST  COMPANIES 


807 


Resources. 

Sept  14, 1909  Aug.  31, 1910 


Bonds  and  mortgages  $69,203,287  73,367,196 

Stock  and  bond  investments — 

Public  securities  75,182,192  71,385,258 

Other  securities  268,246,371  261,721,097 

Loaned  on  collaterals 627,481,274  484,160,420 

Loans,  not  secured  by  collateral  6,347,849  9,324,052 

Other  loans  and  bills  purchased  

Bills  purchased  98,046,079  106,595,490 

Overdrafts 126,285  113,170 

Real  estate  22,205, 844  25,355,464 

Due  from  approved  reserve  deposits,  less  offsets  116,699,223  126,815,411 

Due  from  trust  companies,  banks  and  bankers,  not  in- 
cluded in  preceding  items 66,901,581  54,674,654 

Specie  124,903,213  114,865,369 

U.  S.  legal-tenders  and  bank  notes 13,939,537  12,391,586 

Bills  and  checks  for  the  next  day’s  exchange  and  other 

cash  items  724^74  592,448 

Investments  held  as  executor,  etc 

Other  assets  23,414,913  34,390,310 


Grand  total 

The  year  has  seen  several  changes  in 
the  relative  size  of  the  companies. 
Through  its  consolidations  the  Guaranty 
Trust  Company  has  passed  the  Farm- 
ers' Loan  & Trust  Company  in  point  of 
size,  and  now  ranks  as  the  largest 
trust  company  in  the  country.  The  fol- 
lowing table  gives  a list  of  the  trust 
companies  in  Greater  New  York,  ar- 
ranged in  order  of  size,  with  their  ag- 
gregate resources  on  August  31,  1910: 

1 Guaranty  Trust  Company. . .$161,312,884 

2 Farmers*  Loan  & Trust  Co..  129,827,555 


3 Central  Trust  Company 88,644,946 

4 Bankers’  Trust  Company 81,692,484 

5 United  States  Trust  Company  78,323,857 

6 Union  Trust  Company 68,348,058 

7 Mercantile  Trust  Company..  64,449,002 

8 U.  S.  Mortgage  & Tr.  Co...  60,273,482 

9 New  York  Trust  Company..  58,174,562 

10  Equitable  Trust  Company...  48,957,836 

11  New  York  Life  Ins.  & Tr.  Co.  47,516,189 

12  Knickerbocker  Trust  Co.....  42,105,709 

13  Title  Guarantee  & Tr.  Co...  39,893,491 

14  Trust  Company  of  America.  34,924,791 

15  Metropolitan  Trust  Company  34,189,326 

16  Lawyers’  Title  Ins.  & Tr.  Co.  23,860,362 

17  Empire  Trust  Company 20,414,116 

18  Manhattan  Trust  Company..  19,121,268 

19  Standard  Trust  Company..  16,403,210 

20  Astor  Trust  Company 16,189,499 

21  Columbia  Trust  Company...  15,745,533 

22  Franklin  Trust  Company 15,022,479 

23  Lincoln  Trust  Company 12,633^552 

24  Washington  Trust  Company.  11,961,633 

25  Carnegie  Trust  Company 10,976,324 

26  Mutual  Alliance  Trust  Co...  10,155,087 

27  Fulton  Trust  Company 8,907,064 


$1,513,421,967  $1,375,751,925 

28  Fidelity  Trust  Company 8,592,511 

29  Van  Norden  Trust  Company.  8,393,870 

30  Windsor  Trust  Company 8,322,187 

31  Commercial  Trust  Company.  5,891,539 

32  Broadway  Trust  Company. . . 5,238,443 

33  Hudson  Trust  Company 4,823,520 

34  Guardian  Trust  Company 4,489,285 

35  Savoy  Trust  Company 2,556,712 


OFFICERS  OF  TRUST  COMPANY 
SECTION 

* I 'HE  trust  company  section  of  the 
A American  Bankers'  Association 
continues  to  be  happy  in  the  selection 
of  its  officers,  and  for  the  coming  year 
will  be  in  the  hands  of  an  able  and 
energetic  body  of  men  who  maintain 
high  ideals  of  their  profession.  Oliver 
C.  Fuller,  president  of  the  Wisconsin 
Trust  Company  of  Milwaukee,  was  pro- 
moted from  the  position  of  first  vice- 
president  to  that  of  president;  and 
Lawrence  L.  Gillespie,  vice-president  of 
the  Equitable  Trust  Company  of  New 
York,  from  that  of  chairman  of  the 
executive  committee  to  that  of  first  vice- 
president.  Both  of  these  gentlemen 
have  proved  their  fitness  by  work  al- 
ready done  for  the  section.  The  new 
chairman  of  the  executive  committee  is 
F.  H.  Fries,  president  of  the  Wachovia 
Loan  & Trust  Company  of  Winston- 
Salem,  N.  C.,  prominent  in  Southern 


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banking  circles,  and  for  many  years  a 
faithful  worker  in  the  section,  and  a 
frequent  speaker  at  its  meetings.  The 
new  members  of  the  executive  commit- 
tee are:  J.  C.  Drake,  president  of  the 

Los  Angeles  Trust  & Savings  Bank, 
Los  Angeles,  Cal.;  W.  C.  Poillon,  vice- 
president  The  Mercantile  Trust  Com- 
pany, New  York;  Roland  L.  Taylor, 
president  The  Philadelphia  Trust,  Safe 
Deposit  & Insurance  Company,  Phila- 
delphia; E.  E.  Foye,  of  The  Old  Colony 
Trust  Company,  Boston;  Isaac  H.  Orr, 
trust  officer  The  St.  Louis  Union  Trust 
Company,  St.  Louis. 


TWENTY  FRUITFUL  YEARS 

'T'WENTY  years  is  not  a great  age. 
*■*  but  there  are  only  a few  trust 
companies  much  older  than  that  in  the 
middle  West,  and  indeed  twenty  years 
measures  the  period  during  which  the 
trust  company  has  been  an  important 
factor  in  our  financial  circles.  In  Oc- 
tober, the  Mississippi  Valley  Trust 
Company  of  St.  Louis  celebrated  its 
twentieth  anniversary.  The  company 
began  its  career  on  October  3,  1890,  its 
president  then  being  Julius  S.  Walsh, 
now  chairman  of  the  Board,  and  its  sec- 
retary, Breckenridge  Jones,  who  is  now 
president.  Its  resources  now  exceed 
$27,000,000,  while  its  influence  on  the 
prosperity  of  the  community  has  been 
large.  "The  Globe-Democrat"  says: 
"The  company  has  assisted  in  the  con- 
struction of  six  important  railroads,  all 
serving  St.  Louis.  It  has  developed  a 
new  wholesale  section  and  two  new  resi- 
dence districts  in  St.  Louis,  besides 
large  suburban  subdivisions.  For  the 
past  ten  years  it  has  been  depositary 
for  three- fourths  of  the  public  moneys 
of  the  State  of  Missouri  and  also  for 
part  of  the  funds  of  the  city  of  St. 
Louis."  This  reference  calls  attention 
to  the  fact  that  the  trust  companies  of 
St.  Louis  have  made  much  of  their  real 
estate  departments,  whose  relative  im- 
portance is  greater  than  that  of  trust 
companies  elsewhere. 

The  Mississippi  Valley  Trust  Com- 
pany is  to  be  congratulated  especially 


upon  the  conservatism  of  its  manage- 
ment and  upon  the  high  ideals  it  has 
followed  as  to  the  responsibility  of  the 
trust  company  as  a fiduciary  institu- 
tion. 


FOREIGN  BRANCHES 

AN  opinion  rendered  in  July  last  by 
Attorney-General  O'Malley  of 
New  York,  in  response  to  an  inquiry 
by  the  State  Superintendent  of  Banks, 
O.  H.  Cheney,  has  necessitated  the 
amendment  of  the  charters  of  several 
New  York  trust  companies.  These 
companies  have  been  maintaining 
branches  in  European  cities,  especially 
London  and  Paris,  and  some  of  them 
desire  to  include  other  European  cities, 
including  Berlin  and  Rome.  It  is  un- 
derstood that  they  have  developed  quite 
a large  business  abroad.  The  decision 
above  noted  shows  that  neither  the  com- 
panies chartered  under  the  general 
banking  law  nor  those  existing  under 
special  charters  have  authority  to  con- 
duct such  foreign  branches  (except  the 
Guaranty  Trust  Company,  whose 
amended  charter  gave  authority  to 
maintain  a branch  in  London).  The 
companies  affected,  including  The 
Farmers'  Loan  & Trust  Company,  The 
Trust  Company  of  America,  The  Guar- 
anty Trust  Company  and  The  Equita- 
ble Trust  Company,  are  meeting  the 
problem  by  amendments  to  their  char- 
ters. The  question  came  upon  investi- 
gation by  Superintendent  Cheney  re- 
garding the  examination  of  the  foreign 
branches. 


SAVINGS  DEPOSITS 

"XTARIOUS  questions  relating  to  sav- 
* ings  deposits  continue  to  hold  the 
field  of  discussion  in  all  parts  of  the 
country.  An  interesting  feature  of  the 
matter  is  that  to-day  all  classes  of  bank- 
ing institutions  are  interested  in  these 
questions.  The  Maryland  Bankers' 
Association  recently  appointed  a com- 
mittee to  investigate  the  matter  of  in- 
terest on  deposits,  the  committee  includ- 
ing representatives  of  trust  companies, 
national  banks.  State  banks  and  savings 
banks  with  and  without  capital  stock. 


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Presumably  interest  on  savings  de- 
posits will  demand  a considerable  part 
of  the  committee’s  attention.  With  the 
growing  custom  of  the  maintenance  of 
savings  departments  by  national  banks* 
and  the  still  more  prevalent  custom  of 
carrying  commercial  accounts  in  trust 
companies  and  stock  savings  banks*  the 
lines  of  divergence  between  classes  of 
financial  institutions  are  fast  disap- 
pearing. 

It  appears  that  in  Vermont  the  trust 
companies  are  giving  the  mutual  sav- 
ings banks  a hard  struggle  to  keep  up 
in  competition  for  savings  deposits.  In 
a recent  editorial  “The  United  States 
Investor”  discusses  the  situation  at 
length*  and  concludes  that  the  State 
legislature  should  give  attention  to  the 
matter.  It  calls  attention  to  the  fact 
that  the  trust  companies  have  the  ad- 
vantage in  the  competition*  in  that  their 
officials  have  an  interest  in  building  up 
the  business  that  is  lacking  in  the  case 
of  the  officers  of  the  mutual  savings 
banks.  The  latter  have  no  stockholders 
who  look  for  dividends,  and  their  di- 
rectors give  their  services.  It  thinks 
that  the  trust  companies  are  likely  to 


outstrip  the  savings  banks  in  the  race 
for  deposits,  and  says:  “They  may 
bring  about  the  ultimate  retirement  of 
mutual  banks  from  business  by  hasten- 
ing the  day  when  business  men  will  be 
unwilling  to  donate  their  services  to  a 
savings  bank,  because  it  has  for  its  com- 
petitor another  type  of  savings  bank 
where  the  management  and  directors  do 
obtain  some  profit  from  the  enterprise.” 
Attention  is  called  to  the  large  divi- 
dends made  by  some  of  the  trust  com- 
panies in  the  State,  in  spite  of  the  small 
margin  of  earnings  over  the  four  per 
cent,  paid  depositors,  because  of  the  de- 
posits being  very  large  as  compared 
with  capital  stock.  Several  companies 
have  savings  deposits  in  excess  of  one 
million  dollars*  while  their  capital  stocks 
are  only  $50*000.  An  instance  is  cited 
of  a trust  company  having  $2,700,000 
of  savings  deposits  besides  $160,000  of 
commercial  deposits* — a total  of  more 
than  fifty-seven  times  its  capital  stock 
of  $50,000.  The  suggestion  is  made 
that  legislation  may  be  needed  to  re- 
quire a ratio  of  capital  to  deposits  that 
is  more  in  keeping  with  real  conser- 
vatism. 


PRACTICAL  BANKING 


KEEPING  A RECORD  OF  OPEN  AND  CLOSED 

ACCOUNTS 

By  Edgar  G.  Alcorn 


COME  banks  do  not  keep  any  record 
^ at  all  of  “Accounts  Opened,”  “Ac- 
counts Closed,”  and  “Overdrafts.”  It 
cannot  be  possible  that  they  consider  it 
“too  much  work.”  or  that  the  advan- 
tages gained  therefrom  are  not  sufficient 
to  justify  the  time  and  trouble,  for  all 
the  labor  required  to  keep  a permanent 
record  of  all  three  accounts  is  hardly 
worth  consideration. 

No  doubt  the  true  reason  for  a bank’s 
neglect  in  this  matter  is  that  they  do  not 
see  any  particular  advantage  in  keeping 


such  records.  In  small  banks  the  indi- 
vidual bookkeeper  and  cashier  are 
usually  familiar  with  the  individual  ac- 
counts* and  when  a new  account  is 
opened,  which  is  a rare  occurrence  in 
such  banks,  the  officers  of  the  bank  are 
naturally  acquainted  with  the  fact.  In 
some  of  the  larger  banks  the  custom  is 
for  the  bookkeeper  to  merely  “mention” 
the  fact,  although  he  may  not  always 
remember  to  do  so,  and  consequently  the 
cashier  may  have  no  knowledge  of  the 
matter  for  some  time  afterwards.  He 


Digitized  by  t^ooQle 


810 


THE  BANKERS  MAGAZINE 


ACCOUNTS  OPENED 
DATE. 

ADDRE88  AM< 


Figure  1 


may  discover  it  then  only  when  looking 
up  some  other  account,  or  when  look- 
ing over  the  ledger  balances. 

Some  bookkeepers  keep  a record  of 
their  overdrafts  on  a little  slip  of  paper, 
simply  checking  them  off  as  they  are 
made  good.  Others  trust  to  their  mem- 
ories entirely,  and  only  mention  those 
of  any  size  to  the  officers.  It  is  quite 
an  advantage  to  the  bookkeeper  him- 
self to  keep  a daily  record  of  over- 
drafts. Whenever  the  comptroller  or 
State  banking  department  call  for  a 
statement  he  has  the  overdrafts  at  hand, 
while  otherwise  he  would  have  to  go 


through  his  ledger  to  secure  them;  and 
as  the  statement  generally  calls  for  the 
overdrafts  for  a particular  date  several 
days  previous  to  the  day  the  statement 
was  received,  it  is  quite  a tedious  job. 
Of  course  one  may  guess  at  it,  but  he 
may  not  always  make  a good  guess. 

Banks  who  keep  a record  of  these  ac- 
counts usually  use  blank  statement 
sheets  ruled  particularly  for  the  pur- 
pose. These  sheets  are  about  six  and 
one-half  inches  wide  by  eight  inches 
long,  and  are  perforated  at  one  end  so 
that  they  can  be  placed  in  a binder. 

For  instance,  Figure  1 shows  the 


ACCOUNTS  CLOSED 

DATE. 

Business 


I 

i 


i 

Figure  2 


Opened! 


AVERAGE 

BALANCE 


Digitized  by  t^ooQle 


PRACTICAL  BANKING 


811 


ruling  of  the  sheets  for  “Accounts 
Opened/’  The  date  is  written  at  the 
upper  right-hand  corner,  the  names  of 
the  new  accounts  are  entered  in  the 
first  division,  the  address  in  the  second, 
the  amount  in  the  third,  and  the  busi- 
ness or  occupation  of  the  person  in  the 
fourth. 

The  ruling  of  the  “Accounts  Closed” 
sheets  is  shown  by  Figure  2.  This  sim- 
ply shows  the  name  of  the  account,  the 
amount  of  his  balance  when  the  ac- 
count was  closed,  the  date  the  account 


In  the  book  for  “Accounts  Closed” 
the  record  would  be  about  the  same  as 
that  on  the  statement  sheets.  Instead 
of  recording  the  highest  balance*  of  the 
accounts,  however,  it  will  be  found  more 
advantageous  to  give  the  average  bal- 
ances. 

Besides  the  great  advantage  to  the 
individual  bookeeper  himself  in  keep- 
ing a daily  record  of  these  accounts,  in 
that  it  avoids  the  necessity  of  going 
through  the  entire  ledger  to  secure  in- 
formation which  may  be  called  for  at 


OVERDRAFTS 


NAME 


ADDRESS 


DATE 


AMOUNT 


AVERAGE 

BALANCE 


Figure  3 


REMAHK8 


was  opened,  his  average  balance,  and 
also  gives  space  for  memoranda  in  the 
last  column. 

Figure  3 is  the  “Overdraft”  sheet. 
It  gives  a record  of  the  date,  the  name, 
the  address,  and  the  amount  of  the 
overdraft. 

Some  banks  may  have  some  other 
methods  of  keeping  a record  of  these 
accounts.  We  have  found  that  about 
the  most  convenient  way  of  any  is  to 
use  spoiled  or  uncalled  for  pass  books. 
The  individual  bookkeeper  uses  three 
books.  One  he  labels  “Accounts 
Opened,”  one  “Accounts  Closed,”  and 
the  other  “Overdrafts.” 

For  each  entry  in  these  books  the 
spaces  across  the  two  open  pages  are 
used.  The  date  is  entered  in  the  mid- 
dle of  the  page  with  a rubber  stamp. 


any  time,  it  furnishes  a convenient  and 
important  record  for  the  use  of  the 
cashier. 

Of  Benefit  to  the  Cashier. 

At  the  end  of  the  day’s  posting  the 
bookkeeper  lays  the  books  on  the  cash- 
ier’s desk,  and  the  first  thing  that  officer 
does  the  next  morning  is  to  look  them 
over  carefully.  From  the  book  of  “Ac- 
counts Opened”  he  will  know  at  once 
what  new  accounts  have  been  opened, 
and  thus  the  opportunity  is  given  him 
to  write  a polite  note  to  the  new  de- 
positor, thanking  him  for  his  business 
and  expressing  assurance  that  the  busi- 
ness relation  thus  established  between 
them  will  always  be  satisfactory  and 
pleasant. 


Digitized  by  t^ooQle 


812 


THE  BANKERS  MAGAZINE 


ACCOUNTS  OPENED 


DATE— 


Name 


ADDRESS 


Deposit  ? 


Remarks  . . : 

i 

Figure  4 


By  having  a daily  record  of  those 
who  have  closed  their  accounts  he  has 
the  opportunity  of  writing  them  a cour- 
teous note,  expressing  his  regret  that 
the  depositor  has  closed  his  account  and 
hoping  it  is  not  because  of  any  dissatis- 
faction, as  it  had  always  been  the  policy 
of  the  bank  to  treat  their  customers  with 
the  utmost  consideration  and  liberality. 
Such  thoughtfulness  has  often  been  the 
means  of  bringing  back  a good  cus- 
tomer, who  had  withdrawn  simply 
through  some  misunderstanding. 

The  cashier  is  also  enabled  to  keep  a 


line  on  the  customer  who  habitually 
overdraws  his  account,  and  to  notify  all 
others  promptly  to  make  their  accounts 
good.  It  is  the  only  way  to  keep  the 
ledger  rid  of  these  annoying  little  ac- 
counts. 

Advantages  of  the  Card  System. 

Still  another  method  used  by  some 
banks  of  keeping  an  intelligent  record 
of  opened  and  closed  accounts  is  the 
card  system,  it  is  needless  to  use  the 
vantageous  particularly  to  banks  con- 


ACCOUNTS  CLOSED 


DATE. 


Name 


ADDRE88-  


I 


Average  Balance  $ 

Remarks  — — - _ — — — _ 

Figure  5 


Digitized  by  t^ooQle 


PRACTICAL  BANKING 


813 


ducting  an  advertising  campaign.  It 
affords  a good  way  of  showing  whether 
or  not  new  accounts  have  been  secured 
through  any  particular  line  of  adver- 
tising. Figures  4 and  5 show  the  form 
of  the  cards  that  may  be  used.  These 
forms  need  no  further  explanation. 

If  a bank  keeps  a record  of  its  ad- 
vertising, however,  by  means  of  the 
card  system,  it  is  needlees  to  use  the 
same  system  for  keeping  the  open  and 
closed  accounts.  In  keeping  the  card 


A UNIQUE  CERTIFICATE  OF 
DEPOSIT 

r I 'HE  accompanying  illustration  shows 
A a form  of  certificate  of  deposit 
recently  adopted  by  the  Third  National 
Bank  of  Springfield,  Mass.,  which  has 
proved  very  successful.  The  idea, 
which  is  one  of  many  originated  by  Mr. 
A.  J.  Skinner,  assistant  cashier  of  this 
bank,  takes  into  consideration  the  nat- 
ural desire  of  many  small  depositors  to 
have  some  kind  of  a book.  The  cer- 


system,  a bank  of  course  lias  a list  of 
prospects,  and  on  the  cards  is  kept  a 

record  of  all  advertising  matter  sent 
out.  If  a prospect  is  secured  as  a de- 
positor, his  card  is  removed  from  the 
list  of  prospects  and  filed  with  the  de- 
positors’ list.  Before  they  are  filed, 
however,  these  same  cards  may  go  to 
the  cashier  and  be  used  by  him  at  di- 
rectors’ meetings  to  show  what  accounts 
had  been  opened  since  the  previous 
meeting. 

If  an  old  account  is  closed  the  card 
is  simply  removed  from  the  files  of  ac- 
tive accounts,  and  after  passing  through 
the  hands  of  the  cashier  in  order  to  give 
him  the  opportunity  of  making  an  effort 
to  have  the  account  reopened,  it  is  filed 
with  the  prospects,  or  destroyed,  if  no 
longer  considered  of  any  value  as  a 
prospect. 


Church — According  to  statistics,  there 
are  in  the  whole  world  9,600,000  tele- 
phones. 

Gotham — And  when  you  consider  that 
great  number  isn’t  it  queer  that  the  very 
one  you  want  is  always  busy? — Yonkers 
Statesman . 


tificate  of  deposit  is  made  up  with  a 
gummed  flap  which  is  pasted  in  the  cov- 
er, which  can  be  carried  in  the  pocket  if 
desired.  The  certificate  as  shown  speci- 
fies the  rate  of  interest  which  will  be 
paid  if  the  money  is  left  on  deposit  for 
one  month  or  more.  It  is  also  made 
payable  to  the  owner  in  person  if  de- 
sired, so  that  it  becomes  non-negotiable. 


i ctnm  mt  d imp 


4 CERTIFICATE  Of  DCPOSIT 
ki 

ku  ten  dtpamud  ui  wS  tv  fmd  tfee 
THIS  CERTIFICATE  OF  DEPOSIT 

» SOT  NEGOTIABLE  NOR  SUBJECT  TO  CHta  M wK 
art  fe»  ittaenrf  '4  ftcmUi  br  mt  rtk®  pr»*  >k**  matt  *«oa. 

INTEREST  IS  RECKONED 

fan  itk  oi  wm  m An  «t  piyMt 
WHEN  PART  PAYMENT  IS  DESIRED 


THIRD  NATIONAL  BANK 

SPRINGFIELD.  MASSACHUSETTS. 


((flYIWt 
'of  Owin' 


( /(' , y ./.  / //, 


A unique  Certificate  of  Deposit.  It  has 
gummed  flap  and  is  pasted  in  a cover 
which  can  be  carried  in  the 
pocket 


Digitized  by  t^ooQle 


SAVINGS  BANKS 

Conducted  by  W.  H.  Kniffin,  Jr. 


SURPLUS  AND  DIVIDENDS 

AN  ANSWER  TO  JOHN  HARSEN  RHOADES 
By  Charles  E.  Sprague 


TN  the  earlier  stages  of  the  develop- 
A ment  of  savings  bank  law  in  this 
State  there  was  no  compulsion  to  keep 
any  surplus  whatever.  There  was  a 
permission  conferred  upon  the  trustees 
to  accumulate  a surplus  of  not  exceed- 
ing fifteen  per  cent. — an  impossible 
standard,  never  yet  reached  in  any  case. 

There  was  also  a provision  that  the 
trustees  voting  for  a dividend  in  ex- 
cess of  the  “interest  or  earnings”  should 
be  liable  to  repay  the  excess.  This 
would  have  prevented  them  from  using 
up  all  the  surplus,  but  the  Court  of 
Appeals  decided  that  this  means  all 
gross  earnings,  allowing  nothing  for 
expenses. 

Against  such  a law  it  was  difficult  to 
offend,  especially  as  the  only  provision 
for  computing  the  surplus  was  one 
striking  out  from  the  assets  all  pre- 
miums and  recognizing  all  discounts  as 
valid,  which  made  all  values  appear  at 
the  minimum. 

So  the  matter  stood  until  1908,  when 
amendments  were  adopted  which  partly 
remedied  the  laxity  of  the  law.  The 
trustees  were  required  to  deduct,  be- 
fore declaring  a dividend,  the  amount 
necessary  for  two  purposes;  amortiza- 
tion and  expenses.  This  amendment 
was  one  step  in  the  right  direction  al- 
though it  did  not  accomplish  all  that 
might  have  been  done.  Reforms  can- 
not usually  be  brought  about  at  one 
blow.  Several  things  remained  and 
still  remain. 

It  therefore  seems  a little  harsh  for 
J.  Harsen  Rhoades  to  have  character- 
ized the  amortization  law  as  a “delusion 
and  a snare,”  although  he  does  not  state 
who  was  deluded  or  ensnared.  He  cen- 
sures this  law  because  it  does  not  also 
legislate  on  something  else  not  neces- 
sarily pertaining  to  amortization.  As 


well  blame  a pure  food  law  for  not  pre- 
venting automobile  accidents. 

To  show  how  much  worse  the  condi- 
tions were  before  the  amortization 
amendment,  we  may  point  out  that  in 
the  old  times  a seven  per  cent,  bond, 
even  if  bought  at  a three  per  cent,  basis, 
was  considered  to  produce  the  entire 
seven  per  cent.,  and  in  calculating  the 
dividend  this  is  included.  The  result 
was  that  at  the  maturity  the  premium 
was  gone  and  the  surplus  depleted  by 
that  much. 

I quite  agree  with  Mr.  Rhoades  that 
there  should  be  a required  contribution 
to  surplus,  and  I would  restrict  the 
dividend  rate  in  an  institution  having 
less  than  a minimum.  This,  however, 
has  nothing  to  do  with  amortization — 
the  same  defect  has  occurred  in  the 
savings  bank  law  ever  since  1875  and 
exists  still;  it  might  have  been  remedied 
earlier  but  was  not.  Why  lug  in 
amortization  as  the  fon*  et  origo  mali? 

Mr.  Rhoades  is  uninformed  or  mis- 
informed as  to  the  genesis  of  the  amor- 
tization movement,  which  he  believes  to 
have  been  introduced  in  1908  for  the 
purpose  of  bolstering  up  market  sur- 
pluses which  were  weakened  by  the  fact 
that  there  was  actually  no  market  what- 
ever. The  report  for  December  31, 
1907,  was  all  made  up  and  turned  in 
before  the  amortization  amendment  was 
introduced,  and  when  printed,  that  re- 
port contained  no  reference  to  invest- 
ment values. 

As  a matter  of  fact,  the  subject  of 
amortization  was  broached  in  1903  in  a 
paper  before  the  New  York  State  Sav- 
ings Bank  Association,  although  well- 
known  already  to  many.  In  1906,  a 
sub-committee  of  the  executive  commit- 
tee of  the  association  considered  the 
subject  carefully  and  reported  favor- 


814 


Digitized  by  t^ooQle 


SAVINGS  BANKS 


815 


ably  upon  it.  Mr.  Kilburn,  the  Superin- 
tendent of  Banks,  was  considering  plans 
for  having  the  banks  report  their  in- 
vestment values,  which  action  did  not 
require  any  legislation,  but  was  per- 
fectly legal  under  his  general  powers. 
Clark  Williams,  who  succeeded  after 
Messrs.  Keep  and  Mott,  was  strongly  in 
favor  of  the  amortization  principle,  but 
preferred  to  introduce  it  through  legis- 
lative process.  The  reports  for  Janu- 
ary 1,  1908,  were  based  on  alleged 
“market  values,”  just  as  they  had  been 
ever  since  1875. 

So  far  from  the  amortization  prin- 
ciple inducing  extravagance,  it  may  be 
shown  that  the  lack  of  amortization 
permitted  over-declaration  of  dividends 
for  many  years.  As  the  surplus  was 
inflated  by  a rise  in  the  market,  trustees 
having  no  accurate  knowledge  of  the 
profits  said,  “We  have  made  so-and-so 
much,”  and  divided  accordingly. 

There  were  also  two  other  causes  for 
the  depletion  of  surplus;  one,  the  rapid 
increase  of  deposits,  and  the  other,  the 
iniquitous  franchise-tax  imposed  in  the 
time  of  Odell. 

Mr.  Rhoades  is  right  in  saying  that 
the  surplus  should  be  proportionate  to 
the  deposits;  I should  not  say  a “fixed 
ratio,”  but  a ratio  within  limits.  But  a 
standard  method  for  computing  the  sur- 
plus should  be  adopted. 

There  never  was  a word  in  the  law 
prescribing  the  market  value  as  the 
basis  of  surplus,  and  Mr.  Rhoades  is 
entirely  wrong  in  saying  this  was  “ab- 
rogated” and  the  investment  value  sub- 
stituted. The  only  clause  specifying 
the  coinponeney  of  the  surplus  is  Sec- 
tion 124,  and  that  has  never  been  em- 
ployed in  the  published  reports. 

My  recommendations  for  amendment 
of  the  law  would  be  as  follows: 

1.  It  should  be  the  duty  of  the 
trustees  to  accumulate  at  least  six  per 
cent,  surplus. 

2.  Unless  six  per  cent,  surplus  is 
held  it  should  be  forbidden  to  pay  more 
than  three  and  one-half  per  cent,  in- 
terest. 

8.  No  superior  limit  of  fifteen  per 
cent,  is  necessary  or  desirable,  nor  any 
extra  dividends. 

3 


4.  The  official  surplus  should  con- 
sist of  the  investment  value  minus  one- 
fifth  of  the  excess,  if  any,  of  the  in- 
vestment value  over  the  market  value, 
as  shown  at  the  previous  report. 

No.  4 is  based  upon  the  fact  that  no 
savings  bank  has  been  known  to  sell 
even  as  much  as  one-tenth  of  its  bonds 
to  provide  money  for  paying  its  de- 
positors, in  any  time  of  financial  dis- 
tress. There  can  be  no  loss  without  a 
sale;  bonds  which  go  on  to  redemption, 
gradually  amortizing  but  without  sell- 
ing, never  incur  loss.  It  is  only  those 
bonds  that  are  sold  that  cause  loss.  I 
have,  therefore,  taken  twice  the  pro- 
portion that  have  ever  been  sold  as  a 
thoroughly  safe  margin  against  the  con- 
tingency of  a forced  sale. 

It  is  very  curious  to  see  what  mis- 
apprehensions as  to  the  nature  of  the 
surplus  exist  in  the  minds  of  some  in- 
telligent persons.  One  delusion  is  the 
belief  that  the  depositors  “never  get 
it,”  whereas  every  depositor  has  been 
receiving  the  income  of  the  surplus  as 
part  of  the  interest  credited  him.  If 
the  deposit  is  $100  and  the  assets  are 
$108,  the  eight  dollars  is  earning  at 
the  same  average  rate  as  the  $100,  and 
evidently  the  earnings  are  greater  than 
if  there  were  no  surplus  of  eight  dol- 
lars. Suppose  the  earnings  after  pay- 
ing expenses  to  amount  to  three  and 
one-quarter  per  cent.,  the  additional 
eight  dollars  would  increase  them  to 
8.51  per  cent.;  each  depositor  is  receiv- 
ing over  one-fourth  of  one  per  cent, 
which  his  money  has  never  produced. 
If  he  continues  a depositor,  he  receives 
this  benefit;  if  he  withdraws,  he  has  no 
claim  to  take  with  him  that  to  which 
he  has  contributed  very  little.  The  sur- 
plus is  not  something  of  which  present 
depositors  are  deprived,  but  a source  of 
revenue  which  is  gratuitously  afforded 
them. 

If  all  investments  were  for  short 
times,  as  mortgages  are,  surplus  would 
be  less  necessary;  but  in  purchasing  se- 
curities, the  bank  must  discount  amounts 
receivable  many  years  hence  at  rates 
which  seem  at  the  moment  fair  but  which 
will  go  up  and  down  many  times  before 


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THE  BANKERS  MAGAZINE 


maturity,  and  from  the  nature  of  things 
the  depositors  will  insist  on  the  return 
of  their  money  most  frequently  and 
urgently  at  the  moment  when  the  rate 
is  high  and  the  value  of  principal  is 
correspondingly  low.  This  is  the  fallacy 
in  declaring  high  dividends  when  mar- 
ket values  are  high,  for  that  is  merely 


another  way  of  saying  that  income-rates 
are  low. 

Market-values  are  of  absolutely  no 
value  for  deciding  the  rate  of  interest- 
dividend;  except  to  guard  against  the 
one  contingency  of  sudden  demand  for 
cash,  and  one-fifth  of  the  depreciation 
is  sufficient  for  this. 


POSTING  AND  PROVING  METHODS 


By  W.  H.  Kniffin,  Jr. 


TN  the  present  paper  it  is  proposed  to 
***  demonstrate  by  concrete  citations 
how  the  fundamental  ideas  embodied  in 
the  articles  on  posting  and  proving 
methods  in  The  Bankers  Magazine 
for  October,  1910,  and  the  suggestions 
on  proof  of  cash  offered  in  the  article 
on  the  teller  and  his  cash  in  the  Septem- 
ber number,  arc  carried  out  in  different 
institutions. 

At  the  risk  of  appearing  presumptu- 
ous, the  writer  wishes  to  go  on  record 
as  an  advocate  of  the  teller’s  cash  sheet 
in  whatever  form  the  bank  may  elect,  as 
long  as  it  provides  a quick  and  accurate 
test  of  the  day’s  work.  This  can  only 
be  accomplished  by  eliminating  all  need- 
less details,  and  confining  the  work  to 
the  listing  of  account  number  and 
amount  of  deposit  or  draft.  Likewise 
no  better  foundation  for  the  proof  of 
posting  can  be  laid  than  the  coupon  sys- 
tem, in  whatever  form  it  may  be  adopted 
as  long  as  it  will  prevent  wrongful  post- 
ing and  wrongful  grouping,  each  of 
which  is  of  equal  importance.  The  un- 
derlying ideas  in  the  coupon  system  are 
the  grouping  of  the  accounts  and 
“blind”  proving,  as  discussed  in  the 
previous  paper  on  this  subject.  The 
grouping  is  well  nigh  universally  prac- 
ticed, and  the  blind  checking  should  be. 
The  use  of  the  journal  is  mainly  to  as- 
semble the  totals,  and  provide  a more 
permanent  record  than  loose  sheets  af- 
ford. Where  the  force  is  large  enough 
to  pass  the  transaction  through  the  dis- 
tribution clerk,  and  at  the  same  time 
make  a journal  entry,  while  the  de- 
positor is  waiting,  as  in  the  case  of  the 


Bowery,  given  below,  so  much  the  bet- 
ter; but  in  many  banks  this  would  be 
impossible,  and  simpler  methods  must 
be  found. 

Correct  posting  is  important — vital, 
but  correct  grouping  is  essential  if  the 
nerve-racking  work  of  long  and  tedious 
checking  back  at  trial  balance  time  is 
to  be  avoided.  And  the  eyes  of  the 
savings  bank  man  are  usually  focused 
upon  the  testing  time,  which,  thanks  to 
better  methods,  is  being  robbed  of  its 
terrors. 

The  Bowery's  Method. 

A very  clear  idea  of  the  procedure  in 
a large  savings  bank  may  be  obtained 
from  the  following  description  of  a 
transaction  in  the  Bowery  Savings 
Bank,  from  the  pen  of  its  comptroller, 
Mr.  William  E.  Knox: 

“The  new  depositor  is  directed  to  the 
receiving  teller’s  window,  and  hands  in 
his  money.  The  teller  asks  him  the 
amount  of  his  deposit,  and  finding  it 
correct,  enters  it  upon  a card,  and  on 
the  same  card  notes  the  replies  to  the 
following  questions:  ’What  is  your  busi- 
ness, your  residence,  your  father’s  name, 
mother’s  name,  wife’s  or  husband’s 
name,  nationality/  and  in  the  case  of  a 
minor,  ‘Your  age?’  On  the  card  the 
depositor’s  signature  is  afterwards 
taken,  and  it  is  used  as  an  identifica- 
tion card  so  long  as  the  account  re- 
mains open.  The  teller  passes  this  card 
along  to  a clerk  who  enters  on  the  cash 
book  (this  takes  the  place  of  the  teller’s 
cash,  which  it  really  is)  the  number  of 


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SAVINGS  BANKS 


817 


the  account,  the  name  of  the  depositor 
and  the  amount  of  the  deposit.  The 
same  clerk  enters  the  number  of  the 
deposit  on  what  is  known  as  a classifica- 
tion slip  (similar  to  Form  1),  and  at 
the  end  of  the  day’s  work,  the  footing 
of  the  cash  book,  the  aggregate  foot- 
ings of  all  the  classification  slips,  and 
the  amount  of  cash  received  by  the 
teller  must  agree. 

“The  classification  slips  referred  to 
are  so  called  because  the  transactions  of 


the  day  are  arranged  and  classified  on 
them  in  groups  corresponding  to  the 
ledgers  to  which  they  are  afterwards  to 
be  posted,  each  ledger  having  a slip  cor- 
responding to  it  in  number. 

“After  the  deposit  tickets  are  en- 
tered on  the  cash  book,  they  are  imme- 
diately arranged  on  the  classification 
slips,  which  are  sheets  about  the  size  of 
foolscap  divided  into  four  columns — 
the  first  column  being  for  the  number 
of  the  account,  the  second  for  the  name, 


CREDIT  DEPOSITS. 

Ledger  /$ 


i Credit  Deposits, 

• Ledger  X3 


NUMBER. 


this  portion/of  ths  shset  goss  to  th# 
bookkeepers  who  locates  the  entry  on 
the  1 adj^r  by  the  number  in  the  first 
column* verifies  the  name  and  enters 
her^whatever  ha  finds  posted  under 
the  current  date*  The  total  in  sons 
banka  ia  carried  to  a 'summary  sheet 
but  if  the  work  as  a thole  is  out  of 
balance,  comparison  of  the  total  of 
this  part  with  the  detached  portion 
will  indicate  on  which  sheet  the  error 
has  occurred,  and  by  placing  the  two 
parte  together,  the  item  will  be 
quickly  indicated* 


At  the  close 
of  the  day*  s 
business,  the 
footings  of 
this  column 
may  be  carried 
to  the  cash 
book  in  bulk; 
but  if  the 
items  are 
listed  singly 
and  grouped 
on  the  cash 
book,  the  totals 
must  agree* 

This  part  is 
detached  and 
held  by  the 
head  book- 
keeper or 
other  officer* 


Form  1-The  basis  of  the  coupon  system  of  posting  and  proving.  The  form  given  does 
not  prove  the  correctness  of  the  ledger  extensions.  For  this  see  he  preceding 
number.  This  simply  distributes  the  items  among  the  ledgers  and  proves 
the  correctness  of  the  posting 


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THE  BANKERS  MAGAZINE 


the  third  being  for  the  present  left 
blank,  and  the  fourth  for  the  amount 
of  the  deposit.  The  last  column  is  sep- 
arated from  the  rest  of  the  sheet  by 
perforations,  and  after  the  proof  of  the 
day’s  cash  receipts  has  been  made,  this 
column  is  torn  off,  leaving  on  the  main 
sheet  only  the  number  and  name  of  the 
depositor  and  a blank  column.  The 
bookkeeper  takes  the  sheet  to  the  proper 
ledger,  turns  up  the  account  recorded, 
and  puts  down  in  the  blank  column  the 
amount  which  he  finds  posted — the  post- 
ings having  been  previously  made  from 
the  ticket . 

“Each  bookkeeper  checks  out  the 
postings  on  another  man’s  ledger  and 
enters  on  a sheet,  known  as  the  ‘Sum- 
mary* (Form  2),  the  total  of  all  the 
postings  in  the  ledger.  When  the  post- 
ings have  all  been  checked  out,  and  the 
results  entered  on  the  ‘Summary’  the 
entries  are  compared  with  the  coupons, 
and  any  error  in  posting  is  at  once  de- 
tected. If  it  be  borne  in  mind  that  the 
bookkeeper  when  checking  out  has  only 
the  number  and  name  of  the  depositor 
to  guide  him,  and  that  his  report  is 
held  by  the  head  bookkeeper,  it  will  be 
seen  what  an  effective,  yet  simple, 
check  this  is.  Finally,  the  footing  of 
the  ‘Summary’  must  agree  with  the  foot- 
ing of  the  cash  book  and  with  the 
teller’s  cash.’’ 

The  same  treatment  is  given  the 
drafts.  It  will  be  noticed  in  this  in- 
stance that  there  is  no  proof  of  the 
correctness  of  the  ledger  balance,  as 
shown  in  the  preceding  number,  where 
the  extensions  were  proven  also.  The 
check  upon  wrongful  classification  is 
the  fact  that  postings  are  made  direct 
from  the  tickets  and  checked  back  from 
the  lists,  and  it  is  unlikely  that  the  two 
men  will  make  the  same  error  and  get 
an  item  posted  to  the  wrong  ledger,  on 
the  wrong  account  and  on  the  wrong 
classification  slip.  The  classification 
proof  (Form  3)  prevents  wrongful 
classification. 

Around  a Triangle. 

In  the  Greenwich  Savings  Bank  of 
New  York,  one  of  the  largest  of  the 


New  York  banks,  the  operation  is  as 
follows: 

This  is  a good  moment  to  take  a glance 
at  the  desk  situated  directly  between  and 
within  easy  reach  of  the  men’s  and  the 
women’s  teller,  forming  the  base  of  a tri- 
angle described  by  the  three  tellers*  win- 
dows. It  will  offer  us  the  opportunity  to 
examine  the  complete  system  of  recording 
and  proving  cash  transactions  in  use  in 
one  of  our  largest  savings  banks. 

The  work  of  the  desk  of  the  journal 
clerk  forms  the  base  of  triangular  record 
and  proof.  All  transactions  are  worked 
off  and  proved  outwardly  by  way  of  re- 
ceiving teller,  journal  clerk,  paying  teller, 
and  inversely,  journal  clerk,  bookkeeper, 
balance  bookkeeper,  making  a collusion  of 
at  least  five  persons  necessary  for  the  per- 
petration of  fraud.  The  journal  clerk  en- 
ters and  initials  whatever  he  finds  written 
on  the  pass-book  on  so-called  balance  sheets, 
while  deposit — respectively  draft  tickets 
are  sent  around  in  another  direction,  by  w'ay 
of  paying  teller’s  spindle  to  the  bookkeepers 
for  posting,  when  in  the  hands  of  the  bal- 
ance bookkeeper  the  twro  ends  again  meet, 
forming  a system  of  record,  complete,  sim- 
ple and  safe  beyond  contravention. 

And  now  let  me  explain  in  detail  this 
system  of  the  journal  clerk’s  balance  sheets 
‘on  which  are  made  the  record  of  the  day’s 
transactions  and  also  the  daily  ledger  proof. 
These  are  double  sheets  about  10x8*4  inches, 
numbered  and  ruled  off  with  columns  for 
number  of  account,  name,  amounts  of  de- 
posits and  drafts.  There  is  a sheet  for 
each  ledger. 

The  clerk  takes  pass-book  placed  on  his 
desk  by  the  teller  and  copies  on  sheet  from 
it  the  amount,  name  of  account  and  de- 
posit or  draft  entry  of  that  day  in  their 
respective  columns,  then  initials  the  pass- 
book entry. 

At  the  close  of  the  day  the  columns  are 
added  by  the  clerk,  and  footings  as  well 
as  number  of  transactions  recorded  on  the 
sheets  must  agree  with  the  records  of  the 
tellers;  then  tellers  and  clerk  put  down 
their  sums  total  on  a book  of  summary  of 
daily  cash  transactions. — Chas.  L.  Siebert,  in 
“The  Bookkeeper.” 

Draft  transactions  are  treated  in  exactly 
the  same  way  as  the  deposits.  At  the  close 
of  the  depositors’  hours,  three  o’clock,  the 
tickets  are  taken  from  the  chief  teller’s 
spindle  by  bookkeepers,  each  taking  his 
own  class  of  transaction,  and  wThen  ar- 
ranged in  numerical  order,  they  are  posted 
in  the  depositors’  ledger.  The  following 
morning  three  or  four  men,  appointed  by 
the  balance  bookkeeper,  act  as  checkers. 
They  take  the  stub  of  the  journal  sheet, 
as  before  said,  bearing  only  the  number 
of  account  and  the  name  of  the  depositor, 
and,  finding  number  and  name  on  ledger 
to  agree,  they  should  find  a transaction. 


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That  transaction  is  copied  according  to  the 
posting  upon  the  blank  page  opposite  said 
stub  into  its  proper  column— deposit  or 
draft . 

When  all  of  that  ledgers*  postings  have 
been  copied  thereon,  the  footings  are  com- 
pared respectively  with  the  footings  of  de- 
posits and  drafts  as  entered  the  day  before 
by  the  journal  clerk,  he  having  kept  over- 
night in  a sealed  envelope  such  portion  of 
his  sheets.  This  comparison  is  made  by  the 
balance  bookkeeper  and  the  journal  clerk. 
On  their  being  found  to  agree,  we  have 
again,  without  the  production  of  the  bank 
book,  verified  the  entry  therein,  and  which 
Is  of  course  the  liability  of  the  bank  to 
the  depositor.  In  case  the  comparison  shows 
a difference  between  the  footings  of  said 
columns,  they  are  compared  with  each  other, 
item  by  item,  until  the  one  in  error  is  dis- 
covered, and  at  once  the  ticket  is  referred 
to  for  verification,  and  must  necessarily 
show  the  error  as  occurring  in  either  the 
posting  into  the  ledger,  or  the  copy  of  such 
posting,  because  on  the  prior  afternoon,  the 
journal  clerk’s  footings  were  found  to 
agree  with  the  chief  teller’s  and  receiving 
teller’s  slips.  By  this  method  you  will  see 
that  errors  are  at  once  corrected,  and  do 
not  remain  un found  until  a general  proof 
of  the  ledger  is  made. — Letter  from  James 
Quinlan,  President . 

The  “Balance-Posting”  Method. 

In  the  Union  Dime  Savings  Bank  of 
New  York,  noted  for  what  may  be 
termed  for  want  of  better  word,  the 
“technique”  of  its  system,  the  “balance- 
posting”  is  used.  This,  of  course,  is 
only  applicable  when  the  balance  column 
is  used  and  is  not  only  reliable  but 
practically  infallible.  As  its  president 
states:  “The  human  mind  is  inclined 

to  assent  to  what  is  presented  to  it,  and 
if  the  figures  of  the  test  have  not  been 
copied  or  compared,  but  are  the  result 
of  a mental  process,  a vastly  higher 
degree  of  dependence  may  be  placed 
upon  them.” 

President  Sprague  thus  describes  his 
system:  “The  first  step  in  the  posting 

is  really  not  posting  at  all ; it  leaves  the 
debit  and  credit  columns  blank  and  in- 
serts in  the  balance  column  the  in- 
creased or  decreased  balance  which  re- 
sults from  the  deposit  or  draft.  The 
bookkeeper  has  in  his  hand  both  de- 
posit and  draft  tickets,  assorted  nu- 
merically, but  not  separated , so  that  he 
must  discriminate  between  a plus  and  a 


minus  in  every  case.  Having  properly 
checked  each  ticket,  as  entered,  he  turns 
the  bundle  over  to  the  chief  accountant, 
and  commences  to  perform  the  second 

DEPOSITS  I 1 I I 1 I 

Number  1 

440.000 

520.000 

600.000 

640.000 

680.000 
7 0 0. 00  0 

720.000 

740.000 

760.000 

780.000 

800.000 

810.000 

820.000 

830.000 

840.000 
850. 00Q 

860.000 

870.000 

880.000 

890.000 

900.000 

910.000 

920.000 

930.000 
. 040.000 

950.000 

956.000 

960.000 

965.000 

970.000 

976.000 

980.000 


Form  2— Summary  sheet  coupon  system 
of  posting 

stage,  not  upon  those  accounts,  but  on  a 
section  which  his  predecessor  has  been 
putting  through  the  first  degree.  These 
sections  rotate  among  the  bookkeepers 
daily,  so  that  Mr.  A,  who  began  to-day 
on  Section  No.  1,  starts  to-morrow  on 


*\ 
/ G 

3 

'7 


xi  I 

3 < 

\ 7 


The  totals  of  ths  various 
•JLassi  float  ion  slips  are 
oarxitd  to  this  smeary 
shoot,  and  tho  total  sust 
agree  with  tho  total  of  tho 
eatfi  hook  and  with  tho  cam 
in  hands  of  tho  toller. 


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THE  BANKERS  MAGAZINE 


Section  No.  2,  doing  the  second  opera- 
tion on  Section  No.  3.  No  bookkeeper 
has  any  permanent  section  under  his 
dominion;  every  few  days  he  passes 
over  the  entire  held,  and  there  can  be 
no  complaint  about  unequal  distribution 
of  labor. 

“To  return  to  the  ‘second  stage/  for 
which  ruled  sheets  are  provided.  A list 
of  the  numbers  of  the  tickets  which 
have  just  been  used  in  the  work  is  writ- 
ten down  the  center  of  the  page,  using 
the  adding  machine  for  this  purpose. 
The  second  stage  bookkeeper,  armed 
with  this  list,  having  no  access  to  the 
original  tickets,  goes  to  each  account 
and  inspects  the  two  last  items  in  the 
balance  column.  They  must  show  either 
an  increase  or  a decrease,  and  the  book- 
keeper can  only  ascertain  which  by  sub- 
tracting the  amounts.  If  there  is  a 
decrease  of  ten  dollars,  he  inserts  ten 
in  the  debit  column  of  the  ledger  and 
ten  in  the  ‘decrease'  column  of  the 
sheet.  If  there  appears  an  increase  of 
ten  dollars,  he  inserts  ten  in  the  credit 
column  of  the  ledger  and  ten  in  the  in- 
crease column  of  the  sheet.  He  also 
writes  the  name  which  he  finds  at  the 
top  of  the  account,  having  no  clue  to  the 
name  on  the  ticket. 

“Finally  the  tickets  and  the  lists  have 
reached  the  accountant,  who  separates 
the  deposits  from  the  drafts  and  care- 
fully compares  each  ticket  with  the  list. 
They  should  agree  in  the  following 
respects : 

“1.  The  number. 

“2.  The  name. 

“8.  The  amount. 

“Having  eliminated  any  errors  found, 
the  totals  are  made  up  by  the  smaller 
sections  and  recapitulated,  finally  reach- 
ing an  agreement  between  the  increase 
and  the  decrease  of  the  depositors'  bal- 
ances and  the  increase  and  decrease  of 
the  teller’s  cash.  Barring  the  possibil- 
ity of  double  and  compensating  errors 
(which,  though  rare,  is  always  with 
us)  any  error  would  throw  the  final  fig- 
ures out,  whether  it  be  in  amount,  in  the 
wrong  side,  in  the  wrong  account,  or, 
most  important  of  all,  in  the  derived 
balance,” 


Posted  “While  You  Wait.” 

In  the  Strafford  Savings  Bank  of 
Dover,  N.  H.,  posting  is  done  at  the 
time  of  the  original  transaction . The 
teller  makes  his  entry  at  the  window 
(e.  g.  in  case  of  a withdrawal),  takes 
the  depositor's  receipt  and  sends  the 
pass-book,  with  a charge  slip  for  the 
amount  to  be  withdrawn,  back  to  one 
of  the  bookkeepers.  She  selects  the 
deposit  card,  corresponding  in  number 
to  the  bank-book,  enters  all  back  divi- 
dends on  the  book  and  then  enters  the 
withdrawal  on  both  book  and  card.  The 
card  is  then  placed  in  a special  drawer 
and  the  book  returned  to  the  paying 
teller,  who  passes  it,  with  the  cash,  to 
the  depositor.  At  the  end  of  the  day 
the  cards  are  checked  back  with  the  pay- 
ing teller's  sheets  and  are  then  filed  in 
place. 

Daily  Trial  Balance. 

In  the  Home  Savings  Bank  of  Boston 
they  use  the  card  ledger,  and  the  active 
cards  are  removed  from  the  tray  at  the 
time  of  posting,  and  at  the  end  of  the 
day's  work  a trial  balance  is  taken  of 
those  cards . They  use  a fifteen-bank 
adding  machine  (Burroughs)  with  the 
split  and  normal  device  which  allows 
two  columns  to  be  added  simultaneously. 
In  the  left-hand  column  they  add  the 
old  balance  on  the  card,  that  is,  the  bal- 
ance before  the  transactions  are  posted. 
In  the  right-hand  column  is  added  the 
new  balance.  To  the  sum  of  the  old 
balance  is  added  the  deposits  for  the 
day,  and  to  the  sum  of  the  new  balance 
is  added  the  drafts  for  the  day.  The 
results  of  the  two  columns  should  be 
alike.  The  transactions  are  then  listed 
numerically  and  sub-divided  to  corre- 
spond with  the  contents  of  each  tray,  a 
sub-footing  being  carried  out. 

In  the  front  of  each  tray  of  ledger 
cards  they  have  what  is  called  a proof 
card,  which  shows  at  all  times  the  bal- 
ance to  the  credit  of  that  tray,  the  de- 
posits for  each  day  being  added  and  the 
drafts  deducted.  It  is  a very  simple 
matter  at  any  time  to  take  off  a com- 
plete trial  balance  on  any  tray,  and 
owing  to  the  fact  that  a daily  trial  bal- 


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&nce  is  taken  of  the  active  accounts,  an 
error  is  very  rare.  The  tickets,  deposit 
and  draft,  after  a proof  is  made  and 
they  have  been  listed,  are  sorted  away 
numerically,  so  that  the  transactions  of 
any  one  depositor  are  all  together . 


deposits  and  drafts  in  bulk,  as  will  be 
seen  from  the  following:  Money  re- 

ceived, whether  for  deposit,  interest, 
rents  or  payment  on  loans  is  entered  on 
a “Received”  ticket,  and  the  ticket 
placed  with  the  money  until  it  is  checked 


A Maine  Idea. 

The  Bangor  Savings  Bank,  Bangor, 
Me.,  uses  the  following  system: 

The  sheet  system  was  adopted  after 
installing  the  card  ledger,  and  has  been 
found  to  facilitate  the  work  very  much 
(Form  4).  The  sheets  are  used  on 
strong,  light  boards,  held  in  place  by  a 
ten-inch  Globe  clamp.  A deposit  is  en- 
tered when  taken,  number,  name  and 
amount,  the  ledger  card  is  taken  from 
its  case,  a red  tag  dropped  into  its 
place,  deposit  book  balance  is  compared 
with  the  ledger  card  and  the  card  stood 
in  a box  marked  “deposits,”  handy  to 
the  deposit  sheet  at  the  receiving  tellers 
window.  All  postings  to  the  ledger 
cards  are  made  from  the  sheets  (Form 
4a),  and  if  the  cards  are  placed  in  the 
deposit  box,  one  back  of  the  other  in 
order  of  deposits  taken,  they  will  be  in 
regular  order  for  posting  and  for  the 
comparing  of  postings,  thus  saving 
much  handling.  After  the  day’s  entries 
are  made  and  compared,  the  cards  are 
returned  to  the  cases.  The  payment 
sheets  (Form  4c)  and  cards  are  used  in 
a similar  manner,  the  paying  teller  en- 
tering the  number  of  account,  amount 
to  be  drawn  and  taking  signature  of 
payee. 

At  the  close  of  the  day,  the  sheets 
are  footed,  footings  carried  to  cash 
book  (Form  4b),  then  filed  away  till 
the  end  of  the  year,  when  they  are 
bound. 

Each  deposit  is  crosspiled  in  a com- 
partment, and  so  are  kept  distinct  for 
checking  bock.  Orders  are  filed  away 
in  order  taken.  No  other  books  are 
used  in  the  receipt  or  payment  of  money. 

Connecticut  Speaks  on  the  Subject. 

The  Middletown  Savings  Bank  of 
Middletown,  Conn.,  enters  the  items  of 


CLASSIFICATION  PROOF. 
WOMEN. 


Number  1 8 

1 

6 

X 

Z? 

440.000  /o 

z 

vS 

A 

3 o 

520.000  3 

sS 

/ 

✓ 

'? 

600,000  / ^ 

J 

r 

v5 

x 

640.000 

680.000  

700.000  41 

& 

/ 

O 

o a 

720.000 

rj  a r\  nnn.*.  _ 

7 6 0 0 00  tad  tot  flbtek  oltxk 

i u v v entaxad  la  the  m 

7 8 0.000  otlmn  of  too  distribution 
oaa  aaa«  clostifleotios  afcoots 

8 0 0.000  ^atoror  ho  found  pootod 

810.000  mA*x  *bo  cuxront  dot o, too 

non  nnn totUi  w'  •nt#r#d  « ***• 

8 2 0.00  o^lMUlfiMtlQO  ^ 

8 8 0 . 0 0 0 not  only 

0 . A with  too  onto  book 

840.000  and  tot  'iwj*  but  tot 
8 50.000  ""rat*  on  to*  ltd(tf  mmt 

*ith  tot  savory.  This 
8 60.000  it  proof  toot  tot  it« 

8 7 0.000  terv  bMO  9*0***1?  •nuwifltdi 

880.000 
800.000 

900.000 

910.000 

920.000 

930.000 

940.000 

950.000 

956.000 

960.000 

965.000 

970.000 

976.000 

980.000 


Form  3 — Classification  proof,  coupon 
system  of  posting 


up.  Receipts  other  than  deposits  are 
copied  on  the  journal,  all  deposit  tickets 
are  added  together  and  entered  as  one 
amount  on  the  journal . All  “Received” 
tickets  are  added  up  on  an  adding  ma- 
chine at  the  end  of  the  day,  and  must 
agree  with  the  footing  from  the  journal 
and  the  cash  received.  All  “Paid”  tick- 
ets are  treated  as  above  stated,  and  the 


Digitized  by  t^ooQle 


822 


THE  BANKERS  MAGAZINE 


difference  between  the  two  shows  the 
cash  balance. 

All  deposit  tickets,  “Received”  and 
“Paid,”  are  entered  on  a slip  each  day, 
number  of  account  and  amount  of  entry ; 
each  slip  is  in  turn  copied  off  into  divi- 
sions, and  the  entries  in  each  division 
beng  added  up  at  the  end  of  the  month, 
show  the  increase  or  decrease  of  that 


ink  on  the  deposit  account  card  (they 
use  the  card  system).  As  all  of  the 
proving  work  is  done  by  machine,  they 
carry  about  two  hundred  accounts  in 
each  division. 

The  Silk  City  Does  It  Differently. 

In  the  Paterson  Savings  Institution 
the  tellers  never  make  an  entry  on  de- 


Bangor  Sayings  Bank  in  account  with  Individual  Deposits, 


Dr. 


gg 

■i 

n 

RAME  OF  DEPOSITOR 


AMOUNT. 


Automat  brought  forward 

■win  if  Mourn  in  urns  n 


fJ^7j 


» einira  to  no  cm  i 


Dr. 


BANGOR  SAVINGS  BANK, 


u. 


To  awtoomf,  kroufkt  forward. 


DIBIT  fin  or  CASH  root.  TO  MUCH  D«r;3ITA  ark  car  Ml  IT  it  WLf 
dcm  the  rcroeit  joowal  aon  abcvr,  rooms  ntt  ii-t^t 
RKcriTir  A*r  jock  othih  it«w  aa  rortoaci  patristi,  hkc.iptb 
rrxtti  bo;uj  matihie  or  aoit,  rrc. 


t,  the  undersigned,  acknowledge  to  have  received  of  the  BANGOR  SAVINGS  BANK,  of 
Bangor,  Maine,  the  amounts  set  against  our  names  respectively,  in  payment,  in  part  or  in  full, 
of  sums  deposited  in  said  Bank  in  our  names  or  subject  to  our  control 


DATE  1 

No  ol  Aet't 

— 

AMOUNT 

Don 

Ci. 

SIGNATURE 

Amomitt  brought  forward 

<J'o 

£ 

V' 

^ ^ - 

/ o 

- 

C 

r' 



S 3 

- 

le 

/ O O 

- - 

■Aft  joaniL  nuai  if  awn  rr  m was 

mm,  totau 

ABB 

oonff 

not  him  to  tu  awn  mm  or  cm  booc. 

1 

1 

1 

Form  4— Draft  and  deposit  journal  and  the  journal  cash.  Bangor  Savings  Bank,  Bangor.  Me. 


division  for  the  month,  which  being 
added  to  or  subtracted  from  the  balance 
of  the  division  for  the  preceding  month 
gives  a new  balance.  Each  six  months 
these  balances  are  proved  by  comparing 
with  the  previous  six  months*  balance, 
and  this  proved  balance  is  entered  in 


positors*  pass-books.  The  bookkeepers 
receive  the  pass-books,  compare  them 
with  ledger  accounts,  make  the  de- 
sired entry  in  the  book,  and  fill  out  a 
deposit  slip,  which  is  initialed  by  the 
particular  clerk  who  makes  the  entry. 
The  clerk  also  writes  the  same  initial 


Digitized  by  t^ooQle 


SAVINGS  BANKS 


8 23 


in  pass-book,  and  it  is  as  much  a part 
of  the  entry  therein  as  the  date  and 
sum  involved.  The  pass-book  is  then 
passed  to  one  of  the  tellers,  who  re- 
ceives the  money  from  the  depositor,  at 
the  same  time  returning  to  him  his  book. 
The  teller,  for  the  purposes  of  his 
money  proof,  enters  in  a book,  conven- 
iently ruled,  the  number  of  the  pass- 
book and  the  sum  received,  as  indi- 
cated by  the  pass-book  entry. 

The  deposit  slips  are  taken  by  a 
junior  clerk  at  convenient  times  during 
the  day  and  copied  in  a book  prepared 
for  that  purpose,  and  this  clerk  places 
a check  mark  on  the  ticket  against  the 
word  “Entered.”  The  total  shown  by 
this  book  at  the  close  of  the  day  must 
prove  with  the  teller’s  list  of  the  same 
transactions,  and  the  system  proves  a 
very  effectual  check  against  omissions, 
either  by  the  teller  from  his  list  or  by 
the  bookkeeper  in  failing  to  make  out  a 
slip,  as  an  instance  has  never  been 
known  where  both  teller  and  bookkeeper 
have  omitted  the  same  item. 

The  bookkeepers  now  take  the  de- 
posit slips  and  post  from  them  to  the 
ledgers,  entering  not  only  the  amount 
shown  by  the  ticket,  but  at  the  same 
time  extending  the  new  balance  of  the 
account  into  the  balance  column.  The 
bookkeeper  places  a check  mark  on  the 
slip  against  the  word  “Posted.”  An- 
other bookkeeper,  who  does  no  posting, 
now  takes  the  book  into  which  the  de- 
posit slips  have  been  copied  in  full, 
and  from  it  compares  the  postings  on 
the  ledgers,  checking  the  same,  also 


proving  and  checking  the  newly  ex- 
tended balance.  The  deposit  slips  are 
bound  in  suitable  packages  and  filed 
away.  The  occasion  for  again  referring 
to  any  of  them  is  very  rare  indeed,  but 
they  are  filed,  nevertheless,  so  that 
should  necessity  arise  they  can  be  pro- 
duced on  short  notice. 

FOUR  BILLIONS  IN  BANKS 

Saviogs  Increased  Last  Year 

TF  the  prosperity  of  the  nation  can  be 
A reflected  in  its  savings  bank  de- 
posits, the  year  ended  on  June  SO  must 
have  been  a banner  one  for  the  Ameri- 
can people. 

Deposits  in  the  1,759  savings  banks 
during  the  year  increased  to  more  than 
$4,000,000,000.  The  average  deposit- 
or’s account  was  $445.22,  just  $24.77 
above  the  average  of  the  year  before. 
There  are  300,000  more  savings  bank 
depositors  than  there  were  a year  ago, 
and  the  total  of  the  deposits  has  swelled 
$357,000,000  during  the  year. 

These  statistics  include  also  the  re- 
ports from  7,145  national  banks  and 
15,948  State  and  private  banks.  Bank- 
ing capital  employed  in  the  United 
States  increased  $80,000,000  during  the 
year.  Individual  deposits  in  all  the 
banks  increased  more  than  $1,240,000,- 
000,  and  the  aggregate  assets  increased 
$1,355,000,000.  The  banks,  however, 
are  holding  about  $31,000,000  less  in 
cash  than  they  did  in  1909- 

• 


A TOTAL  OF  7,218  NATIONAL  BANKS  NOW  IN  EXISTENCE,  WITH 
AUTHORIZED  CAPITAL  OF  $1,145,897 


DURING  the  month  of  October,  1910, 
twenty-six  applications  to  organize 
national  banks  were  received.  Of  the 
applications  pending,  eleven  were  approved 
and  eighteen  rejected.  In  the  same  month 
twenty-two  banks,  with  total  capital  of 
$2,480,000,  were  authorized  to  begin  busi- 
ness, of  which  number  thirteen,  with  capital 
of  $380,000,  had  individual  capital  of  less 
than  $50,000,  and  nine  with  capital  of  $2,- 
100,000  individual  capital  of  $50,000  or  over. 
The  total  number  of  national  banks  or- 


ganized is  9,883,  of  which  2,665  have  discon- 
tinued business,  leaving  in  existence  7,218 
banks  with  authorized  capital  of  $1,015,897; 
135  have  circulation  outstanding,  secured 
by  bonds,  $691,335,845.  The  total  amount 
of  the  national  bank  circulation  outstanding 
is  $724,874,308,  of  which  $33,538,463  is  cov- 
ered by  lawful  money  of  a like  amount  de- 
posited with  the  Treasurer  of  the  United 
States  on  account  of  liquidating  and  insol- 
vent national  banks  and  associations  which 
have  reduced  their  circulation. 


Digitized  by  t^ooQle 


INVESTMENTS 

Conducted  by  Franklin  Etcher 


EUROPE’S  INVESTMENT  IN  AMERICAN 
SECURITIES 


By  John  Terret 


TOECAUSE  of  the  very  great  influ- 
ence which  the  foreign  markets 
are  exerting  upon  our  own  market  at 
the  present  time,  Europe’s  investment 
in  American  securities  is  attracting  a 
great  amount  of  attention.  In  a gen- 
eral way,  people  realize  that  there  is 
much  foreign  capital  invested  here — 
or,  to  put  it  another  way,  that  there  are 
large  amounts  of  American  bonds  held 
abroad — but  it  is  doubtful  if  there  is 
any  general  realization  of  the  extent  to 
which  our  industries  are  carried  on  with 
the  help  of  European  capital. 

In  the  Early  Days. 

Foreign  investment  in  American  se- 
curities dates  back  to  the  earliest  times. 
When  the  Republic  was  first  established, 
its  industries,  on  account  of  the  repres- 
sive policy  of  the  mother  government, 
were  in  an  absolutely  undeveloped  state. 
Of  capital,  of  course,  there  was  very 
little.  Practically  everything  that  had 
been  done,  had  been  done  on  English 
money. 

When,  therefore,  at  the  end  of  the 
first  quarter  of  the  nineteenth  century, 
the  building  of  railways  was  beguit  in 
the  United  States,  it  was  mostly  with 
foreign  capital  that  these  first  under- 
takings were  financed.  It  is  not  easy 
now  to  get  at  the  exact  record  of  what 
happened,  but  it  is  sufficiently  clear  that 
it  was  with  English  money  that  prac- 
tically all  of  the  first  railroads  in  this 
country  were  built.  And  as  the  country 
grew,  this  investment  of  foreign  money 
grew  with  it.  In  time,  of  course,  we 
began  to  accumulate  capital  of  our  own, 
and  to  build  railroads  and  factories  with 
our  own  money,  but  by  that  time  the 
possibilities  of  American  enterprise  had 
become  well  known  abroad  and  an  in- 

824 


creasing  stream  of  foreign  money  came 
into  this  market.  There  were  periods 
when  investment  of  foreign  capital  was 
greater  than  at  others,  but  steadily  up 
to  the  time  of  the  Civil  War  this  invest- 
ment of  foreign  money  in  our  securities 
went  on.  And  after  the  resumption  of 
specie  payment  in  1879*  foreign  capital 
came  into  this  market  on  an  even  greater 
scale.  By  that  time  there  had  been  de- 
veloped a very  large  fund  of  native  cap- 
ital, but  in  spite  of  that,  each  big  issue 
of  securities  was  largely  participated  in 
by  the  foreign  bankers.  And  so,  Eu- 
rope’s investment  here  continued  to 
grow,  and  with  each  new  issue  has  kept 
on  growing.  At  the  present  time  it  is 
probably  greater  than  ever  before  in  the 
country’s  history. 

“Fixed”  and  “Floating”  Investment. 

The  investment  of  foreign  capital  in 
the  United  States  may  be  divided  into 
two  parts,  that  which  is  “fixed”  and  that 
which  is  “floating.”  By  the  “fixed”  in- 
vestment is  meant  the  very  great  amount 
of  American  securities  lodged  with  in- 
vestors, institutions,  and  estates,  all 
over  Europe — securities  which  have 
been  bought  for  investment  and  which 
are  apt  to  “stay  put”  for  many  years 
to  come.  By  the  “floating”  investment 
is  meant  the  constant  buying  of  Ameri- 
can stocks  and  bonds  by  the  foreigners 
— buying  which  is  sometimes  continued 
over  a considerable  period,  and  which  is 
sometimes  reversed  by  a selling  move- 
ment coming  very  soon  after. 

What  the  fixed  investment  of  foreign 
capital  in  American  securities  amounts 
to,  it  is  impossible  to  say.  Estimates 
run  anywhere  between  three  to  five 
billion  dollars.  One  man’s  guess  is  as 


Digitized  by  t^ooQle 


INVESTMENTS 


825 


good  as  another’s.  Whether  the  smaller 
or  larger  figure  be  correct,  it  is  a fact 
that,  all  over  Western  Europe,  Ameri- 
can bonds  and  to  a certain  extent  Amer- 
ican stocks  are  held  for  investment  in 
very  large  amounts.  They  yield  a high- 
er rate  than  can  be  realized  from  the 
equivalent  home  securities,  and  are  thus 
attractive  to  that  large  class  of  in- 
vestors abroad  who  are  intent  upon  get- 
ting the  highest  rate  possible  on  their 
money  consistent  with  safety. 

The  way  in  which  these  foreign  hold- 
ers of  American  bonds  study  their  in- 
vestments is  remarkable.  The  French 
peasant  who  buys  500  francs’  worth  of 
St.  Paul  “fours”  does  not,  of  course, 
know  anything  much  about  the  condi- 
tion of  the  St.  Paul  railroad,  but  the 
mere  fact  that  he  has  been  offered  these 
securities  is  in  itself  proof  that  some- 
body, acting  in  his  interests,  has  studied 
the  situation  very  fully.  In  England, 
where  the  aristocracy  are  very  largely 
invested  in  “Americans,”  first  hand 
knowledge  of  conditions  in  this  country 
is  very  full  and  free.  The  English- 
man is  a great  traveller.  He  comes 
over,  sees  the  progress  of  our  enter- 
prise, realizes  the  investment  oppor- 
tunity, and  ends  by  putting  a good  block 
of  his  money  into  American  securities. 
Not,  however,  without  having  first  given 
the  matter  the  closest  attention.  It  is 
safe  to  say  that  the  average  English 
investor  in  American  railroad  bonds  is 
infinitely  better  informed  regarding  the 
property  than  is  the  American  holding 
a similar  investment. 

The  Floating  Investment. 

The  floating  foreign  investment  in 
American  securities  is  made  up  of  the 
operations,  first,  of  individuals,  then  of 
banking  houses,  then  again  of  the  “In- 
vestment Associations”  which  flourish  in 
so  many  European  countries. 

Being  great  travellers  and  seeing  how 
money  is  made  in  American  securities, 
many  wealthy  individuals  abroad  are 
continually  “in”  our  market.  As  a rule 
their  operations  are  conducted  through 
London;  that  is  to  say,  orders  are  given 


in  the  London  market  and  either  exe- 
cuted there  or  cabled  to  this  side. 

Banking  house  operations,  too,  are  an 
important  consideration,  bankers  here 
in  connection  with  bankers  abroad  being 
continually  in  the  market  and  buying 
and  selling  securities  in  large  amounts. 
Sometimes  these  purchases  will  be  car- 
ried along  for  many  months.  Some- 
times, on  the  other  hand,  the  transac- 
tions are  closed  off  within  a very  few 
weeks. 

The  foreign  “Investment  Associa- 
tions” are  groups  of  capitalists  on  the 
other  side  who  issue  their  bonds  at  a 
fixed  rate  of  interest,  using  the  money 
thus  raised  to  deal  in  American  securi- 
ties. Being  well  informed  and  playing 
only  for  the  long  swings,  these  “Asso- 
ciations” usually  make  money  and  pay 
handsome  dividends. 

Because  of  this  big  investment  of 
foreign  capital  in  American  securities, 
it  stands  to  reason  that  buying  and  sell- 
ing movements  of  considerable  impor- 
tance must  be  continually  taking  place. 
Not  infrequently,  indeed,  the  European 
attitude  toward  our  stock  and  bond  mar- 
kets is  an  influence  of  absolutely  domi- 
nating importance. 


IMPROVEMENT 

DACK  in  the  middle  of  the  summer 
" when  pessimism  was  the  prevail- 
ing creed  and  when  the  man  who  took 
the  other  view  of  things  was  pityingly 
regarded  in  Wall  Street  as  little  better 
than  a lamb,  “Investments”  steadily 
maintained  that  the  outlook  was  by  no 
means  as  black  as  it  was  painted,  and 
that  investors  who  bought  securities  at 
prevailing  prices  would  not  be  sorry. 

We  are  not  out  of  the  woods  yet,  but 
by  what  has  happened  during  the  past 
couple  of  months  the  attitude  toward 
the  situation  which  we  took  during  the 
summer  would  seem  to  have  been  so  far 
borne  out.  There  are  plenty  of  un- 
certainties still  ahead  of  the  market, 
but  considering  the  improvement  in  sen- 
timent reflected  in  the  material  rise  in 


Digitized  by  t^ooQle 


To  Increase  Principal  and  Income 

No  form  of  Investment  has  proven  more  uniformly  8afe  and  Profitable  than  the  Shares  of 
Gas  and  Electric  Companies.  The  growth  of  the  lighting  business  has  been  and  is  remark- 
able, the  demand  for  Service  is  Constant  and  varies  only  to  Increase. 

The  Stocks  of  the  older  Companies  sell,  in  many  cases,  as  high  or  higher  than  the  best 
Railroad  Stocks  and  are  more  closely  held. 

We  offer  a small  block  of  Participating  5 per  cent.  Preferred  8tock  of  a large  Gas  and 
Electric  Company  This  Stock  has  paid  regular  dividends  at  the  rate  of  5 per  cent,  per  annum 
since  July  1,  1907,  shows  earnings  now  amounting  to  more  than  Three  Times  the  Dividend 
Requirements  and  is  entitled  to  share  equally  with  the  Common  Stock  after  the  Common  has 
received  its  5 per  cent,  dividend. 

We  Recommend  These  Shares,  as  in  our  opinion  a Safe  Inves’ment  in  which  there  is  an 
unusual  opportunity  for  Increase  of  Principal  and  Income. 

SPECIAL  CIRCULAR  OX  REQUEST. 

A.  H.  BICKMORE  & CO.,  Bankers  30  Pine  Street,  New  York 


security  prices,  the  optimist  will  be  seen 
to  have  had  all  the  better  of  the  ar- 
gument. What  may  happen  in  the  fu- 
ture no  one  can  foretell,  but  certainly 
the  investor  who  bought  either  stocks 
or  bonds  during  the  summer  has  as  yet 
little  cause  to  regret  what  he  has  done. 

Moreover  we  see  no  reason  for  chang- 
ing the  attitude  which  we  have  held 
all  along.  The  latter  part  of  1910,  it 
is  true,  has  been  a period  frought  with 
difficulties  and  uncertainties  but  one  by 
one — the  money  situation,  the  crops, 
etc. — they  have  worked  themselves  out, 


until  the  outlook  has  become  infinitely 
clearer  than  it  was.  There  are  some  big 
questions  ahead  of  the  market  still  to 
be  settled,  but  by  all  indications  they 
will  be  .settled  satisfactorily,  just  as 
was  the  money  situation  which  looked 
so  bad  in  the  middle  of  the  summer,  and 
the  crop  situation  which  seemed  at  one 
time  as  though  it  were  bound  to  cause 
such  trouble.  A good  many  disappoint- 
ments have  awaited  the  man  who  went 
into  1910  with  an  optimistic  spirit,  but 
it  seems  now  as  though  patience  were  to 
be  at  last  rewarded. 


SHORT-TERM  NOTES  AS  INVESTMENTS 

By  Casper  Cromwell 


A LARGE  amount  of  short-term 
**  notes  have  been  issued  so  far  this 
year  and  this  class  of  security  has  been 
widely  recommended  by  banking  houses 
to  their  clients.  It  is  a question,  indeed, 
whether,  at  any  time  since  1906,  trading 
in  short-term  notes  in  the  outside  mar- 
ket, as  it  is  called,  has  been  as  active  as 
at  present.  By  institutions  and  inves- 
tors the  short-term  note  as  an  invest- 
ment security  is  being  carefully  and 
closely  studied. 

The  short-term  note  in  the  sense  in 
which  it  is  usually  spoken  of  is  the  obli- 
gation of  a railroad  or  of  an  industrial 
company,  maturing  anywhere  between 

siit; 


two  and  five  years  from  the  date  of  is- 
sue. Usually  notes  of  this  kind  are  un- 
secured, though  sometimes  there  is  col- 
lateral in  back  of  them.  As  a rule,  how- 
ever, it  can  be  said  that  they  are  noth- 
ing more  nor  less  than  a promissory 
note  made  by  the  company,  issued  in 
somewhat  larger  amounts,  and  running 
for  a somewhat  longer  time,  than  the 
ordinary  note-of-hand.  Among  a cor- 
poration’s securities,  therefore,  short- 
term notes  usually  rank  just  ahead  of 
the  stock,  but  behind  the  bonds.  The 
short-term  notes  of  corporations  con- 
sistently paying  dividends  are  naturally 
a better  security  than  those  of  compa- 


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Union  Notional  IBank 

CAPITAL  $1,600,000  (D.  SURPLUS  $900,000 


GEO.  H.  WORTHINGTON,  President 
J.  F.  HARPER.  Vice-President 
E.  R.  FANCHER,  Vice-President 
Q.  A.  COULTON,  Cashier 
W.  E.  WARD,  Asst.  Cashier 


f]  Organized  in  1884.  More  than 
twenty  Uve  years  of  service  back 
of  us*  May  we  be  of  use  to  you? 


nies  able  only  to  earn  their  bond  inter- 
est and  a little  surplus  over. 

Emergency  Financing. 

Realization  of  what  these  short-term 
notes  are,  and  where  they  stand,  will 
make  it  very  plain  that  the  short-term 
note  per  se  is  a kind  of  emergency 
financing.  That  is  to  say,  short-term 
notes  are  issued  only  when  a corporation 
needs  money  and  cannot  raise  it  in  any 
other  way.  “Emergency”  may  perhaps 
be  too  strong  a word  to  apply  to  finance 
of  this  sort,  but  in  any  case  it  can  be 
set  down  that  it  is  only  when  the  regu- 
lar long-term  bond  is  unsalable  that  the 
short-term  note  makes  its  appearance. 

In  the  case  of  corporations  enjoying 
good  credit  it  will  thus  appear  that 
while  the  issue  of  short-term  notes  may 
be  an  effective  way  of  borrowing  money, 
it  is  also  an  expensive  one.  For  notes 
of  this  kind  usually  bear  a high  rate  of 
interest — five  or  six  per  cent. — and  not 
infrequently  are  sold  by  the  company  at 
a price  several  points  under  par.  That 
makes  the  money  come  pretty  high.  At 
the  same  time  when  a company  needs 
money  and  finds  itself  unable  to  raise 
it  in  any  other  way  it  is  willing  to  pay 
a stiff  rate  of  interest. 

Four  Years  Ago. 

The  last  time  that  there  was  any  con- 
siderable issue  of  short-term  notes  was 
in  1906-7,  when  the  exhaustion  of  the 
country's  capital  supply  had  made  it 
practically  impossible  to  sell  the  regu- 


lar long-term  bonds.  At  that  time  a 
perfect  flood  of  short-term  notes  was 
put  out  upon  the  market.  The  rail- 
roads issued  them,  the  industrial  compa- 
nies issued  them — within  a few  months, 
a very  great  volume  had  been  put  out 
and  an  exceedingly  active  outside  mar- 
ket established. 

In  the  early  part  of  1907,  indeed, 
there  were  not  a few  banking  houses 
who  gave  practically  all  their  attention 
to  trading  in  securities  of  this  kind. 
The  profit  as  a rule  ^yas  but  a small 
fraction,  but  the  turnover  being  very 
large,  trading  of  this  sort  proved  to  be 
most  lucrative. 

At  Present. 

Now  again,  four  years  later,  we  have 
a repetition  of  the  same  thing.  Again 
the  railroads,  though  not  the  industrial 
companies  to  such  an  extent,  are  offer- 
ing big  amounts  of  their  short-term 
securities.  Again  banking  houses  are 
actively  trading  in  these  short-term 
notes,  turning  over  big  amounts  of  them 
every  day,  creating  and  maintaining  a 
close  market  in  them.  This  market,  it 
must  be  borne  in  mind,  is  not  confined 
to  any  exchange.  It  is,  like  the  foreign 
exchange  market,  established  directly 
between  houses  interested,  and  fluctu- 
ates solely  according  to  the  law  of  sup- 
ply and  demand.  It  is  at  present  a big, 
broad,  and  active  market,  one  on  which 
it  is  possible  at  any  time  to  dispose  of 
large  quantities  of  notes  without  dis- 
turbing quotations,  or  on  the  other  hand 
to  buy  equally  large  amounts. 

S27 


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828 


THE  BANKERS  MAGAZINE 


Investment  Function  of  the  Short- 
Term  Note. 

It  would  probably  be  difficult  to  name 
a security  concerning  the  real  invest- 
ment function  of  which  so  great  a de- 
gree of  misapprehension  exists.  Short- 
term notes  have  their  uses  as  investment 
securities,  but  comparatively  few  peo- 
ple, or  even  institutions  for  that  mat- 
ter, seem  to  realize  just  what  they  are. 
From  the  nature  of  the  security  itself, 
it  is  evident  that  an  unsecured  note  run- 
ning from  two  to  five  years  is  entirely 
different  as  an  investment  proposition 
from  a long-term  bond  whether  it  be  a 
mortgage  or  debenture  or  what  not. 
These  short-term  bonds  indeed,  have  a 
distinctive  function  in  their  relation  to 
investment  funds,  which  puts  them  in  a 
class  all  by  themselves. 

Their  main  purpose  is  of  course,  for 
the  temporary  investment  of  money — 
for  the  keeping  of  funds  liquid,  ready 
to  take  advantage  of  any  other  profit- 
able investment  opportunity  which  may 
offer.  For  the  individual,  for  instance, 
who  believes  that  during  the  course  of 
the  next  few  years  it  will  be  possible  to 
buy  long-term  bonds  at  a much  lower 
price  than  at  present,  the  short-term 
note  is  an  ideal  way  of  holding  his  cap- 


ital available.  It  possesses  a high  de- 
gree of  marketability.  It  is  not  apt  to 
fluctuate  greatly  in  price.  At  any  time 
it  can  be  disposed  of  at  par,  or  very 
close  to  it,  and  the  money  got  out  of  it. 
For  the  individual,  therefore,  who 
wants  to  be  ready  to  take  advantage  of 
a lower  range  of  prices  which  he  thinks 
is  coming  along  within  the  next  couple 
of  years,  the  short-term  note  is  about 
the  most  suitable  investment  that  can 
readily  be  imagined. 

As  a Secondary  Reserve. 

It  is,  however,  for  the  investment  of 
funds  belonging  to  institutions  that 
short-term  notes  appear  to  have  their 
greatest  use.  As  a secondary  reserve 
for  bank  and  trust  company  funds,  they 
are  almost  ideal.  As  has  been  said,  they 
are  a very  safe  form  of  investment 
which  readily  can  be  bought  and  sold, 
and  the  fluctuations  in  their  price  are 
comparatively  unimportant.  In  every 
part  of  the  country  hanks  and  trust  com- 
panies are  becoming  more  and  more  in- 
terested in  short-term  notes.  It  is, 
indeed,  the  constant  inquiry  from  this 
source  which  makes  the  market  for  them 
as  broad  and  as  active  as  it  is  at  present. 


THE  REAL  BOND  MARKET 

By  B.  Nathan  Moran 


'T'HE  daily  record  of  bond  transac- 
**•  tions  on  the  New  York  Stock  Ex- 
change regularly  runs  up  into  the  mil- 
lions, but  it  is  not  on  the  Board  that 
the  real  market  for  bonds  exists.  It  is 
the  “outside”  trading  between  the  bond 
houses — the  “over-the-counter”  busi- 
ness which  each  day  largely  exceeds  the 
total  volume  of  dealings  on  the  ex- 
change— that  constitutes  the  real  mar- 
ket for  bonds.  Indeed,  were  the  trans- 
actions on  the  stock  exchange  to  be 
stripped  of  the  trades  made  for  specu- 
lative account,  what  was  left  would 
make  a poor  showing  in  comparison 
with  what  is  done  on  the  outside — that 


is  to  say,  between  the  houses  who  trade 
directly  with  one  another.  A few  bonds, 
it  is  true,  have  their  best  market  on  the 
exchange;  there  are  a number  of  ac- 
tive issues  which  are  largely  traded  in 
every  day.  But  when  it  comes  to  the 
trading  in  the  rank  and  file  of  bonds 
and  the  passing  back  and  forth  of  big 
blocks,  it  is  on  the  “outside”  that  the 
real  big  market  exists. 

Development. 

The  past  few  years  have  seen  a very 
great  development  in  this  outside  mar- 
ket. As  interest  in  bonds  has  increased 


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and  receive  suggestions  for  investment  or  speculation  through  our  weekly 
44  Market  Letter  on  Stocks.” 


Swartwout  & Appenzellar,  Bankers 

Members  New  York  Stock  Exchange 

40-42-44  PINE  STREET,  NEW  YORK  CITY 

Agricultural  Nat.  Bank  Bldg.  First  Nat.  Bank  Bldg. 

Pittsfield.  Mass.  Chicago*  HL 


and  as  investments  in  this  class  of  se- 
curity have  been  made  by  people  all 
over  the  country  who  formerly  never 
thought  of  using  their  money  that  way, 
it  has  come  about  that  the  number  of 
houses  engaged  in  the  bond  business  has 
been  very  largely  increased.  Not  so 
very  many  years  ago  practically  all  the 
business  was  done  by  a limited  number 
of  firms,  possessed  of  large  capital,  and 
virtually  having  a monopoly  of  the  new 
issues  as  they  were  brought  out.  That 
condition,  however,  no  longer  exists. 
The  register  of  the  houses  now  engaged 
in  the  business  of  underwriting  and 
distributing  securities  is  long  and  con- 
stantly growing.  Where  there  were 
formerly  a few  big  houses  who  had  a 
monopoly  of  the  business,  they  can  now 
be  counted  by  the  dozen,  many  of  them 
having  great  capital  and  resources,  and 
being  well  represented  at  court.  In 
the  next  place  there  has  sprung  up  a 
great  number  of  smaller  bond  firms, 
partly  brokers  and  partly  dealers,  who 
have  to  be  counted  in  on  every  sub-syn- 
dicate and  whose  influence  in  the  bond 
market  is  becoming  increasingly  impor- 
tant. Some  of  these  smaller  houses  are 
offshoots  of  the  older  ones,  some  of 
them  are  entirely  new.  Not  a few  of 
them  are  aggressive  in  policy.  The 
short  time  in  which  this  class  of  firm 
has  been  in  existence  has  seen  more  than 
one  of  them  graduate  into  the  class  of 
the  full-fledged  banking  house. 

Banks  and  Bonds. 

In  bringing  about  this  development, 
the  establishment  of  bond  departments 
by  banks  and  trust  companies  all  over 
the  country  has  played  no  little  part. 


As  the  individual  customers  of  these 
banks  have  become  more  and  more  in- 
terested in  bonds  as  investments,  the 
demand  upon  these  institutions  to  han- 
dle the  business  themselves  instead  of 
giving  it  out  to  someone  else,  has  be- 
come more  and  more  insistent.  Conse- 
quently, during  the  last  few  years, 
banks  and  trust  companies  all  over  the 
Union  have  themselves  been  going  into 
the  investment  business  and  establishing 
well  organized  bond  departments. 

With  the  increase  in  bond  business 
arising  from  this  and  other  sources, 
there  has  come  a great  development  of 
facilities  in  the  big  “outsider>  market 
at  New  York.  As  the  demand  for  bonds 
from  the  interior  has  increased,  so  com- 
petition in  the  New  York  market  has 
increased,  until  the  facilities  for  doing 
business  have  been  developed  to  a very 
high  point  indeed.  One  of  the  prin- 
cipal results  has  been  the  establishment 
of  numerous  branches  by  most  of  the 
important  investment  firms.  Another 
has  been  the  development  of  an  exten- 
sive wire  system  by  which  the  bond  men 
in  New  York  find  themselves  linked 
with  practically  every  important  center 
in  the  country,  A third  development  of 
great  importance  has  been  the  organiza- 
tion of  elaborate  sales  forces,  and  the 
taking  on  of  outside  men  who  play  the 
part  of  scouts  in  the  market  and  con- 
tinually keep  their  principals  in  touch 
with  actual  conditions. 

Branches. 

The  establishment  of  branches  at  im- 
portant outside  points  has  been  a nat- 
ural consequence  of  the  competition 
which  has  developed.  As  orders  coming 

829 


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TELEPHONES 


6700 

6701 
6>0*2 
670:1 
6704 


BROAD 


Union  Ferry 
Stock  and  5*r 
Now  Amsterdam 

Gao  5*o 


WILLIAMSON  A SQUIRE 

>1  EMBERS  N.  Y.  STOCK  EXCHANGE 

INVESTMENT  SECURITIES 

85  BROAD  ST.,  NEW  YORK  OITY 

All  Local  Street  Hallway,  Gao,  Electric  and  Ferry 
Companies  Boo«kl,  Sold  and  Quoted 


Economy  l.lftat  A 
Power  re.  I«M 
Syracuse  Light- 

toff  re.  1561 

Dela.,  Lack.  A 
Western  Coal 
Pacific  Gao  and 
Electric 

Klnr’i  County 
El.  Lt.  A Power 


from  these  outside  points  have  in- 
creased, it  has  been  found  by  the  big 
dealers  here  that  it  is  far  more  economi- 
cal for  them  to  handle  these  orders 
through  a branch  of  their  own  than  to 
have  the  business  come  through  some- 
one else.  It  works  the  other  way,  too. 
Where  it  is  a question  of  distributing 
bonds  at  a center  of  secondary  impor- 
tance, it  has  been  found  that  the  distri- 
bution can  be  better  and  more  econom- 
ically effected  by  a branch  than  by  a 
correspondent. 

Wires. 

The  wire  system  is  a development 
along  the  same  line.  A big  bond  house 
in  New  York  is  continually  getting  or- 
ders and  inquiries  from  cities  all  over 
the  country,  but  manifestly  it  is  impos- 
sible to  maintain  branches  at  all  these 
points.  What  has  happened,  therefore, 
is  that  these  houses  have  leased  private 
wires  to  correspondents  at  various 
points  thereby  keeping  themselves  in 
pretty  close  touch  with  what  is  going 
on.  Not  infrequently  an  active  bond 
house  in  New  York  will  have  as  many 
as  twenty  wires  radiating  out  to  various 
points  of  the  country,  over  some  of 
which  wires  as  many  as  fifty  or  sixty 
messages  will  pass  during  a single  day. 

The  cost  of  all  this,  of  course,  is  very 
great.  It  is  impossible  to  set  down  in 
figures  what  the  cost  of  a wire  system 
amounts  to,  but  in  the  case  of  the  big 
houses  it  runs  up  into  high  figures.  At 
the  same  time,  it  must  be  remembered 
that  with  conditions  as  they  are  at  pres- 
ent, the  maintenance  of  one  of  these 
elaborate  wire  systems  is  no  longer  a 
luxury  or  a mere  means  of  gathering  in 
additional  business,  but  an  absolute 
necessity.  It  is  the  way  the  business  is 
being  done.  The  other  houses  all  do  it 
that  way,  and  if  a house  wants  to  com- 
pete on  terms  of  equality  it  simply 

830 


means  that  it,  too,  must  be  correspond- 
ingly equipped. 

Salesmen. 

The  outside  men,  also,  who  are  con- 
tinually in  touch  with  the  investment 
pulse  of  the  country,  are  a development 
of  the  modern  system  under  which  the 
business  is  being  done.  Not  so  many 
years  ago  a bond  house  would  have  con- 
sidered it  lowering  to  its  dignity  to  send 
out  a salesman  for  the  purpose  of  dis- 
tributing the  securities  it  had  on  hand. 
With  the  advent  of  the  same  competitive 
conditions  into  the  bond  market  as  pre- 
vail in  mercantile  business,  however, 
these  ideas  were  speedily  relegated  to 
where  they  belong.  With  so  many 
houses  all  trying  to  sell  the  same  securi- 
ties, and,  on  account  of  the  narrower 
margin  of  profit,  dependent  upon  a 
much  larger  turn-over  than  formerly,  it 
came  to  be  quickly  realized  that  the 
salesman  was  an  absolute  necessity.  In 
the  organization  of  a modern  live  bond 
house  he  has  now  come  to  be  one  of  the 
most  important  parts.  Not  only  does 
he  distribute  far  and  wide  the  securities 
which  his  house  has  to  offer,  but,  by 
his  reports  on  sentiment  towards  securi- 
ties in  the  territory  in  which  he  is  trav- 
elling, he  keeps  his  house  in  touch  with 
things  and  enables  it  intelligently  to 
buy  the  securities  for  which  a demand 
exists. 

Crowded  Out. 

As  all  this  development  has  taken 
place,  it  will  plainly  be  seen  that  the 
position  of  the  middleman  has  become 
more  and  more  precarious.  With  each 
big  bond  house  equipped  with  an  elab- 
orate selling  force  having  for  its  sole 
purpose  direct  sales  to  investors,  and 
with  the  extensive  advertising  which  is 
being  done  at  present,  it  will  be  evi- 
dent that  the  broker  has  come  to  be  less 


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HUD80N  COMPANIES  OWNS* 

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OBLIGATIONS  CONSIST  OPi 

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T,l.  Rimwp  SOTS  Briggs  C.  Keck  4«  Wall  Straat 


and  less  of  a factor.  It  is  a tendency 
which  has  been  strongly  marked  in  every 
kind  of  business,  and  particularly  so  in 
this  business  of  handling  bonds.  The 
good  old  days  of  several  points  profit 
on  a trade  are  a thing  of  the  past. 
Houses  have  to  work  on  a much  closer 
margin  of  profit  now  than  formerly. 
There  is  less  in  it  for  the  middleman. 
He  has  been  literally  crowded  out. 

Outside  Interest. 

All  this  development  in  the  bond 
market  and  the  cutting  down  of  com- 
missions by  which  it  has  been  accom- 
panied, has  naturally  resulted  in  stim- 


ulating outside  interest  in  the  New 
York  bond  market.  With  such  an  ex- 
cellent market  as  exists  at  present  in 
any  number  of  issues,  the  incentive  on 
the  part  of  the  inland  institution  to  put 
some  of  its  secondary  reserve  into  the 
form  of  bonds  has  become  very  much 
greater  than  it  ever  was  before.  It  was 
the  awakening  interest  in  bonds  all  over 
the  United  States  which  was  first  re- 
sponsible for  the  great  development  of 
the  “outside”  bond  market  at  New  York, 
It  is  the  present  high  state  of  develop- 
ment of  that  market  which  is  now  re- 
acting back  on  the  rest  of  the  country 
and  largely  increasing  the  interest  in 
bonds  which  already  exists. 


DIVIDEND  PAYMENTS 

By  William  H.  Lough* 


r | 'HE  payment  of  dividends  is  no 
doubt  the  pleasantest  function  of 
corporate  management;  it  is  also  one 
of  the  most  critical.  To  a large  extent 
the  corporation’s  reputation,  financial 
standing  and  ultimate  success  depend 
upon  the  principles  which  the  directors 
follow  in  fixing  dividends.  The  cor- 
rect principles  are  few  and  simple;  yet 
they  are  very  often  misunderstood  or 
misapplied. 

It  is  a universal  rule  of  the  courts, 
and  is  specifically  set  forth  in  the  stat- 


♦Extract  from  a Concrete  Business  Talk, 
written  by  Mr.  Lough  for  the  Alexander 
Hamilton  Institute,  Astor  Place,  New  York 
City. 


utes  of  most  States,  that  dividends  must 
not  impair  the  corporation’s  capital. 
The  word  “capital,”  as  here  used,  means 
practically  the  value  of  the  corporate 
assets,  which  is  equal  to  the  outstand- 
ing obligations  plus  the  capital  stock. 
If  a corporation  has  acquired  and  is 
employing  assets,  the  value  of  which  is 
greater  than  the  value  of  its  outstand- 
ing obligations  and  capital  stock  com- 
bined— in  other  words,  if  the  corpora- 
tion has  a surplus — then  no  legal  ob- 
jection except  in  special  cases,  can  be 
offered  to  the  payment  of  the  dividend. 
It  is  well  to  note  carefully  this  inter- 
pretation of  the  legal  rule  which  de- 
pends upon,  and  follows  from,  the  use 

831 


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S.  H.  P.  PELL 

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0 

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Member*  New  York  Stock  Exchange  Members  New  York  Cotton  Exchange  1 

Dealers  In 

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Unlisted  and  Inactive  Securities 

43  EXCHANGE  PLACE,  N.  Y. 

of  the  word  “capital,”  in  a sense  some- 
what different  from  its  ordinary  mean- 
ing. 

There  is  an  exception  to  this  rule,  the 
reason  for  which  is  obvious,  in  the  cases 
of  corporations  which  own  wasting  as- 
sets, such  as  mines,  tracts  of  lumber, 
estates  in  process  of  liquidation,  and  so 
on.  The  only  source  of  profit  of  such 
companies  is  the  sale  of  assets  and  they 
must  either  pay  dividends  out  of  capital 
or  not  at  all.  The  law  recognizes  the 
peculiar  situation  of  such  concerns. 

Three  Sources  of  Dividends. 

Except  in  the  cases  of  those  cor- 
porations already  mentioned  which  may 
pay  dividends  out  of  capital  there  are 
only  three  legally  possible  sources  of 
dividends.  Those  three  sources  are: 

1.  Current  net  income;  that  is,  the 
income  remaining  after  all  operating 
expenses  and  all  fixed  charges  have  been 
paid,  and  after  any  previous  impair- 
ments of  capital  have  been  made  good. 

2.  The  net  income  of  previous  years 
which  has  been  saved  and  allowed  to 
accumulate ; this  income  usually  appears 
on  the  company's  balance  sheet  under 
some  such  title  as  “surplus,”  “undi- 
vided profits,”  “profit  and  loss,”  “in- 
come account,”  or  “surplus  income.” 
The  title  used  to  designate  this  saved 
income  is  not  important;  its  essential 
characteristic,  so  far  as  paying  divi- 
dends is  concerned,  is  that  it  should  have 
been  accumulated  from  profits  actually 
earned  during  some  previous  year,  or 
years,  and  not  offset  by  more  than  equal 
losses  in  other  years. 

8.  Profits  derived  from  the  sale  of 
assets  of  the  corporation  at  more  than 
their  book  value,  such  profits  not  being 
required  to  make  good  previous  impair- 
ments of  capital.  These  profits  also 
often  appear  on  a corporation's  balance 

832 


sheet  under  such  titles  as  “surplus,” 
“undivided  profits,”  “profit  and  loss,” 
and  so  on,  although  careful  accounting 
would  show  them  in  a separate  account. 

Special  Cases. 

It  has  been  indicated  above  that  cur- 
rent income  may  properly  be  used  to 
pay  dividends  only  after  the  previous 
impairments  of  capital  have  been  made 
good.  This  saving  reservation  which  is 
made  necessary  by  the  legal  rule  against 
paying  dividends  out  of  capital,  is  ordi- 
narily required  also  by  sound  financial 
practice.  In  most  cases  obviously  a 
corporation  which  after  a long  period  of 
losses  should  pay  out  its  first  profits 
in  dividends  would  be  placing  in 
jeopardy  its  very  existence.  But  ex- 
ceptions may  sometimes  properly  be 
made. 

For  instance,  suppose  a manufactur- 
ing corporation  two  or  three  years  old 
has  been  operating  at  a loss — as  prac- 
tically all  corporations  must  do  during 
the  first  stage  of  their  existence — and 
suppose  that  this  corporation  begins  to 
earn  large  and  steady  profits.  Is  it  just 
or  expedient  to  ask  the  stockholders  to 
wait  until  all  previous  losses  have  been 
made  good  before  starting  to  pay  divi- 
dends? Generally,  yes;  sometimes,  no. 
The  so-called  operating  losses  at  the  be- 
ginning may  be  in  effect  simply  the 
price  that  the  corporation  pays  for  the 
permanent  business  connections,  the 
reputation,  the  good-will,  wjiich  will  en- 
able it  steadily  to  earn  profits  there- 
after; in  such  a case  these  losses  may 
probably  be  capitalized  as  an  invest- 
ment, and  dividends  may  be  paid  out  of 
the  first  profits. 

Dividends  and  Current  Profits. 

Assuming  that  a corporation  has  at- 
tained to  the  happy  situation  where  it 


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Miners  Bank,  Joplin,  Mo. 

We  cordially  invite  correspondence  relative  to  opportunities  and  investments,  the  advan- 
tages of  Joplin  as  s manufacturing  point,  etc.  Accounts  and  collections  also  invited. 

Capital,  $100,000  Surplus,  $100,000  Deposits,  $750,000 


has  no  previous  impairment  of  capital 
to  make  good,  and  is  earning  profits,  the 
directors  have  next  to  consider  the  ques- 
tion: How  much  of  these  profits  shall 

be  paid  out  in  dividends?  Two  distinct 
— in  fact,  opposing — policies  are  fol- 
lowed. Some  corporations  set  aside  out 
of  net  income  whatever  is  actually  need- 
ed at  the  time  by  the  corporation  for 
small  capital  expenditures,  and  pay  out 
all  the  remaining  profits  in  dividends. 
Other  corporations  establish  a fixed  divi- 
dend rate  which  they  aim  to  maintain 
over  a long  period  of  years  in  good 
times  and  bad,  and  reserve  for  the  cor- 
poration's use  whatever  profits  may  be 
earned  over  and  above  this  regular  divi- 
dend. The  first  policy  is  generally  fol- 
lowed abroad,  and  by  small  and  closely- 
held  corporations  in  this  country.  The 
second  policy  is  commonly  adopted  in 
this  country  by  large,  conservative  cor- 
porations and  is  generally  to  be  pre- 
ferred. 

Dividends  from  Surplus. 

Little  need  be  said  about  the  other 
two  sources  of  dividends  beside  current 
income.  Legally,  dividends  may  be 
paid  without  question  out  of  accumu- 
lated income  saved  from  the  earnings 
of  previous  years.  As  a matter  of  finan- 
cial practice  it  is  regarded  as  poor 
policy  to  pay  dividends  from  this  source 
except  in  emergencies.  Saved  income  is 
usually  put  back  into  the  corporation's 
property,  and  becomes  in  reality  a part 
of  the  corporation's  capital  investment. 
It  should  be  drawn  upon  for  dividends 
only  in  those  cases  where  it  is  important 
to  keep  up  a regular  dividend  rate,  and 
current  income,  contrary  to  expectations, 
has  for  a short  time  fallen  below  the 
regular  dividend  requirements.  This 
was  the  situation  of  the  Baltimore  Sc 
Ohio  Railroad  in  July,  1908.  The  cor- 


poration had  been  paying  six  per  cent 
on  the  common  stock  regularly,  and  it 
would  have  been  detrimental  to  the  cor- 
poration's credit,  and  to  the  interests  of 
its  stockholders  to  lower  this  rate.  In 
consequence,  the  directors  declared  the 
usual  dividend,  part  of  which  was 
charged  against  the  company's  surplus, 
and  their  action  was  generally  approved. 

Before  the  Industrial  Commission, 
Mr.  Jacob  H.  Schiff  said,  that  as  an 
emergency  measure,  where  a corpora- 
tion had  suffered  a severe  loss  not  likely 
to  recur,  he  would  regard  it  as  an  “emi- 
nently proper"  step  to  declare  dividends 
out  of  surplus,  even  if  it  were  necessary 
to  borrow  the  cash  with  which  to  pay 
them.  This  is  advisable,  he  thought, 
because  of  the  great  importance  of  regu- 
larity of  dividends  in  maintaining  a cor- 
poration's credit  standing.  “I  would 
heartily  recommend  such  a step,"  he  con- 
cluded, “and  believe  it  perfectly  sound." 

As  to  dividends  declared  out  of  profits 
from  the  sale  of  assets  at  a figure  above 
their  book  value,  the  chief  point  to  re- 
mark is  that  such  dividends  should  be 
clearly  labeled  “extra,"  and  their 
source  should  be  indicated,  so  that  all 
stockholders  may  be  fully  aware  that 
current  income  does  not  provide  the 
dividend.  Unless  the  profits  from  this 
source  are  unusually  large,  and  the  cor- 
poration does  not  need  the  money  so 
obtained  for  capital  expenditures,  it  is 
generally  considered  better  practice  to 
leave  profits  of  this  character  in  the 
company's  treasury. 

Dividends  and  Cash. 

So  far  the  question  of  dividend  pay- 
ment has  been  considered  solely  in  re- 
lation to  net  income.  But  another  im- 
portant factor  ought  always  to  be  taken 
into  account  in  the  declaration  of  divi- 
dends— at  least,  of  cash  dividends — 

S3.*? 


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834. 


THE  BANKERS  -MAGAZINE 


namely,  the  financial  condition  of  the 
corporation. 

It  is  not  always  safe,  by  any  means, 
to  assume  that  a good  showing  of  profits 
in  a corporation’s  income  statement,  or 
a good  showing  of  accumulated  surplus 
in  its  balance  sheet,  is  a sufficient  basis 
for  cash  dividends.  In  its  report  for 
1908,  the  Missouri  Pacific  Railroad 
Company  showed  an  accumulated  sur- 
plus of  $10,000,000;  yet  within  a short 
time  the  company  was  obliged,  not  only 
to  discontinue  dividends,  but  to  borrow 
$6,000,000  on  two-year  notes. 

Sometimes  a corporation’s  accounts 
are  frauduently  or  improperly  kept,  and 
do  not,  for  that  reason,  show  actual  con- 
ditions; but  that  is  not  the  only  reason 
why  dividends  should  not  be  based 
wholly  on  the  figures  for  profits  and  for 
surplus.  The  Missouri  Pacific  surplus 
in  1908,  for  instance,  was,  no  doubt, 
honestly  reported.  The  chief  reason  for 
caution  lies  in  the  fact  that  profits  may 
be  realized  in  many  other  forms  than 
cash.  They  may  be  realized  in  enlarged 
plant,  improved  machinery,  wider  busi- 
ness connections,  more  valuable  good- 
will. Similarly,  surplus  may  take  any 
or  all  of  these  forms,  and,  indeed,  sel- 
dom affects  directly  the  cash  account. 
Hence,  it  often  is  true  that  a corpora- 
tion is  prosperous,  has  a big  surplus,  is 
earning  large  profits,  and  yet  is  finan- 
cially weak — that  is,  lacks  cash  and  cash 
resources.  As  a matter  of  fact  the  more 
rapidly  a corporation  expands  its  opera- 
tions, and  the  larger  profits  it  realizes, 
the  more  likely  it  is  to  reduce  the  pro- 
portion of  its  quick  assets  to  its  quick 
liabilities. 

Ignorance  of,  or  unwillingness  to 
recognize,  this  simple  fact  has  been  the 
immediate  cause  of  many  an  unneces- 
sary bankruptcy.  A company  which  de- 
clares dividends  on  the  strength  of  its 
profits,  or  of  its  surplus,  at  the  same 
time  being  short  of  cash,  must  neces- 
sarily borrow  the  money  with  which  to 
pay  the  dividends.  Bearing  in  mind 
that  the  company  is  already  deficient  in 
quick  assets,  it  is  easy  to  see  how  this 
additional  borrowing  often  proves  suffi- 
cient to  bring  on  insolvency.  With  small 
corporations  it  may  be  laid  down  as  a 


rule  which  has  few  exceptions  that  cash 
dividends  ought  not  to  be  paid  until  the 
company  has  on  hand  the  cash  resources 
with  which  easily  to  pay  them. 

The  same  general  principle  holds 
good  with  large  corporations,  but  ex- 
ceptions may  more  readily  be  made  be- 
cause such  corporations  usually  have 
strong  financial  connections  and  a wide 
credit,  which  make  it  comparatively  safe 
for  them  to  increase  their  borrowings. 

In  practice  the  directors  of  these  com- 
panies frequently  consider  dividends 
only  in  relation  to  profits  earned,  and 
rely  on  being  able  to  finance  extensions, 
and  raise  cash  when  needed  from  new 
stock  and  bond  issues.  That  the  prac- 
tice, even  at  the  best,  involves  elements 
of  danger  is  indicated  by  the  failure  of 
the  Westinghouse  Electric  Company,  in 
1907.  The  underlying  cause  of  this 
company’s  difficulties  was  the  continual 
payment  of  dividends  based  on  large 
profits,  but  not  properly  related  to  the 
company’s  supply  of  cash. 

Supplementary  Factors  Affecting 
Dividends. 

In  addition  to  the  amount  of  cash  and 
other  quick  assets  on  hand,  as  compared 
with  the  quick  liabilities,  the  directors 
of  a corporation  ought  to  take  certain 
closely  related  factors  into  considera- 
tion. Before  declaring  cash  dividends 
they  should  consider  the  prospective 
volume  of  business,  and  of  new  construc- 
tion or  extensions.  Cash  may  be  on 
hand  in  sufficient  quantity  for  imme- 
diate needs,  but  not  for  the  needs  of 
the  near  future.  Another  related  fac- 
tor to  consider  is  the  state  of  the  com- 
pany’s credit.  Before  depleting  cash  to 
any  extent  the  directors  should  ask 
themselves,  are  we  certain  that  the  com- 
pany will  easily  be  able  to  borrow  money 
in  case  of  emergency?  Large  corpora- 
tions which  make  a practice  of  financing 
small  capital  improvements  by  short- 
term note  issues,  and  later  refunding 
these  notes  by  long-term  bonds,  ought 
always  to  have  their  net  floating  debt 
permanently  financed  before  cash  divi- 
dends arc  paid.  A third  factor  too 
often  ignored,  especially  by  small  com- 


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panie9,  is  the  general  financial  outlook. 
It  goes  without  saying  that  a reduction 
of  cash  at  a time  when  the  company  is 
entering  a period  of  financial  stringency, 
is  a dangerous  proceeding,  although  it 
might  be  conservative  enough  if  the  out- 
look were  more  favorable. 


THREE  BILLION  BUSHELS  OF 
CORN 

'C'OR  the  improvement  in  sentiment 
which  has  taken  place  the  great 
success  of  the  crops  is  largely  respon- 
sible. The  American  business  man, 
while  he  can  become  fearfully  pessi- 
mistic, is  not  of  a disposition  to  main- 
tain that  attitude  for  any  great  length 
of  time.  By  the  political  outlook,  by 
what  he  thinks  is  the  government’s  at- 
titude toward  the  corporations,  by  rea- 
son of  what  he  thinks  the  Supreme 
Court  may  do  to  the  trusts,  he  may  be 
rendered  sceptical  as  to  the  business 
outlook,  but  give  him  a good  live  influ- 
ence like  a three-billion-bushel  corn 
crop  and  all  his  fears  melt  away  like 
snow  under  the  influence  of  a genial 
spring  sun.  He  does  not  want  to  be  a 
pessimist.  He  is  never  very  confirmed 
in  that  position.  He  is  like  a man  who 
feels  that  he  is  called  upon  to  hold  a 
certain  opinion  but  wants  to  be  con- 
verted. With  him,  not  infrequently  the 
wish  is  father  to  the  thought.  There- 
fore as  the  extremely  favorable  weather 
with  which  the  season  closed  ripened  a 
corn  crop  far  exceeding  anything  that 
has  ever  been  seen  before,  realization 
of  the  tremendous  wealth  to  be  added 
has  greatly  heightened  the  business 
pulse  of  the  country.  For  years  and 
years  we  tried  to  raise  a corn  crop  of 
three  billion  bushels,  but  it  was  not  until 
last  season  that  that  became  fait  ac- 
compli. 


It  means  a big  tonnage  for  the  rail- 
roads— first  when  the  crops  are  hauled 
to  market,  and  after  that  when  the  mer- 
chandise bought  with  the  proceeds  of 
the  crops  goes  back  into  the  agricultural 
sections.  Tonnage  for  the  railroads — 
buying  power  of  a strength  sufficient 
to  make  itself  felt  in  every  market 
from  Maine  to  California — that  in  a 
word  is  why  a corn  crop  such  as  we 
have  raised  this  year  is  such  a mar- 
velous restorer  of  depressed  sentiment. 


THE  “ BAROMETER  ” INDUSTRY 

"D  ECENT  statements  of  unfilled  or- 
ders  by  the  United  Steel  Corpo- 
ration have  been  anything  but  inspiring, 
and  yet  it  is  a question  whether  the 
steel  business  is  in  anything  like  as  bad 
shape  as  these  reports  would  seem  to 
indicate.  It  is  always  easy  of  course 
to  make  excuses  and  to  point  out  rea- 
sons why  this  was  so  or  why  that  was 
not  so,  but,  as  a matter  of  fact,  by 
everyone  in  touch  with  the  steel  situa- 
tion at  the  present  time  it  is  realized 
that  these  statements  of  unfilled  orders 
have  made  the  situation  out  much  worse 
than  it  is. 

The  fact  of  the  matter  is  that  during 
the  past  couple  of  months,  on  account 
of  the  pendency  of  the  elections  and 
the  highly  troubled  political  situation, 
there  has  been  a strong  disposition  on 
the  part  of  the  large  users  of  steel  to 
go  slow  in  their  operations.  Whether 
it  has  been  a case  of  adding  to  in- 
dustrial plants  or  of  going  in  for  new 
railroad  construction  it  has  all  been 
the  same  thing — “Let’s  wait  and  see 
how  things  come  out’’  has  been  the  con- 
trolling sentiment. 

As  a result,  the  amount  of  new  orders 

S3." 


Digitized  by  t^ooQle 


836 


THE  BANKERS  MAGAZINE 


placed  during  September  and  October  sight  a couple  of  months  ahead,  it  makes 
has  been  very  meagre.  That  fact  in  mighty  little  difference, 
itself,  however,  by  no  means  proves  that?  Sooner  or  later,  as  the  steel  men  very 
the  steel  industry  is  entering  the  pau-  well  know,  these  orders  are  bound  to 
per  stage.  On  the  contrary,  the  way  in  come  in.  Whether  the  administration 

which  the  volume  of  unfilled  orders  has  is  Democratic  or  Republican,  whether 

been  cut  down  shows  that  the  steel  the  big  users  of  steel  happen  to  like 

people  are  not  afraid  to  fill  the  orders  or  not  to  like  the  way  politics  are  going, 

which  they  have  on  hand,  believing  that  they  have  to  buy  structural  steel  and 

within  a short  time  there  will  be  plenty  shapes  and  rails  just  the  same.  #If 

of  additional  business  to  keep  them  they  are  holding  back  on  their  orders 
going.  It  does  not  make  a very  good  now,  it  only  means  that  later  on  they 

showing,  it  is  true,  when  the  volume  of  will  have  to  buy  all  the  more.  When 

orders  on  hand  is  so  far  reduced,  but  that  times  comes  the  item  of  unfilled  or- 
if  there  are  plenty  of  new  orders  in  ders  will  take  care  of  itself. 


THE  INTEREST  RATE  ON  GOVERNMENT 

BONDS 

DISCUSSING  the  knotty  problem  represented  by  these  low  interest  bear- 
confronting  the  government  with  ing  two  per  cent,  issues.  They  are 
regard  to  the  rate  of  interest  the  next  nearly  all  owned  by  the  national  banks, 
issue  of  government  bonds  shall  bear,  Of  the  $646,000,000  outstanding  Con- 
the  National  City  Bank  of  New  York  sols  of  1930,  $602,780,000  are  held  by 
says:  It  is  quite  likely  that  some  effort  the  Treasurer  of  the  United  States  in 
would  have  been  made  to  secure  reim-  trust  for  national  banks  either  as  se- 
bursement  for  the  money  spent  on  the  curity  for  circulation  or  public  deposits; 
Canal  before  this,  had  it  not  been  for  while  of  a total  issue  of  $84,631,000 
the  fact  that  the  recent  bond  authoriza-  Panama  bonds,  more  than  $82,000,000 
tion  contemplated  an  issue  of  bonds  are  so  held  by  the  Treasurer.  Every 
bearing  a rate  of  interest  in  excess  of  effort  was  made  by  the  Secretary  of  the 
that  which  is  borne  by  the  two  per  cent.  Treasury  during  the  last  session  of  Con- 
Consols  of  1930  and  the  previous  issues  gress  to  induce  that  body  to  amend  the 
of  Panama  twos.  Both  the  latter  classes  Act  of  August  5,  1909,  so  as  to  give 
of  bonds  were  put  out  at  the  low  rate  the  outstanding  twos  at  least  the  ad- 
of  two  per  cent,  under  special  induce-  vantage  of  a parity,  but  without  suc- 
ment  as  to  circulation  privileges.  They  cess,  it  being  understood  that  Congress 
subject  circulation  to  a tax  of  one-half  was  adverse  to  any  further  financial 
of  one  per  cent,  per  annum,  while  the  legislation  which  might  interfere  with 
higher  interest  bearing  bonds  subject  the  plans  which  the  Monetary  Commis- 
circulation  to  a tax  of  one  per  cent,  per  sion  has  under  consideration, 
annum.  Issued  in  large  amounts  a three 

per  cent,  bond  subjecting  circulation  to  Certificates  of  Indebtedness. 
a tax  of  one  per  cent,  would  send  below 

par  a two  per  cent,  bond  subjecting  cir-  It  is  doubtful  if  the  Commission  will 
culation  to  a tax  of  one-half  of  one  per  be  able  to  make  its  report  during  the 
cent.  An  issue  of  two  and  one-half  per  short  session  of  Congress,  and  this 
cent,  bonds,  circulation  tax  one  per  cent.,  leads  to  the  conclusion  that  there  may 
would  in  effect  be  the  same  as  issuing  be  further  delay  in  securing  an  amend- 
more  twos,  circulation  tax  one-half  of  ment  to  the  recent  bond  authorization 
one  per  cent.  Of  the  $913,000,000  out-  which  will  result  in  removing  the  threat- 
standing  interest  bearing  debt  of  the  ened  discrimination  against  the  two  per 
United  States,  more  than  four-fifths  is  cent,  issues.  Such  being  the  case,  there 


Digitized  by  t^ooQle 


J.  K.  Rice,  Jr.,  & Co. 

We  bare  good  markets  in  unlisted  and  inactive 
secor ities  and  respectfully  invite  inquiries. 
Phones  7460  to  7466  Hanover.  S3  Wall  Street,  N.  Y. 


can  be  no  resort  to  an  issue  of  Panama 
bonds  for  some  considerable  time  to 
come;  but  there  always  remains  the  au- 
thority to  issue  certificates  of  indebted- 
ness to  an  amount  not  to  exceed  $200,- 
000,000,  with  maturities  not  exceeding 
one  year.  Failing  remedial  legislation 
this  authority  will  safeguard  the  Treas- 
ury against  any  untoward  event  that 
might  occur  before  it  is  in  position  to 
issue  Panama  bonds.  Such  an  event, 
for  example,  might  be  a decision  from 
the  Supreme  Court  holding  the  Corpora- 
tion Ta^  Law  to  be  unconstitutional; 
in  which  case  the  Treasury  would  be 
obliged  to  refund  something  like  $25,- 
000,000  collected  at  the  beginning  of 
the  current  fiscal  year.  This  sum  has 
been  a material  factor  in  strengthening 
the  Treasury  financial  position,  and  its 
withdrawal  would  be  equally  potent  in 
weakening  it.  Government  authorities 
profess  to  be  confident  that  the  Supreme 
Court  will  uphold  the  law,  but  should  it 
not  do  so,  the  Treasury  must  necessarily 
fall  back  upon  its  authority  to  issue  cer- 
tificates. Likewise  if  the  business  of  the 
country  should  suffer  severe  depression 
as  the  result  of  political  unrest,  or  from 
any  other  cause,  the  public  revenues 
would  likely  reflect  such  condition,  and 
this  might  make  it  necessary  to  resort 
to  the  certificates. 

The  Corporation  Tax  case  is  to  be  re- 
argued at  the  next  session  of  the  Su- 
preme Court,  and  as  the  late  Solicitor- 
General  Bowers  had  this  case  in  charge 
and  made  the  argument  when  it  was 
formerly  presented  to  the  Supreme 
Court,  there  may  be  some  delay  in  the 
rehearing,  although  it  has  been  gener- 
ally understood  that  this  is  the  first  of 
the  great  cases  pending  before  that 


tribunal  scheduled  to  come  up  for  argu- 
ment. It  is  thought  it  will  be  midwin- 
ter, or  perhaps  early  spring,  before  the 
case  is  finally  determined.  In  the  mean- 
time, according  to  the  present  outlook, 
the  Treasury  will  be  able  to  make  both 
ends  meet  out  of  current  receipts.  The 
interval  will  give  the  Secretary  of  the 
Treasury  full  opportunity  to  renew  his 
efforts  in  the  direction  of  a fair  and  just 
solution  of  the  problem  involved  in  the 
readjustment  of  the  tax  on  national 
bank  circulation  in  such  manner  as  to 
avoid  discrediting  nearly  the  whole  of 
the  outstanding  bonded  indebtedness  of 
the  United  States. 

The  Real  • Question  at  Issue. 

Of  course  the  real  question  before  the 
Treasury  and  Congress  is  the  rate  any 
new  issue  of  bonds  shall  bear.  It  is  ad- 
mitted that  the  old  artificial  basis  re- 
sulting from  special  circulation  tax 
privileges  can  no  longer  be  applied. 
What,  therefore,  is  the  true  investment 
basis  which  will  find  a ready  and  satis- 
factory market  for  Government  bonds? 
Efforts  have  been  made  during  the  past 
year  by  Treasury  authorities  to  obtain 
some  understanding  as  to  what  this  rate 
should  be.  There  are  many  opinions  on 
the  subject,  and  it  is  not  possible  to  de- 
termine the  matter  actually  in  advance 
of  a sale  of  bonds.  There  is  only  one 
method  by  which  an  investment  basis  in 
the  market  can  be  established,  and  that 
is  by  fixing  an  arbitrary  rate  which  the 
bonds  shall  bear,  say  three  per  cent,  or 
four  per  cent.  If  bonds  of  this  char- 
acter are  offered  in  the  open  market  to 
the  highest  bidder  the  market  itself  will 
determine  the  true  investment  basis.  In 

S37 


Digitized  by  t^ooQle 


Wanted 


160  Brooklyn  City  R.  R.  16  Louisville  Property  Co. 

50  Brooklyn  Union  Elevated  Com.  166  Natural  Fuel  & Gas 

166  Chicago  Burlington  & Quincy  56  Phelps,  Dodge  Co. 

56  Federal  Sugar  Com.  166  United  Cigar  Stores 

166  Underwood  Typewriter  Pfd. 

For  Sale 

25  American  Trading  Co.  Com.  366  Mahoning,  Shenango  Ry.  &Ltg. 

50  Brooklyn  City  R.  R.  17  Phelps  Dodge  Co. 

15  Chicago,  Burlington  & Quincy  166  Pope  Mfg.  Co  Pfd. 

14  St.  Joe  & Grand  Island  1st.  Pfd. 

J.  HATHAWAY  POPE  & CO. 

67  Exchange  Place  F*?n*  New  York  City 


other  words,  a bond  bearing  three  per 
cent,  or  four  per  cent,  would  sell  at  a 
premium,  and  the  amount  of  such  pre- 
mium would  determine  with  absolute 
certainty  the  rate  of  interest  the  Gov- 
ernment would  be  obliged  to  pay.  It 
can  be  ascertained  in  no  other  way. 
Certainly  this  method  would  be  prefer- 
able to  one  which  contemplates  issuing 
bonds  at  par. 


THE  INSURANCE  COMPANIES’ 
DILEMMA 

DY  the  Armstrong  Law  which  was 
passed  in  1906  it  was  provided 
that  within  five  years  the  insurance  com- 
panies of  New  York  State  should  dis- 
pose of  all  their  investments  in  stocks. 
Expiration  of  four  years  out  of  the  five- 
year  period  allowed,  finds  these  compa- 
nies with  most  of  their  stockholdings 
still  on  their  hands.  Every  effort,  they 
say,  has  been  made  to  comply  with  the 
law,  but  so  poor  have  been  prevailing 
market  conditions  that  they  have  been 
unable  to  get  rid  of  any  considerable 
part  of  the  stocks  they  held  when  the 
Armstrong  Law  went  into  effect. 

The  framers  of  this  law  did  not,  of 
course,  when  they  put  their  measure 
into  effect,  realize  what  sort  of  a market 
would  prevail  after  1906.  Five  years 
at  that  time  seemed  ample  for  the  in- 
surance companies  to  dispose  of  the 

S3S 


stocks  they  were  carrying.  That,  how- 
ever, has  not  turned  out  to  be  the  case. 
Of  these  investments  a very  large  pro- 
portion consists  of  stocks  of  the  so- 
called  “inactive”  class.  They  are  val- 
uable but  at  almost  any  time  they  are 
hard  to  sell,  in  quantity.  During  such 
times  as  we  have  been  having*  it  is  al- 
most impossible  to  sell  them. 

As  a result  of  the  predicament  in 
which  the  insurance  companies  now  find 
themselves,  it  seems  as  though  they 
would  be  compelled  to  appeal  to  the 
legislature  for  an  extension  of  time. 
In  order  to  get  these  stocks  sold  before 
the  end  of  1911,  the  limit  of  the  time 
allowed,  it  would  be  necessary  for  them 
to  throw  their  big  stockholdings  on  the 
market  at  practically  whatever  they 
would  bring.  That  they  may  be  proper- 
ly and  sensibly  disposed  of,  therefore, 
it  seems  only  right  that  the  time  in 
which  the  selling  can  be  done  should  be 
extended. 

As  the  matter  stands  now,  it  seems 
as  though  this  were  a thoroughly  rea- 
sonable request  and  as  though  it 
surely  would  be  granted.  The  Arm- 
strong Law  was  passed  not  for  the  pur- 
pose of  hurting  the  insurance  com- 
panies but  rather  for  the  purpose  of 
helping  them.  The  insurance  companies 
so  far  have  acted  in  perfectly  good 
faith  but  conditions  have  been  against 
them — have  made  it  impossible  for  them 
to  do  what  the  law  told  them  they 


Digitized  by  t^ooQle 


INVESTMENTS 


839 


should  do.  To  make  them  sell  these 
stocks  at  low  prices  would  only  be  to 
hurt  the  companies  themselves,  the  very 
purpose  for  which  the  Armstrong  Law 
was  passed  being  thus  defeated.  More 


likely  the  commonsense  view  of  the 
question  will  be  taken  by  the  legisla- 
ture, and  the  disposal  of  these  stock- 
holdings carried  out  in  a reasonable  and 
orderly  manner. 


INVESTMENT  AND  MISCELLANEOUS  SECURITIES 

ICorrected  to  November  17,  1910.] 


GOVERNMENT,  STATE  AND  CITY  BONDS. 

Quoted  by  J.  Hathaway  Pope  A Co.,  broker* 
In  investment  securities  and  dealers  in  un- 
listed and  inactive  railroad  and  industrial 
securities,  67  Exchange  pi..  New  York. 

Name  and  Maturity.  Price.  Yield. 

U.  S.  Gov.,  reg.  2,  1930 100%-101%  1.66 

U.  8.  Gov.,  reg.  8s,  1918 102  -102  % .2.60 

Panama  Canal,  reg.  2s,  1986.  .100%-101  1.94 

Dist.  of  Columbia  8-66s  105  -106 

Alabama  4s,  July,  1956  101  -104%  8.77 

Colorada  4s,  '22  (op.  '12) 95  -100  4.00 

Connecticut  3%s,  Apr.  '30....  99  -102  8.37 

Georgia  4%s,  July  1915 104  -106  8.40 

Louisiana  4s.  Jan.,  1914 96  -101  8.72 

Massachusetts  3%s,  1940 94  %-  95  8.76 

New  York  State  3s,  '69 101%-103  2.88 

North  Carolina  6s,  Apr.,  '19.  .114  %-116%  8.80 

South  Carolina  4%s,  1983 108  -104  4.22 

Tenn.  New  Settlement  8s,  ’13..  95%-  96%  4.40 

Va.  6s.  B.  B.  A Co.ctfs.,  1871  40  - 45 

Boston  3%s.  1929  95  - 96%  3.86 

New  York  City  4%s.  1957 ...  106  %-107  4.10 

New  York  City  4%s,  1917 102  -103  3.96 

New  York  City  4s.  1959 98  %-  99  4.06 

New  York  City  4s,  1955 98  - 98%  4.05 

New  York  City  3%s,  1954 87%-  88%  4.10 

New  York  Coty  3%s,  1930 89%-  91  4.12 

New  York  City  rev.  6s,  1910..  101  -101%  1.80 

Philadelphia  4s.  Jan..  1938...  100  -101%  3.96 

8t  Louis  4s.  July.  1928 100  -101%  8.92 


SHORT  TERM  SECURITIES. 

Quoted  by  J.  Hathaway  Pope  & Co. 

Following  are  current  quotations  for  the 
principal  short-term  railway  and  industrial 
securities.  Date  of  maturity  is  given,  be- 
cause of  the  importance  of  those  dates  In 
computing  the  value  of  securities  with  so 
near  a maturity.  All  notes  mature  on  the 
first  of  the  month  named  except  where  the 
day  Is  otherwise  specified;  interest  is  semi- 

annual on  all.  Accrued  Interest  should  be 
adaed  to  price. 

Name  and  Maturity  Price.  Yield. 

Am.  Cig.  4s.  "A"  Mar.  15,  '11  98 %-  99%  4.92 

Am.  Cig.  4s.  "B"  Mar.  15,  '12  97  %-  98%  6.10 

Am.  Locomotive  5s,  Oct.,  '10..  99%-100%  4.25 

Bethlehem  Steel  6s.  Nov.,  '14..  97  - 98  6.20 

"Big  Four”  5s,  June.  '11 100  -100%  4.86 

B.  R.  & P.  Equip.  4 %s 99  -100%  ... 

Chic.  A Alton  5s,  Mar.  15,  '13  98%-  99%  6.25 

C.  H.  A D.  4s.  July,  '13 96  %-  97%  6.06 

Diamond  Match  6s,  July,  '12  98  -100  6.00 

Hudson  Co.  6s.  Oct.,  'll 98  -100  6.00 

Interboro  6s.  May,  '11 101%-101%  3.92 

K.  C.  R.  & L.  6s.  Sept..  '12..  98  - 99  6.60 

Maine  Central  4s.  Dec.,  '14 98  -100  4.26 

Minn.  A St.  Louis  5s.  Feb.,  '11  98%-  99%  5.58 

New  Orl.  Term.  6s,  Apr.,  *11..99%-100  3.45 

N.Y.C.  Equip.  5s.  Nov.,  '10  100  -101%  4.15 

N.Y.C.  Equip.  6*.  Nov.,  '14.  .102%-103%  4.16 

N.Y.C.  Equip.  6s,  Nov.,  '16.  .103%-104%  4.16 

N.Y.C.  Equip.  5s.  Nov.,  '19.  .104%-106%  4.15 

N.Y..N.H.AH.  5s,  Jan.,  '11 100  -100%  8.70 


Name  and  Maturity.  Price.  Yield. 

N.Y..N.H.AH.  5s,  Jan.*  '12 100%-101  8.98 

No.  American  5s,  May,  '12..  99  -100  5.00 

St.  L.  A S.  F.  4 %8,  Feb.,  *12..  95%-  96%  6.00 

Southern  Ry.  5s.  Feb.,  1913 98  - 98%  6.46 

Tidewater  6s,  June.  '13 100%-101%  6.35 

Westinghouse  6s,  Aug.,  '10 99% -100%  4.26 

Wood  Worsted  4%s.  Mar.,  '11  99%-  ..  4.60 

Western  Tel.  5s.  Feb.,  '12 99  - 99%  5.20 


GUARANTEED  STOCKS. 

Quoted  by  J.  Hathaway  Pope  A Co. 

(Guaranteeing  company  in  parentheses.) 

Bid.  Asked. 


Albany  A Susquehanna  (D.  A H.)..270  300 

Allegheny  A West'n  (B.  R.  I.  A P)  .140  145 

Atlanta  A Charlotte  A.  L.  (So.R.R.)  .180  ... 

Augusta  A Savannah  A.  L.  (Cen. 

of  Ga.)  104  112 

Beech  Creek  (N.  Y.  Central) 96  100 

Boston  A Lowell  (B.  AM.)  210  225 

Bleecker  St,  A F.  Ry.  Co.  (Met. 

St.  Ry.  Co.)  15  22 

Boston  A Albany  (N.  Y.  Cen.) 220  225 

Boston  A Providence  (Old  Colony)  .285  300 

Broadway  A 7th  Av.  R.  R.  Co. 

(Met.  St.  Ry.  Co.)  120  140 

Brooklyn  City  R.  R.  (Bk.  H.  R.  R. 

Co.)  165  170 

Camden  A Burlington  Co.  (Penn. 

R.  R.)  140  160 

Catawlssa  R.  R.  (Phila.  A Read.).. 112  120 

Cayuga  A Susquehanna  (D.L.AW.)  .216 
Cent.  Pk.  N.AE.  R.R.  (Met.  8t.  Ry.)  16  25 

Christopher  A 10th  St.  R.  R.  Co. 

(M.  S.  R.)  75  90 


Cleveland  A Pittsburg  (Pa.  R.  R.).165  175 

Cleveland  A Pittsburg  Betterment..  95  100 

Columbus  A Xenia  (Pa.  R.  R.) 200  215 

Commercial  Union  (Com'l  C.  Co. )..100  110 

Commercial  Union  of  Me.  (Com.  C. 

Co.)  100 

Concord  A Montreal  (B.  A M.)....155  170 

Concord  A Portsmouth  (B.  AM.)..  175  ... 

Conn.  A Passumpslc  (B.  A L.)..135 

Conn.  River  (B.  A M.)  260  270 

Dayton  A Mich.  pfd.  (C.  H.  A D )..180  190 

Delaware  A Bound  B.  (Phila.  AR.).190  200 

Detroit,  Hillsdale  A S.  W.  (L.  S.  A 

M.  S.)  95  100 

East  Pa.  (Phila.  A Reading)  ....135 
Eighth  Av.  St.  R.  R.  (M;  S.  R.  Co.) 200  300 

Elmira  A Williamsport  pfd.  (Nor. 

Cen.)  135  100 

Erie  A Kalamazoo  (J.  S.  A S.) 220  240 

Erie  A Pittsburg  (Penn.  R.  R.)....135 
Franklin  Tel.  Co.  (West.  Union)..  40  60 


Ft.  Wayne  A Jackson  pfd.  (L.  S.  A 

M.  S.)  130  140 

Forty-second  8t.  A G.  St.  R.  R. 

(Met.  St.  Ry.)  200 

Georgia  R.  R.  A Bk.  Co.  (L.  A N. 

A A.  C.  L.)  252  262 


Gold  A Stock  Tel.  Co.  (W.  U.) 100  110 

Grand  River  Valley  (Mich.  Cent.). .120 
Hereford  Railway  (Maine  Central).  85  92 

Inter  Ocean  Telegraph  (W.  U.)....  90  100 

Illinois  Cen.  Leased  Lines  (111.  Cen.)  95  100 

Jackson.  Lans.  A Saginaw  (M.  C.)..  80  90 

Joliet  A Chicago  (Chic.  A Al.) 164  172 

Kalamazoo,  Al.  A G.  Rapids  (L.  S. 

A S.)  131 


Digitized  by  i^ooQle 


840 


THE  BANKERS  MAGAZINE 


Bid.  Aokod. 

Kan.  C.,  Ft.  Scott  A M.,  pfd.  (St. 

L.  & S.  F.)  70  80 

K.  C.  St.  L.  A C.  pfd.  (Chic.  A Al.).136  140 

Lake  Shore  Special  (Mich  S.  A N. 

Ind.)  8*0  860 

Little  Miami  (Penn.  R.  R.)  210  226 

Little  Schuylkill  Nav.  A Coal  (Phil. 

& R.)  115  180 

Louisiana  & Mo.  Riv.  (Chic.  & Atl.)155  165 

Mine  Hill  & Schuylkill  Hav.  (F.  & 

R.)  120  186 

Mobile  A Birmingham  pfd.  4ft  (So. 

Ry.)  70  80 

Mobile  & Ohio  (So.  Ry.)  75  86 

Morris  Can.  pfd.  (Lehigh  Valley).. 170 
Morris  & Essex  (Del.  Lack.  A W.).17S  180 

Nashville  & Decatur  (L.  & N.) 185  192 

N.  H.  & Northampton  (N.  Y.,  N.  H. 

A H.)  100 

N J.  Transportation  Co.  (Pa.R.R.)  . 260  255 

N.  Y..  Brooklyn  A Man.  Beach  pfd 

(L.  I.  R.  R.)  105  115 

N.  Y.  A Harlam  (N.  Y.  Central) .. 300 

N.  Y.  L.  A Western  (D.  L.  A W. ) . 1 20  125 

Ninth  Av.  R.  R.  Co.  (M.  St.  Ry.  Co.)150  180 

North  Carolina  R.  R.  (So.  Ry.) 156  164 

North  Pennsylvania  (Phlla.  & R.)..196 
North.  R.  R.  of  N.  J.  (Erie  R.  R.).  85  05 

Northwestern  Telegraph  (W.  U.)..105  118 

Nor.  & Wor.  pfd  (N.Y..N.H.&H.) . .208 
Ogden  Min.  R.R.  (Cen.R.R.ofN.J.) . 95  106 

Old  Colony  (N.Y..N.H.AH.)  180 

Oswego  A Syracuse  (D.  L.  A W.)..216  226 

Pacific  & Atlantic  Tel.  (W.  U.) 60 

Peoria  A Bureau  Val.  (C.R.I.AP.) . .175  186 

Philadelphia  & Trenton  (Pa.R.R.)  .248 
Pitts.  B.  A L.  (P.  L.  E.  A C.  Co.).  82  85 

Pitts.  Ft.  Wavne  & Chic.  (Pa.R.R.)165 
Pitts.,  Ft.  Wayne  A Chic,  special 

(Pa.  R.  R.)  155  166 

Pitts.  A North  Adams  (B.  A A.). 127  184 

Pitts.,  McWport  A Y.  (P.  A L.  E. 

M.  S.)  117  126 

Providence  A Worcester  (N,  Y.,  N. 

H.  A H.)  260  800 

Rensselaer  A Saratoga  (D.  A H.)  . .106 
Rome,  Watertown  & O.  N.Y.Cen.)120 
Rome,  Watertown  A O.  (N.Y.Cen.)118  180 

Saratoga  A Schenectady  (D.  A H.)166  176 

Second  Av.  St  R.  R.  (M.  8.  R.  Co.)  10  20 

Southern  Atlantic  Tel.  (W.  U.>...  80  100 

Sixth  Av.  R.  R.  (Met.  S.  R.  Co.).. 115  130 

Southwestern  R.  R.  (Cent,  of  Ga.).100  110 

Troy  A Qreenbush  (N.  Y.  Cent.)..  165 
Twenty-third  St.  R.  R.  (M.  8.  R.)..190  220 

Upper  Coos  (Maine  Central)  ....135  145 

Utica  A Black  River  (Rome.  W. 

A O.)  160  175 

Utica,  Chen.  A Susqueh.  (D.  L. 

A W.)  145  165 

United  N.  J.  & Canal  Co.  (Pa.R.R.)  .240  246 

Valley  of  New  York  (D..  L.  A W.).122  ISO 

Ware  R.  R.  (Boston  A Albany) ...  .160 
Warren  R.  R.  (D.f  L.  A W.) 168  176 


IN  ACTIVE  RAILROAD  STOCKS. 
Quoted  by  J.  Hathaway  Pope  A Co. 


Bid. 

Asked. 

Ann  Arbor,  pref 

. 66 

73 

Arkansas,  Oklahoma  A Western—  4 

9 

Atlanta  A West  Point  

.182 

, • • 

Atlantic  Coast  Line  of  Conn 

,230 

260 

Buffalo  A Susquehanna,  pref 

6 

12 

Central  New  England  

. 10 

16 

Central  New  England,  pref 

. 20 

S7 

Chicago,  Bur.  A Quincy  

.210 

230 

Chicago,  Indianapolis  A Louisville 

. 60 

€0 

Chicago,  Ind.  A Louisville,  pref... 

. 60 

75 

Cincinnati,  Hamilton  A Dayton.. 

. 39 

60 

Cincinnati,  Ham.  A Dayton,  pref. 

. 66 

70 

Cincln.,  N.  O.  A Tex.  Pac 

.135 

140 

Clncin.,  N.  O.  A Tex.  Pac.,  pref. . 

.102 

106 

Cincinnati  Northern  

. 60 

60 

Cleveland.  Akron  & Columbus.... 

. 70 

84 

Cl  eve.,  Cln.,  Chic.  A St.  L.,  pref. 
Delaware  

. 98 

110 

. 42 

46 

Des  Moines  A Ft.  Dodge,  pref. . . 

. 65 

70 

Detroit  A Mackinac  

. 75 

85 

Detroit  & Mackinac,  pref 

. 90 

100 

Grand  Rapids  A Indiana  

. 25 

45 

Bid.  Asked. 


Huntington  A Broad  Top 
Huntington  A Broad  Top. 
Kansas  City,  Mexico  A O 


Northern  Central,  new  ctfs. 


Pittsburg.  Shawmv.t  A Northern.. 


Pere  Marquette,  2d  pref 

St.  Louis,  Rocky  Mt.  & Pac.,  pref, 

Seaboard  1st  pref 

Seaboard  2s  pref 

Spokane  A Inland  Empire 

Spokane  A Inland  Empire,  prof.. 


Williamsport  A North  Branch 


36 

40 

90 

96 

65 

75 

8 

9 

20 

25 

14 

17 

20 

24 

12 

15 

30 

37 

205 

... 

20 

25 

155 

170 

32 

36 

200 

. . • 

105 

115 

296 

• • • 

. 1 

• • • 

24 

31 

. 45 

68 

28 

35 

40 

’ 72 

80 

39 

43 

. SO 

50 

. 60 

79 

, 18 

25 

75 

82 

. 1 

4 

EQUIPMENT  BONDS. 

Quoted  by  Blake  A Reeves,  dealers  in  invest- 
ment securities,  84  Pine  st..  New  York. 
Quotations  are  given  in  basis. 

Bid.  Asked. 

Atl.  Coast  Line  4%,  Mar.,  'IT 4%  4% 

Buff..  Roch.  A Pitts.  4 ft  ft,  Apr.,  '27  4%  4% 

Canadian  Northern  4 ft  ft,  8ept,  '19  6 ft  6 

Central  of  Georgia  4 ft  ft,  July,  '16  6 4ft 

Central  of  N.  J.  4%,  Apr.,  '13 4%  4ft 

Ches.  A Ohio  4ft.  Oct.,  '16 5 4ft 

Chic.  A Alton  4ft,  June,  '16 6ft  6 

Chic.  A Alton  4 ft  ft,  Nov.,  '18..  6ft  6 

Chic.,  R.  I.  A Pac.  4 ft  ft,  Feb.,  '17  5%  4% 

Den.  A Rio  Grande  6ft,  Mar.,  '11  6ft  4ft 

Del.  A Hud.  4 ft  ft , July.  '22......  4ft  4ft 

Erie  4ft,  Dec.,  'll  6 6 

Erie  4ft,  June,  ’13  6 6 

Erie  4ft.  Dec.,  '14  6 6 

Erie  4ft,  Dec.,  'l(i  6 b 

Erie  4ft,  June,  '16  6 6 

N.  Y.  Cent.  5ft,  Nov.,  ’ll  4%  4ft 

N.  Y.  Cent.  5ft,  Nov.,  '18 4ft  4ft 

No.  West  4ft,  Mar.,  'IT  4ft  4ft 

Pennsylvania  4 ft,  Nov.,  *14 4ft  4ft 

Seaboard  Air  Line  5ft,  June,  'll..  6 6 

So.  Ry.  4 ft  ft.  Series  E,  June,  '14  5ft  4% 


NEW  YORK  CITY  RAILWAY,  GAS  AND 
FERRY  COMPANY  BONDS  AND  STOCKS. 


Quoted  by  Williamson  A Squire,  members  New 
York  Stock  Exchange,  brokers  and  dealers  In 
Investment  securities.  26  Broad  street.  New 


York  City. 


Bid.  Asked. 


Bleecker  St  A Ful  Fy 

1st  4s  1950 

Bway  Surf  Ry  1st  5s..  1924 

Bway  A 7th  Av  stock 

Bway  A 7th  Av  Con  5s.  1943 
Bway  A 7th  Av  2d  6s.  1914 
Col  A 9th  Av  1st  5a..  1993 
Christopher  A 10th  St  ... 
Dry  Dk  E B A Bat  5s.  1932 
Dry  Dock  E B A Bat 

Ctfs  5s  1914 

42d  St  M A St  N Av  6s.  1910 
Lex  Av  & Pav  Fy  5a..  1922 

Second  Av  Ry  stock 

Second  Av  Ry  Cons  5s.  194  8 

Sixth  Av  Ry  stock 

South  Ferry  Ry  1st  5s.  1919 
Tarryt'n  W P A M 6s.  1928 

Union  Ry  1st  5s 1942 

Westchester  El  Ry  58.1943 
Yonkers  Ry  1st  5b..  1946 
New  Amst  Gas  Cons  5s.  1927 
Central  Union  Gas  5s. . 1932 
Equitable  Gas  Light  5s.  1948 


JAJ 

54 

60 

JAJ 

102 

104 

120 

126 

j*J 

100 

108 

JAN 

99 

100ft 

MAS 

96 

100 

QJ 

80 

100 

JAD 

98 

101 

FAA 

40 

49 

MAS 

95 

100 

MAS 

96 

98 

5 

12 

FAA 

52 

60 

115 

ISO 

A AO 

88 

91 

MAS 

60 

80 

FAA 

100 

108 

JAJ 

65 

85 

A AO 

76 

65 

JAJ 

100 

101 

MAS 

100  ft 

108 

JAJ 

101 

105 

Digitized  by  CjOOQle 


INVESTMENTS 


841 


N Y A E R Gas  1st  6s.  1944 

JAJ 

Bid. 

102 

Asked. 

104 

N Y A E R Gas  Con  5s.  1945 

JAJ 

98 

100 

Northern  Union  Gas  6s.  1927 

MAN 

99 

101 

Standard  Gas  Light  5s. 1930 

MAN 

103 

106 

Westchester  Light  6s..  1950 

JAD 

100 

108 

Brooklyn  Ferry  Gen  6s.  1943 

23 

26 

Hoboken  Fy  1st  mtg  5s.l946 

MAN 

102 

105 

NY  A Bkn  Fy  1st  Mt  6s.  1911 

JAJ 

94 

98 

NY  A Hobok  Fy  Gen  5s.  1946 

JAD 

96 

99 

NY  A East  River  Fy 

QM 

22 

30 

10th  A 23d  St  Ferry 

AAO 

30 

40 

10th  A 23d  St  Fy  1st  5s.  1919 

JAD 

65 

75 

Union  Ferry  

QJ 

25 

29 

Union  Ferry  1st  5s....l920 

MAN 

96 

100 

Arizona  Power  Co.,  bonds 
1933  

Bid. 

69fc#  due 
85 

Asked. 

98 

Arizona  Power  Co.  pref. 

45 

55 

Arizona  Power  Co.  com. 

24 

27 

Great  Western  Power  Co.  bonds, 
5%,  due  1946  

88 

89 

Western  Power  Co.  pref, 

67 

G9 

Western  Power  Co.  com . , 

42 

42% 

Mobile  Elec.  Co.  bds.,  5%, 

due  1946 

88 

90 

Mobile  Electric  Co.  pref., 

7% 

90 

Mobile  Electric  Co.  com.  . 

25 

‘ 80 

Amer.  Power  A Lt.  Co.,  pref.,  6%.. 

79 

81 

Amer.  Power  A Lt.  Co. 

com.  . . . 

48% 

50 

COAL  BONDS. 

Quoted  by  Frederick  H.  Hatch  A Co.,  dealers  In 
Investment  securities,  80  Broad  street.  New 
York. 


Bid.  Asked. 

Beech  Creek  C.  A Coke  1st  5s,  1944.  70  75 

Cahaba  Coal  Min.  Co.  1st  6s,  1922.105  110 

Clearfield  Bltum  Coal  1st  4s,  1940.  80  85 

Consolidated  Indian  Coal  1st  Sink* 

ing  Fund  5s,  1935  84  87 

Continental  Coal  1st  5s.  1952 95  100 

Fairmount  Coal  1st  5s,  1981 95  98 

Kanawha  A Hooking  Coal  A Coke 

1st  Sinking  Funds  5s.  1951. 99  101 

Monongahela  River  Con.  Coal  A 

Coll.  Tr.  5s,  1947  95  97 

New  Mexico  Railway  & Coal  1st  A 

Coll  Tr.  6s,  1947  95  97 

New  Mexico  Railway  A Coal  Con. 

A Coll.  Tr.  5s,  1951 94  96  H 

O’Gara  Coal  Co.  1st  6a,  Sept.,  1955.  70  80 

Pittsburg  Coal  Co.  1st  A Coll.  Tr. 

Sinking  Fund  5s,  1954  106  110 

Pleasant  Val.  Coal  Co...  1st  5s,  1988  88  90 

Pocohontas  Consol.  Collieries  1st 

6s,  1957  80  85 

Somerset  Coal  Co.  1st  5s,  1982 108  110 

Sunday  Creek  Co.  Coll.  Tr.  6s,  1944  64  67 

Vandalia  Coal  1st  6s,  1930  100 

Victor  Fuel  1st  5s,  1958  85  87 

Webster  Coal  A Coke  1st  6s.  1942..  80  88% 

West  End  Coll.  1st  5s.  1918  95 


ACTIVE  BONDS. 

Quoted  by  Swartwout  A Appensellar,  bankers, 
members  New  York  Stock  Exchange,  44  Pine 
street.  New  York. 


Bid.  Asked. 


Amor.  Agrl.  Chem.  5s  102  103 

Amer.  Steel  Froundries  4s,  1923...  69  71 

Amer.  8teel  Foundries  6s.  1936.. .100  101 

Balt.  & Ohio,  Southwest.  Div.  3%s.  90  91 

Bethlehem  Steel  5s  85%  86 

Chi.,  Burlington  A Quincy  Gen.  4s.  97  97% 

Chi.,  Burl.  A Quincy  111.  Div.  4s...  99%  100 
Chi.,  Burl.  A Quincy  111.  Div.  8%s.  88  89 

Cln..  Hamilton  & Dayton  4s 97%  93% 

Denver  A Rio  Grande  Ref  ng  5s.  . 90  92 

Louis.  & Nashville  unified  4s  98%  98% 

Mason  City  A Ft.  Dodge  4s  83%  84% 

Norfolk  A West.  Divisional  4s... -93  94 

Savannah.  Florida  & Western  6s..  183 

Va.  Carolina  Chem.  1st  5s  100  100% 

Western  Maryland  4s  86  86% 

Wheeling  A Lake  Erie  cons.  4s 88  86 

Wls.  Central,  Superior  A Duluth  4s  92  93 

Western  Pacific  5s  94%  95% 


POWER  COMPANY  BONDS. 

Quoted  by  Wm.  P.  Bonbright  A Co.,  bankers, 
members  of  the  New  York  Stock  Exchange, 
24  Broad  street,  New  York. 


Bid.  Asked. 

Guanajuato  Power  A El.  Co.  Com.  87  89 

Bonds,  6%.  due  1982  Unt.)  ....  93  97 

Guanajuato  Power  A Electric  Co. 

Pref..  6%,  cumulative  (ex  com. 

stk.  div.)  75  80 


FOREIGN  GOVERNMENT  AND  MUNICIPAL 
BONDS. 


Reported  by  Zimmerman  A Forshay,  9-11  Wall 


street.  New  York. 

German  Govt.  3%s  ... 

do  3s  

Prussian  Consola  4s  . 
Bavarian  Govt.  4s  . . . 
Hessian  Govt.  3%s  ... 

Saxony  Govt.  3s  

Hamburg  Govt.  3s  . . . 

City  of  Berlin  4s  

City  of  Cologne  4s  . . . 
City  of  Augsburg  4s  .. 
City  of  Munich  4s  . . . 
City  of  Frankfurt  3%s 
City  of  Vienna  4s  . . . 

Mexican  Govt.  5s  

Russian  Govt.  4s  

French  Govt.  Rente  8s 
British  Consols  2%s 


Bid. 

Asked. 

. 92 

93 

. 83 

84 

.101% 

102% 

.100% 

101% 

. 90% 

91% 

. 82% 

88% 

. 81 

82 

.100 

101 

. 99% 

100% 

. 99% 

100% 

. 99% 

100% 

. 92 

93 

. 95% 

96% 

. 99% 

100% 

. 91% 

92% 

. 96% 

97% 

. 78% 

79% 

MISCELLANEOUS  SECURITIES. 

Quoted  by  J.  K.  Rice,  Jr.,  A Co.,  brokers  and 
dealers  In  miscellaneous  securities.  33  Wall" 
Street,  New  York. 

Bid.  Asked. 

American  Brass  

American  Chicle  Com.. 223 

American  Chicle  Pfd 

American  Coal  Products 

American  Gas  A Electric  Com.. 

American  Gas  A Electric  Pfd....  40 

Adams  Express  251 

American  Express  

American  Light  A Traction  Com.. 285 
American  Light  A Traction  Pfd..  101% 
American  District  Tel.  of  N.  J....  48 

Babcock  A Wilcox  97 

Borden’s  Condensed  Milk  Com.... 123 
Borden’s  Condensed  Milk  Pfd....  105 

Bush  Terminal  

Childs  Restaurant  Co.  Com 140 

Childs  Restaurant  Co.  Pfd.  . 

Cripple  Creek  Central  Com. 

Cripple  Creek  Central  Pfd 43 

Del.,  Lack.  A Western  Coal. 

Du  Pont  Powder  Com 145 

Du  Pont  Powder  Pfd 

E.  W.  Bliss  Com 120 

E.  W.  Bliss  Pfd 

Hudson  A Manhattan  Com 18 

International  Nickel  Com 142 

International  Nickel  Pfd.... 

International  Silver  Com.... 

International  Silver  Pfd 108 

Int.  Time  Recording  Com 190 

Int.  Time  Recording  Pfd 112 

Kings  Co.  E.  L.  A P 

Otis  Elevator  Com 49 

Otis  Elevator  Pfd 

Pacific  Gas  & Electric  Com....  70 

Pacific  Gas  A Electric  Pfd 87 

Phelps,  Dodge  A Co 

Pope  Manufacturing  Com 58 

Pope  Manufacturing  Pfd 75% 

Producers  Oil  146 

Royal  Baking  Powder  Com. 185 

Royal  Baking  Powder  Pfd 105 

Safety  Car  Heating  A Lighting. ..  137 

Sen  Sen  Chiclet  139 

Singer  Manufacturing  345 

Standard  Coupler  Com 

Texas  A Pacific  Coal  9 


120 

125 

223 

228 

99 

103 

92 

95 

45 

48 

40 

42 

.251 

265 

288 

248 

285 

290 

101% 

104 

48 

53 

97 

102 

.123 

125 

105 

108 

95 

100 

.140 

145 

.105 

111 

20 

30 

43 

48 

.210 

220 

.145 

150 

82 

84 

.120 

130 

.125 

135 

. 18 

20 

.142 

150 

. 90 

93 

. 50 

80 

.108 

112 

.190 

225 

.112 

120 

.124 

126 

. 49 

52 

. 94 

98 

. 70 

71 1 

. 87 

89 

.205 

220 

. 58 

62 

. 75% 

79 1 

.146 

151 

.185 

195 

.105 

108 

.137 

141 

.139 

145 

.345 

355 

. 30 

40 

. 97 

101 

Digitized  by  t^ooQle 


842 


THE  BANKERS  MAGAZINE 


Bid.  Asked. 

Tri-City  Railway  & Light  Com..  28  32 

Tri-City  Railway  & Light  Pfd..  92  96 


1*.  S.  Express  99  101 

IT.  S.  Motors  Com 48  63 

U.  S.  Motors  Pfd 68  73 

Union  Typewriter  Com 47  61 

Underwood  Typewriter  Pfd 99  100 


Bid.  Asked. 

Underwood  Typewriter  Com 58  62 

Virginian  Railway  20  25 

Wells  Fargo  Express  160  164 

Western  Pacific  20  25 

Western  Power  Com 41%  43% 

Western  Power  Pfd 67%  68% 

Worthington  Pump  Pfd 103  108 


BANK  AND  TRUST  COMPANY  STOCKS 


[Corrected  to  November  20,  1910.] 


NEW  YORK  BANK  STOCKS. 

Reported  by  Hornblower  & Weeks,  members 
New  York  and  Boston  8tock  Exchanges,  42 
Broadway,  New  York. 


Dlv.  Rate.  Bid.  Asked. 


Div.  Rate.  Bid. 


Twelfth  Ward  Bank  

Twenty-Third  Ward  Bk...  6 

Union  Ex.  Nat.  Bank 8 

Washington  Heights  Bank.  .. 

West  Side  Bank  12 

YorkvIUe  Bank  20 


185 

170 

275 

600 

525 


Asked. 

140 


Aetna  National  Bank  . . . . 

8 

175 

Amer.  Exchange  Nat.  Bk.  . 

10 

230 

£40 

Audubon  Bank  

116 

125 

Bank  of  America  

26 

590 

. . . 

Bank  of  the  Manhattan  Co. 

12 

820 

335 

Bank  of  the  Metropolis.... 

16 

880 

410 

Bank  of  N.  Y.,  N.  B.  A 

14 

315 

325 

Bank  of  Washington  Hts.. 

8 

280 

. . . 

Battery  Park  Nat.  Bank... 

125 

Bowery  Bank  

if 

880 

. . . 

Bronx  Borough  Bank 

20 

800 

Bryant  Park  Bank  

155 

165 

Century  Bank  

6 

160 

175 

Chase  National  Bank  . . . . 

6 

425 

440 

Chatham  National  Bank.... 

16 

300 

825 

Chelsea  Exchange  Bank.... 

8 

200 

Chemical  National  Bank... 

15 

425 

435 

Citizens  Central  Nat.  Bk.  . 

6 

145 

155 

Coal  & Iron  Nat.  Bank.... 

6 

150 

Colonial  Bank  

10 

400 

Columbia  Bank  

12 

350 

400 

Corn  Exchange  Bank  

16 

312 

320 

East  River  Nat.  Bank 

6 

10Q 

120 

Fidelity  Bank  

6 

165 

175 

Fifth  Avenue  Bank  

100 

4000 

4500 

Fifth  National  Bank  

12 

300 

* . . 

First  Nntlonal  Bank  

32 

835 

860 

Fourteenth  Street  Bank.... 

6 

150 

160 

Fourth  National  Bank  . . . . 

8 

190 

195 

Gallatin  National  Bank  . . . . 

14 

330 

340 

Garfield  National  Bank  .... 

12 

800 

German- American  Bank . . . . 

6 

140 

150 

German  Exchange  Bank.... 

20 

460 

, , 

Germania  Bank  

26 

600 

. . . 

Gotham  National  Bank  . . . 

150 

Greenwich  Bank  

10 

250 

260 

Hanover  National  Bank.... 
Importers'  & Traders  Nat. 

16 

600 

630 

Bank  

24 

660 

570 

Irving  Nat.  Exchange  Bk. 

8 

200 

210 

Jefferson  Bank  

10 

# # 

175 

Liberty  National  Bank  .... 

20 

600 

Lincoln  National  Bank 

10 

400 

430 

Market  & Fulton  Nat.  Bk.. 
Mechanics  & Metals  Nat. 

12 

250 

Bank  

12 

245 

250 

Merchants’  Nat.  Bank 

7 

177 

Merchants’  Ex.  Nat.  Bk... 

6 

160 

. . . 

Merchants’  Nat.  Bank  . . . . 

7 

175 

Metropolitan  Bank  

8 

200 

208 

Mount  Morris  Bank  

10 

250 

. . . 

Mutual  Bank  

8 

270 

300 

Nassau  Bank  

8 

240 

Nat.  Bk.  of  Commerce 

8 

200 

205 

Nat.  Butchers  & Drovers.. 

6 

185 

145 

National  City  Bank  

10 

380 

388 

National  Park  Bank  

16 

350 

365 

National  Reserve  Bank  .... 

6 

100 

New  Netherlands’  Bank.... 

5 

210 

. . . 

N.  Y.  County  Nat.  Bank... 

40 

950 

New  York  Bkg.  Assn 

14 

310 

325 

N.  Y.  Produce  Ex.  Bank.. 

8 

160 

170 

Night  & Day  Bank  

225 

Nineteenth  Ward  Bank.... 

245 

255 

Northern  Bank  

6 

105 

Pacific  Bank  

8 

230 

240 

People’s  Bank  

10 

250 

280 

Phenlx  National  Bank  .... 

8 

185 

200 

Plaza  Bank  

20 

600 

Seaboard  National  Bank... 

12 

400 

Second  National  Bank.... 

12 

400 

Sherman  National  Bank... 

125 

State  Bank  

io 

275 

300 

NEW  YORK  TRUST  COMPANY  STOCKS. 


Dir. 

Rate. 

Bid. 

Asked. 

Astor  Trust  Co 

8 

320 

330 

Bankers'  Trust  Co 

16 

630 

650 

Broadway  Trust  Co 

6 

140 

150 

Brooklyn  Trust  Co 

20 

485 

Central  Trust  Co 

45 

1015 

1035 

Central  Trust  Co 

45 

1000 

Columbia  Trust  Co 

8 

270 

Commercial  Trust  Co 

115 

Empire  Trust  Co 

10 

300 

810 

Equitable  Trust  Co 

24 

455 

470 

Farmers’  Loan  A Truit  Co. 

(par  $25)  

50  . 

1626 

1675 

Fidelity  Trust  Co 

6 

210 

Franklin  Trust  Co 

8 

220 

Franklin  Trust  Co 

8 

?.0 

220 

Fulton  Trust  Co 

10 

290 

Guaranty  Trust  Co 

32 

800 

810 

Guardian  Trust  Co 

165 

Hamilton  Trust  Co 

12 

270 

Home  Trust  Co 

4 

106 

Hudson  Trust  Co 

6 

150 

175 

International  Bank’g  Corp.. 

90 

105 

Kings  Co.  Trust  Co 

16 

600 

Knickerbocker  Trust  Co.... 

12 

300 

305 

Lawyers’  Title  Insurance  & 

Trust  Co 

12 

255 

260 

Lawyers’  Mortgage  Co 

12 

240 

250 

Lincoln  Trust  Co 

140 

Long  1st.  Loan  & Trust  Co. 

12 

800 

Madison  Trust  Co 

210 

Manhattan  Trust  Co.  (par 

$30)  

12 

375 

Mercantile  Trust  Co 

80 

725 

Metropolitan  Trust  Co 

24 

515 

Mutual  Alliance  Trust  Co. . 

iis 

130 

Nassau  Trust  Co 

8 

175 

National  Surety  Co 

8 

250 

265 

N.  Y.  Life  Ins.  & Trust  Co. 

45 

1100 

N.  Y.  Mtg.  & Security  Co.. 

12 

195 

205 

New  York  Trust  Co 

32 

625 

650 

People's  Trust  Co 

12 

286 

Queens  Co.  Trust  Co 

. . 

115 

125 

Savoy  Trust  Co 

90 

105 

Standard  Trust  Co 

16 

. . . 

400 

Title  Guar.  & Trust  Co 

20 

495 

510 

Trust  Co.  of  America  

10 

820 

330 

Union  Trust  Co 

50 

1275 

1300 

U.  S.  Mtg.  & Trust  Co 

24 

475 

United  States  Trust  Co..,. 

50 

1175 

11*90 

Van  Norden  Trust  Co 

• . • 

210 

Washington  Trust  Co 

12 

370 

Williamsburg  Trust  Co 

80 

ioo 

Windsor  Trust  Co 

*6 

123 

— . ■ 

BOSTON  BANK  STOCKS. 

Reported  by  Hornblower  & Weeks,  members 
New  York  and  Boston  Stock  Exchanges,  60 


Congress  St.,  Boston. 


Name. 

Div. 

Rate. 

Last 

Sale. 

Atlantic  National  Bank  

...  6 

151% 

Boylston  National  Bank  

...  4 

102% 

Commercial  National  Bank  . . . 

...  6 

140 

Eliot  National  Bank  

...  8 

226 

First  National  Bank  

...12 

400 

Digitized  by  CjOOQle 


INVESTMENTS 


843 


Div.  Rate.  Bid.  Asked. 

First  Ward  Bank  8 186 

Fourth  National  Bank  7 178 

Merchants  National  Bank  10  254 

Metropolitan  National  Bank  6 128 

National  Bank  of  Commerce 8 173% 

National  Market  Bank,  Brighton..  6 116 

Nat.  Rockland  Bank,  Roxbury 8 167 

National  Shawmut  Bank  10  875 

National  Union  Bank  7 196 

National  Security  Bank  12  • 

New  England  National  Bank  6 152 

Old  Boston  National  Bank  5 124% 

People’s  National  Bank,  Roxbury.  .5  122 

Second  National  Bank  10  265% 

South  End  National  Bank  5 104  £ 

State  National  Bank  7 170 

Webster  A Atlas  National  Bank...  7 173 

Wlnthrop  National  Bank  10  825 

* No  public  sales. 


BOSTON  TRUST  COMPANIES. 


Div.  Last 
Name.  Rate.  8ale. 

American  Trust  Co 8 825 

Bay  State  Trust  Co 7 • 

Beacon  Trust  Co 8 186 

Boston  Safe  D.  & T.  Co 14  869 

City  Trust  Co 12  458 

Columbia  Trust  Co 5 120 

Commonwealth  Trust  Co 6 200 

Dorchester  Trust  Co 5 105 

Exchange  Trust  Co ... 

Federal  Trust  Co 6 188 

International  Trust  Co 16  400 

Liberty  Trust  Co 5 

Mattapan  D.  A T.  Co 6 201 

Mechanics  Trust  Co 6 110 

New  England  Trust  Co 15  325 

Old  Colony  Trust  Co 20  700 

Puritan  Trust  Co 8 200 

State  Street  Trust  Co.  8 • 

United  States  Trust  Co 16  225 

* No  public  sales. 


CHICAGO  8TATE  BANKS. 

Div.  Rate.  Bid.  Asked. 


Ashland  Exchange  Bank..  ..  ...  110 

Austin  State  Bank  10  280 

Central  Trust  Co 7 164  168 

Chicago  City  Bank  10  174  180 

Chicago  Savings  Bank  6 144  160 

Citizens  Trust  Co 4 126 

Colonial  Tr.  A Sav.  Bank..  10  180  185 

Drexel  State  Bank  6 ...  151 


Div.  Rate.  Bid.  Asked. 


Drovers  Tr.  A Sav.  Bank..  8 175  180 

Englewood  State  Bank 6 118  128 

Farwell  Trust  Co 6 120  125 

Hibernian  Banking  Assn..  8 213  216 

Illinois  Tr.  A Sav.  Bank...  20  498  606 

Kaspar  State  Bank  10  260 

Kenwood  Tr.  & Sav.  Bk..  7 135  140 

Lake  View  Tr.  A Sav.  Bk..  5 140  145 

Merchants  Loan  A Tr.  Co..  12  423  435 

Metropolitan  Tr.  & Sav.  Bk  6 119  123 

Northern  Trust  Co 8 314  318 

North  Avenue  State  Bank..  6 138  142 

North  Side  State  Bank....  6 135 

Northwest  State  Bank  4 117  120 

Northwestern  Tr.  A Sav.  Bk..  6 137  142 

Oak  Park  Tr.  A Sav.  Bank  . . 80S  312 

Peoples  Stock  Yards  State 

„ Bank  10  200 

Prairie  State  6 260 

Pullman  Loan  A Tr.  Bank.  8 160  165 

Railway  Exchange  Bank...  4 125 

Security  Bank  6 178  185 

Sheridan  Tr.  A Sav.  Bank..  6 110  112 

South  Side  State  Bank 140  150 

State  Bank  of  Chicago....  12  340  ... 

State  Bank.  Evanston  10  290 

Stockmen’s  Trust  Co 5 115  118 

Stock  Yards  Savings  Bank  8 ...  216 

Union  Bank  6 134  13f 

Union  Trust  Co 8 275 

Wendell  State  Bank  110 

West  8ide  Tr.  A Sav.  Bank  . . 175 

Western  Trust  6 145  150 

Wilmette  Ex.  State  Bank 110  115 

Woodlawn  Trust  8 136  142 


CHICAGO  NATIONAL  BANK  STOCKS. 
Reported  by  Hornblower  A Weeks,  members 
New  York  and  Boston  Stock  Exchanges,  152 
Monroe  St.,  Chicago. 


Div.  Rate.  Bid.  Asked. 
Calumet  National  Bank  ...  6 160 

City  National,  Evanston...  12  300  ... 

Corn  Exchange  Nat.  Bank..  16  415  420 

Drovers  Deposit  Nat.  Bank.  10  220  225 

First  National  Bank  16  425  428 

First  Nat.  Bk.  of  Englewood  10  250 

Fort  Dearborn  Nat.  Bank..  8 170  180 

Live  Stock  Exchange  Nat. 

Bank  10  230  285 

Monroe  National  Bank 4 180  185 

Nat.  Bank  of  the  Republic.  8 190  198 

National  City  Bank  6 218  221 

National  Produce  Bank....  4 145  150 


MONEY  IN  BANKS 

THE  COUNTRY  IS  STILL  SAVING  AND  CAREFUL,  FIGURES  SHOW 


AS  a people — taking  ns  as  a whole — we 
l are  not  prodigal,  we  are  not  extrava- 
gant, we  are  not  improvident.  Quite 
the  contrary.  Regardless  of  all  appearances, 
Yankee  thrift  and  Yankee  caution  still 
dominate  us.  For  example:  The  latest  sta- 
tistics we  have  on  the  subject  show  that 
for  a single  month  of  the  present  year  the 
total  savings  deposits  in  the  United  States 
amounted  to  $.'>,>00,000,000.  This  is  an 
average  of  $381 .28  per  account  and  $64.9-2 
per  capita  of  population.  In  England  the 
average  account  is  $80.70  and  $23.08  per 
capita  of  population.  In  France  the  aver- 
age account  is  $74.03  and  $21.18  per  capita 
of  population.  In  Germany  the  average 
account  is  $171.07  and  $51.79  per  capita  of 
population. 


It  may  be  said  that  with  our  opportuni- 
ties to  save  our  showing  ought  to  be  much 
better.  Very  true,  and  it  is.  The  savinars 
of  the  American  people  are  only  partly 
represented  by  the  savings  bank  deposits. 
In  no  other  country  can  such  a large  per- 
centage of  the  population  be  classed  ns 
land  and  house  owners;  in  no  other  coun- 
try can  such  a large  percentage  of  the  pop- 
ulation be  classed  as  investors.  It  must 
be  admitted  and  regretted  that  there  is 
altogether  too  much  extravagance  and 
waste  in  this  count ry,  but  no  good  purpose 
can  be  subserved  by  exaggerating  our 
faults.  We  are  not  doing  so  well  as  we 
might,  but  we  are  improving  every  year. — 
Christian  Science  Monitor . 


Digitized  by  i^oogLe 


SAFE  DEPOSIT 


GUARDING  AGAINST  THE  CARELESSNESS  OF 
SAFE  DEPOSIT  BOX  RENTERS 


By  Thomas  W.  Hotchkiss 


I HAD  been  but  a short  time  in  charge 
of  the  new  safe  deposit  vaults  of  one  of 
the  West  Side  trust  companies  in  New 
York,  and  was  showing  the  boxes  of  various 
sizes  to  a prospective  customer,  when  I 
opened  a small,  five-dollar-n-year  one  and 
noticed  some  white  tissue  paper  tucked 
away  in  the  end  of  the  box  where  the  long 
lid  was  attached  by  a hinge  to  a narrow 
cross-piece.  I put  in  my  hand  and  brought 
out  a neatly  rolled  wad  containing  some- 
thing hard,  and,  unrolling  it,  saw  flashing 
up  at  me  a dozen  diamond-and-sapphire 
buttons — exceptionally  large  sapphires,  each 
surrounded  by  a circle  of  diamonds  and  set 
in  burnished  gold,  with  clasp  at  the  back. 
The  customer,  with  eager  eyes,  exclaimed: 
“I’ll  take  that  box  as  it  stands!” 

“Not  if  I know  myself,”  I replied;  for  I 
realized  that  here  was  one  of  those  unex- 
pected incidents  in  the  early  business  career 
of  a safe  deposit  company,  which  called  for 
prompt  and  unerring  judgment  and  a plan 
to  prevent  its  repetition.  1 remembered 
that  the  box  had  been  released  by  a woman 
who  needed  a larger  one,  and  it  was  easy  to 
locate  her  through  our  card  index.  When 
I restored  the  jewels  to  her,  she  said,  “I 
thought  I must  have  left  them  there,  and  I 
was  going  to  look.”  Her  calm  indifference 
to  the  danger  of  loss  and  her  confidence  in 
the  security  of  the  vaults  reminded  me  of 
a conversation  between  Mrs.  Coupons  and 
Mrs.  Goldbonds:  “My  husband  says  we 
must  economize;  all  his  securities  are  drop- 
ping lower  every  day,”  said  one.  “Mine 
are  all  right,  I know,”  answered  the  other. 
“I  keep  them  in  a safe  deposit  vault.” 

Day-Time  Safeguards. 

One  would  suppose  that  with  the  massive 
and  intricate  construction  of  the  modern 
safe  deposit  vault  and  the  watchfulness  of 
the  guards  at  night  to  prevent  assault  upon 
any  part  of  the  place,  there  were  sufficient 
safeguards  for  all  practical  purposes.  It  is 
in  the  day  time,  however,  that  the  utmost 
care  must  be  observed  by  the  vault's  custo- 
dians. They  have  to  guard  themselves  then 
not  against  burglars,  but  against  sneak 
thieves-  the  “light-fingered  gentry.”  The 
vault  door  is  open.  Customers  pass  in  and 
out,  and,  during  the  busy  hours  of  the  day, 
are  there  in  considerable  numbers.  It  is  a 
matter  of  some  surprise  that  customers, 

SH 


once  within  the  grille,  should  enter  the 
vault,  unlock  their  safes,  and  then,  un- 
guarded, remove  their  tin  boxes,  and  pass 
and  repass  out  of  the  vault  into  the  coupon 
rooms  adjoining,  and  so  return. 

This  unguarded  freedom  of  action  has 
been  referred  to  as  a measure  of  the  pecu- 
niary confidence  which  members  of  a com- 
munity repose  in  one  another,  as  one  of  the 
signs  of  the  times  and  an  index  of  our  ad- 
vanced civilization. 

But  it  must  be  remembered  that  no  per- 
son is  admitted  as  a box  holder  in  a safe 
deposit  company  who  has  not  lieen  properly 
introduced  and  given  reliable  references, 
which  have  been  promptly  investigated;  and 
each  one  so  admitted,  for  identification  af- 
terwards, is  required  to  have  his  personal 
description  and  signature,  and  is  given  a 
secret  pass-word,  which  at  any  time  may 
be  demanded  of  him  by  the  guard  at  the 
grille  door.  If  a box-holder  finds  it  neces- 
sary to  appoint  a deputy  to  visit  the  vault 
for  him,  the  appointment  is  made  only  by 
power  of  attorney,  signed,  sealed  and  wit- 
nessed; and  the  same  means  of  identification 
are  required  of  the  deputy  as  of  their  prin- 
cipal. 

Notwithstanding  the  employment  of  all 
these  precautions  to  insure  identification  of 
customers  and  to  prevent  burglary  and 
theft,  the  guardians  of  treasure  in  the  safe 
deposit  vault  have  to  prevent  a further 
danger.  They  must  circumvent  the  careless- 
ness of  the  box-holders  themselves. 

There  is  small  chance  of  anyone  attempt- 
ing to  “hob-nob”  with  the  locks  while  the 
guards  are  armed  with  revolvers  and  with 
a stack  of  Winchesters  standing  ready  at 
hand.  But  what  shall  be  done  with  a cus- 
tomer like  the  woman  who  left  her  jewels 
in  the  hox  she  relinquished?  The  restora- 
tion of  the  jewels  and  her  receipt  for  them 
are  not  sufficient.  The  boxes  of  the  entire 
vault  must  be  reconstructed,  so  there  will 
be  no  place  in  them  where  possessions  can 
be  left  hidden;  and  every  time  a box  is  re- 
linquished it  must  be  examined  immediately 
by  one  of  tlie  vault  attendants,  to  satisfy 
himself  that  it  is  empty. 

Protecting  the  Absent-Minded. 

What  shall  be  done  with  the  box-holder 
who  thoughtlessly  puts  his  tin  box  in  an- 
other man's  safe,  the  door  of  which  he  finds 


Digitized  by  L^OOQle 


SAFE  DEPOSIT 


84$ 


w 

AM  OPEN  LETTER 

To  the  Public:— 

In  Tiew  of  the  fact  that  many  people  know  very  little  about  Safety 
and  Convenience  of  Safe  Deposit  Boxes,  we  are  prompted  in  using 
this  method  of  acquainting  the  Public  in  general,  with  the  many  ad- 
aantages  connected  with  them. 

In  the  first  place,  the  Vault  in  which  these  Boxes  are  kept,  is  ab- 
solutely Fire-proof  and  the  Boxes  now  in  use  are  new  and  modern  in 
every  respect,  and  among  the  finest  to  be  found  in  the  State. 

These  Boxes  are  located  in  a large  Customers  Vault,  entirely  sep- 
arate from  the  main  Bank  Vault,  and  built  especially  for  these 
Boxes. 

The  Boxes  are  large  enough  to  contain  many  Valuable  Papers 
such  as  Old  Receipts,  Insurance  Policies,  Deeds,  Notes,  Etc.,  together 
with  other  Valuables,  that  you  may  wish  to  put  away. 

When  renting  one  of  these  Boxes  you  are  given  a key,  and  have 
access  to  the  Vault  at  all  times  during  Banking  hours.  No  one  has 
access  to  your  Box  except  yourself  or  a duly  authorized  person  by 
yourself. 

The  rental  of  these  Boxes  is  but  One  Dollar  a year.  Can  you 
afford  to  be  without  one,  when  for  a Single  Dollar  you  may  rest  assured 
that  your  Valuables  and  Valuable  Papers  are  absolutely  Safe,  Conven- 
ient, and  Strictly  Private. 

We  invite  you  to  call  at  this  Bank  and  see  what  convenient  safe 
arrangements  we  have  made  to  accommodate  you,  and  to  protect  your 
Valuables  against  loss  from  fire  and  other  causes, 

Yours  respectfully, 

Lake  County  Bank. 


One  of  a aeries  of  newspaper  ads.  used  by  the  Lake  County  Bank  of  Madison,  S.  D.. 
in  its  campaign  for  new  box  renters 


open  next  Ms  own,  and  who  then  locks  the 
door  with  the  key  already  in  the  lock,  puts 
the  key  in  his  pocket  and  goes  home?  The 
danger  of  this  accident  lies  in  the  fact  that 
tlie  otlier  man — the  renter  of  that  box — is 
provided  with  a duplicate  key.  There 
should  be  upon  every  tin  box  in  a safe  de- 
posit vault  the  number  of  the  safe  to  which 
it  belongs;  each  box-holder  should  be  re- 
quired to  lock  his  safe  door,  after  removing 
his  box,  before  taking  it  into  the  coupon- 
room;  and  the  vault  attendant  should  see 
him  replace  it. 


What  shall  be  done  for  the  customer  who 
leaves  coupons  of  good  bonds,  endorsed 
checks,  or  rolls  of  bills  in  the  coupon- 
rooms?  These  accidents  happen  occasion- 
ally in  the  busiest  safe  deposit  vaults,  and 
record-books  are  kept  of  the  articles  found. 
Coupons  have  been  found  under  the  blotter 
on  the  table,  on  the  floor,  and  in  the  waste 
basket.  Sometimes  the  customer  leaves  be- 
fore the  room  can  be  searched,  and  then 
there  is  no  means  of  tracing  the  owner,  ex- 
cept possibly  by  his  name  on  the  envelope 
containing  the  coupons,  or  by  the  return  of 


Digitized  by  t^ooQle 


846 


THE  BANKERS  MAGAZINE 


the  owner  in  search  of  them.  The  entries 
in  the  record-book  of  one  vault  show  the 
finding  of  a watch,  a diamond  brooch,  a seal 
ning,  a pocket-book  containing  bills,  a dia- 
mond pendant,  a bank  book,  800  shares  of 
choice  stock,  and  other  articles.  A woman 
may  remove  her  rings  to  handle  her  papers 
more  readily  and  leave  them  in  the  table 
drawer.  A man  may  hang  his  watch  on  the 
electric  fixture,  to  show  him  the  time,  and 
then  go  away  without  it.  Various  other 
careless  acts  are  the  cause  of  leaving  arti- 
cles -in  the  coupon-rooms. 

Dealing  With  the  Unexpected. 

It  may  be  supposed  that  such  carelessness 
is  too  extreme  to  be  a common  condition, 
and  that  is  true.  The  singular  feature  of 
the  situation  is,  however,  that  people  who 
pride  themselves  on  their  carefulness  are 
sometimes  the  very  ones  to  be  negligent. 
The  story  is  told  by  the  manager  of  a busy 
New  York  vault  that  a certain  lady  found 
among  the  envelopes  in  the  stationery  case 
of  a coupon- room  an  envelope  containing 
coupons.  She  said  she  didn’t  see  how  peo- 
ple could  be  so  careless.  A few  months 
later  another  customer  found  $800  in  cou- 
pons belonging  to  the  lady  who  found  those 
in  the  envelope. 

Careful  people  are  careless  unexpectedly. 
A certain  man  who  was  in  the  habit  of 
turning  up  every  sheet  of  paper,  blotter, 
envelopes,  waste  basket  and  everything  else 
in  the  coupon-room,  to  make  sure  he  left 
nothing  behind,  left  his  diamond  ring  on 
the  wash  stand  in  the  toilet-room.  It  seems 


You  Are  Apt  to  Say, 

1 Wish  I Had 

secured  protection  for  my  valuables, 
should  .you  fail  to  do  so.  Our 
Vaults  are  FIRE  and  BURGLAR 
PROOF,  conveniently  located  on 
ground  floor,  and  OPEN  8 A.M. 
to  6 P.M.  Inspection  invited. 

Private  Safes,  $3.00  Per  Year. 

21  y2  inches  long,  4}i  wide,  2)4  deep. 

Pioneer  Vaults 
For  Valuables 

37  to  51 FLAT6U3H  AVE. 

PHONE  MOO  MAIN 

A small,  but  striking,  one  column  news- 
paper ad.  Note  especially  that  the 
rental  price  and  size  of  the  box 
is  mentioned 


to  be  with  such  a man  a condition  of  mo- 
mentary pre-occupation  of  mind  and  con- 
sequent forgetfulness.  It  shows  how  im- 
portant it  is  to  watch  over  mental  states 
and  processes,  to  guard  against  such  men- 
tal absorption  while  transacting  important 
business,  especially  where  valuable  property 
is  being  handled. 

Equally  important  is  it  for  bank  officials 
to  inquire  into  the  state  of  mind  of  pros- 
pective employes  before  putting  them  to 
work,  to  determine  not  only  whether  they 
are  “worthy  of  trust,  honest  and  sober, 
willing  and  obliging,  neat  and  orderly,”  but 
also  whether  they  have  any  mind-torment- 
ing worries  that  are  likely  to  make * them 
forgetful  and  negligent  of  their  responsible 
duties — worries  which  a frank  and  friendly 
talk  with  the  superior  in  office  will  probably 
easily  solve. 

Safe  deposit  keepers  recognize  some  cus- 
tomers as  careless  and  some  as  careful,  but 
all  are  watched.  Formerly  the  customer 
would  inquire  about  the  honesty  and  relia- 
bility of  the  safe  deposit  company’s  custo- 
dians; now  the  situation  is  reversed.  It  is 
an  interesting  study  in  human  nature.  One 
man  will  walk  out  into  the  street  with  his 
safe  deposit  box  under  his  arm,  absent- 
mindedly  starting  for  home  before  being 
checked  by  the  watchman  at  the  grille.  He 
has  a right  to  take  the  box  home,  although 
it  belongs  to  the  company;  but  it  is  unusual 
to  do  so,  and  is  preferably  done  by  agree- 
ment with  the  manager.  Another  man  will 
go  home,  and  not  remembering  whether  he 
locked  his  box,  will  ring  up  the  vault  by 
telephone  in  a state  of  desperate  worry, 
until  assured  that  his  box  is  locked. 

The  Personal  Element. 

It  all  comes  back  to  the  watchfulness  and 
honesty  of  the  officials  in  charge  of  the 
vault.  The  largest  and  busiest  vaults  in 
New  York,  with  a clear  record  of  from 
twenty-five  to  forty  years  or  more,  have 
sustained  no  loss  by  reason  of  inability  to 
restore  goods  left  in  the  vaults  by  custom- 
ers, or  by  reason  of  dishonesty  of  employes; 
though  it  is  sometimes  claimed  that  val- 
uables have  been  extracted  from  safes — 
valuables  which  afterwards  turn  up  at  the 
owner’s  home,  in  his  “other  clothes,”  or  else- 
where. 

The  vault  officials  have  learned  to  know 
every  one  entering  the  vault;  to  look  out 
especially  for  the  caller  who  says  he  wants 
to  see  one  of  the  vault’s  customers;  to  cover 
every  possible  chance  of  carelessness  on 
the  part  of  customers  as  well  as  themselves; 
and  to  check  up  each  other’s  work  at  every 
important  step,  particularly  in  setting  the 
time-locks,  and  in  locking  the  vault  at 
night,  after  every  corner  has  been  searched 
for  stray  possessions  of  customers. 


Digitized  by  t^ooQle 


INCREASING  BUSINESS  BY  PUBLICITY 


HAVING  expended  considerable  capital 
for  vault  fittings,  the  First  National 
Bank  of  Pittsburgh,  after  the  com- 
pletion of  its  new  home  a year  ago,  began  a 
campaign  of  publicity  calculated  to  arouse 
the  interest  of  prospective  box- renters. 
Through  personal  work,  newspaper  adver- 
tising, follow-up  letters  and  circulars,  the 
bid  for  business  was  made.  Success  has  fol- 
lowed, as  it  always  does,  whenever  an  insti- 
tution goes  into  a campaign  of  this  sort 
with  determination  to  win  out. 

Perhaps  the  best  results  have  been  ob- 
tained through  the  use  of  the  bank’s  house- 
organ.  This  little  magazine  has  a rather 
surprising  circulation,  and  it  is  generally 


treasures  is  quite  natural.  In  olden  times 
it  was  the  custom  to  bury  gold  and  silver 
in  the  fields,  and  this  is  still  the  custom  in 
some  Oriental  countries,  where  safe  facili- 
ties for  treasure-keeping  are  scarce.  In 
some  countries  “the  strong  box”  was  long  a 
feature  of  the  man  of  means,  while  persons 
of  small  wealth  were  prone  to  hide  valu- 
ables in  secret  drawers,  or  in  some  other 
recess  of  their  dwellings. 

The  strong  box  did  very  well  when  the 
owner  was  in  a position  to  defend  it  against 
marauders,  ^nd  in  times  when  wealth  was 
usually  in  bulky  form — in  those  days,  for 
example,  when  the  pound  sterling  really 
consisted  of  twelve  ounces  Troy  of  fine  sil- 


Door  and  Entrance  to  Safe  Deposit  Vault,  First  National 
Bank  of  Pittsburgh 


read  too,  Decause  it  contains  real  news  in 
addition  to  the  advertising. 

A recent  issue  of  The  Business  Monthly 
contained  some  printed  arguments  that  it 
might  be  profitable  to  mention.  This  par- 
ticular article  was  headed,  “Under  Lock 
and  Key,”  and  ran  as  follows: 

Almost  everybody  nowadays  is  the  pos- 
sessor of  some  treasure  which  he  or  she 
wishes  kept  in  a secure  place,  where  it  will 
be  safe  from  danger  and  beyond  the  reach 
of  prying  eyes.  It  may  be  some  tangible 
property,  representing  the  savings  of  years, 
in  the  form  of  bonds  or  stocks;  it  may  be  a 
cherished  heirloom,  priceless  old  lace,  or 
costly  jewelry.  The  articles  for  which  se- 
curity is  desired  are  diverse  in  kind  and 
numberless  in  quantity,  and  the  wish  for 
some  private  receptacle  for  one’s  private 

4 


ver.  In  these  days  of  corporations,  how- 
ever, when  vast  sums  of  capital  are  col- 
lected together  for  enormous  enterprises, 
and  each  contributor’s  share  is  represented 
by  a document  known  as  a certificate  of 
stock,  wooden  boxes  and  secret  drawers  are 
altogether  unsuitable  for  the  care  of  a sin- 
gle sheet  of  paper  which  may  represent,  let 
us  say,  100  shares  of  United  States  Steel 
preferred,  of  a value  of  $12,800,  or  the 
same  number  of  shares  of  bank  stock  worth 
several  times  as  much.  No  wise  person 
trusts  his  life  insurance  policies,  his  re- 
ceipts for  the  annual  premium  thereon,  his 
fire  insurance  policies,  his  last  will  and  tes- 
tament, his  bonds  and  mortgages,  to  a 
compartment  in  his  desk.  The  loss  result- 
ing from  the  destruction  of  these  things  by 
fire,  or  through  theft,  is  too  heavy  to  be 

847 


Digitized  by  t^ooQle 


848 


THE  BANKERS  MAGAZINE 


thought  of.  Women  who  are  the  possessors 
of  gems  of  price  do  not  wear  them  con- 
stantly, or  keep  all  of  them  in  their  bou- 
doirs, if  they  are  wise.  Some  are  carefully 
bestowed  in  a place  of  undoubted  security, 
where  they  are  within  reach  during  the  day, 
for  the  function  of  the  evening. 

Thus  it  is  that  the  Safe  Deposit  Depart- 
ment of  the  modern  bank  has  come  to  be  a 
necessity.  It  is  an  outgrowth  of  modern 


ing,  a description  of  which  should  be  of 
deep  interest  to  all,  whether  they  have  val- 
uables to  deposit  for  safe-keeping,  or  arc 
merely  interested  in  knowing  what  man  has 
done  to  render  impregnable  a great  modern 
treasure  house. 

In  the  construction  of  the  vault,  Harvey- 
ized  nickel-steel  armor  plate  is  used,  some 
of  the  largest  pieces  ever  forged  being  em- 
ployed. Only  two  of  these  are  used  for  the 


Interior  View  Safe  Deposit  Vault,  First  National  Bank  of  Pittsburgh 


needs.  Such  a department  is  the  deposi- 
tory, in  a large  city,  of  securities  and  valu- 
ables representing  in  the  aggregate  vast 
sums  of  money,  and  the  problem  of  pro- 
viding absolute  safety  for  such  deposits  has 
engaged  the  closest  attention  of  the  highest 
inventive  and  constructive  skill.  All  of  the 
most  modern  appliances  for  safety  and  con- 
venience have  been  utilized  in  the  Safe  De- 
posit Department  which  the  First  National 
Bank  of  Pittsburgh  has  installed  in  its  new 
building.  No  expense  has  been  spared  to 
provide  the  very  highest  order  of  material 
and  workmanship,  and  the  result  is  a pre- 
eminent example  of  the  art  of  vault-mak- 


floor,  but  they  are  four  inches  thick  and 
weigh  58,800  pounds.  The  circular  outside 
door,  of  the  same  material,  is  eight  feet  in 
diameter,  twenty-three  inches  thick,  and 
weighs  seventeen  tons.  It  is  provided  with 
quadruple  time  locks  and  dial  combination 
lock.  Notwithstanding  its  great  weight,  so 
delicately  hung  is  it,  on  hinges  carried  on 
roller  bearings,  that  it  is  easily  opened  and 
closed.  The  door  is  provided  with  twenty- 
four  bolts,  each  three  and  one-half  inches 
in  diameter  and  weighing  fifty-five  pounds. 
When  closed,  special  machinery  seats  the 
door  in  its  place,  and  when  locked  the  vault 
is  absolutely  water-tight,  for  the  door  is 


Digitized  by  t^ooQle 


SAFE  DEPOSIT 


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ground  to  an  absolutely  perfect  liquid-proof 
joint,  and  fitted  to  the  jamb  in  a manner 
similar  to  the  seating  of  a disc  valve.  The 
compressor  system,  bolting  and  locking 
mechanism,  and  protective  devices  possess 
the  highest  known  degree  of  perfection. 

There  are  four  time  locks  on  this  front 
door,  which  are  wound  and  set  every  morn- 
ing. If  three  of  these  locks  should  go 
wrong  (an  almost  impossible  contingency), 
the  other  time  lock  would  allow  the  door  to 
be  opened  at  the  proper  time.  This  is  not 
all,  however;  if  anything  should  happen  to 
prevent  the  front  door  from  opening,  there 
is  a smaller  emergency  door,  with  similar 
protection,  in  the  rear  of  the  vault.  This  is 
provided  with  three  time  locks.  There  are 
seven  time  locks,  therefore,  in  all,  and  it 
would  be  necessary  for  ail  seven  to  get  out 
of  order  to  prevent  the  opening  of  the  door 
at  the  time  indicated  by  the  clocks.  Once 
locked,  however,  at  4:30  in  the  afternoon, 
no  power  on  earth  can  gain  access  to  the 
vault  until  8:15  the  next  morning,  the  time 
set  for  the  opening. 

The  electrical  safety  appliance  deserves 
special  mention.  Completely  surrounding 
the  vault — top,  bottom,  sides,  ends  and 
doors — is  a device  arranged  to  report  in- 
stantly any  tampering  with  the  mechanism. 
Just  back  of  the  sheet  of  steel,  one-eighth 
of  an  inch  thick,  which  forms  the  inside 
finish  of  the  vault,  are  two  sheets  of  tinfoil 
wire,  with  paraffine  paper  between  them, 
electrically  connected  with  the  offices  of  the 
Holmes  Electric  Protective  Company.  If 
so  much  as  a pin-prick  were  to  bring  these 
sheets  together,  an  alarm  would  instantly 
be  sounded  in  the  company’s  offices,  which 
would  be  responded  to  instantly  by  the 
guards  constantly  on  duty. 

The  interior  of  the  vault  is  fitted  up  with 
private  safes  of  various  sizes,  most  of  which 
are  secured  by  keys,  but  there  are  a few 
provided  with  combinations.  The  renter  is 
provided  with  two  keys,  and  the  bank  re- 
tains no  key  that  will  open  any  rented  safe. 
With  each  safe  there  is  a tin  box  of  im- 
proved design,  and  much  more  convenient 
than  boxes  hitherto  in  use.  It  is  provided 
with  two  lids,  hinged  in  the  middle,  thus 
affording  access  to  either  end  without  dis- 
turbing the  contents  of  the  other  end  of 
the  box.  The  renter  insures  absolute  pri- 
vacy in  the  examination  of  the  contents  of 
his  box,  by  taking  it  to  one  of  the  individ- 
ual booths,  which  is  provided  with  every 
requisite,  including  stationery  and  coupon 
cutters. 

Next  to  absolute  security,  the  renter  of  a 
private  safe  wishes  his  valuables  to  be 
easily  accessible  when  he  wants  them.  No 
out-of-the-way  place  will  do  for  a public 
vault.  There  could  not  be  a more  conven- 
ient location  than  the  corner  of  Fifth  ave- 
nue and  Wood  street,  right  in  the  heart  of 
the  business  and  shopping  district,  and 
therefore  easily  accessible  to  men  and 


women  alike.  The  vault  is  only  a few  steps 
from  the  Fifth  avenue  entrance  of  the  bank. 
It  is  reached  from  the  vestibule  without  en- 
tering the  main  banking  room.  The  man- 
ager will  take  pleasure  in  explaining  the 
advantages  of  renting  a private  safe  in  this 
impregnable  vault,  and  of  pointing  out  the 
provisions  for  absolute  security  and  for  the 
convenience  of  the  customer.  Safes  are 
rented  as  low  as  $5  a year,  quite  large 
enough  for  ordinary  purposes,  thus  afford- 
ing absolute  insurance  for  valuables  for 
less  than  two  cents  a day. 


FRENCH  BANKERS  STUDYING  THE 
SAFE  DEPOSIT  SYSTEM 

THE  safe  deposit  system  employed  in 
New  York  and  Chicago  will  be  used 
in  the  construction  of  banking  institu- 
tions of  Paris  and  other  French  cities,  ac- 
cording to  Jacques  Hermant.  He  is  archi- 
tect at  the  City  Hall  at  Paris  and  expert 
president  to  the  Paris  Civil  Tribune.  “We 
come  to  America,”  Mr.  Hermant  said,  “to 
study  the  systems  employed  in  the  safety 
deposit  vaults  of  the  larger  banking  insti- 
tutions with  the  view  of  adopting  them  in 
our  banking  institutions.  The  system  in 
New  York  is  excellent  and  we  expect  to 
secure  what  we  desire  from  the  systems  in 
use  there  and  in  Chicago.  In  many  ways 
the  ideas  of  Chicago  are  being  adopted  in 
European  cities  and  this  city  has  a most 
excellent  reputation  throughout  all  Europe.” 


CHICAGO  COMPANY  SPREADING 
OUT 

STOCKHOLDERS  of  the  Harris  Safe 
Deposit  Company  of  Chicago  have 
elected  the  following  additional  direc- 
tors: W.  M.  Pelouse,  Robert  M.  Wells,  G. 
P.  Hoover  and  N.  C,  Kingsbury.  An  addi- 
tional §375,000  to  the  capital  stock  was  or- 
dered, making  the  total  outstanding  stock 
of  the  company  §1,635,000.  The  total  au- 
thorized issue  is  $3,000,000. 


PRACTICAL  BANKING  CONTRI- 
BUTIONS WANTED 

HELPFUL  articles  relating  to  the  every- 
day work  of  banks  savings  banks 
and  trust  companies  are  desired  for  publi- 
cation in  The  Bankers  Magazine. 

Short,  bright  paragraphs,  telling  in  a clear 
and  interesting  way  of  some  of  the  methods, 
systems  and  ideas  employed  in  the  most 
progressive  banks  of  the  country,  will  be 
especially  welcome. 

Contributions  accepted  by  the  editor  will 
be  paid  for  on  publication. 


Digitized  by  t^ooQle 


INDUSTRIAL  HOUSTON 

By  Adolph  Boldt,  Secretary  Houston  Business  League 


WITH  the  rapid  increase  of  popula- 
tion in  this  city  during  the  past  five 
years,  there  has  been  going  on  a still 
more  rapid  rate  of  development  in  the  ex- 
ploitation of  material  resources,  such  as  ag- 
riculture, commerce,  the  industries,  and  all 
of  those  activities  that  add  materially  to  the 
wealth  and  advancement  of  a community. 

There  is  nothing  anomalous  in  the  fact 
that  throughout  the  entire  republic,  Hous- 
ton, as  a city,  is  regarded  as  the  marvel  of 


cultural  conditions  and  the  natural  resources 
of  our  great  State.  Almost  the  entire  Texas 
supply  of  timber,  iron,  oil,  coal  and  gas  are 
found  east  of  a line  drawn  from  Wichita 
Falls  on  the  north  to  Brownsville  on  the 
south,  embracing  about  one-third  of  the 
State’s  area.  All  of  the  sugar  cane,  rice, 
fruit,  tobacco,  as  well  as  the  most  product- 
ive corn  and  cotton  lands  in  the  State  are 
included  in  the  same  area  and  the  city  of 
Houston  is  easily  accessible  to  almost  every 


Street  Scene,  Business  Section,  Houston,  Texas 


the  great  Southwest.  Pre-eminent  in  its 
growth  in  population;  in  the  massiveness  of 
Its  commercial  buildings;  in  the  extent  and 
variety  of  its  manufacturing  enterprises;  in 
the  stability  of  its  financial  institutions;  in 
its  public  schools  and  institutions  for  higher 
education,  both  technical  and  practical,  in 
its  transportation  facilities;  in  the  number 
of  its  railroads  and  the  rich  purchasing  ter- 
ritory they  penetrate;  in  the  abundance  and 
variety  of  its  natural  resources;  all  tending 
to  reduce  the  item  of  household  economy; 
and  in  the  resolute,  progressive  and  broad- 
minded character  of  its  inhabitants,  Hous- 
ton has  indeed  become  the  first  city  in  im- 
portance, not  only  in  the  State  of  Texas, 
but  in  the  entire  Southwest  as  well. 

The  above  facts  create  no  wonderment  in 
the  minds  of  those  familiar  with  our  agri- 

S50 


section  of  this  rich  and  productive  territory, 
and  has  become  its  great  central  market 
both  for  concentrating  and  distributing  pur- 
poses. The  largest  inland  port  cotton  mar- 
ket in  the  world,  its  receipts  for  the  season 
of  1908-09  averaged  2,604,000  bales,  valued 
at  $121,000,000.  Because  of  Houston’s  splen- 
did water  transportation  facilities,  there  is 
saved  to  the  cotton  industry  of  Texas  the 
sum  of  $3,000,000  annually  in  freight  charges. 
Additional  millions  are  also  saved  to  ship- 
pers on  miscellaneous  cargoes,  but  the  saving 
on  cotton  forms  the  largest  individual  item. 

The  wholesale  lumber  trade  aggregating 
$37,000,000  annually,  is  also  largely  benefit- 
ed by  the  great  reductions  in  transporta- 
tion charges,  which  have  been  made  to  ap- 
ply to  and  from  Houston  on  account  of 
water  competition.  And  the  Houston  manu- 


Digitized  by  t^ooQle 


INDUSTRIAL  HOUSTON 


851 


facturer  is  enabled  to  transport  his  raw  ma- 
terial on  a rate  of  freight  much  lower  than 
applies  to  any  of  the  inland  cities,  and  in  the 
distribution  and  sale  of  his  manufactured 
products,  he  is  protected  by  a correspond- 
ingly low  rate  out-bound.  The  same  bene- 
fits are  also  enjoyed  by  wholesale,  jobbing 


city  on  an  arm  of  the  sea,  although  fifty 
miles  inland.  This  water  way,  now  known 
as  the  Houston  ship  channel,  became  in  time, 
and  for  the  purpose  of  improvement,  a na- 
tional government  project,  which  provides 
for  a depth  of  twenty-five  feet  its  entire  dis- 
tance. There  is  at  present  a universal 


The  Carter  Building,  Houston.  Texas.  Tallest  and  Finest  Office 
Building  in  the  South 


and  retail  merchants,  and  in  time  these  ben- 
efits find  their  way  to  the  great  mass  of 
consumers. 

The  New  Ship  Channel. 

It  was  no  chance  or  fortunate  circum- 
stance that  determined  the  location  of  this 


depth  of  eighteen  feet.  A recent  appropria- 
tion by  Congress  provided  an  additional  sum 
of  $1,250,000,  which  together  with  an  equal 
sum  to  be  furnished  by  the  city  of  Houston, 
will  complete  the  ship  channel  to  its  pro- 
posed depth,  and  according  to  the  recom- 
mendations of  the  United  States  board  of 
engineers.  That  the  city  of  Houston  should 


Digitized  by  CiOOQLe 


Half  Million  Dollar  Court  House,  just  completed,  Houston.  Texas 


Interior  View  Bankers  Trust  Company.  Houston,  Texas 


Digitized  by 


Google 


INDUSTRIAL  HOUSTON 


853 


expend  dollar  for  dollar  with  the  Federal 
Government  for  the  early  completion  of  this 
work  is  indicative  of  the  faith  its  citizens 
have  in  the  important  part  the  ship  channel 
is  to  bear  in  further  establishing  and  main- 
taining our  commercial  and  industrial  su- 
premacy. 

With  its  completion  there  will  be  avail- 


The  arrival  and  departure  of  ocean  car- 
riers is  not  contemplated  from  the  city 
wharves.  Deep  draft  vessels  will  be  han- 
dled from  the  turning  basin,  three  miles  dis- 
tant, where  the  city  owns  174  acres  of  land, 
and  is  at  present  engaged  in  the  construc- 
tion of  wharves,  warehouses  and  terminals, 
the  usages  of  which  will  be  free  to  all  ves- 


New  Building  for  the  Union  National  Bank  of  Houston 


able  factory  sites  almost  within  the  city  lim- 
its. Extending  for  a distance  of  twenty-five 
miles  on  each  bank  there  will  be  factories 
where  we  do  not  dream  of  them  now.  For 
raw  material  and  the  distribution  of  their 
manufactured  products  the  factories  will  not 
be  entirely  dependent  upon  artificial  trans- 
portation, for  towards  them  will  flow  at  a 
depth  of  twenty-five  feet,  and  capable  of 
floating  upon  its  bosom  the  largest  ocean 
carriers,  a steady,  equal,  dependable  stream. 


sels  entering  and  clearing  from  the  port  of 
Houston.  By  reason  of  the  navigation  of 
this  waterway,  the  rail  lines,  rather  than 
have  their  revenues  encroached  upon,  have 
met  the  rates  made  by  the  water  carriers, 
the  law  prohibiting  the  advance  of  such 
rates  thereafter. 

To  appreciate  the  many  opportunities 
which  exist  for  the  profitable  investment  of 
capital  in  the  Houston  territory,  it  will  be 
necessary  to  bear  in  mind  the  all-important 


Digitized  by  t^ooQle 


854 


THE  BANKERS  MAGAZINE 


fact  that  we  are  not  dependent  upon  a sin- 
gle industry,  but,  on  the  contrary,  we  are 
the  headquarters  for  some  of  the  most  gigan- 
tic enterprises  which  have  had  to  do  with 
the  development  of  the  coastal  belt.  Cities 


J.  S.  RICE 

President  Union  National  Banks  President 
Bankers  Trust  Company,  Houston 

there  are  with  deep  water,  but  they  are  not 
reached  by  seventeen  distinct  lines  of  rail 
transportation,  nor  do  they  command  trade 
relations  with  a territory  as  extensive  and 
as  rich  agriculturally  as  that  centered  around 
Houston.  The  largest  independent  oil  com- 
pany in  the  United  States,  capitalized  at 
$36,000,000,  is  a Houston  corporation,  which 
together  with  the  other  oil  companies  here, 
handle  almost  the  entire  Texas  production, 
averaging  12,000,000  barrels  annually.  The 
Texas  production  is  taken  from  fields  strict- 
ly within  the  trade  territory  of  Houston,  and 
all  oil  operations  are  directed  from  the  Hous- 
ton headquarters. 

Of  the  282,0f>0  acres  planted  in  rice,  the 
entire  production  is  to  be  found  in  counties 
adjacent  to  Harris,  of  which  Houston  is  the 
county  seat,  and  of  the  3,000,000  bags  pro- 
duced in  1909,  2,000,000  bags  were  handled 
by  our  mills,  making  Houston  the  largest 
primary  rice  market  in  the  Union. 

Mutual  Center  of  Many  Industries. 

Opportunities  await  the  capitalist  here, 
not  only  in  the  further  development  of  the 


rice  industry,  and  in  the  preparation  of 
cereal  foods,  but  likewise  in  the  preparation 
of  paper  from  the  rice  straw.  With  the  de- 
velopment of  this  industry',  the  erection  of 
a paper  mill  at  Houston,  the  very  center  of 
the  rice  producing  section,  would  be  the 
logical  step.  The  consumption  of  paper  in 
Texas  is  enormous.  It  is  stated  that  the 
newspapers  in  the  five  leading  cities  consume 
600  tons  of  paper  per  month,  or  7200  tons 
during  the  year.  Other  newspapers,  job 
printing  firms  and  merchandise  establish- 
ments, consume  at  least  three  times  as  much, 
so  there  is  a demand  in  Texas  for  at  least 
2,000  tons  of  paper  per  month.  The  demand 
from  other  States  would  be  sufficient  to 
place  a rice  paper  mill  in  a position  to  be 
active  in  competition  with  mills  using  other 
raw  material. 

We  are  told  that  “theoretically  the  prime 
factors  of  the  industrial  problem  are  raw 
material,  power,  transportation  and  mar- 
kets.” Houston  is  easily  accessible  to  raw 
material  so  diversified  in  character  as  to  be 
capable  of  creating  a condition  of  indus- 
trialism second  to  none  in  the  South,  were 
it  not  for  the  conservative  force  of  capital 


D.  C.  DUNN 

Cashier  Union  National  Bank,  Houston 

already  invested;  ore,  which  could  be  con- 
verted into  structural  material,  and  a thou- 
sand and  one  articles  of  necessity  and  con- 
stant demand;  timber  for  the  manufacture 
of  lumber  for  general  construction  purposes. 


Digitized  by  t^ooQle 


INDUSTRIAL  HOUSTON 


855 


and  to  supply  wood-working  and  furniture 
factories;  petroleum  and  lignite,  the  cheap- 
est fuels  in  the  South — these  natural  re- 
sources abound  in  vast  quantities.  Valuable 
clays  for  the  manufacture  of  building  brick 
and  drainage  tile ; and  both  glass  and  build- 
ing sand  are  almost  within  a stone’s  throw 
of  the  Houston  ship  channel.  Other  prod- 
ucts of  minor  importance  need  not  be 
mentioned. 

And  as  to  cotton  mills.  Is  there  anything 
more  logical  than  the  manufacture  of  cotton 
goods  at  the  greatest  inland  cotton  market 
in  the  world?  There  will  undoubtedly  be 
established  ocean  transportation  lines  clear- 
ing from  the  port  of  Houston  for  seaboard 
and  eastern  points,  and  for  foreign  ports  as 
well.  Why  should  not  these  vessels  go 
laden  with  cotton  goods,  manufactured  in 
the  largest  cotton  market  of  the  State  pro- 
ducing two-thirds  of  the  entire  cotton  crop 
of  the  South? 

The  Banking  Interests  of  Houston. 

The  Bankers*  Trust  Company  of  Houston 
was  organized  in  the  summer  of  1909  by  H. 
N.  Tinker,  who  was  made  president.  Mr. 
Tinker  recently  resigned  his  office  and  J.  S. 
Rice  is  the  present  executive.  It  opened  for 
business  September  1 of  the  same  year  in 
its  magnificent  quarters  in  the  Scanlan 
building.  It  occupies  floor  space  of  5000 
square  feet,  having  a frontage  of  eighty-five 
feet  on  the  main  street  of  the  city  and  a 
depth  of  100  feet.  The  location  is  consid- 
ered the  most  choice  in  the  city. 

The  capital  paid  in  at  the  beginning  was 
$500,000,  the  surplus  $25,000.  The  earnings 
for  the  first  ten  months’  business  amounted 
to  $100,000,  or  twenty-five  per  cent,  on  the 
capital.  At  the  end  of  the  first  six  months 
a five  per  cent,  dividend  was  declared,  and 
the  second  semi-annual  diyidend  was  paid 
on  September  1.  At  this  time  the  capital 
stock  of  the  institution  was  increased  to 
$1,000,000,  making  it  the  largest  trust  com- 
pany in  Texas  and  among  the  largest  in  the 
entire  South. 

The  stock  of  this  company  is  distributed 
over  fifteen  different  States  and  150  different 
cities. 

The  Bankers’  Trust  Company  proposes  to 
increase  in  size  and  its  facilities  for  handling 
the  rapidly  increasing  business  of  the  terri- 
tory it  occupies  and  to  keep  pace  with  the 
large  growth  of  Houston.  This  company 
not  only  proposes  to  grow  in  proportion  to 
the  growth  of  Houston,  but  it  will  also 
serve  a purpose  and  a people  in  such  a 
manner  that  it  will  reap  greater  profits  than 
have  been  earned  up  to  the  present  time. 

The  directors  of  the  company  represent 
the  financial  strength  of  Texas,  the  various 
enterprises  which  they  manage  being  the 
most  successful.  They  are  interested  in 
nearly  every  line  of  trade  and  they  give  to 
the  trust  company  a peculiar  service,  which 


is  not  only  an  advantage  to  the  stockholder, 
but  also  to  people  seeking  information  or 
correct  financial  assistance. 

It  has  inaugurated  one  line  of  business 
which  is  proving  profitable  and  popular,  and 
that  is  the  issue  of  six  per  cent,  coupon  real 


The  Jones  Building,  Home  of  the  Southern 
Trust  Company,  Houston,  Texas 


estate  notes,  based  upon  an  actual  fifty  per 
cent,  real  cash  valuation  of  the  property  at 
the  time  the  loan  is  made.  Every  precaution 
possible  is  taken  in  making  these  loans.  The 
company's  own  funds  are  first  invested  and 
then  the  notes  are  offered  for  sale.  The 
loans  are  principally  made  upon  farm  lands. 
These  lands  are  as  rich  as  any  in  the  world. 
They  now  have  a low  selling  price,  but  will 
gradually  increase  to  the  top  of  the  market. 
The  principal  and  interest  of  these  notes  is 
guaranteed  by  the  company  and  collected 
by  it,  the  company  holding  the  lien  ns  trus- 


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THE  BANKERS  MAGAZINE 


tee.  Its  capital  of  $1,000,000  and  an  addi- 
tional stockholders  responsibility  of  $1,000,- 
000  makes  these  securities  safe.  The  com- 
pany will  take  up  these  notes  when  not  paid 
by  the  maker  at  maturity,  it,  however,  re- 
serves a six  months’  grace  in  which  to  take 
them  up  (paying  the  interest  for  that  time), 
in  order  to  cover  any  strenuous  financial 
troubles  that  might  arise.  It  is  the  pur- 
pose of  the  company  to  acquaint  every  in- 
vestor in  the  United  States  with  these  farm 


can  be  gained  from  the  knowledge  that  the 
market  value  of  the  old  stock  is  $150  per 
share  and  the  new  stock  for  the  increased 
capitalization  was  sold  on  that  basis.  It  Is 
considered  one  of  the  strongest  institutions 
in  the  whole  country. 

Union  National  Bank. 

The  Union  National  Bank  of  Houston  op- 
ened for  business  on  March  28,  1910,  with  a 


First  National  Bank  Building,  Houston,  Texas 


mortgage  bond  notes,  so  that  they  may  be 
widely  sought  after. 

The  business  of  the  trust  company  is  di- 
vided into  departments,  each  in  charge  of  a 
manager  especially  trained  for  his  line  of 
work. 

Its  pride,  object  and  policy  is  to  perpet- 
uate the  name  and  thereby  build  up  a gen- 
eral trust  business,  which  is  so  essential  to 
every  city  and  vicinity.  It  has  a real  estate 
department,  handling  real  estate  on  a com- 
mission basis  only,  and  also  has  a legal  and 
public  audit  department. 

A test  of  its  growth  and  present  standing 


capital  of  $1,000,000;  surplus  and  undivided 
profits,  $300,000,  and  deposits  of  nearly  $9,- 
000,000. 

It  was  the  result  of  the  consolidation  of 
the  Union  Bank  and  Trust  Company  and 
the  Merchants  National  Bank  of  Houston, 
both  of  which  institutions  bore  most  excel- 
lent reputations  for  progressive,  yet  conser- 
vative methods  and  each  had  built  up  a 
splendid  business. 

It  was  deemed  advisable  by  the  directors 
of  those  banks  to  concentrate  the  business 
under  one  management,  selecting  men  from 


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INDUSTRIAL  HOUSTON 


857 


each  institution  for  that  purpose,  and  the 
present  success  of  the  Union  National  Bank 
is  an  indication  that  the  organization  as  it 
now  stands  is  in  all  respects  satisfactory  to 
the  depositors. 

J.  S.  Rice,  the  president;  T.  C.  Dunn,  act- 
ive vice-president,  who  directs  the  policies 
of  the  bank  and  who  is  the  executive  officer; 
active  vice-president,  George  Hamman;  the 
cashier,  DeWitt  C.  Dunn;  assistant  cashiers, 
D.  W.  Cooley  -and  H.  B.  Finch,  are  re- 
sponsible in  a great  measure  for  the  present 
high  standing  of  the  institution. 

J.  S.  Rice,  the  president,  was  born  and 


for  Governor  of  the  State  of  Texas,  but  has 
always  declined  to  enter  politics. 

Dewitt  C.  Dunn,  the  cashier,  is  only 
twenty-eight  years  old,  yet  he  has  been  a 
banker  for  ten  years  past,  at  least  his 
knowledge  of  the  rudiments  of  banking  be- 
gan a decade  ago  when  lie  was  with  the 
old  T.  W.  House  Bank.  He  became  assistant 
cashier  of  the  Union  Bank  & Trust  Com- 
pany when  it  was  organized  by  Mr.  Rice, 
was  subsequently  elected  cashier  and  is 
still  cashier  of  the  Union  National  Bank. 

Each  director  of  the  bank  is  a man  who 
has  attained  individual  success  and  each 


The  Commercial  National  Bank  Building  of  Houston,  Texas 


raised  in  Houston.  By  honest  and  straight- 
forward methods  he  has  accumulated  a for- 
tune and  his  integrity  and  business  sagacity 
have  never  been  questioned.  Five  years  ago 
he  arnica  few  others  conceived  and  organ- 
ized the  Union  Bank  and  Trust  Company. 
It  had  a capital  of  $500,000  and  was  very 
successful.  In  March  of  this  year  it  was 
converted  into  the  Union  National  Bank  as 
was  also  the  Merchants  National  Bank,  and 
the  capital  raised  to  $1,000,000,  the  surplus 
and  profits  to  $300,000,  and  the  deposits  to 
$9,000,000.  Mr.  Rice  is  also  president  of 
the  Bankers  Trust  Company  of  Houston 
and  is  a director  of  other  thriving  enter- 
prises in  and  around  Houston.  He  has  on 
a number  of  occasions  been  importuned  to 
allow  his  name  to  be  placed  in  nomination 


lends  his  best  efforts  towards  the  upbuild- 
ing and  success  of  the  Union  National 
Bank. 

The  Union  National  Bank  has  purchased 
a piece  of  property  fronting  seventy-five  feet 
on  Main  street  and  running  back  on  Con- 
gress 131  feet,  and  is  having  plans  drawn 
for  a modern  twelve-story  bunk  and  office 
building. 

It  is  announced  that  this  magnificent 
structure  will  have  a foundation  of  granite 
and  twelve  stories  of  brick  and  stone,  sup- 
ported by  a modern  steel  frame,  and  will  be 
fireproof  in  every  particular. 

At  a meeting  of  the  directors  of  the  bank 
recently  held,  a quarterly  dividend  of  two  and 
one-half  per  cent,  was  declared,  placing  the 
bank  on  a ten  per  cent,  dividend  paying 


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THE  BANKERS  MAGAZINE 


basis.  The  stock  is  held  by  about  160  share- 
holders. 

At  the  recent  call  by  the  Comptroller  of 
Currency  for  a statement,  the  Union  Na- 
tional Bank  led  all  other  hanks  in  the 
State  in  total  deposits  and  the  prospects 
for  a large  increase  in  deposits  are  indeed 
bright,  as  crop  conditions  in  this  State  were 
never  better  at  this  time  of  the  year. 

Southern  Trust  Company. 

This  company  was  organized  August  13, 
1909,  with  a paid-in  capital  stock  of  $500,- 


investments  made  since  January  1,  1910,  the 
company  reports  a gross  earning  from  Jan- 
uary 1,  1910,  to  July  1,  1910,  of  $398,104.31, 
which  was  done  at  a gross  expense  of  $3,- 
967.44  for  the  same  period,  leaving  a net 
earning  for  this  period  of  $324,136.87,  or  a 
fraction  less  than  sixty-five  per  cent,  net 
earnings  on  the  capital  stock  of  the  com- 
pany for  the  past  six  months.  The  total 
gross  earnings  of  the  company  from  date 
of  organization  to  July  1,  1910,  has  been 
$338,962.12,  which  has  been  done  at  a total 
expense  of  $5,015.27,  leaving  the  net  earnings 
of  the  company  to  July  1,  1910,  of  $333,946.- 


Interior  View  Commercial  National  Bank  of  Houston,  Texas 


000  and  $50,000  surplus,  but  on  account  of 
delay  in  completing  the  building  which  they 
were  to  occupy,  they  did  not  open  for  busi- 
ness until  January  1,  1910.  In  the  mean- 
time their  capital  stock  was  placed  on  de- 
mand loans  at  low  rate  of  interest.  By 
January  1,  1910,  they  had  gotten  into  their 
present  quarters  and  opened  for  business. 

Since  beginning  business  on  January  1, 
1910,  the  funds  of  this  company  have  been 
principally  employed  in  the  purchase  and 
sale  of  stocks,  bonds  and  other  securities 
allowed  under  the  law's  of  this  State,  but  at 
no  time  have  they  had  any  idle  funds.  They 
have  had  arrangements  perfected  by  which 
they  have  all  their  funds,  not  needed  for  in- 
vestments, loaned  on  demand  notes  at  six 
per  cent,  interest,  so  that  same  wras  avail- 
able at  any  time  for  investments  and  at  the 
same  time  is  drawing  a fair  rate  of  interest 
until  needed  for  investments. 

By  reason  of  some  unusually  profitable 


85,  making  the  book  value  of  stock  $176.78 
per  share  on  July  1,  1910. 

The  officers  of  the  bank  are  as  follows: 
R.  E.  Brooks,  president;  T.  J.  Donoghue, 
vice-president;  Ernest  Carroll,  secretary  and 
treasurer;  J.  M.  Powers,  Jr.,  assistant  sec- 
retary. 

First  National  Bank. 

The  career  of  the  First  National  Bank  of 
Houston  has  been  such  as  to  excite  admira- 
tion from  the  entire  business  world.  It  is  a 
bank  in  the  truest  sense  of  the  term,  and  re- 
garded by  its  depositors  and  various  other 
connections  as  a stronghold  and  a monument 
to  faithful  perseverance  and  business  integ- 
rity. 

The  organization  of  this  institution  dates 
back  to  1854,  wrhen  the  future  of  Houston 
was  very  much  in  doubt.  With  abiding  faith, 
B.  A.  Shepherd  started  a private  bank,  and 
time  has  vindicated  his  good  judgment 


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INDUSTRIAL  HOUSTON 


859 


During  the  more  than  half  a century  of 
its  useful  existence  there  have  been  many 
changes  in  the  personnel  of  the  bank,  but 
fortunately  for  the  institution,  the  manage- 
ment of  its  affairs  has  always  fallen  into 
the  hands  of  able  and  capable  financiers, 
hence  its  affairs  have  prospered.  From  a 
small  beginning  it  has  increased  in  useful- 


The  officers  and  directors  are  men  of 
means  and  the  highest  standing,  both  in  the 
commercial  world  and  the  social  circle. 
They  are  men  whose  names  mean  strength, 
and  who  have  always  been  foremost  in  the 
advancement  of  the  city’s  progress.  That 
they  are  business  men  of  the  highest  order 
their  business  success  is  ample  evidence. 


Home  of  the  South  Texas  National  Bank  of  Houston 


ness  to  where  it  now  enjoys  a place  of  dis- 
tinction among  the  larger  banking  institu- 
tions of  the  country.  It  has  a paid-in  capi- 
tal stock  of  $1,000,000,  $700,000  of  which 
has  been  earned.  It  has  paid  dividends  all 
the  time,  and  at  the  same  time,  in  addition 
to  its  large  capital  stock,  placed  to  the  sur- 
plus account  $250,000,  and  has  in  undivided 
profits  up  to  the  last  government  reports, 
$20,620.10.  The  bank  has  deposits  of  over 
$8,000,000. 


7'he  officers  are  as  follows:  O.  L.  Cochran, 
president;  J.  T.  Scott,  first  vice-president; 
H.  R.  Eldridge,  second  vice-president;  W. 
S.  Cochran,  cashier;  W.  E.  Hertford,  assist- 
ant cashier. 

Commercial  National  Bank. 

The  Commercial  National  Bank  of  Hous- 
ton, splendidly  located  in  its  own  well 
equipped  and  well  kept  six-storv  building,  at 


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THE  BANKERS  MAGAZINE 


Main  Lobby  South  Texas  National  Bank  of  Houston 


the  corner  of  Main  street  and  Franklin  ave- 
nue, is  frequently  regarded  by  those  who 
know  how  to  make  comparisons,  as  one  of 
the  strongest  banks  in  the  entire  Southwest. 
For  nearly  a quarter  of  a century  it  has 
pursued:  a policy  at  all  times  conservative, 
but  never  lacking  in  liberality,  wherever  that 
quality  was  needed.  At  no  time  have  the 
officers  sacrificed  basic  principles  in  yielding 
to  the  temptations  of  volume  or  for  the  pur- 
pose of  establishing  the  institution  upon  any 
plan  of  inferiority.  They  have  adhered 
strictly  to  the  lines  which  in  their  concep- 
tion they  thought  were  necessary  for  per- 
manent and  healthful  growth.  At  various 
times  the  capital  has  been  increased  as  the 
business  grew,  until  now  they  have  $.500,000, 
fully  paid  up,  with  a surplus  account  of  an 
equal  amount  and  $100,000  of  undivided 
profits. 

W.  B.  Chew,  the  president  of  the  bank,  is 
highly  esteemed  among  all  classes  of  Hous- 
tonians and  recognized  as  one  of  the  ablest 
financiers  in  the  State.  He  is  identified  with 
several  of  the  leading  enterprises  in  this 
city,  and  his  identity  is  synonymous  with 
good  management  and  successful  results  in 
every  instance. 

James  A.  Baker,  of  the  firm  of  Messrs. 
Baker,  Botts,  Parker  6c  Garwood,  and 
Thornwell  Fay,  vice-president  and  general 
manager  of  the  Southern  Pacific,  are  vice- 
presidents,  and  while  not  active  in  the  man- 


agement of  the  bank,  are  prominently  iden- 
tified with  the  growth  and  development  of 
Houston,  occupying  positions  of  importance 
and  trust,  each  in  his  line,  thus  eminently 
fitting  them  for  the  relation  which  they  sus- 
tain to  the  institution. 

Oscar  Wells,  cashier  of  the  bank,  recently 
came  from  Fort  Worth,  where  he  was  cash- 
ier of  the  Fort  Worth  National  Bank  for 
several  years. 

P.  J.  Evershade,  the  assistant  cashier,  is 
w'ell  and  favorably  known  in  this  communi- 
ty, w'here  he  has  grown  from  boyhood,  and 
w’here,  almost  ever  since  the  organization  of 
the  bank,  he  has  served  in  various  capacities 
from  messenger  to  officer. 

South  Texas  National  Bank. 

Among  the  stable  institutions  of  the  State 
the  South  Texas  National  Bank  of  Houston 
stands  very  high.  Organized  in  1890,  the 
bunk  has  prospered  year  by  year,  until,  with 
its  twenty  years  of  successful  banking  expe- 
rience, it  is  well  able  to  care  for  the  wel- 
fare of  its  customers.  During  its  existence 
it  has  maintained  a uniformly  strong  and 
conservative  position  through  all  the  vary- 
ing conditions  of  business,  w’ith  ample  cash 
resources  at  all  times  to  afford  dependable, 
satisfactory  and  adequate  banking  facilities 
to  the  public. 

The  bank  feels  proud  that  its  deposits 


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INDUSTRIAL  HOUSTON 


861 


have  been  acquired  by  natural  growth,  and. 
not  through  consolidation  with  or  the  ab- 
sorption of  any  other  institutions.  They 
feel  that  they  offer  depositors  every  advan- 
tage consistent  with  conservative  methods, 
with  the  assurance  of  satisfactory  service 


CHAS.  DILLINGHAM 
President  South  Texas  National  Bank  of 
Houston 


and  treatment  and  a policy  that  has  stood 
the  test  of  time. 

The  officers  of  the  bank  are  among  the 
best-known  citizens  of  Houston.  Charles 
Dillingham,  the  president,  is  »;  man  whose 
business  ability  and  integrity  is  unques- 
tioned, and  who  has  the  confidence  and  re- 
gard of  his  fellow  citizens. 

J.  E.  McAshan,  the  active  vice-president, 
has  been  in  banking  circles  in  Houston  since 
his  earliest  recollection,  and  his  able  efforts 
have  been  partly  instrumental  in  placing  the 
Institution  upon  its  present  basis. 

H.  Brashear  and  O.  T.  Holt,  the  other 
vice-presidents,  are  both  well-known  citizens 
of  Houston,  Mr.  Holt  having  served  some 
years  since  as  mayor  of  the  city. 

B.  D.  Harris,  the  cashier,  while  a com- 
paratively recent  comer  to  Houston,  has  won 
the  highest  respect  of  Houston  citizens,  and 
is  regarded  as  one  of  the  coming  bankers  of 
the  community. 

C.  A.  McKinney  and  C.  F.  Schultz,  the 
assistant  cashiers,  are  also  well  known  in 


Houston  banking  circles,  having  seen  many 
years  of  service  with  this  institution. 

Since  the  bank  was  organized  on  May  10, 
1890,  it  has  paid  consecutive,  semi-annual 
dividends,  and  has  returned  more  than 
double  the  amount  of  its  capital  to  its  stock- 
holders in  the  intervening  time. 

With  its  list  of  conservative  officers,  Its 
representative  board  of  directors  and  large 
facilities  at  home  and  abroad,  gained  by  its 
many  years  of  experience,  the  South  Texas 
National  Bank  feels  that  it  is  in  a position 
to  offer  advantages  to  those  needing  a strong 
and  dependable  banking  connection. 

Texas  Trust  Company. 

The  Texas  Trust  Company,  a compara- 
tively new  institution,  has  made  an  almost 
phenomenal  success.  It  closed  its  first  year’s 
business  on  July  12,  1910,  and  showed  on 
that  date,  including  earned  interest  up  to 
that  time,  a net  profit  for  the  year  of  $160,- 


J.  E.  McASHAN 

(Active)  Vice-President  South  Texas 
• National  Bank  of  Houston 

000.  The  company  has  declared  a divi- 
dend of  ten  per  cent,  to  the  stockholders, 
and  has  passed  $15,000  of  the  profits  to  a 
surplus  fund,  making  same  $140,000.  The 
balance  of  the  earnings  for  the  year  has  been 
passed  up  to  the  undivided  profits  account. 
The  officers  of  the  bank  are  all  well- 


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THE  BANKERS  MAGAZINE 


known  citizens.  Jesse  H.  Jones,  who  heads 
the  list  as  president,  is  one  of  Houston’s 
most  philanthropic  citizens,  having  many 
monuments  here  in  the  way  of  public  build- 
ings. His  influence  in  placing  the  Texas 


All  these  gentlemen  stand  high  in  both 
State  and  local  banking  circles,  and  it  is  to 
their-  conservative  management  that  the  in- 
stitution owes  its  almost  phenomenal  suc- 
cess. 

The  business  of  the  company  is  conducted 
in  four  departments;  a financial  department, 
in  which  loans  are  made  on  real  estate, 
bonds,  stocks  and  other  high-grade  collat- 
eral; a safe  deposit  department,  with  boxes 
for  rent;  a trust  department,  which  acts  as 
administrator,  guardian,  executor  and  re- 
ceiver, also  trustee  in  all  forms  of  mort- 
gages, and  a real  estate  department,  which 
buys  and  sells  property  on  commission,  col- 
lects rents,  pays  taxes,  places  insurance  and 
manages  property  for  owners. 

The  institution  is  housed  in  its  own  struc- 
ture—a handsome,  five-story  building,  on  a 
prominent  corner  in  the  banking  section, 
the  upper  four  stories  being  devoted  to  of- 
fice room  for  various  firms. 

Lumbermans  National  Bank. 

Among  the  financial  institutions  of 
Houston  the  Lumbermans  National  Bank 
stands  prominent,  expressing  commercial 
progressiveness  and  maintaining  a standard 


Trust  Company,  upon  a dependable  and 
paying  basis  has  been  invaluable. 

James  A.  Baker,  J.  S.  Rice,  S.  F.  Carter, 
J.  M.  Rockwell  and  N.  E.  Meador,  the  vice- 
presidents  of  the  concern,  are  all  connected 
with  various  lines  of  Houston  enterprise, 
and  their  work  for  this  institution  has  done 
much  to  give  it  its  successful  showing  dur- 
ing the  first  year  of  its  existence. 

The  resources  of  the  bank  at  the  close  of 
business,  June  30,  1910,  were  as  follows: 
Loans  and  discounts,  $552,659.08 ; stocks 
and  bonds,  $138,900;  real  estate,  $250,000; 
furniture  and  fixtures,  $6,84-1.45;  earned  in- 
terest, $10,706.92;  cash  and  due  from  banks, 
$471,681.96. 


Houston  Land  & Trust  Company. 


Chartered  in  1875  and  reorganized  in  1899, 
the  Houston  Land  & Trust  Company  may 
also  be  numbered  with  the  old  and  depend- 
able banking  institutions  of  Houston. 

O.  L.  Cochran  is  president;  R.  E.  Paine 
and  P.  B.  Timpson,  vice-presidents,  and 
William  S.  Patton,  secretary  and  treasurer. 


both  conservative  and  stable  that  com- 
mands the  respect  of  its  patrons,  as  well 
as  the  banking  world  in  general. 

The  Lumbermans  National  Bank  has  a 
capital  and  surplus  of  $500,000,  which  has 
recently  been  increased  to  over  $600,000  by 


Cashier  South  Texas  National  Bank  of 
Houston 


S.  F.  CARTER 

President  Lumberman's  National  Bank, 
Houston,  Texas 


B.  D.  HARRIS 


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INDUSTRIAL  HOUSTON 


863 


the  absorption  of  two  other  institutions, 
the  American  National  Bank  and  the  Cen- 
tral Bank  & Trust  Company,  and  which, 
coupled  with  the  integrity  and  sound  busi- 
ness judgment  by  those  who  manage  and 
direct  its  affairs,  makes  the  bank  a tower 
of  financial  strength. 

The  history  of  the  bank  has  been  one  of 
steady  progress  along  the  lines  of  wise,  con- 


und  Prairie  avenue  are  among  the  finest 
in  the  entire  South,  having  been  planned 
and  arranged  especially  for  this  bank.  The 
customers  of  this  bank  are  from  all  parts 
of  Texas  and  adjoining  states.  This  bank 
has  a savings  department  in  connection 
and  it  is  open  every  Saturday  night  for  the 
convenience  of  the  working  people. 

The  officers  of  the  Lumbermans  National 


Houston  Land  and  Trust  Company  Building,  Houston,  Texas 


servative  and  mature  judgment  and  in  point 
of  resources,  reliability  and  facilities  af- 
forded patrons  the  bank  stands  in  the  front 
rank.  A general  banking  business  is  trans- 
acted and  accounts  of  banks,  bankers,  cor- 
porations, firms  and  individuals  solicited 
and  at  all  times  the  most  careful  and  pains- 
taking effort  is  exerted  by  the  officials  of 
the  bank  to  conserve  the  interests  of  pa- 
trons and  depositors. 

Quarters  occupied  by  the  Lumbermans 
National  Bank  at  the  corner  of  Main  street 


Bank  of  Houston  are  men  of  wide  experi- 
ence in  the  banking  business  and  are  well 
known  throughout  the  state.  They  are  as 
follows:  S.  F.  Carter,  president;  H.  M. 

Garwood,  vice-president;  Jesse  H.  Jones, 
vice-president;  J.  P.  Carter,  vice-president; 
Guy  M.  Bryan,  active  vice-president;  A.  S. 
Vandervoort,  cashier;  Hulon  Sterling,  as- 
sistant cashier;  M.  S.  Murray,  assistant 
cashier,  while  the  directorate  is  composed 
of  men  whose  standing  and  reputation  are 
not  confined  to  Houston  alone,  but  who 


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THE  BANKERS  MAGAZINE 


are  most  favorably  known  throughout  the 
Southwest. 

Houston  National  Exchange  Bank. 

Among  the  Houston  banks  perhaps  none 
is  better  known  than  the  Houston  National 
Exchange  Bank,  formerly  known  as  the 
Houston  National  Bank.  This  institution 


citizens  of  Texas,  the  majority  residing  in 
Houston.  Henry  S.  Fox,  the  president,  has 
long  been  known  as  a gentleman  of  solid 
worth  and  great  business  sagacity.  The  same 
may  be  said  of  Joseph  F.  Meyer,  vice-presi- 
dent. 

Henry  S.  Fox,  Jr.,  active  vice-presi- 
dent; Joseph  W.  Hertford,  cashier,  and  F. 
F.  Dearing,  assistant  cashier,  are  all  known 


The  Chronicle  Building.  Home  of  the  Texas  Trust  Co..  Houston,  Texas 


was  organized  March  29,  1889,  continuing 
under  the  name  of  the  Houston  National 
until  March  29,  1909,  or  a period  of  twenty 
years,  at  which  time  the  business  was  taken 
over  by  the  Houston  National  Exchange 
Bank,  which  was  organized  and  opened  for 
business  on  the  latter  date.  Always  one  of 
the  staid  banking  institutions  of  Houston, 
the  bank  has  become  under  the  new  regime 
of  even  greater  importance  to  the  commu- 
nity. 

The  officers  and  directors  of  the  Houston 
National  Exchange  Bank  are  all  prominent 


as  men  of  fine  business  principles,  whose 
acts  are  always  a credit  to  the  banking  fra- 
ternity. 

The  resources  of  the  bank  are  as  follows: 
Loans,  discounts  and  overdrafts,  $2,026,003.- 
15;  U.  S.  bonds  and  premiums,  $50^307.19; 
furniture  and  fixtures,  $3,000;  redemption 
fund,  $2,500;  cash  and  exchange,  $1,003,- 
431.27;  making  a total  of  $3,085,141.61. 

The  liabilities  are  as  follows:  Capital, 
$200,000;  surplus,  earned,  $65,000;  undivided 
profits,  net,  $6,312.33;  circulation,  $50,000; 
individual  deposits,  $2,256,224.28 ; bank  de- 


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INDUSTRIAL  HOUSTON 


865 


posits,  8507,605;  making  a total  of  $3,085,- 
141.61. 

Guaranty  State  Bank. 

The  Guaranty  State  Bank,  since  opening 
for  business  at  a point  just  beyond  the 
city  limits  of  Houston,  where  it  is  in  a 
direct  line  for  the  business  of  Houston 
Heights,  Brunner  and  other  suburbs,  is 
able  to  show  a handsome  profit  on  its 
first  six  months’  business,  during  which  time 
there  was  an  increase  of  $40,888.40.  This 
is  a splendid  showing  when  it  is  considered 
that  the  growth  has  taken  place  during  the 
dull  seasons.  The  community  spirit  is  said 
to  have  been  much  in  evidence  since  this 
institution  has  opened  for  business  and  its 
oflieers  attribute  a large  portion  of  the 
growth  to  this  condition. 

The  officers  are:  A.  C.  Bell,  president; 
W.  M.  Fonville,  vice-president;  R.  F.  Butts, 
cashier  and  D.  F.  Wade,  assistant  cashier. 

The  resources  are  as  follows:  Loans,  $63,- 
469.47;  furniture  and  fixtures,  $£,068.95; 
int.  and  dep.  guar,  fund,  $600;  expense  ac- 
count, $1,769.18;  cash  on  hand  and  in  banks, 
$23^33.10. 

The  liabilities  are  as  follows:  Capital 
stock,  $90,000;  interest  & discount,  $9,781.- 
60;  deposits,  $69,052.10. 


Harris  County  Bank  and  Trust  Company. 

Of  the  smaller  banking  institutions  of  Hous- 
ton none  stands  higher  than  the  Harris  Coun- 
ty Bank  and  Trust  Company,  which  was  or- 
ganized some  time  ago  for  the  accommoda- 
tion and  convenience  of  the  residents  of  the 
Fifth  Ward,  one  of  the  largest  and  most 
populous  sections  of  the  city.  This  institu- 
tion has  made  a success  from  the  start,  due 
partly  to  the  able  efforts  of  the  officers  and 
directors  and  their  sagacity  in  being  able 
to  foretell  that  the  Fifth  Ward  needed  an 
institution  of  this  nature. 

The  officers  are  all  well  known  citizens 
of  Houston;  F.  W.  Vaughan  being  presi- 
dent; M.  C.  Lyons,  W.  T.  Carter,  Jr.,  A. 
C.  Abell  and  B.  J.  Harper,  vice-presidents; 
Chas.  F.  McGinty,  cashier,  and  J.  S.  Chase, 
assistant  cashier. 

The  cash  reserve  of  the  bank  is  thirty- 
four  per  cent.  The  resources  are;  Loans 
and  discounts,  $93,795.88;  bonds,  $50,000; 
banking  house  and  fixtures,  $14,933.70; 
home  banks,  $500;  guaranty  fund,  $402.70; 
cash  in  vault  and  banks,  $48,308.73;  total, 
$907,871.01. 

The  liabilities  are:  Capital  stock,  $50,000; 
undivided  profits,  $4,500 ; reserved  for 
taxes,  $360;  deposits,  $153,011.01;  total, 
$907,871.01. 


STARTING  POSTAL  BANKS 

PLACES  DESIGNATED  IN  EACH  STATE  TO  RECEIVE  DEPOSITS 


REVIEWING  the  work  so  far  done 
toward  establishing  the  postal  savings 
banks  system  provided  for  by  the  law 
passed  at  the  last  session  of  Congress  th^ 
National  City  Bank  of  New  York  in  its 
November  circular  points  out  that  so  far 
the  only  feature  definitely  decided  upon  is 
the  location  of  the  offices  which  are  to  be 
designated  at  the  outset  for  the  receipt  of 
postal  deposits.  The  places  designated,  one 
in  each  State  and  Territory,  are: 

Bessemer,  Ala.;  Globe,  Ariz.;  Stuttgart, 
Ark.vDrovillc,  Cal.;  Leadville,  Col.;  Anso- 
nia.  Conn. ; Dover,  Del.;  Key  West,  Fla,; 
Brunswick,  Ga.;  Coeur  d’Alene,  Idaho; 
P£kin,  Bl.y Princeton,  Ind.;  Decorah,  Iowa; 
Pittsburgh,  Kan.;  Middlesboro,  Ky.;  New 
Iberia,  La,;  Rumford,  Me.;  Frostburg,  Md.; 
Norwood,  Mass.;  Houghton,  Mich.;  Bemidji, 
Minn.;  Gulfport,  Miss.;  Carthage,  Mo.;  Ana- 
conda, Mon.;  Nebraska  City,  Neb.;  Carson 


City,  Nev.;  Berlin,  N.  II.;  Rutherford,  N. 
J.;  Raton,  N.  M.;  Cohoes,  N.  Y.;  Salisbury, 
N.  C.;  Wahpeton,  N.  D. ; Ashtabula,  Ohio; 
Guymon,  Okla.;  Klamath  Falls,  Ore.;  Du- 
bois, Penn.;  Bristol,  R.  I.;  Newberry,  S.  C.; 
Deadwood,  S.  D. ; Johnson  City,  Tenn.;  Port 
Arthur,  Texas;  Provo,  Utah;  Montpelier, 
Vt. ; Clifton  Forge,  Va.;  Olympia,  Wash.; 
Grafton,  West  Va.;  Manitowoc,  Wis.;  Lara- 
mie, Wyo. 

The  form  of  the  certificates  to  be  issued  to 
postal  depositors,  the  securities  which  will 
be  accepted  from  banks  holding  postal  de- 
posit funds  and  some  other  important  de- 
tails of  the  application  of  the  law  remained 
to  be  definitely  determined.  It  is  hoped,  the 
bank’s  circular  points  out,  to  put  the  postal 
savings  plan  in  effect  about  Jan.  1 at  the 
points  already  designated  and  then  within 
about  six  months  to  extend  the  system  all 
over  the  country. 


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NATION’S  POT  OF  GOLD 


NEED  FOR  GOVERNMENT  RAILROADS  TO  HARVEST  ALASKA'S 

RICHES 


ALASKA  has  a varied  treasure  waiting 
l to  be  uncovered  and  borne  out  to  the 
enrichment  of  its  owners — the  people, 
according  to  Frederick  H.  Chase,  in  Col- 
lier's Weekly.  And  the  great,  pressing  need 
is  railroad  transportation.  It  is  imperative, 
if  the  territory’s  resources  are  to  be  con- 
served to  the  use  of  all  alike,  that  the  gov- 
ernment shall  build  the  roads. 

If  built  with  private  capital,  furnished 
by  the  large  interests  which  are  contending 
for  the  control  of  Alaska,  they  will  not  only 
tap  and  control  the  known  coal  areas,  but 
at  their  northern  terminals  they  will  be 
waiting  like  a “hound  in  leash,”  to  grab  the 
coal  that  will  be  found  in  these  unexplored 
regions. 

The  Alaska  Northern  Railroad  is  headed 
toward  the  Matanuska  coal  fields.  Its 
builders  say  they  will  push  on  to  the  Tana- 
na  Valley,  but  their  objective  point  is  un- 
doubtedly the  coal  fields.  Further,  it  is  the 
programme  for  friends  in  Congress  to 
“father”  some  sort  of  a bill  that  will  award 
them  the  prize  they  are  after,  and  another 
railroad  will  have  bitten  off  another  sub- 
stantial chunk  of  our  coal  reserves.  Worse; 
it  will  be  in  a strategic  position  to  bite 
again  as  new  coal  areas  are  discovered  in 
the  unexplored  country  to  the  north. 

This  is  not  a nightmare;  see  what  has 
happened  in  the  Pennsylvania  coal  fields. 
There  practically  are  no  private  coal  opera- 
tors, for  the  railroads  have  refused  to  haul 
their  coal  and  have  gathered  them  in.  True, 
there  are  laws  that  are  supposed  to  prevent 
the  ownership  of  coal  lands  by  the  carriers, 
but  the  railroads  easily  evade  them.  In 
counties  such  as  Plymouth,  Luzerne  and 
Lackawanna,  the  railroad  coal  owners  are 
supreme — farms  and  city*  lots  are  sold  on 
the  understanding  that  title  passes  to  the 
surface  only.  No  uncertainty  exists  as  to 
the  intention  of  the  private  railroad  builders 
in  Alaska.  And  the  building  of  govern- 
ment lines  is  the  only  escape  from  monopoly. 

Rich  is  the  Alaskan  coal  prize.  Accord- 
ing to  the  United  States  Geological  Survey, 
8,000,000  acres  of  coal  lands  have  been  dis- 
covered in  Alaska,  and  further  explorations 
will  undoubtedly  show  much  larger  areas. 
Alfred  H.  Brooks,  chief  of  the  division  of 
Alaska  mineral  resources,  says  that  “150,000 
square  miles  of  Alaskan  territory,  an  area 
as  great  as  that  of  New  England,  New  York, 
Pennsylvaniaand  Ohio  combined,  is  yet 
practically  an  unknown  land,  a terra  incog- 
nita, as  far  as  its  useful  and  precious  min- 
erals are  concerned.”  Coal  is  known  to 
exist  in  this  little  explored  region,  and  it  is 

soo 


not  impossible  that  it  will  add  billions  of 
tons  to  Alaska’s  coal  reserves. 

Before  former  President  Roosevelt  with- 
drew Alaska  coal  lands  from  public  entry 
the  plans  of  the  big  fellows  for  corralling 
all  the  coal  lands  were  working  very 
smoothly. 

The  law  then  allowed  each  individual  to 
locate  a tract  of  160  acres.  Dummy  lo- 
caters,  consisting  largely  of  idle,  shiftless 
fellows  with  no  interest  whatever  in  coal 
lands,  were  sent  out  to  locate  160  acres 
each,  and  then  for  a small  consideration 
turn  it  over  to  their  employers.  In  other 
cases  a man  would  start  out  with  a pocket- 
ful of  powers  of  attorney  and  blanket  thou- 
sands of  acres.  It  was  an  attempt  to  vali- 
date titles  to  a lot  of  such  locations  that 
precipitated  the  Ballinger-Pinchot  contro- 
versy. 

Alaska  has  produced  about  140  millions 
of  gold  with  but  little  assistance  from  out- 
side capital.  How  has  this  been  done? 
Largely  by  using  the  natural  facilities  at 
hand.  The  gold  was  there  and  so  w^as  the 
water  and  timber.  Boilers  to  thaw  the 
ground  were  brought  in  by  steamer  and 
sledded  to  the  mines.  Most  of  the  gold 
production  has  come  from  the  gravels,  and 
once  the  ground  is  thawed,  only  picks, 
shovels,  brawny  backs  and  tireless  arms  are 
needed. 

Alaska’s  needs  are  definite.  Our  govern- 
ment should  build  railroads  to  the  known 
coal  areas  in  Alaska,  lease  the  coal  to  bona 
fide  operators  at  a fair  royalty,  and  then 
reserve  all  future  discoveries  of  coal,  to  be 
leased  only  as  our  coal  necessities  demand. 
Private  ownership  of  railroads  and  railroad 
ownership  of  lands  in  Alaska  will  create  a 
monopoly  that  will  make  Standard  Oil  look 
like  a weakling,  and  if  the  Guggenheim 
family  dominates  the  smelter  situation,  its 
fortune  will  some  day  outshine  that  of  King 
Solomon. 

It  is  astonishing  that  this  great  mine  of 
wealth,  bought  for  a song  from  Russia  for 
the  use  of  the  entire  people  of  the  United 
States,  and  which  constitutes  a reserve 
storehouse  as  significant  as  the  store  of 
grain,  wisely  conserved  by  Joseph  to  guard 
against  the  seven  lean  Egyptian  years,  is 
almost  an  unknown  quantity  to  the  average 
citizen,  who  is,  with  every  other  ciUsen,  an 
equal  stockholder  in  this  vast  property. 
It  is  deplorable  that  the  people  who  own 
this  pot  of  gold  at  the  end  of  the  American 
rainbow  do  not  realize  just  what  it  is  that, 
if  the  interests  have  their  way,  will  be  taken 
from  them  without  remuneration. 


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LATIN  AMERICA 


FROM  THE  RIO  GRANDE  TO  PANAMA* 

By  Fullerton  L.  Waldo,  Associate  Editor  Philadelphia  Public  Ledger 


BETWEEN  June  30  and  August  5 of 
the  current  year,  in  company  with 
Arthur  Purdy  Stout,  Esq.,  of  New 
York,  it  was  my  good  fortune  to  make  a 
7,300-mile  journey — from  Philadelphia  to 
Mexico  City,  via  St.  Louis;  from  Mexico 
City  to  Salina  Cruz;  thence  along  the  Pa- 
cific coast  to  Panama,  touching  at  several 


will  make  for  a better  mutual  understanding 
between  the  United  States  and  each  and 
every  one  of  lier  sister  republics.  I was 
only  too  glad  to  contribute  my  unofficial 
mite  wherever  and  whenever  I could  toward 
the  furtherance  of  what  should  be  made 
not  merely  the  purpose  of  the  Union,  but  the 
mission  of  every  good  American  whom  a 


Model  of  the  Canal  Locks  at  Panama 

Ships  will  pass  through  these  locks  and  through  the  narrower  portions  of  the  canal  with  the  aid 
of  electric  motors,  but  through  a large  portion  of  the  upper  levtl  of  the  canal  they  will 
be  propelled  by  tlioir  own  power. 


ports  and  in  two  instances  journeying  in- 
land; returning  from  Colon  to  New'  York 
by  way  of  the  Panama  Railroad  steamships. 
Director  General  Barrett  has  done  me  the 
honor  to  ask  for  my  impressions  of  the 
regions  traversed*;  and  from  the  standpoint 
of  an  enthusiastic  advocate  of  the  objects 
for  which  the  Pan  American  Union  was  es- 
tablished, it  is  a pleasure  to  accede  to  his 
request.  I may  say  that  everywhere  I went 
I found  the  value  of  the  work  the  Union  has 
done,  and  the  value  of  the  work  that  it  will 
do,  eagerly  recognized,  and  there  was  in 
evidence  on  the  part  of  our  Latin- American 
neighbors  to  the  Southward  nn  entire  wil- 
lingness to  cooperate  in  all  measures  that 


•This  article  first  appeared  in  the  Bulletin 
of  the  Pan  American  Union  and  is  reprinted 
by  special  permission. 


pleasure  journey  or  a business  venture 
brings  into  contact  with  peoples  to  whose 
manifest  points  of  excellence  we  of  the 
brisk  and  stirring  northern  races  have  some- 
times done  scant  justice. 

Anyone  w'ho  travels  for  the  first  time 
among  those  whom  my  friend  Arthur  Rubl 
has  called  “the  other  Americans”  must  be 
struck  by  the  gruve  and  ceremonious  cour- 
tesy w'hich  is  the  universal  habit  among  the 
men  and  women  of  all  classes.  The  poorest 
peon  returns  vour  greeting  with  a polite 
salutation  that  puts  to  shame  our  careless 
and  abbreviated  formulas  of  welcome  and 
leave-taking.  Americans  who  had  charge  of 
construction  gangs  in  railway  work  in  Mex- 
ico informed  me  that  foremen  set  in  au- 
thority over  track  laborers  .soon  found  that 
the  way  to  get  the  best  results  w'as  not  to 
browbeat  and  “bully  rag”  the  men,  adding  the 

S67 


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THE  BANKERS  MAGAZINE 


On  the  Pan  American  Railway  in  Mexico 

This  new  railway,  which  will  form  one  of  the  links  in  the  greater  railway  of  the  same  name  to  extend 
from  New  York  to  Buenos  Aires,  traverses  the  wonderfully  rich  State  of  Chiapas,  and  will 
open  up  for  settlement  large  tracts  of  land  suitable  for  the  raising  of  sugar  cane, 
cotton,  corn,  wheat,  rice,  coffee*,  and  henequen.  Rubber  of  splendid 
quality  is  gathered,  and  on  the  plains  and  mountainsides 
cattle  and  sheep  can  bo  raised  with  none  of  the 
difficulties  that  exist  in  colder  climates. 


toe  of  the  boot  at  the  heel  of  an  imprecation. 
If  you  let  them  do  the  work  in  their  own 
way,  there  were,  they  said,  no  better  rail- 
way workmen  in  the  world.  They  iabored 
at  a more  deliberate  pace,  it  is  true,  but  they 
labored  faithfully  and  steadily,  and  with 
a just  allowance  for  different  climatic  con- 
ditions it  could  not  fairly  be  said  that  their 
performance  was  inferior  to  the  proverbial 
diligence  of  a gang  of  Italians  in  the  United 


Vera  Cruz  Banking  Company,  Ltd. 

(Cla.  Banquera  Veracruzana,  8.  A.) 
VERA  CRUZ,  MEXICO 

Capital  and  Surplus  - - $550,000.00 

A General  Banking  Business  Transacted 
Collections  Promptly  Handled 


States  under  the  watchful  eye  of  an  Irish 
foreman. 

We  had  a striking  illustration  of  the  rus- 
tic Mexican’s  appreciation  of  the  amenities 
during  our  climb  of  Popocatapetl.  We  had 
two  guides,  a cook,  and  a mozo,  or  general 
utility  man.  At  luncheon  time  on  the  first 
day  our  cook  put  all  the  delicate  fare,  in- 
cluding such  comestibles  as  sardines,  cookies, 
and  sweet  chocolate,  on  the  side  of  the 
brook  where  the  two  senores  happened  to 
be  sitting,  and  retired  to  the  farther  bank 
with  the  other  three  men  to  a humble  diet  of 
tortillas,  or  pancakes  of  Indian  corn.  We 
did  not  choose  to  “stand  for”  this  dietary 
demarcation  on  an  expedition  where  every- 
thing depended  on  a cordial  spirit  of  co- 
operation between  master  and  man.  We 
therefore  crossed  the  brook  with  their  full 
share  of  the  good  things,  and  felt  well  re- 
warded by  their  effusive  and  radiant  ap- 
preciation. All  the  way  to  the  painful  sum- 


Digitized  by  t^ooQle 


mit  and  back  they  did  their  best  for  us. 
Perhaps  it  would  be  well  if  we  Americans 
crossed  the  red  torrent  of  the  Rio  Grande 
that  separates  Texas  from  Mexico  in  the 
same  spirit — the  spirit  of  cordial  willingness 
to  go  a little  more  than  half  way  to  give 
as  well  as  to  take.  I believe  that  is  the 
spirit  of  the  Pan  American  Union  if  I ac- 
curately comprehend  its  purpose. 

Mexico's  Ideal  Climate. 

There  are  erroneous  impressions  abroad  in 
the  United  States  concerning  the  climate  of 
Mexico  and  the  countries  to  the  southward. 


As  soon  as  I announced  my  intention  of  tra^ 
versing  the  country  in  midsummer  every- 
body said  at  once,  “But  won’t  it  be  dread- 
fully hot?”  There  was  not  a mile  of  the 
7,300  that  could  truthfully  be  described  as 
“dreadfully  hot.”  The  nearest  approach 
to  thermic  discomfort  was  at  Nuevo  Laredo, 
just  after  crossing  the  border,  where  for  an 
hour  or  so  at  noon  it  was  110  degrees  Fah- 
renheit in  the  buffet  parlor  car.  Candor 
compels  me  to  state  that  I was  not  nearly 
so  uncomfortable  as  I have  been  in  Phil- 
adelphia with  the  thermometer  at  eighty-nine 
degrees.  If  it  was  hot  at  Nuevo  Laredo 
it  was  also  bone  dry,  and  under  such  con- 


Banco  de  Nuevo  Leon 

MONTEREY,  IN.  L.,  MEXICO 

ESTABLISHED  OCT.  1,  1892 

Capital  paid  up,  $2,000,000  Reserves,  $700,115.74  Doposits,  $2,010,000.20 

GENERAL  BANKING  BUSINESS  TRANSACTED 

Principal  Correspondents : — KEW  YORK,  National  Park  Bank,  Mechanics  & 

Metals  National  Bank;  LONDON,  Dresdnor  Bank,  Credit  Lyonnais;  BERLIN, 

Deutsche  Bank,  Berliner  Handels  Gesellshaft:  PARIS,  Credit  Lyonnais,  Comp- 
loir  National  d’Escomte;  HAMBURG,  Deutsche  Bank  Filiale  Hamburg,  Com- 
merz  und  Dtnconto  Bank;  MADRID,  Banco  Hlspano  Americano,  Banco  de 
Castilla;  HABANA,  Banco  de  la  Habana. 

RODOLFO  J.  GARCIA,  Manager 

ARTURO  MANBIQUE,  Accountant  AMADOR  PAZ,  Cashier 


870 


THE  BANKERS  MAGAZINE 


Banco  Miicro 


CHIHUAHUA,  MEXICO 


Capital  - - - - $5,000,000.00 
Surplus  Fund  - - 1,875,193.65 


Transacts  a General  Line 
of  Banking  Business. 

Drafts  and  Letters  of  Credit  on 
Europe,  United  States  and 
Mexico. 

Collections  on  any  part  of 
Mexico  Given  Prompt  and 
Careful  Attention. 

CORRESPONDENCE  INVITED 

New  York  Correspondent , NATIONAL  PARK  BANK 


E«  C.  CUILTY  P.  MIRAMONTES 

General  Manager  Cashier 


ditions  one  is  ready  to  aver  that  the  ther- 
mometer falsifies  unblushingly.  In  July  and 
August,  too,  the  rains  placate  the  desert 
dust  of  the  long  approach  to  the  table-land 
of  Mexico.  Here  is  a region  that  is  one 
day  destined  to  blossom  as  the  rose  and 
reward  the  cultivator  with  all  its  prolific 
might  in  return  for  some  form  of  artesian 
irrigation. 

When  you  come  to  Monterey,  in  a magnifi- 
cent amphitheater  of  mountains,  you  are 
glad  to  hear  that  the  first  steel  mills  in  the 
Republic,  located  there,  are  turning  out  steel 
rails  for  the  suppliance  of  the  constant  ex- 
pansion of  Mexico’s  extant  1.5,000  miles  of 
railway.  The  National  Railway  of  Mexico, 
lifting  you  through  7,000  feet  of  elevation 
in  the  800  miles  from  Nuevo  Laredo  to 
Mexico  City,  is  built  (after  tne  hill-climbing 
contest  seriously  begins)  of  85-pound  rails 
ballasted  as  firmly  as  they  would  be  if  laid 
on  a roadbed  of  the  Pennsylvania  or  the 
New  York  Central. 

In  the  city  of  Mexico  an  American  ought 
to  feel  at  home.  He  is  sure  of  a cordial 
welcome  from  compatriots  when  he  disem- 
barks from  the  Pullman  that  has  brought 
him  with  every  creature  comfort  in  three 
days  from  St.  Louis.  He  will  find  a country 
club  with  an  excellent  golf  course  (having 
an  interesting  water  hazard),  cement  ten- 
nis courts,  and  cool  and  delightful  living 
quarters  either  for  “bachelor  men  in  bar- 
racks” or  for  married  folks.  It  is  an  ex- 
ploded fallacy  that  the  much-abused  “alti- 
tude” inhibits  vigorous  athletic  exercise. 
You  will  find  pitted  against  each  other 
on  the  courts,  perhaps,  the  college-bred  su- 
perintendent of  a big  smelting  concern  and 
a member  of  a diplomatic  corps,  or  a cor- 
poration lawyer,  or  a managing  director  of 
a great  railway  system.  You  are  impressed 
by  the  straightforward  earnestness  of  these 
American  young  men,  with  “their  souls  in 
the  work  of  their  hands.”  There  was  a day 
when  the  carpet  baggers  tried  to  carry  by 
assault  most  of  the  important  industrial  op- 
portunities in  Mexico.  Just  as  at  Panama, 
men  of  the  restless,  unreliable,  fly-by-night 
stamp  have  been  succeeded  by  the  men  of 
sober  minds  and  steady  habits.  They  have 
their  wives  and  families  with  them  in  Mexico 
instead  of  at  some  indeterminate  northern 
address. 

American  Investors  Protected. 

President  Diaz  from  the  first,  has  encour- 
aged the  industrious  and  self-respecting 
American  to  engage  in  business  in  the  coun- 
try which  is  his  own  imperishable  monu- 
ment The  American  has  fair  play  here,  free 
from  suspicious  espionage  and  onerous  ad- 
ministrative exaction.  It  was  said  of  Alex- 
ander Hamilton  that  he  touched  the  corpse 
of  the  national  credit  and  it  stood  upon  its 
feet;  M.  Limantour,  Diaz’s  great  Minis- 
ter of  Finance,  has  done  for  the  monetary 


Digitized  by  L^OOQle 


Important  Port  Work*  at  Vera  Cruz,  Mexico 

■The  new  cement  docks,  showing  the  light  house  in  the  background.  2— Interior  of  the  castoma 
warehouses  (photograph  taken  March  31,  1910).  3— The  new  terminal  station  (photograph 

taken  March  31, 1010). 


871 


Digitized  by  t^ooQle 


872 


THE  BANKERS  MAGAZINE 


system  of  Mexico  what  Alexander  Hamilton 
did  for  the  United  States.  The  American 
who  invests  his  money  in  Mexican  enter- 
prises can  feel  that  it  is  safeguarded  against 
eccentric  fluctuations  in  the  money  market. 
American  paper  money,  by  the  way,  is  as 
good  as  gold  not  unly  in  Mexico  but 
throughout  Central  America,  and  it  is  quite 
unnecessary  for  the  traveler  to  burden 
himself  with  the  more  cumbersome  metal 
unless  he  chooses. 

The  rubber  business,  with  the  booming 
prices,  seems  to  offer  an  increasingly  at- 
tractive prospect  to  American  capital. 
Mexico  sent  19,614,810  pounds  into  the 
United  States  in  1909,  as  compared  with 
11,657,245  in  1908.  The  man  who  intends  to 
put  his  money  into  rubber,  however,  needs 
to  be  reminded  that  he  must  not  expect  his 
profits  to  accrue  with  electric  speed,  and 
he  must  be  prepared  to  make  an  initial  out- 
lay upon  a liberal  scale.  Americans  are 
more  or  less  deeply  interested  in  mining 
enterprises,  which  are  carried  on  in  twenty- 
four  of  the  thirty-one  states.  The  output 
of  precious  metals  in  1907-8  was  worth 
124,955,170  pesos. 

The  State  of  Chiapas,  through  which  the 
new  Pan  American  Railway  runs  to  the 
border  of  Guatemala,  is  particularly  rich  in 
natural  resources.  The  business  of  the  rail- 
way in  1909  showed  an  increase  of  66.2  per 
cent,  over  the  traffic  for  1908,  while  the  im- 
ports from  the  United  States  and  Europe 
into  Chiapas  increased  seventy-five  per  cent. 
Adjacent  to  the  railway  are  tracts  of  val- 
uable hard  timber,  including  mahogany  and 
Spanish  cedar,  amongst  which  at  present 
only  a single  sawmill  is  at  work.  Cattle 
sent  from  this  district  to  market  in  Mexico 
City  bring  satisfactory  prices.  The  railway 
took  8,500,000  pounds  of  coffee  out  of  Chia- 
pas during  the  1909-10  season,  and  for  next 


year  an  increase  of  forty-five  per  cent,  in 
the  crop  and  fifteen  per  cent,  in  the  acre- 
age under  cultivation  is  expected.  Sugar 
land  can  be  purchased  at  from  $2  to  $3  per 
acre.  As  for  rubber,  some  7,000,000  trees 
have  been  newly  planted.  On  account  of 
the  youth  of  the  trees  the  yield,  of  course, 
is  small  at  present,  but  it  is  expected  to  be 
about  150,000  pounds  during  the  current 
year.  Oranges,  limes  and  pipeapples  take 
kindly  to  the  soil  in  this  district,  and  it  is 
possible  to  raise  two  crops  of  corn  annually 
on  the  same  land.  A sixty  per  cent,  in- 
crease in  corn  acreage  is  expected  for  1910. 
Finally,  labor  in  Chiapas  is  plentiful  and 
cheap;  the  unskilled  workman  gets  from 
thirty-eight  to  sixty-three  cents  a day,  and 
the  skilled  laborer  receives  $1  to  $1.50. 

Anyone  thinking  of  engaging  in  agricul- 
tural enterprise  in  Mexico  would  do  well  to 
consider  the  hitherto  slightly  exploited  State 
of  Chiapas;  but  let  me  add  that  it  is  much 
the  best  plan  for  him  to  go  there  and  “spy 
out  the  land”  with  his  own  eyes,  rather  than 
to  accept  the  distant  say-so  of  another,  or 
place  his  credence  in  the  specious  scheme  of 
some  speculative  company.  Those  who  have 
invested  their  money  in  wild-cat  projects 
and  lost  most  or  all  of  it  must  not  unfairly 
lay  the  blame  on  Mexico;  the  fault  is  likely 
to  be  at  the  ground-glass  door  of  some 
bland  and  plausible,  but  unscrupulous, 
American  promoter. 

Mexico's  Fbeight  and  Shipping  Facilities. 

The  Tehuantepec  National  Railway,  cross- 
ing the  Isthmus  of  Tehuantepec  from  Puer- 
to Mexico  (formerly  Coatzacoalcos)  on  the 
Gulf  to  Salina  Cruz  on  the  Pacific,  through 
the  Mexican  States  of  Vera  Cruz  and  Oaxa- 
ca, connects  with  the  Pan  American  Rail- 
way at  Gamboa  (San  Geronimo).  The 


BANCO  MERCANTIL  DE  MONTEREY  . 

MONTEREY,  N.  L.,  MEXICO  A CORPORATION 

Official  Depository  for  the  Government  of  the  State  of  Nnevo  Leon 

Capital  Resources,  $2,500,000.  Reserves,  $291,239.06 

Manager.  MR.  JOSE  L.  GARZA 

Cashier.  MR.  ENRIQUE  MIGUEL  Accountant.  MR.  F.  M.  de  la  GARZA 

Buys  and  Sells  Domestic  and  Foreign  Drafts.  Issues  Letters  of  Credit. 

Takes  charge  of  any  collections  entrusted  to  it  on  a moderate 
rate  for  commission  and  remittance. 

Buys  and  sells  for  account  of  others,  government,  municipal,  banking 
and  mining  stocks  and  bonds. 

Principal  Correspondents— National  Park  Bank  and  Hanover  National  Bank,  New  York; 
Banco  Hinpano  Americano.  Madrid,  Bnain;  Credit  Lyonna'a,  Paris,  France;  Credit  Lyonnatse,  Lon- 
don, England;  Deutsche  Bank  Flliale  Hamburg.  Hamburg,  Germany. 


Digitized  by  t^OOQle 


LATIN  AMERICA 


873 


The  Locks  in  the  Great  Gatun  Dam  at  Panama 

Ships  going  through  the  canal  will  ascend  to  the  H5-foot  level  through  a series  of  three  locks.  These 
are  double,  and  have  a width  of  100.  feet  and  a usable  length  of  1,000  feet.  They  are  con- 
structed of  steel  and  cement,  and  will  be  completed  before  the  time  set  for  the 
opening  of  the  canal  on  January,  1,  1915. 


Tehuantepec  Railway  is  188  miles  in  length; 
it  is  ballasted  with  crushed  rock  and  gravel, 
and  has  ties  of  native  hardw'ood,  California 
redwood,  and  creosoted  pine  to  support  the 
eighty-pound  steel  rails.  The  locomotives  are 
oil  burners,  and  the  track  is  sprinkled  with 
oil.  The  present  traffic  is  extremely  heavy. 
For  one  thing,  all  the  Hawaiian  sugar  that 
goes  to  Philadelphia — some  250,000  tons  per 


annum — travels  by  this  route.  The  dis- 
tance from  New  York  to  Hongkong  is  1,350 
miles  less  via  Tehuantepec  than  via  Pana- 
ma; from  New  Orleans  to  Yokohama, 
Honolulu  and  San  Francisco  it  is  1,970, 
1,960  and  1,860  miles  less. 

Puerto  Mexico  has  a mile  of  wharf  front- 
age, with  seven  steel  wharves,  whose  adja- 
cent wa  rehouses  hold  10,000  tons  of  freight 


Digitized  by  t^ooQle 


THBBE  ABB  THREE  OB'  THE 


C«.  Bsncarta  de  Fomento  * Bieies  Rains,  da  Mexico,  S.  i 


RIAL  ESTATE 

This  department  buys  and 
sells  all  kinds  of  land  in  every 
part  of  the  Republic-City  or 
Country.  Housee  bought, sold 
and  constructed.  Ranches 
subdivided  into  smaller  ones. 
T.  SI.  Gareea,  Manager. 


PUBLIC  WORKS 

This  department  does  paving 
work,  makes  surveys,  con- 
structs sewerage  svstems,  etc. 
It  has  improved  the  Cities  of 
Mexico,  Puebla,  Guadalajara, 
Durango  and  others. 

Sfaaiel  Elgaera,  Manager. 


BANKING 

This  department  finances  the 
other  two  departments  and 
does  all  kinds  of  business  in 
relation  to  banking. 


XsTierlctas  j Uiis,  M§f. 


CORRESPONDENCE  IS  INVITED 


Compasia  Bancaria  de  Fomento  y Biencs  Baices,  de  Mexico,  S.A. 

MEXICO,  d.  r. 

President— P.  PIMENTEL  T FAGOAGA 

1st  T Ice- Pres.— P.  MACEDO  Had  Vlee-Prea.-LUI8  BARR080  ARIAS 


apiece;  at  Salina  Cruz  two  converging 
breakwaters  of  blue  limestone,  each  about 
half  a mile  in  length,  inclose  a harbor  area 
of  some  twenty  acres,  with  an  inner  harbor, 
whose  ninety-foot  entrance  is  spanned  by 
two  swing  bridges.  The  opening  into  the 
outer  basin  is  about  600  feet  wide,  but  it 
looks  much  narrower.  It  js  necessary  to 
keep  a dredge  incessantly  at  work  in  the 
outer  harbor  against  the  insidious  encroach- 
ment of  the  sand,  encouraged  by  the  shore- 
ward current.  Freight  steamships  lie  se- 
curely at  the  wharves  in  the  inner  basin  be- 
side the  enormous  warehouses  and  are 
speedily  unloaded  by  the  huge  electric  cranes.' 

The  Tehuantepec  Railway  is  at  present  a 
single-track  route,  but  it  is  proposed  in  time 
to  quadruple  the  track;  and  the  new  Cana- 
dian-Mcxican  steamship  line  between  Van- 
couver and  Salina  Cruz  will  be  one  of  sev- 


3Ftnanmr 

Only  Weekly  Fin*nci*l  Journal 
Published  in  Mexico 

COMPLETE  QUOTATIONS  OF  ALL 
BANK,  INDUSTRIAL  AND  MINING 
STOCKS 

READING  MATTER  OF  VITAL  INTEREST 
TO  ALL  INVESTORS  IN  MEXICO 

$5,00  U,  S,  Currency  per  Annum,  post- 
age p*id 

JOHN  R.  SOUTHWORTH.  F.  R.  G.  S. 
Managing  Director 

CALLE  DEL  EL1SEO  . MEXICO.  D.  F. 
Cable  Addrew,  Cel-South.  P.  O.  Box  1 172. 
Mexico  City 


S74 


eral  important  connections  that  may  make 
the  railway  a formidable  competitor  of  the 
Panama  Canal. 

It  surely  is  not  too  much  to  expect  that 
within  a comparatively  few  years  the  dream 
of  James  G.  Blaine,  of  an  all-rail  route 
from  New  York  to  Buenos  Aires,  will  be 
realized.  Soon  after  the  bridge  is  built 
across  the  Suchiate  River  between  Mexico 
and  Guatemala  it  should  be  possible  to  take 
a through  Pullman  in  Mexico  City  for 
Guatemala  City,  for,  from  Ayutla,  on  the 
Guatemalan  side  of  the  boundary,  the  grad- 
ing is  finished  for  the  track  of  twenty-five 
miles  which  will  connect  the  Pan  American 
Railway  with  the  Guatemalan  systems.  In 
Salvador  last  April  a line  was  begun  to 
connect  with  the  Guatemala  Central;  tl»e 
concessionaire  is  to  receive  $7,000  per  kilo- 
meter from  the  government. 

The  extant  railways  of  Costa  Rica  should 
prove  valuable  “feeders”  for  the  through 
route,  while  the  Corinto-Granada  line  in 
Nicaragua  may  likewise  prove  of  material 
assistance.  In  Panama  the  preliminary  sur- 
vey has  been  run  for  the  line  of  some  300 
miles  from  the  city  of  Panama  to  the  city 
of  David,  in  the  province  of  Chiriqui,  near 
the  frontier  of  Costa  Rica.  It  is  interesting 
to  note  that  the  Republic  of  Panama  is 
holding  out  the  olive  branch  to  the  proud 
and  self-sufficient  Indians  of  the  San  Bias 
district,  whose  jealous  tribes  have  hitherto 
constituted  one  of  the  principal  obstacles  to 
overland  communication  with  Colombia.  The 
Gnayaquil-Quito  Railway  in  Ecuador  and 
certain  lines  in  Peru  and  Chile  seem  to  re- 
late themselves  more  or  less  directly  to  the 
general  plan,  and  of  course  when  Valpa- 
raiso, Chile,  is  reached  the  railway  builders 
have  attained  “the  haven  where  they  would 
be,”  for  it  is  already  possible  to  go  from 
Valparaiso  to  Buenos  Aires  over  the  won- 
derful new’  railway  through  the  Uspillata 
Pass,  at  an  expenditure  of  only  $63. 

At  Salina  Cruz  there  is  the  choice  of  sev- 
eral lines  of  steamships  to  Panama.  It  is 
also  feasible  to  take  the  Pan  American  Rail- 
way to  the  border  of  Guatemala  and  connect 


Digitized  by  LiOOQle 


LATIN  AMERICA 


875 


E.  N.  BROWN 

President  National  Railways  of  Mexico  and  a Director  of  the 
Banco  National  de  Mexico 


at  Ayutla  with  the  Ocos  Railway,  which 
runs  down  to  the  coast,  a few  miles  distant, 
in  an  hour.  At  present,  however,  there  is 
but  one  train  a week  over  the  last  forty 
miles  of  the  railway,  and  the  surer  connec- 
tion is  at  Salina  Cruz.  The  ports  of  call 
for  ocean-going  steamships  on  the  Pacific 
coast  are  (in  Guatemala)  Ocos,  Champerico 
and  San  Jose;  (in  Salvador)  Acajutla,  La 
Libertad  and  La  Union;  (in  Honduras) 
Amapala;  (in  Nicaragua)  Corinto  and  San 
Juan  del  Sur.  At  each  of  these  ports, 
while  the  vessel  is  discharging  or  taking  her 
cargo,  it  is  possible  to  go  ashore,  and  at  sev- 
eral points  it  is  possible  to  run  a few  miles 
inland  on  the  railway  ere  the  ship  weighs 
anchor.  From  San  Jose,  Guatemala  may  be 
very  comfortably  crossed  by  rail,  with  a 
stop  in  the  beautiful  capital  city,  and  from 
Punta  Arenas  (except  for  a gap  of  a few 
miles  which  the  railway  builders  are  filling 
in)  the  transit  of  a wonderfully  fertile  and 
prosperous  region  may  be  effected  writh 


similar  ease  to  Port  Limon.  At  the  Carib- 
bean ports  some  of  the  best  ships  plying  in 
tropical  waters  will  take  the  traveler  speed- 
ily to  New  Orleans,  New  York  or  Panama. 

Fertile  Central  American  Republics. 

Guatemala  produces  some  70,000,000 
pounds  per  annum  of  the  finest  grade  of 
coffee,  of  which  more  than  60,000,000  pounds 
is  exported,  the  bulk  of  it  to  Germany  and 
England.  A factory  near  Quezaltenango, 
employing  250  hands,  consumes  2,500,000 
pounds  of  the  raw  material  in  the  manufac- 
ture of  cotton  fabrics.  There  are  480  miles 
of  railway,  the  interoceanic  line  between 
San  Jose  and  Puerto  Barrios  being  195  miles 
in  length.  Of  all  the  exports  of  the  coun- 
try, Germany  takes  at  present  some  sixty 
per  cent.,  the  United  States  about  twenty- 
five  per  cent,  and  England  eleven  per  cent. 
The  United  States  leads  in  imports,  with 
Germany  and  England  in  second  and  third 
place. 


Digitized  by  t^ooQle 


GENERAL  PORFIRIO  DIAZ 

Who  has  been  President  of  the  United  States  of  Mexico  continuously,  with  the  exception 
of  one  term  (1880  to  1884),  from  1876  to  the  present  time 


Digitized  by  t^ooQie 


LATIN  AMERICA 


877 


Salvador,  the  only  Central  American  State 
with  no  direct  outlet  to  the  Atlantic,  is  the 
most  densely  populated  of  the  American 
Republics,  with  236  inhabitants  to  the  square 
mile,  or  more  than  ten  times  the  average  for 
the  United  States.  Its  principal  agricul- 
tural product  is  coffee;  in  1908  the  export  of 
37,500  tons  was  worth  about  $5,000,000. 
There  are  immensely  valuable  forests  of 
hardwood  timber  and  mineral  deposits  of 


forty  different  sorts  of  trees  from  which  the 
crude  material  for  oils  and  drugs  may  be 
extracted.  Some  10,000  tons  of  coffee  and 
1,400,000  bunches  of  bananas  were  exported 
in  1906.  The  sugar  yield  of  1907,  including 
the  by-products,  was  valued  at  more  than 
$1,100,000.  Costa  Rica,  prosperous  and  well- 
content,  bravely  living  down  and  forgetting 
occasional  seismic  disturbances,  is  blessed — 
like  the  highland  regions  of  the  other  coun- 


Banco  de  Coahuila  Branch  at  Torreon,  CoahM  Mexico 


unknown  value.  With  the  development  of 
facilities  of  transportation,  Honduras  is  des- 
tined to  become  one  of  the  wealthiest  coun- 
tries of  the  world.  Coffee,  cotton,  sugar 
cane,  tobacco  and  cacao  take  kindly  to  the 
exuberant  soil  of  the  lowlands,  and  in  the 
uplands  is  abundant  pasturage  for  cattle. 
There  are  valuable  forests  of  mahogany  and 
large  possibilities  in  banana  plantations  and 
in  sarsaparilla.  The  latter  is  already  sent 
in  large  quantities  to  the  United  States. 

In  the  forests  of  Nicaragua  are  more  than 


tries — with  a delicious  climate.  Coffee  is  in 
its  element  here,  for  it  can  find  a level  ex- 
actly to  its  liking;  the  best  is  grown  between 
4,000  and  5,000  feet,  and  Mocha  and  Java 
probably  produce  no  better.  As  the  States- 
man’s Year  Book  (a  volume  not  given  to 
rhapsody)  says,  “Almost  anything  can  be 
grown  in  Costa  Rica.”  In  1908  the  bananas 
exported  were  valued  at  over  $5,000,000,  and 
the  coffee  crop  was  worth  $2,200,000.  Rub- 
ber is  doing  well,  stock-raising  has  proved 
profitable,  and  in  the  wide  variety  of  exports 


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878 


THE  BANKERS  MAGAZINE 


FRANCISCO  DE  P.  ZAMBRANO 
Manager  Torreon  Branch  Banco  de  Coahulla, 
Torreon,  Coahuila,  Mexico 


are  included  mother-of-pearl  and  tortoise 
shell. 

Progress  Made  on  the  Big  Ditch. 

I had  visited  Panama  before,  in  the  Christ- 
mas season  of  1906,  and  it  was  most  gratify- 
ing, three  years  and  six  months  later,  to 
witness  the  changes  that  the  brief  period  had 
wrought.  Between  the  military  administra- 
tion and  the  civilian  employes  exists  the  best 
of  feeling.  As  one  man  expresed  it,  “When 
the  army  officers  came  down  here  we  looked 
forward  to  the  change  with  no  little  appre- 
hension. We  didn't  suppose  we  should  be 
able  to  get  along  with  them  and  their  way 


of  doing  business.  But  they've  proved  them- 
selves the  best  of  good  fellows — not  a bit 
domineering  or  dictatorial;  and  no  man 
could  ask  to  work  for  a more  fair-minded 
and  reasonable  lot  of  official  superiors.” 

Standing  on  tlie  wooden  suspension  bridge 
lately  throwm  across  the  Culebra  Cut  at  Em- 
pire, and  looking  in  either  direction,  it  is 
almost  unthinkable  that  human  labor  and 
no  natural  convulsion  achieved  so  gigantic  a 
fissure  in  the  earth’s  crust,  by  means  of  those 
bull-horned  steam  shovels  exiscerating  three 
and  five  cubic  yards  at  a time.  The  slides 
that  have  recently  taken  place  (there  was 
one  the  night  before  our  arrival)  seem  as 
trivial  amid  those  vast  geodetic — almost  cos- 
mic— dimensions  as  a few  bunches  of  grapes 
would  be  in  a California  vineyard.  Of 
course  they  demand  the  serious  attention 
they  receive,  and  where  the  older  houses  are 
too  near  the  crumbling  brink  they  will  have 
to  be  moved  back,  but  the  scare  heads  of 
alarm  in  northern  newspapers  are  without 
their  justification  on  the  firing-line. 

At  Gatun,  where  in  January,  1907,  I had 
seen  a single  seventy-ton  shovel  at  work,  be- 
ginning the  excavation  for  the  locks,  it  now 
looked  as  though  the  pyramid  builders  were 
on  earth  again.  Gone  was  the  little  palm- 
thatched  village  of  three  years  ago,  and  in 
its  place  was  an  expanding  lake,  with  the 
mud-brown  water  of  the  Chagres  pouring 
indignantly  through  the  spillway  in  the  mid- 
dle of  the  dam  site.  Terrared  concrete 
monoliths  a hundred  feet  in  height  and  a 
thousand  feet  in  length  arose,  and  one  could 
peer  into  the  black  openings  of  huge  cul- 
verts designed  to  admit  the  water  to  the 
lock  chambers.  It  was  easy  to  believe 
Colonel  Sibert's  quietly  confident  prophecies 
as  to  the  time  of  completion  of  the  great 
dam;  and  it  was  not  difficult  to  forecast  the 
passing  through  the  canal  early  in  1915  of 
some  such  vessel  as  the  860- foot  Olympic  of 
the  White  Star  Line,  now  building.  To  cross 
the  Isthmus  in  the  present  year  of  grace  and 
see  the  happy,  healthy,  industrious  American 


MERCANTILE  BANKING  COMPANY,  Ltd. 

Avenlda  San  Franolneo  No.  12 

CITY  OF  MEXICO  

Capital,  $500,000.00  Surplus,  $100,000.00 

Members  of  the  American  Bankers’  Association 
GEO.  J.  McCARTY,  President  K.  M.  VAN  ZANDT,  Jr.,  Vice- Pres.  dk  Mgr. 

H.  C.  HEAD,  Cashier  8HUR  WELCH,  Assistant  Cashier. 

A Senoral  Banking  Business  Trsnssotsd  Foreign  ExohanKO  Bought  sad  Sold 
Tolegrsphio  Transfers  Letters  of  Credit 

Unsurpassed  collection  facilities.  Correspondence  solicited.  Accounts  of  Banks,  Bank- 
ers, Hi ere bants  and  Individuals  solicited. 


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LATIN  AMERICA 


879 


community  and  the  great  work  that  is  grow- 
ing day  by  day  beneath  the  thousands  of 
busy  hands,  is  to  receive  a new  accession  of 
confidence  in  America  and  of  pride  and 
thankfulness  that  one  is  an  American. 


GROWING  BUSINESS  RELATIONS 
BETWEEN  MEXICO  AND  THE 
UNITED  STATES 


AS  is  well  known,  Mexico’s  business  re- 
t relations  with  the  United  States  are 
already  more  extensive  than  those 
with  any  other  country.  An  evidence  of 


photo  «v  olivir  uppincott,  n.  v. 

MALCOLM  C.  LITTLE 
Vice-President  Mexican  Title  Mortgage 
Co.,  S.  A.,  of  Mexico  City 

of  the  broadening  of  these  relations  is  af- 
forded by  the  tendency  of  financial  ii  stitu- 
tions,  both  in  Mexico  and  the  United  S.  Ces, 
to  provide  facilities  for  the  growth  of  c > a- 
merce  between  the  two  countries,  and  to 
establish  a more  intelligent  basis  for  the 
investment  of  American  capital  in  Mexico. 

A recent  evidence  of  the  tendency  men- 
tioned is  furnished  by  the  recent  opening 
of  a branch  office  of  the  Mexican  Title- 
'r  . tgage  Company,  at  25  Broad  street, 
New  York  City,  the  head  office  of  the  com- 
pany being  in  Mexico  City,  where  all  mat- 
ters needing  direct  attention  in  the  Mexi- 
can Republic  are  referred  by  the  local 
branch. 


6 


The  New  York  office  of  the  Mexican  Title- 
Mortgage  Company  is  in  charge  of  the 
vice-president  of  ,the  company,  Malcolm  C. 
Little,  a well-known  authority  on  Mexican 
investments  and  author  of  a valuable  work 
entitled,  “Mortgages  and  Trust  Deeds  in 
Mexico,”  which  contains  much  information 
essential  to  those  making  or  handling  Mex- 
ican investments. 

This  departure  on  the  part  of  a Mexican 
financial  corporation  in  establishing  a New 
York  office  seems  warranted  by  the  con- 
stantly increasing  investment  of  American 
capital  in  Mexico  and  in  Spanish-America 
generally,  all  the  countries  of  which  are 
governed  by  the  same  system  of  law. 

The  field  of  the  Mexican  Title-Mortgage 
Company  is  similar  to  that  of  the  title,  trust, 
and  corporation  companies  of  the  United 
States,  special  attention  being  given  to  the 
searching,  abstracting  and  guaranteeing  of 
land  and  mine  titles;  the  proper  prepara- 
tion of  trust  deeds  affecting  Mexican  realty; 
the  safeguarding  of  trust  investments;  the 
organization  of  Mexican  and  the  protocoliza- 
tion  of  foreign  corporations  in  Mexico,  etc. 

The  opening  of  this  office  makes  informa- 
tion on  these  subjects  immediately  avail- 
able to  investors  in  Spanish-America  and 
probably  will  be  the  means  of  avoiding 
complications,  such  as  have  arisen  in  the 
past,  as  a result  of  the  failure,  in  the  ex- 
ecution of  trust  deeds,  to  comply  with  the 
laws  of  the  place  of  performance,  and  be- 
cause of  the  lack  of  skill  in  the  examination 
of  titles.  Those  who  have  had  experience 
in  California,  Arizona,  New  Mexico  and 
Texas  in  connection  with  old  Spanish  land 
grants  will  be  able  to  appreciate  the  skill 
and  care  that  the  examiner  of  Mexican 
titles  must  bring  to  his  work.  This  com- 
pany occupies  a unique  position  in  respect 
of  American  investments  in  the  countries 
to  the  South  of  us  and  is  to  be  congratu- 
lated on  its  enterprise  in  seeking  closer  con- 
tact with  American  investors. 


WINNING  SOUTH  AMERICAN 
TRADE 

AMERICAN  banks  should  be  established 
^ in  every  important  city  in  South 
America.  An  American  merchant- 
marine  should  be  subsidized,  and  our  steam- 
ships should  ply  between  all  important 
North  and  South  American  ports;  and 
American  railroads  should  penetrate  every 
large  productive  area.  Americans,  particu- 
larly merchants,  should  understand  the 
South  American — his  language,  character, 
customs,  and  his  needs  (particularly  in  the 
matter  of  goods),  and  the  credit  system 
of  the  country.  American  and  South  Amer- 
ican experts,  both  government  and  private, 
should  be  employed  to  investigate  condi- 
tions. American  travel  to  and  acquaint- 


Digitized  by  t^ooQle 


880 


THE  BANKERS  MAGAZINE 


anceship  with  South  America  should  be  de- 
veloped. Closer  personal  relations  bring 
about  more  successful  business  relations, 
American  schools  should  teach  the  Spanish 
language  and  South  American  history. 

These  conditions  met,  I believe  that  in  a 
single  decade  American  trade  in  South 
America  would  lead  the  world.  It  is  stated 
that  $700,000,000  of  American  capital  is  in- 
vested in  Mexico.  “It  is  a logical  conclu- 
sion,’* says  Mr.  John  Barrett,  Director  of 
the  International  Bureau  of  American  Re- 
publics, “that  if  this  sum  is  invested  in 
Mexico,  there  is  room  for  ten  times  that 
amount,  or  seven  billion  (7,000,000,000)  dol- 
lars, to  be  placed  in  South  America. — 
Charles  Wellington  Furlong , in  The  WorUTs 
Work  for  November. 


IMMIGRATION  TO  SOUTH 
AMERICA 

BRAZIL  in  one  year  received  about 
100,000  immigrants,  Uruguay  absorbed 
40,000  to  60,000,  Chile  has  immense 
numbers  of  Germans  filling  up  the  southern 
section  of  the  country,  and  many  towns 
south  of  the  beautiful  longitudinal  valley 
are  as  completely  German  as  similar  towns 
in  Wisconsin,  says  Albert  Hale  in  the 
American  Review  of  Reviews . In  Brazil 
there  are  1,000,000  Italian  settlers  in  the 
State  of  Minas  Geraes,  where  much  of  the 
coffee  is  grown,  but  in  addition  this  State 
has  abundant  unoccupied  land,  which  is  dis- 
tributed to  the  newcomer  for  home  building. 

Sao  Paulo,  the  richest  State  in  Brazil, 
has  many  more  Italians  and  Germans,  but 
the  State  of  Rio  Grande  do  Sul,  together 
with  the  less  thickly  populated  States  of 
Parana  and  Santa  Catarina,  are  sometimes 
called  Little  Germany,  so  thickly  strewn 
are  the  villages  of  the  500,000  German  col- 
onists. 

In  Uruguay  .much  of  the  farm  labor  is 
done  by  Italians,  who  take  to  agriculture, 
leaving  the  cattle  industry  to  the  tougher 
native  gaucho.  Argentina  has  often  re- 
ceived over  200,000  immigrants  a year. 
These  come  from  Spain,  Italy,  Portugal, 
Germany,  Austria,  or  even  Syria,  in  ever- 
increasing  numbers.  Some  of  them  go  back 
to  their  own  land  after  a year’s  work  in  the 


harvest  fields,  but  very  many  of  them  re- 
main permanently  to  occupy  and  develop 
with  European  thrift  the  outlying  acres  to- 
ward which  the  newer  railroads  are  stretch- 
ing. 

All  over  their  great  southwest  are  hun- 
dreds of  colonies  founded  by  the  self-inter- 
est or  philanthropy  of  European  men  of 
affairs  or  theorists.  Baron  Hirsch  has  suc- 
cessfully established  in  community  existence 
several  colonies  of  his  otherwise  helpless 
protege.  Of  the  even  million  of  inhabitants, 
which  is  about  the  total  Argentina  may 
report  in  a census  at  the  end  of  her  hun- 
dred years  of  independence,  more  than  one- 
half  are  of  South  European  origin;  many  of 
these  have  arrived  within  the  last  two  gen- 
erations, but  all  have  found  homes  in  a new 
land,  and  are  proud  to  enroll  themselves  as 
citizens  of  an  American  republic. 

They  form  good  citizens,  too.  They  may 
bring  with  them  on  occasions  useless  ideas 
of  economy  or  wild  notions  of  socialistic 
emancipation,  but  they  are  settlers,  home 
builders,  anchoring  themselves  as  securely 
in  South  America  as  their  confreres  from 
the  same  shores  or  others  from  more  north- 
ern countries  of  Europe  become  rooted  in 
the  United  States. 

These  millions  of  energetic  and  product- 
ive immigrants  in  the  various  republics 
created  by  the  struggle  for  liberty  one  hun- 
dred years  ago  are  acknowledged,  even  by 
the  older  inhabitants  of  the  Spanish  and 
Portuguese  conquest,  to  be  the  life  of  the 
industrial  development  that  has  character- 
ized South  America  during  recent  years. 


LOCAL  REPRESENTATIVES 
WANTED 

THE  Bankers  Magazine  wishes  to  se- 
cure a local  representative  in  each  of 
the  large  cities  of  the  country  to  secure 
subscriptions  and  to  act  as  a general  repre- 
sentative. 

Liberal  arrangements  will  be  made  with 
responsible  persons.  Preference  given  to 
those  employed  in  banks  or  familiar  with 
the  banking  business. 

For  particulars,  address  Bankers  Pub- 
lishing Co.,  258  Broadway,  New  York. 


Mexico  City  Banking  Company,  S.  A. 

AVENIOA  SAN  FRANCISCO  No.  14 

Capital  and  8urplus  91*000,000 


8CLLE6TI0RS  AND  ALL  DARKIRQ  MATTERS  RIVER  PROMPT  ARD  CAREFUL  ATTERTIti 


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Special  Banking  Services 

T'HIS  bank  makes  a specialty  of  handling  reserve  accounts  of 
banksand  bankers,  and  of  supplying  carefully  selected  bonds 
for  investment  or  circulation  purposes.  The  special  character 
of  our  business  permits  of  liberal  interest  rateson  inactive  funds. 

Harris  Trust  & Savings  Bank 

Organized  as  N.  W.  HARRIS  & CO.  1882.  Incorporated  1907. 

204  Dearborn  Street,  Chicago 
After  May  1,  1911,  in  New  Harris  Trust  Building 


Digitized  by  t^ooQle 


CARNEGIE 
TRUST  CO. 

1 1 5 BROADWAY 
NEW  YORK  CITY 


New  York  State  and  City  Depository 


JOSEPH  T.  HOWELL,  President 

ROBERT  L.  SMITH,  Vice-President  LAWRENCE  A.  RAMAGB,  Trust  Officer 

ROBERT  B.  MOORHEAD,  Secretary  CHA8.  E.  HAMMETT,  Asst.  Trust  Officer 

ALBERT  E.  CHANDLER,  Asst.  8ee.  LEV  ESTER  G.  BALL,  Auditor 

W.  L.  SAMSON,  Asst.  Treasurer  CHA&  M.  SC  ISM,  Asst  Auditor 

PHILIP  J.  J08Y,  JR..  Cashier 


Commercial  Department 

Check  Accounts.  Time  and  Demand  Certificates  of  De- 
posits. Loans  made  on  approved  Collateral. 

Foreign  Department 

Issues  Travelers’  Cheques.  Buys  and  Sells  Bills  of  Ex- 
change. Grants  Commercial  Letters  of  Credit. 

Trust  Department 

Manages  Estates.  Receives  Deposits  of  Trust  Funds. 
Acts  as  Trustee,  Executor,  Guardian,  eto.  Transfer  Agent 
and  Registrar. 

NEW  YORK  STATE  AND  CITY  DEPOSITORY 

Designated  Depository  for  New  York  Cotton  Exchange,  New  York  Prodnoe  Exchange* 
and  New  York  Coffee  Exchange 

FISCAL  AGENTS  STATE  OF  TENNESSEE 

OARNEOIE  SAFE  DEPOSIT  VAULTS  UNDER  BANKING  ROOMS 


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BANKING  PUBLICITY 

Conducted  by  T.  D.  MacGregor 


GOING  ONE  BETTER  THAN  FOUR  PER  CENT. 

INTEREST 

By  G.  P.  Blacldston,  Advertising  Manager  of  The  People’s  Savings  Bank, 

Pittsburgh,  Pa. 


IT  is  an  exploded  theory  that  the  average 
savings  bank  patron  regards  the  little 
matter  of  four  per  cent,  interest  as  more 
than  a trifle  over  four  dollars  a year  on  each 
hundred  deposited,  with  interest  com- 
pounded semi-annually.  True,  this  four  per 
cent,  compliment  is  decidedly  welcome  and 
a competitory  requisite  without  which  most 
savings  institutions  cannot  hope  to  secure 
their  share  of  the  business,  but  as  for  serv- 
ing as  an  initial  inducement  for  causing  the 
prospective  patron  to  save,  it  would  seem  to 
have  failed  in  its  purpose.  This  is  because 
the  saver  knows — as  does  the  banker — that 
the  simple  item  of  interest  itself  has  never 
been  responsible  for  the  financial  prosperity 
of  any  individual,  and  that  resolution  and 
perseverance  are  the  factors  to  be  thus  cred- 
ited. But  contrary  to  these  facts,  thousands  of 
banks  are  advertising  with  stilted  savings 
talks  of  stereotyped  newspaper  “cards,”  in- 
corporating as  chief  arguments  the  four 
per  cent,  factor,  and  a host  of  generalities 
which  are  supposed  to  appeal  to  all,  but 
really  fail  to  make  an  impression  on  any. 
The  inducements  which  really  appeal  to  the 
prospective  depositor  seem  to  have  been 
omitted.  Seemingly,  the  banker  has  over- 
looked the  fact  that  the  individual  will  con- 
tinue to  spend  his  money  until  he  knows 
just  what  can  be  accomplished  by  saving  it. 
And  the  inducement  must  be  more  than  four 
per  cent,  earning  power  to  provide  sufficient 
argument  to  cause  the  prospect  to  save. 

The  general  picture  of  money  lying  dor- 
mant in  a savings  bank  fails  to  appeal  to 
any  one  forcibly,  while  if  an  idea  were 
given  of  the  many  uses  to  which  a few  hun- 
dred dollars  could  be  put,  and  how  an  ac- 
count, if  built  up  perseveringly,  will,  for 
sound,  practical  reasons,  eventually  con- 
tribute to  financial  independence,  the  mat- 
ter would  probably  be  regarded  in  a slightly 
different  light  by  the  man  who  is  spending 
his  earnings.  The  matter  of  telling  a young 
man  to  save  now  that  he  may  be  protected 
against  possible  emergency,  fails  to  reach 
his  persumed  far-sighted  nature,  especially 
if  he  be  a typical  young  American.  But  tq 
show  him  what  he  can  do  with  a small  finan- 
cial start,  and  j ust  how  to  secure  that  start, 
is  a different  matter.  And  the  younger 
men  constitute  the  principal  class  to  whom 
a savings  argument  should  appeal. 


Ok  the  Wrong  Track. 

It  would  seem,  therefore,  that  most  sav- 
ings banks  have  been  on  the  wrong  track 
for  a long  time,  from  the  viewpoint  of  pub- 
licity. To  appeal  practically  to  the  earning 
public  it  must  be  shown  where  and  how 
more  than  four  per  cent,  return  can  be  se- 
cured on  savings  funds  after  the  account 
has  reached  a comfortable  size.  And  as  a 
savings  bank  cannot  consistently  pay  more 
than  this  figure,  it  remains  for  it  to  adopt 
the  broader  principle  of  advising  people  to 
save  a few  hundred  dollars,  that  they  may 
invest  their  savings  where  they  will  com- 
mand the  greatest  return,  bringing  particu- 
lar stress  on  the  fact  that  a few  hundreds 
are  necessary,  and  that  the  best  way  to  save 
this  amount  is  through  a savings  bank.  The 
advice  should  also  include  specific  informs^ 
tion  on  just  what  to  invest  in,  how  much 
should  be  saved  for  a start,  how  long  it 
should  take  for  savings  to  increase,  etc. 
The  bank  can  count  on  the  use  of  the 
money  during  the  saving  interval  for  its 
profit. 

Generalities  do  not  appeal  to  the  man  de- 
sirous of  bettering  his  financial  condition. 
He  wants  to  know  what  is  possible  if  he 
saves  so  much  each  month,  and  deposits  it 
regularly  in  the  bank.  Now  right  here  is 
where  savings  banks  are  weak  in  their  argu- 
ment in  soliciting  accounts.  They  can  pay 
only  four  per  cent,  at  the  outside — a smaller 
rate  of  interest  than  that  of  good  bonds, 
which  are  now  obtainable  in  hundred  dollar 
denominations.  And  when  money  is  so  in- 
vested it  is  almost  as  available  as  when  in 
bank,  as  good  bonds  are  accepted  as  gilt- 
edged  collateral  for  a loan  of  at  least  sev- 
enty-five per  cent,  of  their  par  value.  And, 
further,  there  is  the  possibility,  if  the  bonds 
are  wisely  selected,  that,  as  they  approach 
maturity,  they  will  command  a premium  in 
the  market,  and  net  a larger  return  on  the 
investment.  But  bonds  are  by  no  means 
the  most  prolific  investment  the  saver  can 
make.  And  when  once  invested  in  bonds, 
the  money  is  temporarily  beyond  the  reach 
of  the  savings  bank.  So  it  is  up  to  the  in- 
stitution to  encourage  other  lines  of  invest- 
ment equally  as  safe  and  even  more  prolific. 
The  building  business  is  one  of  several, 
which,  when  conservatively  conducted,  seem 
to  meet  these  requirements. 

881 


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882 


THE  BANKERS  MAGAZINE 


How  to  Invest. 

It  is  comparatively  easy  to  secure  ten  per 
cent,  net  income  on  small  renting  properties, 
and  if  new  houses  are  built  and  sold  quickly 
on  easy  terms,  which  is  nearly  always  pos- 
sible, as  the  easy  payment  buyer  is  omni- 
present, a greater  percentage  of  profit  may 
be  realized.  And  if  his  real  estate  opera- 
tions be  carried  on  in  a modest  way,  the 
owner  can  fill  a salaried  position  without 
conflicting  with  his  outside  interests.  It 
should  therefore  be  obvious  to  the  savings 
bank  that  the  duty  of  the  institution  is  not 
only  to  promote  the  cause  of  thrift,  but  to 
show  what  can  be  done  with  savings  funds 
if  the  account  is  steadily  built  up  to  an  in- 
vestment size.  To  the  older  banker  this 
broadened  plan  of  personal  appeal  would 
hardly  coincide  with  the  old-fashioned  idea 


of  conservatism,  and  would  suffer  abandon- 
ment for  this  reason. 

But  the  points  stated  above  constitute  in 
the  rough  the  state  of  affairs  the  savings 
bank  must  face  to  meet  existing  conditions. 
While,  on  the  surface,  it  might  seem  unwise 
to  inform  people  where  more  than  four  per 
cent,  can  be  secured  on  savings  funds,  this 
attitude  is  far  more  consistent  on  the  part 
of  the  bank  than  if  it  fails  to  offer  sugges- 
tions at  all  to  its  patrons  on  where  and  how 
to  invest  their  money,  and  to  allow  it  to  be 
withdrawn  for  investment  in  some  hazardous 
enterprise.  And  further,  if  the  bank  acts 
in  the  capacity  of  adviser,  it  is  pretty  cer- 
tain that  very  little  money  will  be  lost. 
The  bank  keeps  in  close  touch  with  its  cus- 
tomers in  this  manner,  and  has  every  claim 
to  their  future  good  will  find  future  favors. 


MORE  THRIFT  EXPERIENCES 

SAVINGS  BANK  MEN  GIVE  ACTUAL  EXAMPLES  OF  SUCCESS 


MR.  Charles  W.  Gennet,  president  of 
the  Binghamton  (N.  Y.)  Savings 
Bank,  writes: 

In  reply  to  your  valued  favor,  requesting  me 
to  epitomize  for  THE  BANKERS  MAGAZINE 
a case  that  has  come  under  my  observation 
illustrating  how  a savings  account  has  pro- 
moted thrift  and  success,  I am  forced  to  ad- 
mit at  the  outset,  after  an  experience  of 
upwards  of  forty  years  in  this  institution, 
that  out  of  the  multitude  of  such  cases  that 
have  come  to  my  personal  observation,  I 
am  hardly  able  to  specialize  any  particular 
one.  It  is  no  uncommon  thing  to  have  a 
depositor  say  to  me,  “Well,  if  it  had  not 
been  for  your  bank  I should  not  have  my 
house.”  Or,  to  cite  a case  that  came  under 
my  very  recent  observation,  a gentleman 
from  a neighboring  village  where  he  is  a 
prosperous  merchant,  said  to  me,  “I  had 
saved  and  had  on  deposit  in  your  bank  four 
hundred  dollars  when  I left  here.”  He  came 
in  the  bank  that  day  to  make  his  account 
up  to  three  thousand  dollars,  and  informed 
me  with  great  satisfaction  that  he  also  had 
ten  thousand  dollars  invested  in  his  busi- 
ness, and  referred  with  pride  to  the  fact 
that  he  made  his  real  start  w’hen  he  opened 
his  savings  bank  account.  We  have  had 
many  cases  where  depositors  have  by  per- 
sistently following  the  saving  habit  accu- 
mulated enough  to  make  a payment  upon 
their  homes,  and  who  now,  instead  of  the 
bank  owing  them,  are  indebted  to  the  bank 
until  by  keeping  up  the  saving  habit  they 
will  eventually  pay  the  sum  they  w’ere  able 
to  borrow. 

I have  also  in  mind  the  case  of  a man 
who  is  now  an  official  in  one  of  our  promi- 
nent banking  institutions,  and  who  years 
ago,  while  a plodding  clerk  in  the  bank,  de- 
posited the  sum  of  five  dollars  per  week  In 
a neighboring  institution,  until  he  was  able, 
after  several  years,  to  purchase  and  make  a 
payment  upon  the  property  upon  which  he 


still  resides.  Possibly  he  might  have  se- 
cured this  property  in  some  other  manner, 
but  the  fact  remains  that  the  nucleus  was 
formed  when  he  started  that  five  dollar 
bank  account,  and  his  home  is  certainly  as 
dear  to  him  as  though  he  had  fallen  heir  to 
It,  or  suddenly  became  possessed  of  it  by 
some  unaccountable  or  lucky  speculation. 

You  have  asked  me  for  only  a paragraph 
or  two,  but  my  long  experience  in  helping 
to  care  for  other  people’s  money  has  tempt- 
ed me  to  enlarge  upon  the  subject,  which, 
in  my  opinion,  is  one  that  admits  of  no 
argument,  and  is  almost  emphatically  in 
favor  of  the  one  who  contracts  the  “saving 
habit”  and  relies  upon  it  for  ultimate  suc- 
cess. 

Mr.  Charles  E.  Ballou,  treasurer  of  the 
Woonsocket,  R.  I.,  Institution  for  Savings, 
writes : 

I have  selected  two  or  three  accounts 
which  show’  particularly  how  deposits  will 
grow  if  deposited  in  a savings  bank  and 
not  disturbed  and  will  add  that  in  each  case 
mentioned,  the  depositors  in  after  years  were 
very  well  to  do  people,  I presume  depositing 
in  other  institutions  as  in  ours. 

1st.  Where  an  account  of  $200,  being  de- 
posited in  1853,  the  amount  in  1888,  when 
the  account  was  closed,  had  accumulated  to 
$1,446.83. 

2nd.  A deposit  of  $423  in  1874  amounted 
to  $1,655.34  in  1903,  when  the  account  was 
balanced. 

3rd.  A deposit  of  $1,000  in  1865  was  paid 
the  estate  in  1908,  and  the  account  when 
withdrawn  was  $6,216. 

We  have  many  cases  where  deposits  are 
made  regularly  each  month  and,  although 
small,  accumulatfons  enable  the  depositor 
in  a few  years  to  purchase  a home.  These 
regular  and  often  deposits,  especially  among 
young  people,  are  to  be  specially  com- 
mended. 


Digitized  by  t^ooole 


BANKING  PUBLICITY 


883 


Mr.  Frank  Patton,  cashier  of  the  As- 
toria Savings  Bank,  Astoria,  Oregon,  con- 
tributes this : 

This  bank  was  opened  for  business  on  the 
first  day  of  March,  1891.  The  first  depositor 
was  a girl,  who  had  saved  up  $20,  and  came 
early,  as  she  wanted  to  be  the  first  de- 
positor. She  placed  the  amount  on  deposit 
on  certificate  bearing  interest.  The  certifi- 
cate has  been  renewed  each  year,  the  in- 
terest being  added  to  the  principal.  Some- 
times it  was  at  the  rate  of  6 per  cent. 
Later  it  was  3 per  cent,  per  annum,  and  now 
bears  interest  at  the  rate  of  4 per  cent,  per 
annum.  On  the  first  day  of  March  this  year 
the  certificate  was  renewed,  and  was  at  that 
date  $51.08.  The  same  person  two  years 
later  placed  $75  in  interest  in  book.  This 
deposit  has  been  added  to  at  intervals.  Some 
years  as  much  as  $200.  As  it  would  accu- 
mulate to  the  amount  of  $500  would  buy 
property.  Later  constructed  houses.  The 
party  is  now  receiving  rental  of  $75  per 
month,  or  $900  per  year.  This  was  all  done 
by  setting  aside  from  $5  to  $10  each  month. 
Another  party  commenced  saving  and  plac- 
ing in  this  bank  whatever  amount  they  could 
spare  each  month.  Sometimes  $5  and  as 
high  as  $20  some  months.  They  commenced 
the  account  with  $10  eighteen  years  ago. 
They  have  added  from  time  to  time,  and 
never  exceeded  $240  in  one  year.  They  now 
have  $8,460  in  this  bank,  and  say  they  never 
missed  the  money  deposited  and  did  not  de- 
ny themselves  anything  really  needed. 

Mr.  M.  E.  Holderness,  assistant  cashier 
of  the  First  Savings  Bank,  and  Trust  Com- 
pany of  Nashville,  Tenn.,  says: 

The  most  conspicuous  cases  in  our  locality 
refer  to  home  building,  and  while  cus- 
tomers seem  to  put  aside  a certain  part 
of  their  income  for  various  purposes,  I am 
more  impressed  with  the  common  desire  of 
many  of  them  to  have  homes  of  their  own. 


I give  as  an  illustration  the  last  case 
coming  under  my  notice:  A young  man  who 
has  been  regularly  employed  as  a driver  by 
a local  express  company,  has  been  deposit- 
ing his  weekly  savings  with  us,  and  had  ac- 
cumulated a sum  sufficient  at  the  beginning 
of  this  season  to  build  for  himself  and 
family  a home.  His  home  was  today  com- 
pleted and  paid  for,  leaving  him  still  a 
balance  of  $6.41,  to  the  credit  of  his  savings 
account,  which  he  will  doubtless  build  up 
again  for  some  worthy  purpose.  I have  no 
doubt  this  young  man  would  still  be  paying 
rent  had  he  not  adopted  the  savings  system. 

Mr.  George  H.  Wise,  treasurer  of  the 
Bangor,  Pa.,  Trust  Company,  sends  this: 

I have  In  mind  a young  man  about  20 
years  of  age  working  as  a slate  maker  in 
one  of  our  quarries  who  is  one  of  our  reg- 
ular depositors  in  the  savings  department. 
During  a period  of  four  years  just  passed  he 
has  deposited  each  month  an  average  of  $25, 
a total  of  $1,200  for  the  period,  or  $300  per 
year.  This  is  a good  yearly  saving,  consid- 
ering the  average  of  steady  work  for  him 
is  nine  months  out  of  the  year. 

Periodically  this  young  man  withdraws 
$500  and  invests  in  good  bonds  yielding  a 
fair  interest.  Since  the  inauguration  of  his 
savings  habit,  about  four  years  ago,  he  has 
accumulated  $2,500  in  such  securities,  and  if 
he  maintains  his  average  savings  for  sev- 
eral years  to  come  he  will  undoubtedly  have 
the  nucleus  of  a small  fortune  and  be  in 
position  to  establish  himself  comfortably  in 
the  world. 

Such  an  example  of  thrift  is  worthy  of 
imitation  and  is  unquestionably  the  surest 
way  to  become  independent. 

All  of  these  incidents  are  good  material 
for  the  man  who  has  savings  advertisements 
to  write.  There  is  nothing  so  good  as 
concrete  examples  of  successful  thrift. 


HOW  BANKS  ARE  ADVERTISING 

Note  and  Comment  on  Current  Financial  Publicity 


THE  Farmers  Deposit  National  Bank  of 
Pittsburgh,  Pa,  advertised  its  cer- 
tificates of  deposit  by  sending  out  a 
good  imitation  of  a handwritten  note,  signed 
by  the  president,  T.  H.  Given,  calling  at- 
tention to  the  advantages  of  the  certificates. 
The  matter  in  the  letter  was  as  follows: 

We  beg  to  call  your  attention  to 
the  advantages  of  our  certificates  of 
deposit,  for  the  employment  of  funds, 
temporarily  in  excess  of  the  wants  of 
your  business  or  that  may  be  await- 
ing permanent  investment. 

We  are  prepared  to  Issue  them,  pay- 
able at  sight  or  at  a fixed  date,  at 
agreed  upon  rates  of  interest  which 
will  be  as  liberal  as  the  demand  for 
money  and  the  circumstances  justify. 

We  shall  esteem  it  a favor  to  be 
permitted  to  take  this  matter  up  with 
you,  either  by  personal  interview  or 
correspondence. 


The  Farmers  National  Bank  of  Beaver 
Falls,  Pa.,  does  some  novelty  advertising. 
It  has  been  giving  away  a safety  match  box 
with  its  name  stamped  on  it. 


The  Long  Island  Safe  Deposit  Company, 
the  oldest  safe  deposit  company  in  Brook- 
lyn, gives  away  a handy  folder  containing  a 
blank  form  for  keeping  track  of  invest- 
ments— their  cost,  rate  and  income  due. 


The  Fulton  Trust  Company  of  New  York, 
on  October  21,  sent  to  its  stockholders  and 
depositors  a printed  letter  giving  the  net 
results  obtained  in  the  twenty  years  of  the 
institution's  history.  It  was  a very  satis- 


Digitized  by  t^ooQle 


884 


THE  BANKERS  MAGAZINE 


Happy  New  Year 


factory  report  indeed,  as  the  company  has 
been  very  successful.  Its  resume  of  the 
banking  period,  1890-1910,  is  a succinct  and 
interesting  statement  of  financial  conditions 
in  that  time. 


The  First  National  Bank  of  Northfork, 
W.  Va.,  in  November  sent  out  neatly  en- 
graved cards  extending  an  invitation  to  visit 
its  remodeled  and  complete  quarters. 


The  Iowa  National  Bank  and  Des  Moines 
Savings  Bank  of  Des  Moines  have  just 
inaugurated  a simple  device  to  make  their 
customers  feel  at  home.  Heavy  bronze 
name  plates  bearing  the  names  of  the  tellers 
are  placed  at  their  respective  windows. 
It  is  a source  of  much  pleasure  to  some 


customers  to  know  the  man  with  whom  they 
do  their  actual  business,  and  it  is  a good 
form  of  personal  advertising. 


The  National  Bank  of  Savannah,  Ga., 
celebrated  its  twenty-fifth  anniversary  by 
issuing  a particularly  noteworthy  brochure. 
Like  the  bank’s  building  itself,  the  booklet 
is  little  less  than  sumptuous.  Most  of  the 
space  is  occupied  by  splendid  halftone  cuts 
printed  on  tintblocks.  The  frontispiece  is 
a portrait  of  the  late  Hon.  Herman  Myers, 
founder  of  the  bank  and  its  president  for 
24  years. 


The  Citizens  Deposit  and  Trust  Company 
of  Allentown,  Pa.,  is  using  a series  of  calen- 
dar post  cards  containing  timely  advertising 


Digitized  by  t^ooQle 


BANKING  PUBLICITY 


885 


matter.  The  E.  P.  Wilbur  Trust  Company 
of  South  Bethlehem,  Pa.,  also  uses  post 
cards. 


The  West  End  Savings  Bank  and  Trust 
Company  of  Pittsburgh  sends  us  a collection 
of  its  advertising  matter,  consisting  of  blot- 


We  want  the  men  oc  woman  who  can  maintain 
only  a moderate  nze  bank  account  to  realize  that  we 
value  the  small  depositor's  business  and  pledge.oursehres 
to  do  all  in  our  power  to  help  them  just  as  we  do  our 
who  carry  larger  accounts. 

You  wl  not  be  lost  in  the  si  this  bwdt  You 

wS  receive  prompt  and  cowteom  stteebm  sad  wl  fettha 
M beaefe  of  tbs  tcrnce  we  feeder. 

We  appreciate  the  fact  that  the  Urge  bank c accounts  of 
lode/ were  tbe  end  accoaotiof  yetftray  and  that  the  enal 
occaita  of  today  wi  be  the  luge  ones  of  tomorrow. 

We  are  i>  a portion  to  hdp  yoa  dedope  your  badaea 
as  wa  hare  daee  n the  com  of  a great  Bear  others  of  de- 
positors. Do  not  hmilitn  to  come  to  as  lot  adwea. 

FOUR  PER  CENT.  ON  SAVING}  ACCOUTNS. 

West  End  Savings  Bank 
&.  Trust  Co 

HTTSBU&GH,  PA. 

“ Va  Soak  That  Troata  Yott  Right " 


Hammering  in  Trade-mark 


ters,  penholders,  pencils,  mailing  cards,  pay 
envelope  and  newspaper  advertisements. 
One  of  the  latter  is  reproduced  herewith 
and  is  particularly  noteworthy  on  account 
of  the  effective  use  of  a trade-mark  emblem. 


Cyrus  H.  Sweet,  paying  teller  of  the  Cen- 
tral National  Bank,  of  Tulsa,  Okla.,  has 
sent  us  a copy  of  a handsome  booklet  re- 
cently issued  by  that  institution.  Its  full 
title  is  “A  Bit  of  History  Concerning  the 
Central  National  Bank  and  Some  Interest- 
ing Facts  About  the  City  of  Tulsa.”  This 
bank  is  not  four  years  old,  but  already  it 
has  more  than  $1,000,000  deposits. 

A good  many  people  in  the  effete  and 
blase  East  first  heard  of  Tulsa  a year  or 
two  ago  when  a party  of  Tulsa  boomers 
came  to  New  York.  . Some  of  the  interest- 
ing facts  about  the  place  published  in  this 
booklet  are  these: 

Population  25,400,  an  increase  in  seven  years 
of  22,000. 

Eighty-eight  manufacturing  plants. 
Twenty-six  wholesale  and  jobbing  houses. 
Seven  public  and  one  parochial  school,  with 
3,683  pupils  and  92  teachers. 

One  business  college  and  one  general  college. 
Five  railroads,  operating  daily  32  passenger 
trains. 


Fifteen  miles  of  street  railway  in  operation, 
with  fifteen  miles  of  suburban  line  in  pro- 
cess of  construction. 

An  assessed  valuation  of  $8,500,000.00. 

Twenty-one  miles  of  asphalt  paving. 

Sixty  miles  of  cement  sidewalk. 

An  area  of  2,580  acres,  nearly  four  miles 
square. 

The  cheapest  fuel  In  the  world,  natural  gas, 
costing  for  factories  from  three  to  seven 
cents  per  thousand  cubic  feet;  for  domestic 
use  sixteen  cents  per  thousand  cubic  feet. 

Coal  may  be  had  for  manufacturing  purposes 
for  $1.50  per  ton  and  for  domestic  use  for 
$2.50. 


The  Maine  Savings  Bank  of  Portland, 
Me.,  has  issued  a series  of  illustrated  ad- 
vertising cards  which  bring  out  very  strong- 
ly the  good  points  of  the  institution.  It  has 
also  published  a very  complete  statement  of 
condition,  giving  a detailed  account  of  its 
resources. 


CHRISTMAS  AND  NEW  YEARS 

Bankers  Ought  to  do  Some  Timely  Advertising 

THE  value  of  having  special  holiday 
advertisements  lies  in  the  fact  that 
at  this  season  everybody  is  thinking 
of  Christmas  and  New  Year’s,  the  holiday 
spirit  is  in  the  air  and  it  is  therefore  a 
comparatively  easy  task  to  get  and  hold 
the  reader’s  attention  by  means  of  a Christ- 
mas or  New  Year’s  advertisement. 

As  will  be  seen  from  the  advertisements 
reproduced  herewith,  banks  quite  generally 
make  an  appeal  along  the  line  of  starting  a 
savings  bank  account  as  a Christmas  gift 
for  son  or  daughter. 

Another  good  idea  is  to  call  attention 
to  the  fact  that  Christmas  is  likely  to  be 
a time  of  greater  cheer  if  the  family  has 
money  in  the  bank. 

The  first  of  the  year  is  a time  for  the 
making  of  good  resolutions.  It  is  also 
a period  when  interest  and  dividends  are 
paid.  Moreover  many  people  take  account 
of  stock,  actually  and  figuratively,  at  that 
time.  So  it  is  very  opportune  for  the 
hanker  to  make  a special  appeal  for  de- 
positors at  fhis  time.  How  some  bankers 
have  done  it  is  shown  by  the  advertise- 
ments reprinted  from  newspapers  of  a 
year  ago. 

a ++ 


TWO  GOOD  BOOKS 

For  Bakers  Who  Are  Making  a Real  Study 
of  Advertising 

66  ADVERTISING”  is  the  title  of  a val- 
aV  uable  little  book  by  Howard 
Bridgewater,  advertising  manager 
of  “The  Financial  Times,”  of  London.  The 
book  treats  of  English  conditions,  but  as 
human  nature  and  the  laws  of  trade  are 


Digitized  by  t^ooQle 


886 


THE  BANKERS  MAGAZINE 


1 


Young  Man.  yoir  totsndrd  bride  will  be  Ihr 
•letter  pleated  if  on  Xmi  day  you  can  show 
her  a pats  book  with  a (air  cum  credited  to  <t  | 
than  all  the  finery  you  might  buy.  , Shell  ace  ■ 
that  you  arc  practical  and  cerioua  and  worthy  of 
her  affection*.  The  f»rl  of  today  has  common 
sente  and  realizes  that  a man  in  order  to  he  suc- 
cessful mutt  be  thrifty  and  economical. 


3 Per  Cent  Interest  on  Savings  Accounts. 

HOME  SAVINGS  BANK, 

7th  and  Mas*.  Avt.  N W. 

BRANCHES: 

7th  and  H Sts.  N t . 4jfi  7tfc  St.  fr  W. 

Under  Supervision  of  the  U.  S.  Treasury,’ 


A,  Christas 
rimntkrTiu 


The  Pennsylvania  Trust  Company 


536  PENN  ST..  READING,  PA. 

Capita/.  5350,000.90  t t Jfcrplaa,  $575,000.00 
tm  Cm* Sadlaih  TVs*  • hm«rt 


Gfee tint's  To  you 


Ta*  Uenra  Savinas"  Bank  wMksi 


.*  U >*• 
have  had  m bask  amnl  da  M 
M a Sat  la  genine  ear  rtarud.  Its- 
mentor  three  la  aaefhvr  CbrU'.mar 


One  Dollar  WOf  Start  an  Accoeat 


1^-HOME  SAVINGS  BANK 

WHITE  PLAINS.  N Y. 


jii 

jUp  Against  It? 

lion  f know  whmi  to  0h£  f<* 
A <Y*n#U»A»  pree-t**  Doo* 
^X>sr  whrfHrr  Wr.nl  WtU 


nalgatuck 

Savin***  Bank. 


mWta  sLAtsr  auav  acapoN 


STRAIGHT  FACTS 


Christmas  is  the  time  fee  (triif. 

Oiving  require*  money. 

Money  u to  be  accumulated  by  saving. 

Saving  ®an  beat  be  aeeompliabfd  through  eastings  SeeounL 
If  you  haven  “t  triad  it  yet.  come  in  with  alsiUar  the  nest  time 
you  art  passing  our  bank  and  get  yuur  avcmnl  started.  Be* 
member  tbera  ia  anothar  Christmas  nee*  a1. 

3%  lutenwl  on  saving*  aeeounla.  Opru  Sa  ■ -»  .y 
S o’clock. 

THE  DIME  DEPOSIT  BANK 

Cae.  WM  SSaihl  and  PraaWht  Sta. 


.Start 
BANK 

tCCOl/NT 

[IbRMVR 

BOY’S 

.;aerry 

jXMAS 

L O- 


Iho  Sarthar  yau  navel  aa  U 


Stmawn  ipaana* 


THE  OEOROIA  STATE  SAVINGS  ASS'N 

IMtq  and  TVwa.) 

onrrraii  «n  tciirus  sisadaas* 

— o.  r m,  sepa 


Union  Savings  Bank 

A f»nrthler*l  St.  MMU.  AH. 


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ORDER  BLANK 

wkv  PayiMe  la  WAi  I ijviA  LOAN  4 TRUST  CO 


.... ^ MOO 

WACHOVIA  LOAN  A TRUST  CO. 

Wsnahwn  lalesn.  N.  C 

Gentlemen:  I send  herewith  name*  of  Uto*e  to  whom  1 wish  to  make’ 

• a Christmas  Gift  of  a bank  account  and  enclcae  (eaah. 

money  order,  eheck ) You  art  to  mail  bank  books  to  reach  destination  by 
Christmas  Day  with  a Christmas  Greeting  in  my  name. 

Yours  truly 


— 1-- 


The  Wachovia  Loan  A Trust  Co.  will  ackno 
receipt  snd  mail  books  just  before  Christmas. 


'Wp  remlttaac*  oa  day  of 


Some  Xmas  Suggestions 


Digitized  by 


Google 


BANKING  PUBLICITY 


887 


the  same  everywhere,  that  does  not  prevent 
the  work  from  being  one  of  great  interest 
and  profit  to  American  advertisers. 

The  one  chapter  dealing  with  the  com- 
mercial value  of  imagination  is  worth  the 
price  of  the  whole  book  which  is  only  fifty 


cents.  Sir  Isaac  Pitman  & Sons  are  the 
publishers. 

Charles  R.  Wiers  of  Buffalo,  N.  Y.,  has 
issued  a new  edition  of  his  book  “How  to 
Write  a Business  Letter.”  This  little  work 
should  be  a r ode  mecu m for  every  man  who 


AnUnusuaOyGoodAdvertisement 


The  Service  of  a Trust  Company 

"Following  closely  upon  the  administration  of  the  estate  of  the  late  Chief  Justice  Fuller  by 
The  Merchants  Loan  and  Trust  Company,  as  one  of  the  executors  and  trustees  under  the  will, 
comes  the  probating  of  the  estate  of  the  late  Lambert  Tree,  another  eminent  jurist,  the  petition 
in  this  case  being  presented  to  the  probate  court  on  Wednesday  by  The  Merchants  Loan  and 
Trust  Company,  as  executor  and  trustee  of  the  estate.  These  two  instances  of  the  corporate 
handling  of  estates  are  notable  ones  for  the  reason  that  both  gentlemen  were  eminent  in  the 
profession  of  law — one  having  occupied  the  highest  place  in  the  world’s  greatest  tribunal,  and  the 
other  having  distinction  throughout  both  continents  as  a lawyer,  a judge  and  a diplomat,  and  1 
both  having  chosen  the  same  institution  to  administer  their  affairs.  And  there  is  even  more 
than  this  prominence  to  be  given  the  circumstances.  When  men  so  schooled  in  legal  requirements 
and  legal  responsibilities,  to  say  nothing  of  legal  possibilities,  turn  to  the  modern  trust  company 
and  use  its  machinery  as  a safeguard  for  the  proper  handling  of  their  estates  after  death,  the 
system  is  given  the  strongest  possible  endorsement.  The  estate  of  Justice  Fuller  was  valued 
at  nearly  one  million  dollars,  while  that  of  Judge  Tree  is  more  than  four  and  a half  million  dollars.’' 

The  above  edkorlal  dipping  from  the  Economist  was  handed  to  us  by  one  of  our 
thoughtful  dtixens  with  the  suggestion  that  we  make  It  the  basis  of  an  advertisement. 

We  adopt  the  suggestion  because  it  emphasises  our  proposition,  to- wit:  That  a 
strong  institution  like  the  YIRGINIA„TRUST  COMPANY  is  better  qualified  to  act 
as  Executor  and  Trustee  than  an  individual.  The  reasons  are  many,  and  we  Invite 
the  opportunity  of  pointing  out  these  advantages  to  any  prudent  man  or  woman 
interested  in  the  matter. 

Booklet  on  trusts  sent  free.  In  it  are  given  some  valuable  Information  about 
the  drawing  of  a Will. 

VIRGINIA  TRUST  COMPANY 

RICHMOND,  VIRGINIA. 

CASH  CAPITAL,  $1,000,000.00 

HERBERT  W.  JACKSON,  President. 

JAMES  N.  BOYD,  Vic.- Ptm Idem.  JNO.  M.  MILLER,  Jr.,  Vica-Prealdant. 

L.  D.  AYLETT,  Secretary.  JNO.  H.  SOUTHALL,  Treasurer. 


"We  thought  perhaps  you  might  be  interested  in 
this  ad.  for  a Trust  Company.  We  have  spent  consider- 
able money  this  year  in  printers  ink  and  this  particular 
ad.  has  brought  more  results  than  any  we  have  used.” 

H.  W.  JACKSON, 

President. 

VIRGINIA  TRUST  COMPANY 

RICHMOND,  VA. 


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888 


THE  BANKERS  MAGAZINE 


has  business  correspondence  to  handle.  Mr. 
Wiers  is  not  a theorist.  He  is  actively 
engaged  in  producing  business-getting  cor- 
respondence and  the  hints  he  gives  are  prac- 
tical ones.  This  book  is  well  worth  the 
price — $1. 

The  Bankers  Publishing  Company,  New 
York,  will  forward  either  or  both  of  these 
books  to  any  address  upon  receipt  of  the 
price. 


MR.  LEWIS  HONORED 

E.  St.  Elmo  Lewis,  advertising  manager 
of  the  Burroughs  Adding  Machine  Com- 
pany of  Detroit,  and  a well-known  writer 
on  advertising  matters,  has  been  appointed 
chairman  of  the  national  advertising  sec- 
tion of  the  Associated  Advertising  Clubs  of 
America,  and  he  has  also  been  given  a place 
on  the  educational  committee. 


BOOK  REVIEWS 


The  Intimate  Life  of  Alexander  Hamil- 
ton. By  Allan  McLane  Hamilton.  New 
York:  Charles  Scribner’s  Sons. 

Pew  of  the  characters  in  our  early  his- 
tory possess  a greater  interest  than  at- 
taches to  the  subject  of  this  biography.  This 
latest  of  the  many  histories  of  Hamilton’s 


FROM  A PAINTING  BY  6HARPLES8 


Alexander  Hamilton  at  Thirty-seven 


life  that  have  been  written  is  “based  chiefly 
upon  original  family  letters  and  other  docu- 
ments, many  of  which  have  never  been 
published.” 

Dr.  Allan  McLane  Hamilton,  the  author 
of  this  biography,  is  a grandson  of  Alex- 
ander Hamilton,  and  has  no  doubt  had 
exceptional  opportunities  of  getting  at  the 
facts.  He  has  produced  a strong  portrait 


of  the  first  Secretary  of  the  Treasury.  Any 
life  of  Hamilton  could  hardly  fail  to  be 
interesting,  but  this  one  is  absorbingly  so 
and  especially  by  reason  of  its  giving  a 
more  intimate  view  of  his  life  and  char- 
acter. His  public  achievements  were  al- 
ready well  known,  but  much  remained  to  be 
told  about  his  private  career.  It  is  in  this 
respect  that  the  present  biography  is  of  ex- 
ceptional value.  Many  of  the  letters  are 
of  peculiar  charm,  revealing  the  tender,  do- 
mestic side  of  Hamilton’s  character. 

“The  Intimate  Life  of  Alexander  Hamil- 
ton” is  a most  appropriate  book  for  the 
banker’s  library. 


Arbitrage,  by  Henry  Deutsch,  Ph.  D.,  Ef- 
fingham Wilson,  London.  Price  $3.40. 

More  facts  and  figures  on  the  process  of 
arbitraging  in  bullion,  coins,  bills,  shares 
and  options,  are  contained  in  Dr.  Deutsch’s 
book  than  in  any  other  ever  published.  Re- 
plete with  calculations  and  examples,  the 
work  is  a perfect  mine  of  information.  To 
the  expert  arbitrageur  as  well  as  to  the 
mere  student  of  the  subject,  the  book 
should  prove  invaluable.  The  calculations 
expressed  and  explained  therein  are  to  be 
found  nowhere  else. 


Legends  of  the  City  of  Mexico.  By  Thomas 
A.  Janvier.  With  six  pictures  by  Walter 
Appleton  Clark,  and  with  photographs. 
New  York:  Harper  & Bros.  (Price,  $1.30, 
net.) 

Rather  “creepy”  are  these  legends,  but 
fascinating  as  Poe’s  romances.  To  those 
who  have  lived  in  Mexico  City,  they  revive 
the  charm  of  its  ancient  streets  and  pic- 
turesque scenes.  To  others  who  have  not 
had  this  good  fortune,  they  will  afford  an 


Digitized  by  t^ooQle 


BOOK  REVIEWS 


889 


entrance  into  a strange  realm,  mysterious 
and  alluring. 

Mr.  Janvier  avers  that  he  did  not  invent 
these  tales,  but  discovered  them.  He  pre- 
sents his  discoveries  in  language  of  rare 
beauty  and  with  a sympathetic  feeling  that 
never  flags. 


People's  Banks:  A Record  of  Social  and 
Economic  Success.  By  Henry  W.  Wolff. 
London:  P.  S.  King  Son.  (Price,  6 
shillings,  net.) 

Not  elsewhere  do  we  remember  to  have 
seen  so  complete  a record  of  the  operations 
of  the  various  kinds  of  “people’s  banks” 


as  may  be  found  in  this  volume.  In  several 
European  countries  these  credit  associations 
have  achieved  remarkable  success  and  have 
been  of  great  benefit  to  the  people,  in  many 
cases  providing  banking  facilities  to  those 
whose  circumstances  debarred  them  from 
other  institutions. 

The  account  of  these  institutions  pre- 
sented by  Mr.  Wolff  is  an  interesting  one 
and  may  be  profitably  studied  by  bankers 
and  especially  by  those  concerned  about 
sound  and  practicable  means  of  bettering  so- 
cial conditions.  No  doubt  some  of  the 
institutions  described  could  be  instituted  in 
the  United  States  with  great  advantage  to 
the  people. 


THE  BANKER  IN  A NEW  ASPECT 

SHOWN  TO  BE  AN  IMPORTANT  FIGURE  IN  LITERATURE 


ACCUSTOMED  as  we  are  to  think  of 
.xV.  banker  as  a lender  of  money 

and  credit,  a custodian  of  securities 
and  a counsellor  of  the  financially  troubled, 
it  comes  as  an  almost  startling  revelation 
to  find  that  one  who  is  looked  upon  as 
a close-fisted  man  of  business,  and  who 
has  even  been  called  a skinflint,  really 
occupies  a prominent  place  in  literature, 
both  as  a creator  of  poetry  and  prose  and 
as  a figure  with  which  the  great  literary 
artists  have  delighted  to  deal. 

This  revelation  comes  to  us  through  a 
book  by  Johnson  Brigham,  State  Librarian 
of  Iowa.  It  is  entitled  “The  Banker  in 
Literature,”  and  is  published  by  The 
Bankers’  Publishing  Co.  of  New  York. 
(Price,  $2.00.) 

As  a creator  of  literature,  the  banker 
has  by  no  means  been  circumscribed  by  the 
lines  of  his  own  business.  History,  poetry, 
criticism — all  the  departments  of  literary 
effort — have  claimed  his  attention  and  con- 
tributed to  his  fame. 

It  was  a lA)ndon  banker — George  Grote — 
who  wrote  what  yet  remains  a standard 
“History  of  Greece,”  as  it  was  also  a 
London  banker — Samuel  Rogers — who  wrote 
“The  Pleasures  of  Memory”  and  “Italy.” 

In  our  own  country  two  distinguished 
poets — Fitz-Greene  Haileck  and  Stedman — 
w’ere  bankers  at  one  time  in  their  lives. 

To  enumerate  all  the  bankers  who  won 
fame  as  essayists,  poets,  dramatists  and 
novelists  would  result  in  a list  of  names 
surprisingly  long  and  of  high  repute  in  the 
world  of  letters.  We  should  find  prominent 
in  this  list,  besides  those  already  mentioned, 
William  Paterson,  John  Law,  David  Ricar- 
do, William  Roscoe,  the  Lubbocks,  Walter 
Bagehot,  Westcott  (the  lamented  author 
of  “David  Harum”),  and  a number  of 
others. 


As  a character  in  literature,  the  banker 
has  figured  prominently  in  the  works  of 
Balzac,  Dickens,  Thackeray,  Bulwer,  Dumas, 
lieade,  Ibsen  and  other  writers.  These  pic- 
tures afford  the  banker  an  opportunity  of 
seeing  himself  as  others  see  him. 

Mr.  Brigham  has  given  us  a sufficient  his- 
torical sketch  of  the  literary  bankers  to 
enable  us  to  judge  what  manner  of  men 
they  were,  and  has  liberally  quoted  from 
their  principal  productions.  Several  anec- 
dotes also  enliven  the  book. 

It  may  be  doubted  whether  the  demands 
made  on  the  banker’s  time  and  energies  by 
the  stress  of  modern  business  life  would 
permit  any  one  to  achieve  the  solid  literary 
fame  of  some  of  those  whose  work  Mr. 
Brigham  has  so  delightfully  called  to  mind. 
These  men  belonged,  if  not  to  “the  good  old 
times,”  to  an  elder  day,  of  more  politeness, 
elegance  and  leisure,  when  the  cultivation 
of  the  fine  arts  was  less  inharmonious  with 
the  banker’s  calling  than  it  seems  now. 

The  book  contains  a peculiar  charm.  In 
its  pages  the  banker  will  realize  a delicate 
reminder  of  his  own  occupation,  but  he  "will 
be  held  by  a thread  so  fine  as  not  to  be 
galling— a mere  reminder  of  busy  hours, 
while  he  is  enjoying  himself  in  company 
with  men  who  were  bankers  and  who  have 
earned  lasting  fame  as  creators  of  litera- 
ture. 

Appropriately  enough,  the  book  is  dedi- 
cated to  John  Pierpont  Morgan,  LL.D., 
“America’s  foremost  banker  and  patron  of 
literature.”  Not  only  is  Mr.  Morgan  a 
distinguished  banker  and  patron  of  litera- 
ture, but  his  name  itself  calls  up  literary 
associations,  his  maternal  grandfather,  John 
Pierpont,  having  been  a New  England 
clergyman  and  poet  of  reputation. 


Digitized  by  t^ooQle 


THE  BANKS  OF  ATLANTIC  CITY— AMERICA’S 
POPULAR  PLEASURE  RESORT 


SPEAKING  of  the  conversion  of  Atlan- 
tic City,  N.  J.,  from  an  exclusive 
watering  place  to  a city  of  business 
and  commercial  interests,  Joseph  A.  Mc- 
Namee,  in  an  article  for  the  Philadelphia 
Public  Ledger,  has  the  following  to  say  of 
the  city’s  banking  institutions: 

Prior  to  the  year  1881  any  banking  that 
was  done  was  by  mail  or  by  express  through 
the  Camden  and  Philadelphia  banks.  Dur- 
ing the  latter  ’70s  there  was  considerable 
agitation  in  favoring  of  organizing  a local 
bank.  In  view  of  the  meagre  population, 
there  being  but  a thousand  odd  souls  in  the 
community,  the  timid  ones  urged  caution. 
However,  in  1881  the  Atlantic  City  National 
Bank  was  successfully  launched  with  a capi- 
talization of  $50,000. 

The  first  bank  met  with  so  much  encour- 
agement that  in  1887  it  proved  an  easy  mat- 
ter to  secure  $100,000  as  capital  for  the  Sec- 
ond National  Bank,  with  which  was  asso- 
ciated the  Atlantic  Safe  Deposit  and  Trust 
Company,  capital  $100,000.  The  banking 
business  offered  such  remunerative  opportu- 
nities that  four  others  quickly  followed  the 
example  of  the  second.  In  1890  came  the 
Union  National,  with  a capital  of  $100,000; 
In  1900  the  Guarantee  Trust  Company,  capi- 
tal $500,000;  in  1901  the  Chelsea  National, 
capital  $100,000,  and  in  1902  the  Marine  Trust 
Company,  capital  $100,000. 

After  this  there  was  a slight  lull.  As  each 
new  bank  made  its  debut  the  pessimist  was 
ever  ready  with  the  claim  that  there  was  one 
bank  too  many,  and,  therefore,  the  new  ven- 
ture would  prove  a failure.  In  each  case  the 
“croaker”  failed  to  reckon  upon  the  increased 
patronage  of  the  resort  and  the  consequent 
increased  demand  for  banking  facilities.  The 
evolution  of  the  famous  Boardwalk  kept  pace 
with  the  growth  of  the  city,  so  that,  from  a 
few  modest  planks  laid  on  the  sand,  it  had 
grown  to  a magnificent  elevated  steel  struc- 
ture. In  the  year  1907  it  was  concluded 
that  the  Boardwalk  would  not  be  complete  in 
Its  appointments  without  a bank.  So  the 
Boardwalk  National  was  organized,  with  a 
capital  of  $200,000.  Upon  opening  its  sub- 
scription books  the  stock  of  the  Boardwalk 
Bank  was  oversubscribed,  as  was  the  case 
with  all  of  the  other  banks,  with  the  excep- 
tion of  the  Atlantic  City  National,  which  was 
considered  somewhat  in  the  light  of  an  ex- 
periment. 

As  the  banks  waxed  strong  and  prosperous 
allied  financial  Institutions  quickly  came  into 
being.  The  Atlantic  City  Building  and  Loan 
Association  has  the  honor  of  antedating  the 
banks,  having  been  organized  in  1869.  In 
1884  came  the  People’s  Building  and  Loan 
Association,  1889  the  Mutual  Building  and 
Loan  Association,  in  1895  the  Atlantic  Coast 
Building  and  Loan  Association  and  in  1900 
the  Atlantic  Title  Company,  which  afterward 

890 


absorbed  the  West  Jersey  Title  Company. 
In  1902  the  Atlantic  City  Fire  Insurance 
Company  and  the  Eastern  Fire  Insurance 
Company  were  organized.  In  1903  came  the 
South  Jersey  Title  Company,  in  1904  the 
West  Jersey  Mortgage  Company,  and  in  1908 
both  the  Home  Building  and  Loan  Associa- 
tion and  the  Ventnor  Building  and  Loan  As- 
sociation were  established. 

All  of  these  corporations,  together  with 
real  estate  companies  galore,  were  either  di- 
rectly or  indirectly  fostered  by  the  various 
banks,  and  the  great  majority  of  them  have 
been  and  are  in  sound  financial  condition. 
In  fact  it  might  also  be  said  there  has  not 
been  a failure  in  any  of  the  financial  insti- 
tutions in  Atlantic  City  that  weTe  organized 
on  a legitimate  basis. 

All  of  the  banks  of  Atlantic  City  occupy 
substantial  and  pretentious  quarters  with  the 
exception  of  the  Atlantic  Safe  Deposit  and 
Trust  Company.  This  highly  successful  in- 
stitution leads  all  of  its  competitors  in  vol- 
ume of  business,  which  it  transacts  under 
the  same  roof  with  the  Second  National 
Bank.  However,  it  has  secured  an  elegant 
building  site  at  the  southeast  corner  of  New 
York  and  Atlantic  avenues,  and  it  is  now 
preparing  to  erect  thereon  a magnificent 
building. 

The  greater  part  of  the  funds  of  the  At- 
lantic City  banks  is  loaned  on  notes  made  by 
the  local  people.  It  has  been  the  policy  of 
the  banks  to  encourage  the  development  of 
the  city,  and,  in  making  loans,  the  moral 
risk  was  always  given  first  consideration. 
The  inherent  confidence  of  the  people  in  the 
future  of  Atlantic  City  was  communicated  to 
the  banks,  and,  as  a consequence,  credit  was 
made  easy  In  all  deserving  cases.  This  con- 
fidence proved  to  be  so  well  reposed  that  the 
entire  loss  by  all  the  banks  upon  commer- 
cial paper  during  their  entire  existence  is  a 
mere  bagatelle.  In  fact,  such  Item  is  so 
small  it  would  barely  suffice  for  the  ordinary 
man  of  means  to  spend  a summer  at  one  of 
the  imposing  beach-front  hotels. 

Each  season  has  shown  a steady  growth 
in  the  business  of  the  banks,  a sure  indica- 
tion of  the  growth  of  the  city.  At  the  close 
of  business  on  September  1,  1910,  the  depos- 
its In  all  the  banks  were,  in  the  aggregate. 
$11,400,000,  while  the  combined  capital  and 
surplus  of  the  institutions  approximated 
$3,105,000.  All  of  the  banks,  with  one  ex- 
ception, are  upon  a dividend-paying  basis, 
the  annual  dividends  ranging  from  six  to 
thirty  per  cent.  The  stock  of  the  banks 
commands  a high  premium.  While  the  stock 
of  metropolitan  banks  generally  sells  at  a 
figure  below  the  actual  book  value,  the  stock 
of  Atlantic  City  banks  commands  a price 
much  above  book  value.  Thus,  although  the 
book  value  of  the  stock  of  the  Atlantic  City 
National  Bank  is  about  $816  per  share, 
$1,200  is  freely  offered  without  takers.  The 
last  sale  was  at  the  rate  of  $1,100  per  share. 


Digitized  by  t^ooole 


Old  Colony  Trust  Co. 

BOSTON,  MASS. 


Capital  and  Surplus  - - $12,500,000 
Deposits  ---  - 65,000,000 


OFFICERS 

T.  JEFFERSON  COOL1DGE,  JR.,  Chairman  Executive  Committee 
GORDON  ABBOTT,  Chairman  Board  of  Directors 

FRANCIS  R.  HART,  Vice-Chairman  Board  of  Directors 
PHILIP  STOCKTON,  President 

WALLACE  B.  DONHAM,  Vice-President 
J.  R.  WAKEFIELD,  Vice-President 

FREDERIC  G.  POUSLAND,  Treasurer 
E.  ELMER  FOYE,  Manager  Credit  Department 
GEORGE  W.  GRANT,  Cashier 

CHESTER  B.  HUMPHREY,  Secretary 

JOSEPH  G.  STEARNS,  Assistant  Secretary 
F.  M.  HOLMES,  Trust  Officer 

F.  M.  LAMSON,  Manager  Temple  Place  Office 


Charles  F.  Adams.  2d 
Oliver  Ames 
F.  Lothrop  Ames 
C.  W.  Amory 
William  Amory 
Charles  F.  Ayer 
John  S.  Bartlett 
Samuel  Carr 
B.  P.  Cheney 
T.  Jefferson  Coolldge 
Charles  E.  Cottlng 
Alvah  Crocker 
Philip  Y.  DeNormandle 
Philip  Dexter 
George  A.  Draper 
Frederic  C.  Dumalne 
William  Endlcott,  Jr. 


DIRECTORS 

Wllmot  R.  Evans 
Frederick  P.  Fish 
Reginald  Foster 
George  P.  Gardner 
Edwin  Farnham  Greene 
Robert  F.  Herrick 
Henry  S.  Howe 
Walter  Hunnewell 
Henry  C.  Jackson 
George  E.  Keith 
Gardiner  M.  Lane 
Thomas  L.  Livermore 
Arthur  Lyman 
Charles  S.  Mellen 
Lawrence  Minot 
Maxwell  Norman 
Richard  Olney 


Robert  T.  Paine.  2d 
Henry  Parkman 
Andrew  W.  Preston 
Richard  S.  Russell 
Philip  L.  Saltonstall 
Herbert  M.  Sears 
Quincy  A.  Shaw 
Howard  Stockton 
Charles  A.  Stone 
Galen  L.  Stone 
Nathaniel  Thayer 
Lucius  Tuttle 
H.  O.  Underwood 
Eliot  Wadsworth 
Stephen  M.  Weld 
Sidney  W.  Winslow 
Charles  W.  Whittier 


The  OLD  COLONY  TRUST  COMPANY  is  in  every  sense 
of  the  word  an  independent  trust  company,  interested  only  in 
the  welfare  of  its  depositors  and  its  stockholders,  and  the 
development  of  New  England’s  business  interests. 

Resources  in  excess  of  $75,000,000  make  this  Company 
one  of  the  largest  and  strongest  financial  institutions  in  the 
country,  and  insure  to  every  depositor,  large  or  small,  absolute  ^ 
security  combined  with  the  highest  type  of  banking  service.  k 


Digitized  by  LiOOQle 


BANKS 


We  Build  from 
Coast  to  Coast 


IF  you  contemplate  remodeling 
your  bank,  or  if  you  want  an 
entirely  new  building  with  every 
known  facility  for  modern  banking, 
you  can  accomplish  your  object  with 
ease  and  satisfaction  by  the  Hogg- 
son  Method. 

Our  Single  Contract  takes  care  of 
every  detail  from  initial  plans  to 
final  touches  of  decoration,  furnish- 
ing and  equipment — at  a guaranteed 
limit  of  cost. 

We  have  published  a Bank-Book  that 
explains  in  detail  how  we  build 
banks.  It  contains  140  illustrations 
of  interiors  and  exteriors  executed 
by  us,  as  well  as  much  valuable  in- 
formation for  the  prospective  builder. 

A copy  of  this  book  will  be  sent  to 
any  bank  on  request 

H0GGS0N  BROTHERS 

7 East  44th  St.,  New  York 


A NOTABLE  BOOK 

The  Economic  Causes  of 
Great  Fortunes 

By  ANNA  YOUNGMAN 


This  Is  a thorough  study  of  this  important  subject.  Miss  Young- 
man.  who  is  connected  with  the  department  of  economics  at 
Wellesley  College,  has  given  her  subject  careful  study  and  close 
research.  Her  book  will  be  read  with  interest  and  profit  by  all 
students  of  economic  subjects. 

The  New  York  “Times'*  said  editorially:  “There  is  noth- 
ing feminine  about  this  book.  Dr.  Youngman  may  take 
her  seat  beside  Ida  Tarbell,  who  knows  how  to  impress 
herself  upon  her  times  even  without  voting.** 

4*The  Nation",  May  12,  1910,  said:  "Marked  by  intellectu- 
al balance  in  discussion  and  Judicial  care  in  the  state- 
ment of  facte." 

The  book  is  Issued  in  attractive  and  readable  form,  making  a 
volume  of  200  pages,  bound  In  red  cloth,  with  title  in  gold.  The 
price  is  $1.50  net. 

The  Bankers  Publishing  Company 

253  Broadway,  New  York 


Digitized  by  CjOOQle 


MODERN  FINANCIAL  INSTITUTIONS 

AND  THEIR  EQUIPMENT 


THE  PLAINFIELD  TRUST  COMPANY,  PLAIN- 
FIELD,  NEW  JERSEY 


THE  eight  years  constituting  the  official 
life  of  the  Plainfield,  N.  J.,  Trust 
Company  have  been  years  of  rapid 
growth  and  development.  Starting  in  1902 
with  a capital  stock  of  $100,000,  this  insti- 
tution, in  the  face  of  keen  competition,  has 
built  up  a line  of  deposits  that,  on  the 
first  day  of  last  September,  was  declared  to 


campaign,  that  has  been  conducted  to  swell 
deposits  in  the  savings  department.  The 
company  has  always  been  an  advocate  of 
extensive  publicity  and  has  found  that  good 
results  are  obtained  when  the  terms  and 
facilities  of  its  banking,  savings,  safe  de- 
posit and  trust  departments,  are  kept  con- 
stantly before  the  public. 


The  Plainfield  Trust  Company,  Plainfield,  New  Jersey 


approximate  three  millions  of  dollars.  On 
this  same  day  the  bank  reported  surplus 
and  undivided  profits  of  $31 6,456  and  total 
resources  of  $3,334,30(5. 

Up-to-date  methods,  conservatively  em- 
ployed, have  won  for  the  Plainfield  Trust 
Company  a confidence  in  its  home  city  that 
has  communicated  itself  to  many  of  the  sur- 
rounding towns  and  villages,  whose  business 
in  constantly  increasing  volume,  it  is  hand- 
ling. This  out-of-town  business  is  largely 
the  result  of  a vigorous  “Banking  by  mail” 


Throughout  its  existence  the  Plainfield 
high  ideals  and  while  there  have  been  con- 
cessions to  many  of  the  demands  of  modern 
banking,  they  have  never  been  made  at  the 
expense  of  sound  banking  principles. 

In  accordance  with  this  policy  it  pays 
three  per  cent,  interest  on  checking  ac- 
counts with  balances  of  $500  or  more,  and 
four  per  cent,  interest  on  time  deposits  in 
its  savings  department.  In  J uly  of  tins 
year  the  stockholders  were  paid  a dividend 

891 


Digitized  by  L^OOQle 


Ladies'  Department 


892 


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MODERN  FINANCIAL  INSTITUTIONS 


898 


of  five  per  cent.,  which  is  but  another  in- 
dication of  the  company’s  healthy  condition. 

The  New  Home. 

Five  years  ago  the  ornate  building  repro- 
duced herewith  was  erected.  It  is  after 
the  classic  style  of  architecture,  a type  that 
possesses  many  advantages  when  the  build- 
ing is  to  be  used  exclusively  for  banking 
purposes,  and  cost  a large  sum  of 
money.  The  high-ceiled  interior  is  con- 
veniently divided  off  into  a generous  public 


experience  and  natural  attainments  emi- 
nently qualify  them  for  the  conduct  of  the 
business.  The  president,  Orville  T.  Waring, 
and  vice-president,  Henry  A.  McGee,  are 
both  prominently  associated  with  the  Stand- 
ard Oil  Company  and  while  their  offices  are 
in  New  York  City,  they  keep  in  close  touch 
with  the  management.  A.  V.  Heely,  first 
vice-president,  holds  a like  position  in  The 
Farmers’  Loan  and  Trust  Company  of  New 
York. 

H.  H.  Pond  assumed  the  position  of  sec- 


Main  Banking  Room 


space  and  a well-lighted  working  space  by 
marble  counters  topped  with  screens  of 
bronze  and  plate  glass.  Looking  across  the 
main  banking  room  from  the  entrance  the 
massive  vaults  may  be  seen.  These  vaults 
are  the  finest  that  could  be  purchased  and 
contain  boxes  of  all  sizes  for  renting.  Spe- 
cial provisions  are  made  for  lady  customers, 
whose  accounts  are  valued  highly.  In  every 
department  special  care  has  been  exercised 
to  select  fittings  that  will  be  pleasing  to 
the  eye  and  at  the  same  time  conducive 
to  routine  of  business.  The  photographs 
reproduced  herewith  will  give  some  idea  of 
the  arrangement  and  appearance  of  the  in- 
terior. 

Personnel. 

The  company  is  fortunate  in  having  its 
affairs  in  the  hands  of  officers  whose  broad 


retary  and  treasurer  in  May  of  this  year, 
succeeding  in  that  office  J.  Herbert  Case, 
now  vice-president,  who  resigned  from  the 
active  management  in  order  to  accept  the 
vice-presidency  of  the  Franklin  Trust  Com- 
pany of  New  York.  Mr.  Pond,  who  was 
for  many  years  cashier  of  the  Vineland 
National  Bank  and  secretary  of  the  Vine- 
land  Trust  Company  of  Vineland,  N.  J.,  is 
well  known  throughout  the  State  of  New 
Jersey  as  vice-president  of  the  New  Jersey 
Bankers’  Association. 

The  assistant  secretary,  DeWitt  Hubbell, 
was  formerly  associated  with  the  Mutual 
Alliance  Trust  Company  in  the  capacity 
of  teller. 

A glance  at  the  names  of  those  who  com- 
prise the  directorate  will  show  that  all  are 
well-known  successful  business  and  profes- 


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894 


THE  BANKERS  MAGAZINE 


the  Plainfield  Trust  Company  is  a guarantee 
of  prudent  and  conservative  management. 

They  are: 

J.  Herbert  Case,  vice-president  Franklin 
Trust  Co.,  New  York. 

Frederick  Geller,  attorney  and  counsellor-at- 
law,  New  York. 

Augustus  V.  Heely,  vice-president  The  Farm- 
ers' Loan  and  Trust  Company,  New  York. 

James  W.  Jackson,  executor  of  the  Jesse 
Hoyt  estate.  New  York. 

Edward  H.  Ladd,  Jr.,  Ladd  & Wood,  bank- 
ers, New  York. 

Charles  W.  McCutchen,  Holt  & Co.,  com- 
mission merchants. 


Henry  A.  McGee,  Standard  Oil  Company, 
New  York. 

Walter  M.  McGee,  Standard  Oil  Company, 
New  York. 

Charles  A.  Reed,  Reed  & Coddington,  at- 
torneys. 

Isaac  W.  Rushmore,  dairy  products.  New 
York. 

Frank  H.  Smith,  Register  Union  County, 
Elizabeth,  N.  J. 

Samuel  Townsend,  president.  People's  Na-' 
tlonal  Bank.  Westfield.  N.  J. 

Cornelius  B.  Tyler,  Tyler  & Tyler,  attorneys. 
New  York. 

Lewis  E.  Waring,  Edward  Sweet  & Co.r 
bankers.  New  York. 

Orville  T.  Waring,  Standard  Oil  Company, 
New  York. 


it 

H 

j|4||! 

Bank  of  British  North  America— Head  Office  in  Canada,  Montreal 


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THE  BANK  OF  BRITISH  NORTH  AMERICA 


THE  Bank  of  British  North  America, 
for  almost  seventy-five  years  has  oc- 
cupied a very  prominent  position 
among  the  financial  institutions  on  both 
sides  of  the  Atlantic  and  throughout  a 
period  longer  than  the  reign  of  the  late 
Queen  Victoria  has  maintained  a most  hon- 
orable reputation.  It  has  never  passed  a 
year  without  distributing  a dividend,  a fact 


of  very  material  importance  to  its  share- 
holders. The  dividends  have  varied  in  rate 
according  to  each  year’s  profits,  owing  to 
the  fearless  policy  of  successive  directors 
and  general  managers  in  meeting  losses 
promptly  and  fully  and  in  exercising  great 
caution  in  the  employment  of  funds  placed 
at  their  disposal.  The  dividend  for  seventy- 
five  years  has  averaged  about  six  and  one- 


Bank  of  British  North  America.  Toronto,  Ont.,  Branch 


895 


Digitized  by 


Google 


896 


THE  BANKERS  MAGAZINE 


half  per  cent,  per  annum  and  in  addition, 
the  bank  has  accumulated,  entirely  out  of 
profits,  a reserve  fund  which  now  amounts 
to  $2,530,666,  equal  to  fifty-two  per  cent, 
of  $4,866,666,  the  amount  of  its  paid-up 
capital. 


the  New  York  agency  was  established. 
Since  that  date  branches  have  been  estab- 
lished all  over  Canada  at  important  cities 
and  towns,  until  at  the  present  time  the 
bank  has  some  eighty  offices  stretching  from 
Halifax,  N.  S.,  and  New  York  on  the  At- 


Bank  of  British  North  America,  Vancouver,  B.  C..  Branch 


The  Bank  of  British  North  America 
was  established  in  1836  and  the  Montreal 
office  opened  for  business  March  13  of  that 
year.  Early  in  the  following  year 
branches  w'ere  opened  at  Quebec,  Toronto, 
Halifax  and  St.  John  and  in  April,  1843, 


lantic  to  Victoria,  B.  C.,  and  San  Fran- 
cisco on  the  Pacific,  with  Dawson  in  the 
far  North.  This  institution,  whose  head 
office  it  as  5 Gracechurch  street,  London, 
E.  C.,  with  the  head  office  for  Canada 
at  Montreal,  is  the  only  bank  in  Canada 


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MODERN  FINANCIAL  INSTITUTIONS 


897 


incorporated  by  Royal  Charter,  which  in- 
corporation was  granted  in  184-0.  Of  this 
fact,  the  officials  of  the  bank  are  justly 
proud  and  as  they  look  back  on  the  useful 
career  it  has  enjoyed  for  seventy-five  years 


long  before  the  opening  of  the  first  trans- 
continental railway,  it  decided  to  afford 
banking  facilities  to  British  Columbia  and 
to  that  end  sent  around  Cape  Horn  the 
necessary  clerks  and  equipment,  when  a 


Bank  of  British  North  America,  Winnipeg,  Man.,  Branch 


and  note  the  extension  of  its  business,  they 
have  a right  to  be  proud  of  its  work  and 
its  results. 

The  old  “British  Bank”  as  it  is  frequently 
called,  hus  been  a pioneer  on  more  occa- 
sions than  one.  More  than  fifty  years  ago, 


branch  was  opened  at  Victoria,  B.  C.,  May 
20,  1859;  and  when  the  Klondike  rush  be- 
gan, it  was  the  first  in  the  field,  opening 
a branch  at  Dawson  City  in  the  Yukon  May 
18,  1898.  These  facts  only  go  to  illustrate 
the  spirit  of  progress  that  has  animated 


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898 


THE  BANKERS  MAGAZINE 


the  bank's  management  and  still  animates 
it. 

As  before  mentioned  an  agency  was 
opened  in  New  York  in  1843  so  that  for 
nearly  seventy  years  it  has  been  a part  of 
the  banking  life  of  the  Metropolis.  In  its 
early  years  it  occupied  quarters  in  Pine 
street  and  in  Nassau  street,  but  since  1873  it 
has  been  located  in  the  building  of  the 
New  York  Life  Insurance  & Trust  Com- 
pany at  52  Wall  street.  For  most  of  this 
time  it  occupied  the  eastern  half  of  this 
building,  but  in  August,  1909,  it  took  pos- 
session of  the  offices  in  the  same  building 
previously  used  by  the  National  City  Bank. 

The  court  of  Directors  of  the  bank  of 
British  North  America  consists  of  J.  H. 
Brodie,  J.  H.  Mayne  Campbell,  J.  J.  Cater, 
Richard  H.  Glvn,  E.  A.  Hoare,  Henry  J. 


B.  Kendall,  Frederic  Lubbock,  C.  W.  Tom- 
kinson  and  G.  D.  Whatman,  all  of  whom 
reside  in  London,  although  they  keep  them- 
selves familiar  with  the  business  condi- 
tions in  Canada  by  frequent  visits  to  this 
side,  and  may  rightly  be  said  to  prudently 
administer  their  trust,  expanding  their  in- 
terests when  and  where  circumstances  war- 
rant and  carefully  guarding  their  financial 
resources. 

In  July  of  this  year,  Mr.  E.  A.  Hoare, 
chairman  of  the  court  of  directors,  came 
out  to  Canada  and  spent  several  months 
visiting  the  various  branches,  going  as  far 
West  as  Vancouver  and  Prince  Rupert. 

The  general  manager,  Mr.  Harry  Stikeman, 
who  resides  in  Montreal,  has  occupied  that 
office  for  over  fifteen  years. 


REMODELING  INTERIOR  SCRANTON  SAVINGS 
BANK,  SCRANTON,  PENNSYLVANIA 


REPRODUCED  above,  is  an  interior 
view  of  the  banking  room  designed 
and  executed  for  the  Kingston,  Pa., 
Deposit  and  Savings  Bank  by  the  Veit 
Manufacturing  Company  of  Grand  Rapids, 


Mich.,  a concern  associated  with  the  Bank- 
ers’ Bulling  Bureau  of  New  York  City. 
The  last  named  company  has  taken  a con- 
tract to  completely  rebuild  the  interior  of 
the  Scranton,  Pa.,  Savings  Bank,  involving 


Interior_View  Kingston  (Pa.)  Deposit  and  Savings  Bank.  Designed  and  executed  by 
the  Veit  Mfg.  Co.,  Grand  Rapids,  Mich. 


Digitized  by  L^OOQle 


1 


1869 


1910 


Mellon  National  Bank 

PITTSBURGH 

The  service  of  this  bank  to  its  corre- 
spondents is  efficient  and  interested, 
whatever  the  size  of  their  balances 

WRITE  FOR  A PROPOSITION 

Capital  and  Surplus  7 Millions 


First  National  Bank 

OF  PHILADELPHIA 


Accounts  of  banks,  firms  and  corporations  are 
welcomed  on  terms  consistent  with  the 
character  of  the  service  rendered 


J.  TATNALL  LEA,  President. 
WILLIAM  A.  LAW,  1st  Vice-President. 
KENTON  WARNE,  2d  Vice-President. 


THOMAS  W.  ANDREW  Cashier 
CHARLES  H.  JAMES.  Asst.  Cashier 
FREAS  B SNYDER.  Asst.  Cashier 


Digitized  by 


Google 


Tt\e 


Rank  of  Pittsburgh 

■-^National  -K.  Association  w 

ONE  HUNDRED  YEARS  OLD 


CAPITAL,  $2,400,000 


SURPLUS,  $3,000,000 


THIS  bank  was 

organized 

when  Pittsburgh 
was  a village  of 
less  than  5,000  in- 
habitants. Tt  is 
the  oldest  Bank  in 
the  United  States 
West  of  the  Al- 
leghany Moun- 
tains. 


W,TH 

V V sources  ol 
over  $25,1*00,000.00 
and  equipped  for 
all  branches  of 
modern  banking, 
it  invites  conser- 
vatively managed 
ban  ks  to  designs  te 
it  as  a reserve  de- 
pository. 


OFFICERS 

_ HARRISON  NESBIT.  President 

WILSON  A.  SHAW.  V.-P.  and  Chair.  Bd.  Director* 

W.  P.  BICKEL,  Cashier  J.  M.  RUSSELL.  Asst.  Cashier  E. 

GEO.  F.  WRIGHT.  Auditor 


J.  D.  AYRES,  V.-Pres. 
C.  MOREY,  Asst  Cashier 


Jranklin  National  lank 


Capital 

{1,000,000 

Surplus  and 
Undiflded  Profits 
$2,711,000 


President 

j.  r.  McAllister 

Vice-President 
J.  A.  HARRIS,  Jr. 
Cashier. 

E.  P.  PASSMORE 
Assistant  Cashier 
J.  WILLIAM  HARDT 
Assistant  Cashier 
L.  H.  SHRIGLEY. 

Foreign  Ex.  Dept. 
WILLIAM  WRIGHT 
Manager 


Invites  the  Accounts  of  Banks,  Bankers,  Corporations,  Mercantile 

Firms  and  Individuals 


Travelers’  Letters  of  Credit  and  Commercial  Credits  Issued. 
Foreign  Exchange  in  all  it*  Branches. 


J.  HAMPTON  BARNES 
SAMUEL  T.  BODINE 
JAMES  C.  BROOKS 
THOMAS  DE  WITT  CUYLER 
GEORGE  H.  FRAZIER 
WILLIAM  F.  HARRITY 
EDWARD  B.  SMITH 


DIRECTORS 


HENRY  TATNALL 
CHARLTON  YARN ALL 
PERCY  C.  MADEIRA 
ELLIS  P.  PASSMORE 
J.  A.  HARRIS,  Jr. 

J.  RUTHERFORD  MCALLISTER 


FREDERICK  L.  BAILY 
EFFINGHAM  B.  MORRIS 
EDWARD  T.  STOTE8BUBY 
HENRY  C.  FRICK 
JOHN  B.  THAYER 
MORRIS  L.  CLOTHIER 
C.  8.  W.  PACKARD 


Digitized  by  CjOOQle 


BANKING  AND  FINANCIAL  NOTES 


899 


the  removal  of  all  partitions  and  fixtures, 
and  will  within  a short  time  complete  the 
work. 

Particular  attention  will  be  p^^by  the 
designers  to  the  lighting  arrange^nts,  a 
problem  that  should  and  will  be  considered 
from  the  viewpoint  of  an  expert,  because 
the  scarcity  of  natural  light  in  a banking 
room  works  a serious  inconvenience  to  both 
patrons  and  clerks. 

The  main  banking  room  will  be  treated  in 
specially  selected  Pavonazza  marble  with 
Verde  antique  base  and  the  working  space 
will  be  enclosed  and  screened  from  the  pub- 
lic by  a marble  counter  topped  with  a 
bronze  grille  of  beautiful  and  unique  de- 
sign. Back  of  this  screen  will  stand  the 
steel  counters,  filing  devices  and  other  ar- 
ticles of  furniture  in  daily  use  by  tellers 
and  clerks.  The  tellers*  counters  are  to 
be  covered  with  carrara  glass  and  the  book- 


keepers’ desks  with  a heavy,  durable  compo- 
sition, green  in  color. 

• Marble  floors  will  be  laid  throughout  the 
public  lobby  and  assistant  cashiers’  space; 
the  floors  of  the  working  space  will  be 
covered  with  Battleship  linoleum. 

An  ornamental  iron  vestibule  finished  in 
Verde  antique  will  give  entrance  to  the  main 
banking  room.  The  doors  will  be  of  solid 
mahogany  and  clear  plate  glass. 

The  cashiers’  private  room  on  the  main 
floor  and  also  his  outer  office  will  be  treated 
in  solid  mahogany.  This  same  beautiful 
wood  will  be  used  in  the  furnishing  of  the 
directors’  room  and  the  ante  room  located 
on  the  mezzanine  floor.  Throughout  the 
bank  the  same  careful  attention  will  be 
given  to  all  details  of  construction  and 
decoration  and  the  final  results  should  be 
pleasing  to  all  concerned. 


BANKING  AND  FINANCIAL  NOTES 


Secretary  of  the  Treasury  MacVeagh  To 
Petition  for  Change  in  Currency 
Law — Desires  Latitude  in  Paper 
Money  Issues. 

Important  changes  in  some  issues  of  pa- 
per currency  and  a radical  reform  in  the 
method  of  disbursing  public  moneys  under 


Bronze  and  Iron  Work  for  Banks 


Cast  Bronze  Signs  and  Tablets 

BRONZE  OOUNTER  SCREENS 
Wire  Meah  Enoloaures 

To  Special  Design 

JNO.  WILLIAMS  INC.  Bronze  Foundry, 
256  West  27th  Street,  New  York,  publishes  the 
Magssine  “ American  Art  in  Bronze  and  Iron."  il- 
lustrating Bank  Counter  Screens,  Tablets,  8igns, 
etc.  Copies  free  to  Bankers. 

“ Tour  Architect  knows  Jno,  Williams  Inc /• 


Merchants  National  Bank 


RICHMOND,  VA. 

Capital  $200,000 

Surplus  and  Profits,  961,000 

This  bank  is  the  largest  depository  for 
banks  between  Baltimore  and  New  Orl- 
eans. It  Is  Virginia’s  most  successful 
National  Bank.  It  has  the  best  facilities 
for  handling  items  on  the  Virginias  and 
Caroltnas.  Collections  carefully  routed. 

Correspondence  Solicited 


the  sub-treasury  system,  probably  will  be 
recommended  to  Congress  by  Secretary 
MacVeagh. 

The  Treasurer  desires  authority  to  issue 
paper  money  in  denominations  most  needed. 
Mr.  MacVeagh  will  recommend  that  the 
laws  restricting  the  issues  to  certain  denom- 
inations be  relaxed.  The  demand  for  small 


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BINDERS 

AND 

BLANKS 

OF  UNIFORM  EXCELLENCE 


FOR  ALL  DEPARTMENTS  OF  BANK  ACCOUNTING 

BAKER-VAWTER  COMPANY 


CHICAGO 


HOLYOKE,  MASS. 


notes  is  so  great  this  year  that  the  Treasury 
is  issuing  $1  greenbacks  for  the  first  time 
since  1885. 

A radical  step  in  the  reform  of  the  sub- 
treasury  system  will  be  a recommendation 
that  collectors  of  customs  and  internal 
revenue  be  authorized  to  receive  certified 
checks  of  national  banks  in  payment  of 
dues  under  such  regulations  as  will  insure 
the  Government  against  loss.  At  present 
nothing  but  cash  is  received  for  customs 
and  internal  revenue. 

The  banks  have  asked  for  a provision  of 
law  to  require  the  Government  to  pay  the 
cost  of  redemption  of  its  own  currency 
and  the  cost  of  transportation  between  the 
banks  and  the  Treasury.  This,  Secretary 
MacVeagh  declines  to  do,  because  it  would 
cost  the  Government  about  $300,000  a year. 


SAVOY  TRUST 
COMPANY 

(Formerly  the  Italtan-Amerlcan  Trust  Co.) 

520  BROADWAY  - NEW  YORK 


Capital  - $500,000.00 


This  company  has  a thoroughly  equipped 
Foreign  Department,  under  the  personal 
supervision  of  an  officer  of  the  bank.  We 
transact  a general  banking  business,  and 
have  the  best  facilities  for  collecting 
checks — domestic  or  foreign. 


ACCOUNTS  OF  BANKS  SOLICITED. 


EMANUEL  GERLI,  - - President 

C.  PITA,  ...  Vice-President 

T.  K.  SANDS,  - - Vice-President 

ARTHUR  DAT,  - - Vice-President 

ARTHUR  BA  UR,  Secretary  and  Treasurer 


900 


It  is  also  desirable  to  have  gold  certifi- 
cates, payable  to  order,  of  the  act  of  1900, 
received  in  payment  for  Government  dues 
at  any  place  where  such  payment  could  be 
made.  This  also  the  Secretary  declines  to 
recommend  on  the  ground  that  it  would 
reduce  the  cost  of  domestic  exchange. 


Mutual  Life  Insurance  Companies 
Propose  National  Bank  Pensions. 

Pensions  for  all  employes  of  national 
banks  and  protection  for  their  families  in 
case  of  death  is  proposed  to  the  Treasury 
Department  by  the  large  mutual  life  insur- 
ance companies. 

Several  representatives  of  the  companies, 
headed  bv  W.  C.  Beers,  of  New  York,  hail 
a lengthy  conference  Nov.  14  with  the 
Comptroller  of  the  Currency  as  to  the  le- 
gality of  the  plan.  Their  proposal  is  to 
have  the  Treasury  Department  interpret  the 
National  Bank  law  to  permit  the  banks  to 
take  out  a special  form  of  policy  for  em- 
ployes. 

Some  time  ago  a ruling  was  made  that 
a national  bank  had  no  right  under  the  law 
to  insure  the  life  of  one  of  its  officers.  That 
ruling  was  made  after  it  had  been  found 
that  a life  insurance  company  had  acquired 
a string  of  banks  and  wras  drawing  back 
all  their  earnings  in  the  form  of  premiums 
on  policies  on  the  lives  of  officers. 


Aldrich  Discusses  Monetary  Reform. 

Senator  Nelson  W.  Aldrich,  chairman  of 
the  Commission  on  Monetary  Reform,  was 
the  principal  speaker  at  the  thirtieth  anni- 
versary dinner  of  the  Academy  of  Political 
Science  given  on  the  evening  of  Nov.  11,  at 
the  Hotel  Astor,  New  York. 

He  told  his  hearers  that  the  question  of 
reforming  the  monetary  system  was  being 
carefully  studied  by  the  commission,  but  he 


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FIRST 

N/  1 lOSiL 

BANK 


CLEVELAND,  OHIO 


Surplus  and  Profits  - $1,345,000.00 


ACCOUNTS  SOLICITED 


Correspondence  Invited  Collections  a Specialty  ! 

I- ! 


did  not  give  any  idea  of  the  nature  of  the 
remedy  which  that  body  would  suggest. 
Those  who  heard  his  address  before  the 
same  body  last  April  were  of  the  opinion, 
however,  that  his  latest  utterance  showed 
a tendency  to  come  around  to  the  idea  of  a 
central  bank. 

Nearly  seven  hundred  guests  sat  down  to 
the  dinner,  and  among  them  were  some  of 
the  leading  financiers  and  students  of  econ- 
omy in  the  country.  The  Academy  of  Po- 
litical Science  is  almost  unique  in  the  sense 
that  it  admits  women  to  full  participation 
in  its  activities  in  the  same  measure  as  it 
does  men. 

No  less  than  three  former  governors  were 
among  those  at  the  dinner.  They  were 
ex-Governor  Rollin  S.  Woodruff  of  Con- 
necticut, ex-Governor  A.  B.  White  of  West 
Virginia  and  ex-Governor  Myron  T.  Her- 
rick of  Ohio.  There  were  also  delegates  ap- 
pointed by  the  Governor  of  practically  every 
state  east  of  the  Rocky  Mountains,  besides 
representatives  of  commercial  bodies  from 
all  parts  of  the  country. 

A.  Barton  Hepburn,  president  of  the 
Chase  National  Bank  of  New  York,  who,  in 
addition  to  being  president  of  the  New 
York  Chamber  of  Commerce,  is  president 
also  of  the  Academy  of  Political  Science, 
was  chairman  of  the  gathering. 

Introducing  Senator  Aldrich,  Mr.  Hep- 
burn recalled  the  services  rendered  to  the 
financial  institutions  of  the  United  States 
by  the  Aldrich-Vreeland  act,  though  he  de- 
clared that  this  was  only  an  emergency 
measure,  and  he  fully  recognized  its  short- 
comings. He  added  that  he  nearly  had 
heart  failure  when  the  retirement  of  Sen- 
ator Aldrich  from  the  Senate  was  an- 
nounced, but  he  hoped  that  Providence  and 
the  Legislature  which  met  in  Providence 
might  remedy  that  even  yet. 

Senator  Aldrich  said,  in  part: 

What  we  now  propose  to  do  is  to  seek 
counsel  and  to  invoke  the  calm  judgment  of 
economists,  students,  men  of  affairs,  bank- 
ers and  business  men.  We  shall  appeal  to 
the  thoughtful  men  of  this  country,  like 
those  that  you  met  to-day,  to  the  commis- 


sion of  the  American  Bankers’  Association 
and  the  representatives  of  the  Merchants’ 
Association  of  New  York,  and  to  other  rep- 
resentatives throughout  the  country,  asking 
them,  as  I believe  we  have  a right  to  do, 
for  their  co-operation  and  support  in  some 
reasonable  solution  of  this  vast  question. 

You  may  ask  why  we  have  not  commenced 
this  work  before.  I will  say  that  the  work 
of  obtaining  literature  was  not  completed, 
but  I have  another  reason  for  not  having 
called  the  commission  for  the  last  two  or 
three  months.  I did  not  think  it  was  wise 
to  enter  upon  a discussion  of  this  question 
in  the  midst  of  a heated  political  campaign. 

If  any  solution  of  this  question  is  to  be 
reached  at  all,  it  must  be  reached  without 
a single  tinge  of  political  partisanship.  It  is 
not  and  must  not  be  in  any  sense  a political 
question.  It  is  a business  question,  affect- 
ing the  material  interests  of  the  entire  peo- 
ple of  the  United  States.  Do  you  realize 
that  the  number  of  depositors  in  the  various 
banks  of  the  United  States  is  greater  than 
the  number  of  people  engaged  in  useful  oc- 
cupations in  this  country? 

Any  plan  which  for  one  instant  permitted 
of  political  control  hereafter  in  any  of  the 
great  functions  of  the  organization  which  we 
might  suggest  would  be  fatal.  My  associates 
will  bear  me  out  when  I say  this  is  not  a 
new  thought  on  my  part.  It  has  not  arisen 
in  my  mind  since  I decided  to  go  out  of 
political  life;  it  was  not  affected  by  the 
events  of  the  last  week;  but  it  comes  from  a 
knowledge  that  this  question,  if  it  is  to  be 
settled  at  all,  must  be  settled  upon  scientific 
and  business  principles  that  will  appeal  to 
the  people  of  this  country  regardless  of  their 
party  affiliations. 

The  commission  have  no  plan.  The  com- 
mission are  approaching  this  question  with 
an  open  mind,  and  wfe  have  a right,  I think, 
to  ask  the  economists*  and  thoughtful  men 


POSITION  WANTED 

ENGINEER  will  consider  new  engagement  about 
first  of  year.  Has  had  sixteen  years  experience  in  con- 
nection with  electric  lighting,  railway,  power  and  gas 
companies,  water  power  development,  etc.,  including 
designing,  construction,  oneratingand  consulting  work. 
Is  technical  graduate,  good  executive,  tactful,  resource- 
ful and  energetic.  Especially  qualified  to  undertake 
examinations,  reports  and  supervision  of  Public  Ser- 
vice properties,  proposed  developments,  etc.  Address, 

X Y.  Z.,  are  Bankers  Magazine,  253  Broadway,  Hew  York  City 


901 


Digitized  by  t^ooQle 


Banks  contemplating  improvements 
should  consult  us  immediately,  there- 
by avoiding  errors  in  planning. 

We  Plan,  Design  and  Build  Banks 
complete,  including  Interior  Work, 
Decorations  and  Equipment. 

WRITE  FOR  SUGGESTIONS 
giving  us  an  idea  of  what  work  you 
have  in  mind.  This  will  place  you 
under  no  obligation. 


BANKERS  BUILDING  BUREAU,  31  & 33  East  27th  St.,  New  York 


throughout  the  country  to  approach  it  with 
an  equally  open  mind.  And  then,  with  my 
faith  in  the  intelligence  and  patriotism  of 
the  American  people,  I believe  that  there  can 
be  no  question  whatever  about  the  result. 

I have  been  told  frequently  that  we  should 
encounter  prejudices,  prejudices  of  locality, 
prejudices  as  to  the  control  of  great  inter- 
ests, as  to  any  institution  or  any  organiza- 
tion which  we  should  suggest.  I realize  as 
well  as  any  person  can  that  there  can  be  no 
successful  solution  of  this  question  that  does 
not  only  eliminate  politics,  but  eliminates  the 
possibility  of  control  In  any  section  or  on 
the  part  of  any  Interest,  great  or  small. 


Schiff  Favors  Central  Bank. 

Jacob  H.  Schiff  declared  in  favor  of  a 
central  bank  as  the  sure  means  of  averting 
future  panics.  Now  that  the  election  was 


THE 

GARFIELD 
NATIONAL  BANK 

Fifth  Avenue  Building 

Corner  Fifth  Ave.  and  Twenty -Third  Street 

NEW  YORK 

CAPITAL  SURPLUS 

$1,000,000  $1,000,000 


OFFICERS 
RUEL  W.  POOR,  President 

JAMES  McCUTCHEON,  Vice-Pres. 
WILLIAM  L.  DOUGLASS,  Cashier 
ARTHUR  W.  SNOW.  Asst.  Cash. 


DIRECTORS 

James  KcCntcheoa  Samuel  Adams 
Charles  T.  Wills  William  H.  Gelshene 
Rnel  W.  Poor  Morgan  J.  O'Brien 

Thomas  D.  Adams 


902 


over,  he  said,  the  currency  question  should 
be  taken  up,  even  before  that  of  the  tariff. 

“The  question  of  currency  reform,”  he 
said,  “should  not  be  a party  question,  for 
the  weal  of  the  entire  nation  and  the  whole 
people  is  so  dependent  upon  its  proper  so- 
lution that  it  should  have  precedence  over 
every  other  question  which  now  awaits  dis- 
cussion by  Congress.” 

Mr.  Schiff  added  that  the  American  peo- 
ple has  learned  much  in  the  last  few  years, 
and  realizes  that  no  system  can  bring 
relief  unless  it  is  based  upon  a centralization 
of  bank  reserves,  now  so  widely  scattered, 
and  because  of  this  of  so  little  actual  value 
in  time  of  distress. 

“The  emergency  currency,  which  may  be 
issued  under  the  so-called  Aldrich- Vreeland 
act,”  he  continued,  “the  sufficiency  of  which 
has  not  yet  been  tested,  not  unlikely  will,  if 
opportunity  shall  proffer  itself  for  its  use, 
serve  well  as  a temporary  makeshift  in 
helping  to  prevent  excessive  money  rates 
under  conditions  which,  without  such  an 
emergency  provision,  might  lead  to  great 
stringency;  an  actual  financial  crisis  the 
A ldrich-V reeland  measure  wall  never  suffice 
to  prevent.” 

Mr.  Schiff  recalled  that  the  Chamber  of 
Commerce  of  New  York  declared  at  first 
in  favor  of  a central  bank  and  then  side- 
tracked the  proposition  in  the  belief  that 
the  people,  as  a whole,  were  not  ready  to 
adopt  so  farreaching  a change  in  methods. 

“I  am  quite  certain,”  he  added,  “that  the 
membership  of  that  important  body  is  to-day 
even  more  strong  in  the  opinion  that  no 
other  way  exists  out  of  our  recurring  finan- 
cial difficulties  than  the  establishment  of  a 
central  agency,  through  which  the  require- 
ment of  our  everchanging  financial  condi- 
tions shall  become  prudently  regulated  and 
provided  for.” 

While  congratulating  the  country  on  the 
quick  recovery  from  the  financial  panic  of 
three  years  ago,  Mr.  Schiff  warned  his 
hearers  that  the  country  had  not  become 
immune,  and  he  advised  them  to  repair  the 
roof  while  the  sun  shone,  adding,  “and  it 
will,  I believe,  shine  for  some  time  to  come.** 


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When 
The  Lights 
Are 

Switched  On 

Make  your  bank  doubly 
attractive  to  clients  by 
doubling  the  amount 
and  improving  the  qual- 
ity of  the  illumination. 
This  is  the  season  of  the 
year  when  there  is  not 
enough  daylight  even 
for  banking  hours,  not 
to  mention  before-time 
and  over  - time  work. 

Insure  having  an 
abundanco  of  brilliant 
artificial  daylight,  elim- 
inate eye-strain  and  in- 
crease the  working  effi- 
ciency of  the  bank’s 
employees  by  installing 
G-E  MAZDA  LAMPS 


Give  More  light 
For  Less  Money 
Than  Any  Other 
Type  of  Electric 
Incandescent  . . . 


For  four-fifths  of  the  electricity  required 
by  an  ordinary  16  candle-power  lamp  a Q-E 
MAZDA  will  give  twice  as  much  light, 
whiter,  more  brilliant,  more  attractive  and 
more  like  actual  sunlight. 

Representative  banks  everywhere  are 
substituting  Q E MAZDA  Lamps  in  place  of 
older  and  less  powerful  lamps.  Our  illus- 


trated booklet,  “Dawn  of  a New  Era  in 
Lighting,”  gives  conclusive  facts  why  you 
should  do  the  same.  Its  22  pages  contains 
chapters  on  modern  lighting  requirements, 
lamp  economy,  metal  filament  lamps,  cost  of 
lighting,  science  of  illumination,  lighting 
plans,  sizes  and  prices,  reflectors,  etc.  Your 
request  brings  it  by  return  post. 


General  Electric  Company  Schenectady,  N.  Y. 

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CHARTERED  ACCOUNTANTS 

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NEW  YORK 
PHILADELPHIA 
WASHINGTON 
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PITTSBURG 
CHICAGO 
MILWAUKEE 
KANSAS  CITY 


ST.  JOSEPH 
ST.  PAUL 
MINNEAPOLIS 
SPOKANE 


MONTREAL 

WINNIPEG 


GLASGOW 

LONDON 


After  warning  the  Monetary  Commission 
that  their  conclusion  was  eagerly  awaited 
and  would  be  judged  by  the  American  peo- 
ple with  intelligence  in  finding  the  proper 
solution,  he  concluded: 

“With  the  excitement  which  the  late  elec- 
tion has  called  forth  ended,  let  us  hope  that 
the  country  will  now  go  about  its  legitimate 
business,  for  which  underlying  conditions 
are  for  the  time  being  indeed  very  satis- 
factory. The  two  great  issues  which  need 
to  be  promptly,  courageously  and  wisely 
dealt  with  to  assure  permanent  prosperity 
are  the  tariff  and  the  currency;  and  of  these 
two  the  currency  is  the  more  important  and 
should  have  the  right  of  way.” 


New  York  State  Bankers’  Association  in 
New  Quarters. 

A communication  from  William  J.  Henry, 
secretary  of  the  New  York  State  Bankers’ 
Association,  announces  the  establishment 
of  association  headquarters  on  the  eigh- 
teenth floor  of  11  Fine  street,  New  York 
City. 


A Bank  on  a Steamship  Pier. 

The  Hamburg-American  Line  has  estab- 
lished on  its  piers  in  Hoboken  a portable 


RUDOLPH  GUENTHER 

Financial  Advertising 

US  Broadway  Thone  4N  Cordaadt 

Efficient  Publicity  Service  for  finan- 
cial firms  of  highest  character.  We 
would  be  pi  eased  to  consult  with  you. 
Advertisers  Pocket  Guide  on  request . 


904 


bank  to  meet  the  demands  of  incoming  and 
outgoing  passengers  who  usually  take  up 
the  time  of  pursers  in  cashing  checks  and 
letters  of  credit  The  bank  is  octagonal 
and  about  ten  feet  in  diameter  and  the 
four  cashiers  who  are  inside  of  it  can  pick 
it  up  and  carry  it  to  any  part  of  any  of  the 
piers.  They  speak  a total  of  twelve  lan- 
guages and  dialects.  The  pier  bank  is  a 
branch  of  a Hoboken  establishment 


BcrFALo  Banks  Combine. 

The  Manufactures  & Traders’  National 
Bank  has  obtained  control  of  the  Fidelity 
Trust  Company  by  purchasing  a majority 
of  the  latter’s  capital  stock.  George  V. 
Forman,  who  was  president  of  the  Fideli- 
ty company,  has  resigned  and  Robert  L. 
Fryer,  president  of  the  Manufacturers  & 
Traders*  National  Bank,  succeeds  him  as 
president  of  the  Fidelity  Company.  Mr. 
Fryer,  who  also  served  as  vice-president  of 
the  Fidelity,  is  succeeded  in  that  position  by 
Franklin  D.  Locke.  The  Fidelity’s  depos- 
its aggregate  nearly  $9,000,000. 


Philadelphia  Banks  Increase  Surplus. 

Within  the  past  few  weeks  the  following 
Philadelphia  banks  have  added  to  surplus 
these  amounts:  Northwestern  National 

Bank,  $50,000  (surplus  now  $600,000);  Man- 
ufacturers’ National  Bank,  $25,000  (surplus 


DANK  PICTURES 

Large  portraits  of  past  officers,  etc., 
made  from  any  good  photograph.  Splen- 
did for  directors’  room  or  bank  offices. 
Write  fr  particulars. 

Oliver  Lipplncott,  Photographer  of  Men 
Singer  Bldg.,  149  B’way,  New  York 
References— The  Bankers  Magazine 


Digitized  by  t^ooole 


Capital  - $6,000,000 
Surplus  - $6,000,000 


Depository  of  the 
United  States,  State 
and  Qty  of  New  York 


The  Mechanics  and  Metals  National  Bank 


OF  THE  CITY  OF  NEW  YORK 

OATES  W.  McGARRAH,  President. 

ALEXANDER  E.  ORR,  Vice-President  WALTER  P.  ALBERTSEN,  Vice-Pres. 
NICHOLAS  F.  PALMER,  Vice-President  JOSEPH  S.  HOUSE,  Cashier. 
FREDERIC  W.  ALLEN,  Vice-President.  ROBERT  U.  GRAFF,  Asst.  Cashier. 

ANDREW  A.  KNOWLES.  Vice-President  JOHN  ROBINSON,  Asst  Cashier. 
FRANK  O.  ROE.  Vice-President  CHARLES  E.  MILLER.  Asst  Cashier. 


now  $330,000) ; Central  National  Bank, 
$250,000  (surplus  now  $3,000,000) ; Ken- 
sington National  Bank,  $25,000  (surplus 
now  $300,000.) 


Indiscriminate  Organization  of  New 
Banks  a Menace. 

In  his  report  on  the  condition  of  the 
state  and  private  banks  of  South  Carolina 
as  of  September  22  last  Giles  L.  Wilson, 
bank  superintendent  for  that  state,  says: 

“To  the  safe,  sane,  conservative  bankers 
of  South  Carolina  I ask:  Where  will  the 
organization  of  new  banks  end?  Should 
there  not  be  a limit  placed  on  the  number, 
of  small,  weak  banks?  Their  rapid  forma- 
tion is  becoming  a source  of  anxiety  to  this 
office.  Such  institutions  are  a constant 
menace  to  existing  banks  of  sound  and  con- 
servative management.  The  weak  institu- 
tions not  only  compete  with  the  older  banks 
in  more  or  less  unfair  and  illegitimate  ways 
but,  owing  to  their  tendency  to  break  down 
at  critical  moments,  they  threaten  the  sol- 
vency of  the  other  institutions  in  their  com- 
munities. 

“It  cannot  be  gainsaid  that  the  first  con- 
sideration of  a properly  conducted  bank 
should  be  to  furnish  absolute  safety  for 
its  depositors’  money.  This  being  true,  it 
follows  that  one  strong  bank  in  a commu- 
nity is  better  for  all  the  people  than  two 
or  more  weak  ones.  I regret  to  admit  that 


ATLANTIC  NATIONAL  BANK 

Providence,  R.  I. 

S?nd  Us  Your  Rhode  blond  Collections 


we  have  numbers  of  instances  in  our  state 
of  the  two  or  more  weak  institutions.” 
There  are  now  276  State  and  private 
banks  in  South  Carolina.  In  addition  there 
are  twenty  other  state  banks  that  have  been 
commissioned  and  are  in  process  of  organi- 
zation. The  majority  of  these  twenty  will 
probably  be  open  for  business  by  the  time 
the  next  call  for  statement  is  made.  There 
are  forty  national  banks  in  the  state  and 
another  one  organizing. 


Seventy-five  Year  Old  Bank  to  Liquidate. 

After  seventy-five  years’  honorable  exis- 
tence, the  Citizens’  Bank  of  Louisiana,  at 
New  Orleans,  will  be  liquidated  on  Jan.  30 
next,  and  the  Citizens’  Bank  & Trust  Com- 
pany of  Louisiana  wil  be  incorporated  to 
continue  the  business  of  the  bank.  The 
latter  has  a paid-in  capital  of  $380,200  sur- 
plus of  $$19,800,  and  undivided  profits  of 
$30,000.  It  claims  deposits  of  $1,600,000 
and  aggregate  resources  amounting  to  $2,- 
430,000.  The  management  of  the  bank  is 
ns  follows:  G.  W.  Nott,  president;  H. 

Laroussini  and  A.  A.  I^elong,  vice-presi- 


Albany 

(Fruat  (Enrapany 

ALBANY,  N.  Y. 

J^CTIVE  and  ‘Reserve  (Accounts 
Are  solicited  And  interest  pAid 
on  dAily  balances,  designated 
depository  for  reserve  of  £fi(ev) 

York  State  *Banks  and  Trust 
Companies  : : : : : : : 

Capital  and  Surplus,  $725,000 


Digitized  by 


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906 


THE  BANKERS  MAGAZINE 


dents;  S.  A.  Trufant,  cashier,  and  H.  C. 
Grenier,  assistant  cashier. 


National  Banks  of  St.  Louis  and  Vicinity 
Organize  a Currency  Association. 

The  national  banks  of  St.  Louis,  East  St. 
Louis  and  Granite  City,  moved  by  the  ac- 
tive demand  for  money  and  the  enormous 
conditions  that  require  enormous  sums  for 
the  movement  of  crops,  have  organized  a 
currency  association  under  the  provisions 
of  the  Vreeland-Aldrich  currency  bill, 
passed  by  the  late  Congress. 

The  officers  elected  were:  C.  H.  Huttig, 
president;  Walker  Hill,  vice-president;  W. 
W.  Hoxton,  secretary  and  treasurer. 

Executive  Committee:  B.  F.  Edwards,  H. 
D.  Sexton,  A.  O.  Wilson,  Festus  J.  Wade, 
W.  H.  Lee. 


Changes  in  Official  Staff  First  National 
Bank,  Minneapolis. 

Some  important  changes  were  made  in  the 
official  staff  of  the  First  National  Bank, 
Minneapolis,  on  October  27.  A.  A.  Crane, 
a vice-president  of  the  Northwestern  Na- 


tional, was  elected  a vice-president  of  the 
First  National.  George  F.  Orde,  for  sever- 
al years  cashier  of  the  First  National,  was 
elected  vice-president,  as  was  also  D.  W. 
Mackerchar,  who  has  been  connected  with 


A.  A.  CRANE 

Vice-President  First  National  Bank  of 
Minneapolis 


Cashier  First  National  Bank  of  Minneapolis 


the  hank  twenty-four  years.  H.  A.  Wil- 
loughby, assistant  cashier,  was  elected  cash- 
ier. C.  T.  Jaffray  is  the  ranking  vice-presi- 
dent and  F.  M.  Prince  the  president. 

Mr.  Crane  was  offered  the  position  with- 
out previous  knowledge  on  his  part  of  the 
contemplated  changes  at  the  First  Na- 
tional. Mr.  Crane  came  to  Minneapolis  in 
1887  and  was  associated  with  the  Flour 
City  National  until  about  fifteen  years  ago, 
when  he  became  assistant  cashier  of  the 
National  Bank  of  Commerce.  He  was  ad- 
vanced to  cashier  and  then  to  vice-president, 
a position  he  held  when  the  bank  was  ab- 
sorbed by  the  Northwestern  National,  two 
years  ago.  He  w>ent  to  the  latter  bank  as 
a vice-president.  In  association  work  Mr. 
Crane  has  been  active.  For  one  term  he 
was  president  of  the  Minnesota  Bankers* 
Association,  and  for  six  years  chairman  of 
the  executive  council.  For  two  years  he 
served  as  treasurer  of  the  American  Bank- 
ers’ Association  and  for  three  years  was  on 
the  executive  council. 

Mr.  Orde  came  to  Minneapolis  more  than 
five  years  ago  from  Chicago  and  has  since 


H.  A.  WILLOUGHBY 


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Success  Magazine 

For  December  and  January 

December 
Our  Prize 
Fiction  Number 

When  “MOLLY  MAKE-BELIEVE ” appeared,  our 
readers  gave  us  no  peace  until  we  promised  another  story 
by  the  same  author.  Our  Christmas  number  opens  with 
“ THE  PINK  SASH/*  by  Eleanor  Hallovell  Abbott. 

In  “THE  HAZARD,”  Katherine  Cecil  Thurston  gives 
an  exciting  romance  of  the  days  when  feelings  ran  high 
in  the  fight  for  a maiden's  hand. 

Rupeft  Hughes ’ story,  full  of  snow,  Christmas  presents, 
soldiers  and  a girl,  is  entitled  “ DUMBHEAD.” 

In  the  “FIRE  BLUE  NECKLACE,”  by  Samuel  Hop- 
kins Adams , the  well-known  detective  hero,  “Average 
Jones,”  while  in  search  for  the  adventure  of  life,  lends 
Cupid  a helping  hand. 

“THE  IRISH  SCHOOLMASTER,”  by  Seumas  Mac - 
Manus,  is  the  first  of  a series  of  delightful  Irish  sketches, 
John  Kendrick  Bangs  comes  into  our  Christmas  issue  with 
one  of  his  up  to  date  fairy  stories,  “PU8S  IN  THE 
WALDORF.” 

Among  the  many  entertaining  stories  in  our  January 
issue  there  is  one  by  Mary  Heaton  Vorse  entitled  “ THEY 
MEANT  WELL” — a story  of  too  many  chaperons  and 
what  happened  to  the  girl;  also,  in  “THE  LITTLE 
MOTHER  AND  THEIR  MAJESTIES,”  Evelyn  Van 
Buren  accomplishes  her  usual  feat  of  making  the  reader 
laugh  and  cry  at  the  same  time. 

The  Boy  Scout  movement,  its  purposes  and  its  laws,  is 
treated  by  Ernest  Thompson  Seton  in  the  article  “ ORGAN- 
IZED BOYHOOD.” 

Miriam  Finn  Scott  in  “SHOW  GIRLS  OF  INDUS- 
TRY” relates  interestingly  how  beauty  of  form  and  fea- 
tures figure  as  a big  asset  in  the  Business  World. 

“THE  8TORY  OF  WENDELL  PHILLIPS,”  by 
Charles  Edward  Russell,  is  a vivid  and  inspiring  character 
sketch  of  thi9  great  ora’or  and  friend  of  freedom. 

Franklin  Clarkin , in  a beautifully  illustrated  article, 
“CITY  BEAUTY  PAYS,”  proves  that  it  pays  big  to 
make  a city  beautiful  — pays  in  actual  dollars  and  cents. 
In  “THE  EVERYDAY  MIKADO,'*  Adachi  Kinnosuke 
gives  a lot  of  interesting  and  hitherto  unknown  facts 
about  the  Emperor  of  Japan,  his  dally  life  and  his  respon- 
sibility for  the  modern  movement  in  the  Island  Empire. 

“A  SOFT  PEDAL  STATESMAN,”  by  Robert  Wick - 
cliffs  Woolley , is  a slashing  character  picture  of  the  rich, 
influential  and  reactionary  Senator,  Murray  Crane  of 
Massachusetts. 


SUBSCRIPTION,  $1.00.  AT  NEWS-STANDS  IS  Co.  PER  COPY 

907 


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Of  Our 
January 
Articles 


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SOLE  AGENTS 

F.  W.  ANDERSON  & COMPANY 

34  Beekman  Street,  New  York 


that  time  served  as  cashier  of  the  First 
National.  Mr.  Mackerchar  is  one  of  the 
well-known  of  Minneapolis  bank  officers, 
having  a service  of  nearly  twenty-five  years 
in  one  bank  to  his  record.  Mr.  Willough- 
by has  been  with  the  First  National  sev- 
eral years  and  has  been  the  second  in  rank 
as  assistant  cashier. 


Ckxtral  National  Bank  of  St.  Louis  Ab- 
sorbs City  National  of  St.  Louis. 

The  Central  National  Bank  of  St.  Louis 
has  assumed  the  liabilities  and  taken  over 
all  the  assets  of  the  City  National  Bank 
of  St.  Louis.  Three  officials  of  the  City 
National  were  elected  directors  in  the  Cen- 
tral National:  M.  Landau,  who  was  presi- 
dent; T.  L.  Rubinstein,  who  has  been  vice- 
president,  and  Jacob  Berger,  who  has  been 
active  vice-president.  Mr.  Berger  has  been 
chosen  one  of  the  vice-presidents  of  the 
Central  National  and  H.  R.  Rehme,  cashier 
of  the  City  National,  will  be  assistant  cash- 
ier of  the  Central,  and  all  of  the  employes 
of  the  City  National  have  also  been  given 
positions  with  the  Central  National  Bank. 

The  Central  National  Bank  has  a capital 
of  $1,000,000  with  deposits  of  $7,500,000, 
and  this  new  addition  to  its  business  will, 
of  course,  result  in  an  extension  of  its 
scope  of  work  and  add  to  its  growth  in 
many  ways.  On  September  first  the  City 
National  reported  a capital  of  $200,000, 
surplus  and  undivided  profits  of  $48,672, 
and  deposits  of  $1,044,995. 

As  a result  of  the  absorption  of  the  City 
National  by  the  Central  National  a savings 
department  has  been  opened.  This  makes 
two  downtown  national  banks  that  have 
savings  deposits,  the  other  being  the  Wash- 
ing National  Bank. 

The  active  officers  of  the  Central  Na- 
tional are:  H.  P.  Hilliard,  president;  M. 
R.  Sturtevant,  vice-president;  J.  A.  Bern- 
inghaus,  cashier;  F.  Diehm,  A.  N. Kingsbury, 
R.  W.  Hawkins  and  T.  C.  Tupper,  assis- 
tant cashiers. 

908 


GoDFKKY  N.  NKL80N. 

Godfrey  N.  Nelson  was  born  in  1878,  edu- 
cated in  the  public  schools  of  New  York 
City  and  attended  Adelphi  College  of 
Brooklyn,  New  York.  He  is  a certified 
public  accountant  of  the  University  of  the 


Godfrey  N.  Nelson 


State  of  New  York,  a member  of  the  New 
York  State  Society  of  Certified  Public  Ac- 
countants, fellow  of  the  American  Asso- 
ciation of  Public  Accountants,  a member  of 
the  New  York  Bar  and  the  New  York 
County  Lawyers’  Association. 

For  the  past  eight  years  Mr.  Nelson  has 
been  practicing  as  a public  accountant  with 


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RATS  FIND  NO  REFUGE 

in  this  ideal  metal  furniture  as  steel  walls  resist  gnawing;.  Contents  are 
thus  amply  protected  from  this  nuisance.  But  aside  from  this, 

BERGER'S  METAL 

OFFICE  FURNITURE 


is  a Ure-retardaDt— sanitary— easily  kept  clean— protects  your  records  like  a vault 
—presents  a handsome  appearance— is  furnished  in  any  grain  finish— endures  in- 
definitely— is  a far  more  economical  investment  for  yon  than  wood. 

Write  for  Catalogue. 

The  Berger  Mfg.  Go.,  Canton,  Ohio 


Eastern  Display  Rooms 
11th  Are.  and  22d  St. 
New  York,  N.Y. 


Western  Display  Rooms 
33  Dearborn  St. 
Chicago,  111. 


i 

i 

t 

t 

/ 


offices  for  the  last  five  years  at  52  Broad- 
way, and  for  three  years  before  that  at 
48  Wall  street.  New  York  City.  His  re- 
ports on  commercial,  mercantile  and  manu- 
facturing companies  are  accepted  by  a num- 
ber of  New  York  banks,  bankers  and  trust 
companies  as  a basis  for  loans  and  exten- 
sion of  credit.  Being  a member  of  the 
New  York  Bar  as  well  as  a certified  pub- 
lic accountant,  he  has  obtained  considerable 
legal  accounting  work  such  as  the  prepara- 
tion of  accounts  for  executors,  trustees 
and  administrators;  the  preparation  of 
cases  for  indictment  and  trial  involving 
books  of  account;  co-partnership  settle- 
ments, etc.  He  is  auditor  for  several 
public  institutions  in  New  York  and  has, 
among  his  clients,  a number  of  the  largest 
manufacturing,  exporting  and  importing 
real  estate  and  mercantile  concerns  of  the 
East.  By  virtue  of  his  experience  in  mat- 
ters of  corporation  law  and  accounting,  he 
is  frequently  consulted  by  business  men  in 
matters  of  incorporation,  stock  and  bond 
issues,  conservation  (with  apologies  to  Col. 
Roosevelt)  of  business  resources,  and  as  to 
the  best  commercial  practice  in  financial 
matter*.  He  is  frequently  called  upon  to 
make  examinations  for  bankers  underwriting 
bonds. 

Mr.  Nelson  realizes  that  his  success  and 
the  recognition  of  his  profession  is  depend- 
ent upon  the  confidence  of  bankers  and 
business  men  and  that  in  order  to  secure 
and  maintain  that  confidence,  not  only  must 
the  accountant’s  report  be  impartial  and 
show  good  judgment,  but  he  must  himself 
be  faithful  to  his  trust  and  at  all  times  ab- 
solutely reliable.  He  believes  that  the 
sendees  of  the  certified  public  accountant, 
as  an  advisor  in  financial  matters,  has  not 
as  yet  received  its  due  recognition;  that  in 
the  course  of  time  the  advice  of  the  ac- 
countant will  be  sought  more  by  bankers 
than  they  have  up  to  this  time. 

Just  a few  years  ago  it  was  considered 
impertinent  on  the  part  of  the  banker  to 
ask  his  prospective  borrower,  seeking  credit, 
for  a statement  of  his  financial  affairs. 
This  practice  now,  however,  has  become 


general  and  it  is  the  exception  where  the 
banker  does  not  ask  for  such  a statement. 
Mr.  Nelson  is  of  the  opinion  that  in  the 
course  of  time  these  statements,  in  order 
to  receive  the  attention  of  the  banker,  will 
have  to  be  certified  to  by  a certified  pub- 
lic accountant.  An  indication  of  this  ten- 
dency is  the  fact  that  the  form  of  report 
now  used  by  a number  of  New  York 
banks  contains  the  question  “Have  your 
books  been  audited  by  a certified  public  ac- 
countant?” When  the  time  arrives  that  this 
will  be  the  rule,  instead  of  the  exception, 
the  benefit  will  accrue  to  the  borrower  as 
well  as  to  the  banker.  The  certificate  of  the 
certified  public  accountant  must  be  an  im- 
partial statement  of  the  facts  and  should 
enable  the  banker  to  intelligently  judge  the 
merits  of  the  proposition  presented  for 
his  consideration.  The  certified  public  ac- 


AMERICAN 

NATIONAL  BANK 

RICHMOND,  VIRGINIA 


(Organized  Nov.  1,  ISM) 

Capital,  - - - $500,000.00 
Surplus  and  Profits,  300,000.00 

Located  in  the  capital  and  metrop- 
olis of  the  state  and  fully  equipped 
In  every  respect  for  prompt  and 
efficient  service,  this  bank  seeks  the 
Richmond  and  Virginia  business  of 
Banks,  Firms,  Corporations  and  In- 
dividuals everywhere. 

The  large  number  of  this  institu- 
tion’s present  correspondents  and  de- 
positors is  ample  proof  of  the  satis- 
factory service  rendered. 


UNITED  STATES  AN0  STATE  DEPOSITORY 


909 


Digitized  by  t^ooQle 


Capital,  $1,000,000.00  Earned  Surplus,  $1,000,000.00 


JOHN  B.  PURCELL 
President 


JOHN  M.  MILLER,  JR. 
Vice-Pres.  and  Cashier 


FREDERICK  E.  MOLTING,  2nd  Vice-President 

CHAS.  R.  BURNETT ■, 

J.  C.  JOPLIN  Assistant 

W.  P.  SHELTON  f Cashier* 

ALEX.  F.  RYLAND  J 


BILL  OF 
LADING  DRAFTS 
ON  RICHMOND  A SPECIALTY 

t Strong*  In  resources,  conservative 
In  management,  progressive  In  pelloy 

OF  RICHMOND,  VIRGINIA 


countant  is,  in  Mr.  Nelson’s  opinion,  fast 
becoming  recognized  as  a factor  in  finan- 
cial matters  and  his  peculiar  fitness,  by 
training  and  experience,  should  make  him 
particularly  valuable  to  banking  interests. 

. Mr.  Nelson  has  in  course  of  preparation, 
a work  on  “Law  and  Accounting  for  Ex- 
ecutors, Administrators  and  Trustees,” 
which  will  go  to  press  within  a few  weeks. 
He  is  the  author  of  a number  of  magazine 
articles  on  accounting  subjects,  including 
one  on  “Accounting  as  a Skilled  Profession.” 


Sa*  Francisco  Banks  Are  Merged. 

With  deposits  aggregating  more  than  $4,- 
000,000  and  with  something  like  10,000  sep- 
arate accounts,  the  Western  Metropolis 


The 

Berlitz  School 

of 

Languages 

MADISON  SQ. „ it 22  BROADWAY 


Harlem  Beaacfc,  B43  Lenox  At#., 
above  I27tb  3*. 

Brooklyn  Branch,  218  Livingston  St, 
Brandies  In  over  250  leading  eitlee 
Summer  School  Asbury  Park,  N,  J. 


Hotel  Touraine  Annex 
Fifth  At.  near  Grand 


Teaobers  sent  all  points  within  50  miles 
Day  and  Evening  Lessons,  in  Classes  or 
Privately,  at  School  or  at  Beeldenoe. 


AWARDS 


PARIS  EXPOSITION. 

1900, 

T.If.I.* 

«< 

1902, 

ZURICH 

44 

1902, 

St.  Louis 

II 

1904, 

LIEGE 

•i 

1906, 

LONDON 

SI 

1908, 

2 Gold  Medals 
Gold  medal 
gold  medal 
Grand  prize 

GRAND  PRIZE 
GRAND  PRIZE 


910 


National  Bank,  which  is  a consolidation  of 
the  Western  National  Bank  and  the  Metrop- 
olis Savings  Bank,  begins  business  in  the 
Metropolis  Bank  Building. 

The  merger  of  the  two  banking  institu- 
tions, which  was  announced  some  time  ago, 
did  not  go  into  effect  until  October  31,  when 
the  last  of  the  safe  deposit  boxes  and  books 
were  removed  from  the  Western  National’s 
offices  in  the  Flood  Building  to  the  Metrop- 
olis Building. 

Alfred  L.  Meyerstein,  president  of  the 
Metropolis  Trust  and  Savings  Bank,  be- 
comes president  of  the  new  Western 
Metropolis  National  Bank,  while  President 
John  H.  Spring,  of  the  Western  National 
Bank,  becomes  vice-president.  William  C. 
Murdoch,  Jr.,  is  cashier  of  the  consolidated 
bank.  The  entire  office  forces  of  the  two 
banks  have  been  retained. 

The  Western  Metropolis  National  Bank 
occupies  one  of  the  five  prominent  comers 
in  the  heart  of  the  banking  district  The 
other  four  comers  are  occupied  by  the  First 
National  Bank,  the  Crocker  National,  the 
Wells-Fargo  Nevada  National  Bank  and 
the  Palace  Hotel. 

The  merging  of  the  two  hanks  gives  the 
Western  Metropolis  National  Bank  the 
largest  safe  deposit  vaults  west  of  Chica- 
go. The  vaults  have  a feature  that  dis- 
tinguishes them  from  other  vaults  in  the 
city,  as  they  will  be  accessible  from  7.30 
in  the  morning  until  midnight  every  day 
in  the  year,  including  Sundays  and  holidays. 

The  directors  of  the  consolidated  hanks 
are:  Alfred  L.  Meverstein,  John  M.  Keith, 
A.  A.  Watkins,  G*.  H.  Umbsen,  John  H. 
Spring,  Gavin  McNab,  George  C.  Board- 
man,  Robert  Oxnard,  C.  A.  Hawkins, 
Charles  Hagmaier  and  Harry  N.  Stetson. 


Comes  to  New  York. 

On  the  first  of  November  Fred  W.  Ells- 
worth took  up  the  duties  of  publicity  man- 
ager for  the  Guaranty  Trust  Company  of 
New  York.  Mr.  Ellsworth  entered  the  em- 


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A Christmas  Gift 
For  Bank  Men 

THIS  is  the  Christmas  gift  book  par  excellence  for  your  banking  friend 
— “THE  BANKER  IN  LITERATURE/'  by  Johnson  Brigham, 
Librarian  Iowa  State  Library. 

By  all  odds,  this  is  the  handsomest  book  ever  issued  by  this 
company.  It  is  an  ornament  to  any  library  and  an  especially  appropriate 
holiday  gift  book  for  any  banker,  as  it  opens  up  a new  and  interesting  field, 
and  does  not  “talk  shop"  too  much. 

This  work  appears  in  three  parts,  namely:  I.  Historical  Side  Lights; 
II.  Bankers  as  Creators  of  Literature;  III.  Notable  Bankers  in  Fiction. 
In  Part  II.  appear  biographical  sketches  of  the  following  banker-authors: 
William  Roscoe,  Samuel  Rogers,  David  Ricardo,  Charles  Sprague,  George 
Grote,  Sir  John  W.  Lubbock,  Walter  Bagehot,  Fitz-Greene  Halleck,  Edmund 
Clarence  Stedman,  Thomas  Hodgkin,  Edward  Noyes  Westcott,  Wm.  Barnes 
Rhodes,  Bernard  Barton,  John  Law. 

In  Part  III.  the  author  discusses  the  subject,  “Notable  Bankers  in 
Fiction,"  under  the  following  heads:  Balzac's  Bankers,  Dickens’s  Bankers, 
Thackeray’s  Bankers,  Charles  Reade’s  “Story  of  an  Old  Bank,"  John  Law 
in  “The  Mississippi  Bubble,"  A Meredith  Creation,  Westcott’s  “David 
Harum,"  The  Rothschilds  in  Literature,  Ibsen’s  “Helrner"  (A  Doll’s 
House),  Mrs.  Ward’s  Country  Banker,  Paul  Leicester  Ford’s  “Mr. 
Blodgett,"  Stockton’s  “J.  Weatherby  Stull,"  Thomas  Nelson  Page’s 
“Norman  Wentworth,"  F.  Hopkinson  Smith’s  “Peter,"  Kenneth  Grahame. 
The  book  concludes  with  a chapter  on  “The  Ideal  Banker." 

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bered and  registered  de  luxe  edition.  Particulars  on  application. 

THE  BANKERS  PUBLISHING  CO. 

253  Broadway,  New  York 

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Address 


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THE  BANKERS  MAGAZINE 


I ESTABLISHED  1865  | 

National  Bank 
of  Virginia 

RICHMOND,  VA. 

Capital  ....  $1,200,000.00 

Surplus  ....  600,000.00 

Deposits  OVER  EIGHT  MILLION  DOLLARS 

WM.  M.  HABLISTON,  President 
JOHN  SKELTON  WILLIAMS,  Vlce-Prea 
WILLIAM  T.  REED,  Vlce-Prea. 

W.  MEADE  ADDISON,  Cashier 
O.  S.  MORTON,  Asst.  Cashier 
JOHN  TYLER,  Asst.  Cashier 
W.  H.  SLAUGHTER,  Asst.  Cashier 
JAMES  M.  BALL.  Asst.  Cashier 

Accounts  of  Banks,  Bankers.  Corporations, 
Firms  and  Individuals  solicited  on  favorable 
terms.  Correspondence  invited. 

LARGEST  CAPITAL 
of  Any  Bank  in  Virginia 


the  branch  bank  was  evolved.  The  boys  in 
the  manual  training  department  are  mak- 
ing the  cashier’s  “cage,”  which  will  be  lo- 
cated in  the  main  hall.  The  cashier  will 
not  pay  out  any  money,  but  will  sell  bank 
stamps,  which  will  be  accepted  for  deposit 
at  the  downtown  institution. 

-The  mangement  under  which  the  pros- 
pective People’s  Trust  & Savings  Banlk  of 
Cnicago  will  begin  business  has  been  com- 
pleted, and  President  C.  H.  Bosworth,  for- 
merly a national  bank  examiner,  will  have 
the  assistance  of  R.  H.  Griffin  as  cashier, 
Earle  H.  Reynolds  as  assistant  cashier  and 
W.  J.  Cook  as  secretary.  The  directorate 
will  be  made  up  of  Mr.  Bosworth,  Samuel 
M.  Felton,  president  of  the  Chicago  Great 
Western  Railroad;  James  F.  Meagher,  vice- 
president  of  the  People’s  Gas  Light  & Coke 
Company;  Julius  Kruttschnitt,  vice-presi- 
dent of  the  Southern  Pacific  Company; 
George  M.  Reynolds,  president  of  the  Con- 
tinental & Commercial  National  Bank; 
Charles  G.  Daw^es,  president  of  the  Central 
Trust  Co.  of  Illinois,  and  W.  Irving  Os- 
borne. As  previously  noted  the  new  in- 
stitution has  been  formed  with  $500,000 
capital  and  $125,000  surplus. 


ploy  of  the  First  National  Bank  of  Chicago 
In  1892.  In  1905  he  was  appointed  manager 
of  the  department  of  advertising  and  new 
business.  In  July,  1909,  he  became  asso- 
ciated with  the  bond  house  oi  Trowbridge  & 
Niver. 

Mr.  Ellsworth  is  a Fellow  of  the  Ameri- 
can Institute  of  Banking  and  a charter 
member  of  Chicago  Chapter.  He  has  been 
an  indefatigable  worker  for  the  chapter 
since  its  organization.  He  has  served  as 
editor  of  the  Bank  Man,  the  official  organ 
of  the  chapter,  and  as  chairman  of  various 
committees;  was  a delegate  to  the  Atlantic 
City  and  Detroit  conventions;  vice-president 
of  the  chapter  in  1906,  and  after  the  most 
closely  contested  campaign  in  the  history  of 
the  organization  became  president  the  fol- 
lowing year. 


GENERAL  NEWS  NOTES 

Personal  and  Otherwise. 

—A  bank  is  to  be  opened  in  the  Irving 
School  of  Kansas  City,  Mo.  It  is  to  be 
a real  bank,  a branch  of  the  Missouri  Sav- 
ings Bank.  The  cashier,  wiio  will  have 
charge,  is  Royal  Griffin,  a sixth  grade  boy. 
Snce  last  spring,  when  the  idea  of  pupils 
saving  their  pennies  and  small  change  w?as 
suggested,  the  pupils  have  taken  so  much 
Interest  in  bank  accounts  that  the  plan  for 


A Book  for  Tellers 

“THE  MONEYS  OF  THE  WORLD” 
Is  a Handy  Reference  Work 
for  Every  Bank 


THE  latest  publication  of  the  Bankers 
Handy  Series  Is  just  out.  It  is  No. 
IV.  — “THE  MONEYS  OF  THE 
WORLD,”  and  the  author  is  James  P. 
Gardner,  of  New  York. 

In  this  practical  book  are  compiled 
within  a small  compass  a complete  list 
of  the  various  denominations  of  the  mon- 
eys of  the  principal  countries  of  the 
world. 

The  lists  are  so  arranged  in  tables  un- 
der the  respective  countries  that  the  av- 
erage price  at  which  the  denominations 
of  the  foreign  coins  and  bank  notes  may 
be  exchanged  or  sold  In  New  York  for 
United  States  money  is  clearly  showm. 

This  hand-book  will  prove  of  very  great 
value  to  banks  throughout  the  United 
States  in  enabling  tellers  to  determine 
readily  the  amount  they  may  safely  ad- 
vance to  customers  presenting  foreign 
money  for  sale  or  exchange. 

The  price  Is  50  cents  per  copy  by  mall, 
postage  prepaid. 

The  Bankers  Publishing  Co. 

2S3  Broadway,  New  York,  U.  S.  A. 


Digitized  by  U,ooQle 


1 If  you  are  in  the  market  for  new  BANK 
nXTUKES  and  FURNITURE  it  will  be  very  much 
to  your  advantage  to  get  our  ideas.  The 
nam-i  ANDREWS  stands  for  all  that  is  modern 
in  every  detail  of  office  equipment,  and  the 
ANDREWS  produce  has  been  the  standard  for 
nearly  half  a century. 

7 We  make  only  the  best  that  skill  and  un- 
equalled manufacturing  facilities  can  pro- 
duce, and  charge  you  only  a fair  price  for  it. 
IT  One  of  our  experienced  traveling  men  will 
be  glad  to  call  on  you  at  your  convenience. 

Illustrated  Booklet  Upon  Request 


THE  A.  H.  ANDREWS  CO. 


174-176  Wabash  Av..  CHICAGO  1161-1175  Broad-way.  NEW  YORK 


— C.  H.  Rodenbach,  for  nine  years  presi- 
dent of  the  Cedar  Falls  (Iowa)  National 
Bank,  left  the  institution  November  1,  and 
H.  S.  Gilkev  succeeded  him.  Mr.  Roden- 
bach becomes  Eastern  manager  of  the  Day- 
Hansen  Security  Company  of  Spokane  and 
will  have  headquarters  in  Chicago. 

— The  Boulevard  Trust  Company  has  just 
been  organized  to  do  business  in  Brookline, 
Mass.,  with  a capital  of  $100,000  and  sur- 
plus of  $25,000.  The  officers  are:  Frank  A. 
Russell,  president;  William  A.  McKenney, 
vice-president;  George  M.  J.  Bates,  treas- 
urer; and  Roswell  C.  Downer,  actuary. 
The  company  will  begin  business  about  De- 
cember 15. 

— National  banks  in  Chicago  lost  a little 
more  than  $5,000,000  of  their  total  de- 
posits between  Sept.  1 and  Nov.  10.  In  the 
same  period  they  reduced  their  total  loans 
nearly  $1,500,000  and  increased  their  cash 
means  by  about  $150,000. 

Total  deposits  in  the  fourteen  banks  Nov. 
10  were  $409,972,000,  against  which  was 
$165,700,000  of  cash  and  “due  from  banks,” 
making  virtually  forty  per  cent,  of  cash 
means.  Many  of  the  banks  are  in  stronger 
cash  position  now  than  they  w?ere  Sept.  1. 

The  deposit  decrease  is  chargeable  prin- 
cipally to  the  withdrawal  of  country  bal- 
ances for  crop  moving  purposes.  Doubt- 
less deposits  will  begin  to  climb  again  as 
soon  as  the  movement  of  funds  turns  back 
toward  the  cities. 

— At  a meeting  of  the  stockholders  of  the 
American  National  Bank  of  Richmond,  Va., 
on  Oct  31  a new  $100,000  issue  of  stock 
was  authorized  which  will  increase  the  capi- 
tal from  $500,000  to  $600,000.  The  selling 
price  of  the  new  stock  is  $150  per  share. 
Earlier  in  the  present  year  the  bank's  capi- 
tal was  raised  from  $400,000  to  $500,000. 


—Justice  George  Freifeld  was  recently 
elected  first  vice-president  of  the  Citizens 
Trust  Company  of  Brooklyn  Borough  to 
succeed  Thomas  F.  Magner,  resigned.  Some 


mouths  ago  differences  with  regard  to  the 
mangement  of  the  company  arose  between 
the  directors  *ith  the  result  that  Mr.  Mag- 
ner and  several  of  the  other  directors  de- 
cided to  dispose  of  their  holdings  and  with- 
draw from  the  institution.  President  Na- 
than S.  Jonas  is  said  to  have  arranged  to 
take  over  their  interests,  amounting  to  900 
shares,  at  $140  per  share,  to  be  paid  in  in- 
stallments, the  final  payment  falling  due 
Oct.  1.  Those  who  retire  with  Mr.  Magner 
are  David  Michel,  Alexander  J.  McCollum, 
Frank  J.  Helmle  and  Dr.  James  E.  O’Dono- 
hue.  With  Justice  Freifeld’s  election  as 
vice-president  on  October  19.  Arthur  S. 
Somers  and  Jeremiah  Wood  were  made 
members  of  the  board  of  directors.  Ralph 
Jonas  was  elected  to  the  directorate  last 
August,  succeeding  H.  B.  Rosenson. 

— At  a recent  meeting  of  directors  of  the 
Fifth  Avenue  Bank  of  Newr  York,  B.  H. 
Fancher  was  elected  vice-president,  and 
Theodore  Hetzler  appointed  cashier. 

— Alexander  Phillips,  who  was  elected 
in  September  ns  secretary  of  the  United 
States  Mortgage  & Trust  Company  of  New 
York,  with  especial  charge  of  its  foreign 
exchange  department,  has  entered  upon  his 
duties.  Mr.  Phillips  was  formerly  sub- 
manager  of  the  London  office  of  the  Societe 
Generate  de  Credit  Industriel  et  Commercial 
of  Paris. 

— Lynn  H.  Dinkins  of  New  Orleans  has 
been  elected  a director  of  the  Mutual  Alli- 


Advertisers  in  THE  BANKERS  MAGA- 
ZINE are  assured  of  a bona  fide  circula- 
tion among  Banks.  Bankers.  Capitalists 
and  others  in  this  and  foreign  countries, 
at  least  double  that  of  any  other  monthly 
banking  publication 


918 


Digitized  by 


Google 


914 


THE  BANKERS  MAGAZINE 


ance  Trust  Company  of  Xew  York.  Mr. 
Dinkins  is  president  of  the  Inter-State  Trust 
& Banking  Company  of  New  Orleans. 

— The  Union  Trust  Company  of  Spokane 
has  changed  its  name  to  the  Union  Trust  & 
Savings  Bank.  The  institution  has  arranged 
to  take  over  the  quarters  of  the  Old  National 
Bank  when  the  latter  moves  to  its  new 
building. 

— Adolph  Dumser,  a member  of  the  port 
commission  and  one  of  the  best  known  busi- 
ness men  in  Louisiana,  has  been  made  an 
active  vice-president  of  the  Metropolitan 
Bank  of  New  Orleans.  Election  of  the  new 
vice-president  took  place  recently.  Mr. 
Dumser  is  prominent  in  Poydras  street, 
which  is  the  produce  wholesale  market  of 
New  Orleans,  and  something’  of  the  success 
of  the  board  of  port  commissioners,  which 
has  charge  of  all  the  port  facilities  of  the 
city,  is  due  to  Mr.  Dumser’s  zeal  and  effort. 

— The  board  of  directors  of  the  Live  Stock 
Exchange  National  Bank  of  Chicago  has 
been  increased  from  eight  to  eleven  mem- 
bers by  the  addition  of  the  following:  Ed- 


ward F.  Swift,  of  Swift  & Co.;  Charles  M. 
MacFarlane,  secretary  of  Morris  & Co.,  and 
H.  E.  Poronto,  secretary  of  the  Chicago 
Junction  Railway. 

— Two  hundred  thousand  dollars  of  addi- 
tional capital  stock  will  be  issued  shortly 
by  the  People’s  National  Bank  of  Charles- 
ton, S.  C.  This  will  bring  the  total  capital- 
ization up  to  $500,000.  It  is  the  general 
policy  of  the  banks  of  South  Carolina  to 
keep  their  capital  to  a minimum  in  order 
to  reduce  tax  assessments,  but  the  unpre- 
cedented increase  in  the  business  of  the 
People’s  Bank  has  made  this  change  neces- 
sary. 

— John  H.  Carter  will  be  president  of  the 
new  National  Bank  of, Commerce  in  pro- 
cess of  organization  in  Atlanta,  Ga. 

— At  a recent  meeting  of  the  stockhold- 
ers of  the  Hamilton  National  Bank  of 
Hamilton,  N.  Y.,  A.  N.  Smith,  vice-presi- 
dent of  the  institution,  was  elected  presi- 
dent. He  was  succeeded  by  John  Har- 
mon, of  the  board  of  directors,  who  was  in 
turn  replaced  by  Dr.  French. 


Preparation  and  Printing 

are  specialists  in  follow  up  advertising  literature  for  banks  and  trust  com- 
panies. Why  not  try  a little  of  our  direct  advertising  for  new  business? 
The  beauty  of  the  plan  is,  it  is  elastic  and  need  be  extended  only  as  it  pays 
for  itself. 

Write  to-day  for  particulars  of  our  individual  service  for  your  benefit. 

Here’s  another  thing,  we  do  printing,  too.  ^ 

Did  you  ever  stop  to  think  that  it  is  just  as  important  that  your  printed  repre- 
sentatives reflect  the  character  and  individuality  of  your  business  as  the  men  of  your 
working  staff  do? 

This  is  a busy  age  and  most  people  haven’t  time  to  make  second  judgments, 
especially  in  the  case  of  advertising  matter. 

First  impressions  go  a long  way. 

Your  printed  matter  will  be  well  introduced  and  well  received  if  it  is  issued  from 
our  shop,  because  we  are  specialists  and  experts  in  the  preparation  and  printing  of 
high  grade  financial  advertising. 

Consult  Us  About  That  Next  Booklet 


PUBLICITY  DEPARTMENT, 

Bankers  Publishing  Company 

253  BROADWAY,  NEW  YORK 


Digitized  by  t^ooQle 


%wm 

:»w*3 


^BANKERS 

MAGAZINE 

64—  DECEMBER  1910  Year 


W 

\'.<V 


SPECIAL  FEATURES 


— 

BANK  ATMOSPHERE  — By  Herbert  G.  Stocfcwell 

«llt« 

ADJUSTING  BRANCH  BANK  FINANCES— 
By  H.  M.  P.  Eckardt 

Sjfe 

KEEPING  A RECORD  OF  OPEN  AND  CLOSED 

# 

tMf 

ACCOUNTS — By  Edgar  G,  Alcorn 

. 

%mb 

GUARDING  AGAINST  THE  CARELESSNESS  OF  SAFE 
DEPOSIT  RENTERS-By  Thomas  W.  Hotchkiss 

SURPLUS  AND  DIVIDENDS— AN  ANSWER  TO  JOHN 

% 

HARSEN*  RHOADES— By  Charles  E.  Sprague 

INVESTMENTS — Conducted  by  Franklin  Esc  her 

HOW  BANKS  ARE  ADVERTISING 

FOR  COMPLETE  TABLE  OF  CONTENTS  SEE  PAGE  XXXVIJ. 

$5.00  A YEAR  — 50  CENTS  A COPY 

L oo*n*iaMv  iato  am  tm»  hanksas  ri*au»Kwa  oo umam  ■ 

PUBLISHED  MONTHLY  BY 

4Yf 

THE  BANKERS  PUBLISHING  CO. 

C,  WMfllM.  wu.  t.  Ml  acrTT,  VlOf'^m.  A t,  IWCOtM,  T0U1  J n.  OurfltU),  MC. 

BOSTON  NEW  YORK  CHICAGO 

LDNOONt  EFFINGHAM  WILSON,  54  THREAONEEDLE 


asgswGoog  ic 


J.  P.  MORGAN  & CO. 

DOMESTIC  AND  FOREIGN  BANKERS 
Wall  Street,  Corner  of  Broad 

NEW  YORK 


DREXEL  & CO.,  PHILADELPHIA 

Corner  of  5th  and  Chestnut  Streets 


MORGAN,  GRENFELL  & CO.,  LONDON 

No.  22  Old  Broad  Street 

MORGAN,  HARJES  & CO„  PARIS 

31  Boulevard  Haussmann 


DEPOSITS  RECEIVED  SUBJECT  TO  DRAFT. 

SECURITIES  BOUGHT  AND  SOLD  ON  COMMISSION. 

INTEREST  ALLOWED  ON  DEPOSITS. 

FOREIGN  EXCHANGE.  COMMERCIAL  CREDITS. 

CABLE  TRANSFERS. 

CIRCULAR  LETTERS  FOR  TRAVELERS,  AVAILABLE  IN  ALL  PARTS  OF  THE  WORLD. 


The  United  States  and  Mexican 
Trust  Company 


RESOURCES 


$2,000,000 


BOARD  OF  DIRECTORS 

B.  BKOOKS,  General  Mgr.,  Western 

Union  Telegraph  Co. 

C1IARLK8  BABCOCK,  Cleveland.  Ohio. 

Babcock,  Hurd  A Co.,  Wholesale 
Grocers. 

JAMES  F.  MALLARD,  Manufacturing 

Cbemfwta  8L  Louts.  Mo. 

L C.  CLOW  Rtf,  Pr<-a  W 


Western  Union 

_ Telegraph  Co.  New  York. 

JAM  i s COT  ZENS.  Bcc.-Treas.,  Ford 
Motor  Co..  Detroit.  Mich, 
r.  F.  FITZPATRICK,  Vloe-Proa,  Ball- 
way  Stutrl  Spring  Co. 

GF.ORGK  L GILT. ON,  Treaa.  Watson 
Stillman  Co..  New  York. 

W.  I*.  I JAMB.  Capitalist.  Tsrro  Haute, 

I U • I 

a.  D.  KSTABROOK.  d*u.  Solicitor, 
Western  Union  Tel-grapl*  Co. 

W:  n.  G A ILL  ARB.  Holt,  Warnor  * 

Gnlilard.  New  York. 

E.  V.  HARMAN,  Prea,  ffi.  V.  Harmon 
* Co.,  New  York. 

OSCAR  L.  ILVSCY,  Retired.  Albany.  N.  Y. 
FREDERICK  IirRDLE.  London.  Eng. 
HENRY  g.  HALL.  Retired,  New  York. 
II.  W.  JONES,  JR..  Vlr# -prea.  Nation*! 
Reaefv#  B»nk.  New  York. 


ANDREW  MrKIKNKT,  Retired,  Ne* 

York- 

B.  U.  MERWITS.  Banker,  W.  J.  B. 

Mill*  A Co.,  New  York. 

TL  W . NEFF,  Pres.,  The  Remmona  Soap 
Co..  Cincinnati.  Ohio. 

N.  F.  MEDKIU-ANDER,  Prea.  VTesttn** 
house  Automatic  Air  A St.am  Coupler 
Co.,  At.  Louis. 

K.  QUINCY  .SMITH.  Pros..  National  City 

Bank.  WfL»biugton.  D.  C. 

E.  D.  8TAIR.  Prea,  Detroit  Fro*  Pruaa. 

Detroit,  Mich. 

A.  E.  BTlhiVEU.,  Proa.  U,  S.  and  Mex- 

ican Truat  Co.,  Now  Tork.  and  Prea 
Kansas  City,  A Oriunt  Hall- 

way Co. 

B.  H iTHlKNirTR,  Dayton.  Olilo,  VTr*- 
Prc-s.,  IT,  R A Mexican  Trust  Co. 

JOSEPH  WALKER,  JR.,  of  Joa*pk 
Walker  & Son.  Bankers,  New  York* 
JOHN  F.  WALLACE,  Pres.,  Eh  c Prop 
crtlr.a  Co..  Ni  w York;  Chalnaaa 
WMstlnghousc,  Church,  Kerr  A CO,. 
New  fork,  . f , * 

II  L.  KKAMKR,  Vlc*.pr*a.  Lord  A 
Thomas.  Chicago 


Offing  : Kansas  City,  Mo.,  CHy  ol  Mexico,  London,  ^simian 

HEW  YOBK  AGENCY,  SINGED  BUILDING,  NEW  YORK  CITY 

,u’1  n,u*,  001  •*  t,u‘- 


Digitized  by 


Google 


LINCOLN  NATIONAL  BANK 

OF  THE  CITY  OF  NEW  YORK 

Depository  of  the  United  States,  State  of  New  York,  City  of  New  York 


Close  of  Business  February  1,  1910 

Capital  ....  $1,000,000.00 

Surplus  ....  1,000,000.00 

Undivided  Profits  - - 456,200.00 

Deposits  ....  22,883,365.00 
Total  Resources  26,728,862.00 

Accounts  of  Banks,  Bankers,  Trust  Companies, 
Corporations  and  Individuals  Invited 


Vice-President 

EDWARD  T.  W.  ROS8ITER 
Caehler 

DAVID  C.  GRANT 


OFFICERS 

President 

THOMAS  L.  JAMES 
Vice-President 
WM.  A.  SIMONSON 
Assistant  Cashier 
JOHN  8.  8AMMIS,  JR. 


Vice-President 

CHARLES  ELLIOT  WARREN 
Assistant  Cashier 
HENRY  E.  8TUBING 


DIRECTORS 

THOMAS  L,  JAMES  EBEN  E.  OLCOTT  M.  HARTLEY  DODGE 

MATTHEW  C.  D.  BORDEN  JAMES  STILLMAN  WILLIAM  BREWSTER 

CHARLES  C.  CLARKE  WILLIAM  G.  ROCKEFELLER  HARRY  J.  LUCE 
E.  V.  W.  ROSSITER  W.  K.  VANDERBILT,  JR.  HENRY  C.  PHIPPS 

JOSEPH  P.  GRACE 


The  Bankers  Bank  of  New  England 

Capital,  $3,000,000  Surplus  and  Profits,  $5,750,000 


With  over  500  correspondents  in  New  England  alone,  this  bank 
Is  able  to  handle  Items  on  this  section  In  the  most  direct  and  sat- 
isfactory manner. 

A department  especially  organized  to  take  care  of  bank  accounts 

DANIEL  G.  WING,  President 

JOHN  W.  WEEKS,  Vice-President  CLIFTON  H.  DWINNELL,  Vice-President 

GEO.  G.  McCAU8LAND.  Vice-President  DOWXIE  D.  MUIR,  Vice-President 

FREDERIC  H.  CURTISS,  Cashier 


Digitized  by  t^ooQle 


THE  TRUST  COMPANY*”  CUBA] 

HAVANA. 


Capital  and  Surplus,  $560,000.00 

TRANSACTS  A GENERAL  BANKING  AND  TRUST  COMPANY  BUSINESS 

We  Invite  Correspondence  with  a view  to  handling  all 
your  COLLECTIONS  and  other  banking  business  In  Cuba 

PROMPT  AND  EFFICIENT  SERVICE 


Continental  and  Commercial  National  Bank 


Capital  of  CHICAGO  Surplus  Profits 

$20,000,000  Northeast  Corner  Clark  and  Adams  Streets  $9,700,000 


OFFICERS 


GEORGE  M.  REYNOLDS.  President 
RALPH  VAN  VECHTEN,  Vice-President 
ALEX.  ROBERTSON.  Vice-President 
HERMAN  WALDECK.  Vice-President 
JOHN  C.  CRAFT,  Vice-President 
JAMES  R.  CHAPMAN,  Vice-President 
WM.  T.  BRUCKNER,  Vice-President 


HARVEY  C.  VERNON,  Asst  Cashier 
GEO.  B.  SMITH,  Asst.  Cashier 
WILBER  HATTERY,  Asst.  Cashier 
H.  ERSKINE  SMITH.  Asst.  Cashier 
JOHN  R.  WASHBURN,  Asst.  Cashier 
RALPH  C.  WILSON,  Asst.  Cashier 
WILSON  W.  LAMPERT,  Asst.  Cashier 
DAN  NORMAN,  Asst.  Cashier 
FRANK  L.  SHEPARD,  Auditor 


WM.  G.  SCHROEDER,  Secretary 
NATHANIEL  R.  LOSCH,  Cashier 

FRANK  H.  ELMORE,  Asst.  Cashier  H.  LAWTON,  Manager  Foreign  Dept. 

EDWARD  S.  LACEY,  Chairman  of  Advisory  Committee 


Accounts  of  Banks,  Bankers,  Manufacturers,  Merchants  and  Individuals  Invited 


Continental  and  Commercial  Trust  and 

Savings  Bank 

Capital  $3,000,000  Surplus  $500,000 

TRUST,  SAVINGS  AND  BOND  DEPARTMENTS 

Corner  Monroe  and  Clark  Streets 
OFFICERS 

E.  A.  POTTER,  Chairman  of  the  Board 

W.  IRVING  OSBORNE,  President  JOHN  JAY  ARBOTT,  Vice-President 

CHARLES  C.  WILLSON.  Cashier 

FRANK  H.  JONES,  Secretary  WM.  P.  KOPF,  Asst.  Secretary. 

The  Capital  Stock  of  this  Bank  Is  Owned  by  the  Stockholders  of  the  Continental  and  Com- 
mercial National  Bank  of  Chicago. 


“TIE  OILY  NATIONAL  Bill  I0ITI  OF  59th  STREET  01  NAIIATTAI  ISLAND” 

The  Audubon  National  Bank  ef  New  York 

■ BROADWAY  AND  143d  STREET 

D.  8.  MILLS,  Pre«.  CHAS.  C.  LLOYD,  Vlc.-Prei.  WILLIAM  REIMERS,  Caah. 

Capital  and  Surplus  - $250,000 

This  Bank  is  equipped  to  transact  a general  banking  business  in  all  its 
branches  and  will  welcome  accounts  of  banks,  bankers,  firms,  corporations  and 
Individuals,  to  whom  it  assures  courteous  treatment  and  every  facility  con- 
sistent with  conservative  banking  methods. 


Digitized  by  ^.ooQle 


iii 


ESTABLISHED  1817 


BANK  of  NEW  SOUTH  WALES 


Paid-up  Capital  - - 
Reserve  Fund  - - - 
Reserve  Liability  of 
Proprietors  - - - 


AUSTRALIA 


$12,500,000 

8,750,000 

12,500,000 

$33,750,000 


Aggregate  Assets,  Si  March,  i9Wt  $ 199,306,571.00 
Head  Office— George  St.,  Sydney  London  Office — 64  Old  Broad  SL,  E.  C. 

310  BRANCHES  AND  ADENCIES 

In  the  Australian  States,  New  Zealand,  Fiji  and  Papua  (New  Guinea) 

Cable  remittances  made  to  and  drafts  drawn  on  Foreign  Places  DIRECT.  Foreign 
Bills  negotiated  and  collected.  Letters  oi  credit  and  Circular  Notes  Issued.  NEGOTI- 
ABLE THROUGHOUT  THE  WORLD. 

The  bank  collect*  for  and  undertaken  the  agency  of  other  baukn  and  transacts 
every  description  of  Australian  Banking  Business 

Agents  In  New  York,  Standard  Bank  of  South  Africa,  Ltd.,  55  Wall  Street 


COMMERCIAL  NATIONAL  BANK 

SYRACUSE,  N.  Y. 

CAPITAL,  $500,000.00  8URPLUS,  $300,000.00 

With  Large  Capital  and  Surplus,  a Strong  Directorate,  Competent 
Officers  and  Every  Modern  Facility,  we  invite  Accounts  andJCollec- 
tions  on  the  most  Liberal  Terms,  Consistent  with  Sound  Banking. 

HEN  RICK  9.  HOLDEN,  Pres.  GEORGE  M.  BARNES,  Vice- Pres. 

ANTHONY  LAMB,  Cashier 


YTT’E  know  that  Davenport  offers  great  opportunities 
for  investment.  We  cordially  invite  correspond- 
ence from  those  looking  for  an  excellent  manufacturing 
site,  or  for  sound  investments  in  this  growing  section. 


FIRST  NATIONAL  BANK 

DAVENPORT,  IOWA 


Digitized  by  (^.ooQle 


lv 


While  one  of  the  oldest  financial  institutions  of  this  country, 
this  bank’s  method  and  equipment  are  thoroughly  modern, 
and  its  officers  would  be  pleased  to  explain  to  you  the  ad- 
vantages of  doing  business  with  this  bank,  and  they  invite 
correspondence  to  that  end. 


RESOURCES  THIRTY  MILLIONS  OF  DOLLARS 


The  Merchants  National  Bank 

NEW  YORK 


B.  M.  G ALLA  WAY'.  President 

E.  A.  BRINCKERHOFF,  Y'ice  President  J.  W.  HARRIM AN,  Vice-President 

JOSEPH  BYRNE,  Cashier 


A.  8.  COX,  Assistant  Cashier 


O.  E.  PAY'NTEB.  Assistant  Cashier 


ESTABLISHED  1852 


iMarkrt  ani>  Jfcdtnn  National  Sank 

of  Nwn  fork 

Capital  and  Surplus,  $2,769,000 


STATEMENT,  NOVEMBER  JO,  1910 


RESOURCES 

Loans  and  discounts  $8,267,767.17  Capital 

U.  S.  Bonds  250,000.00  Surplus 

Other  Bonds  and  Stocks 81,400.00  Circulal 

Banking  House  550,000.00  Deposit 


LIABILITIES 

,267,767.17  Capital  $1,000,000.00 

250.000. 00  Surplus  and  Profits  1,768,875.18 

81,400.00  Circulation  236,500.00 

550.000. 00  Deposits  0,863,012.53 


Cash  Items: 

Cash  In  Vault . .$2,265,473.49 
Exchanges  for 
Clearing  House  595,747.05 
Due  from  Banks  858,000.00-— 8,719,220.54 
$12,868,887.71 


$12,868,387.71 


ALEXANDER  GILBERT,  President 

ROBERT  A.  PARKER,  Vice-President  THOMAS  J.  STEVENS,  Cashier 

JOHN  H.  CARR,  Assistant  Cashier  WILLIAM  M.  ROSENDALE,  Asst.  Cash. 

Accounts  Received  on  the  Most  Liberal  Terms  Consistent  with  Sound  Banking 


Digitized  by 


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▼ 


THE 

NATIONAL 
PARK  BANK 

OF  NEW  YORK 

Capital,  $5,000,000.00  Surplus  and  Profits,  $12,550,163.20 
Deposits,  November  10,  1910,  $99,481,680.31 


RICHARD  DELAF1ELD,  President 

GILBERT  G.  THORNE,  Vice-President  JOHN  C.  McKEON,  Vice-President 
JOHN  C.  VAN  CLEAF,  Vice-President 
MAURICE  H.  EWER,  Cashier 

WILLIAM  O.  JONES,  Asst.  Cashier  WILLIAM  A.  MAIN,  Asst.  Cashier 

FRED’K  O.  FOXCROFT,  Asst.  Cashier 


Joseph  T.  Moore 
Stuyvesant  Fish 
Charles  S^ribn.  r 
Edward  C.  Hoyt 


DIRECTORS 

W.  Rockhlll  Potts  John  Jacob  Astor 

August  Belmont  Cornelius  Vanderbilt 

Richard  Delafleld  Isa^c  GuggenhUm 

Francis  R.  Appleton  1„«  wis  (.'ass  l.t  dyard 


Gilbert  G.  Thorne 
John  <\  McKeon 
Richard  H.  Williams 
Thomas  F.  Vietor 


SAFE  DEPOSIT  DEPARTMENT 


ISSUES  LETTERS  OF  CREDIT  FOR  TRAVELLERS  AVAILABLE  IN  ALL 
PARTS  OF  THE  WORLD 


Digitized  by  UiOOQLe 


m HANOVER  NATIONAL  BANK 


OF  THE  CITY  OF  NEW  YORK 


. NASSAU  AND  PINE  STREETS 


Established  1851 

Capital,  - $3,000,000 

Surplus  Fund,  - 11,500,000 

JAMES  M.  DONALD,  Chairman  of  the  Board 
"WILLIAM  WOODWARD,  President 
E.  HAYWARD  FERRY,  First  Vice-President 
YIENRY  R.  CARSE,  Second  Vice-President 
ELMER  E.  WHITTAKER,  Cashier 
WM.  I.  LIGHTHIPB,  Asst.  Cashier 
ALEX.  D.  CAMBELL,  Asst.  Cashier 
CHAS.  H.  HAMPTON,  Asst  Cashier 
J.  NIEMANN.  Asst.  Cashier 
WILLIAM  DONALD.  Asst  Cashier 


u — 

| BANKERS  TRUST  COMPANYl 


I WALL  STREET,  NEW  YORK 

Capital,  ...  $3,000,000 

{Surplus  and  Profits,  - $6,000,000 

DIRECTORS 

STEPHEN  BAKER, 

OATES  W.  McGARRAH, 

President  Bank  of  the  Manhattan  Co..  New  York 

Pres’t  Mechanics*  A Metals  Nat’l  Bank.  N.  Y. 

SAMUEL  Q.  BAYNE, 

GEORGE  W.  PERKINS, 

President  Seaboard  National  Bank.  New  York 

J.  P.  Morgan  A Co. . Bankers.  New  York 

EDWIN  M.  BULKLEY, 

DANIEL  E.  POMEROY, 

Spencer  Trask  A Co..  Bankeit.  New  York 

Vice-President.  New  York 

JAMES  G.  CANNON, 

WILLIAM  H.  PORTER, 

President  Fourth  Narlona!  Bank.  New  York 

President  Chemical  National  Bank.  New  York 

EDMUND  C.  CONVERSE, 

DANIEL  G.  REID, 

President.  New  York 

Vice-President  Liberty  National  Bank.  New  York 

HENRY  P.  DAVISON, 

BENJ.  STRONG,  Jr., 

J.  P.  Morgan  A Co.,  Bankers,  New  York 

Vice-President.  New  York 

WALTER  E.  FREW, 

EDWARD  F.  SWINNEY, 

Vice 'President  Corn  Exchange  Bank,  New  York 

President  First  National  Bank.  Kansas  City 

FRBDTC  T.  HASKELL, 

GILBERT  O.  THORNE, 

V-Pres’t  Illinois  Yrsst  A Strings  Bank.  Chicago 

Vice-President  National  Park  Bank,  New  York 

A.  BARTON  HEPBURN, 

EDWARD  TOWNSEND, 

President  Chase  N*?*»n*l  Bank.  New  York 

Pres’t  Importers’ A Traders’  Nat’l  Bank.  New  York 

THOMAS  W.  LAMONT, 

ALBERT  H.  WIGGIN, 

Vice-President  First  National  Bank.  New  York 

Vice-President  Chase  National  Bank.  New  York 

EDGAR  L.  MARSTON. 

SAMUEL  WOOLVERTON, 

Blair  A Co..  Bankers.  New  York  | 

President  Gallatin  National  Bank,  New  York 

L C CONVERSE.  PrP  s 

h S T R C N G gt  r. . / /-  Dt.POMEROY,  V . P.  F I A u N T . . 

r N 3 C L.  O SE.  S-\:\  H W DON  OVA  INI  Tr(-  , ■;  H > AILS  C N J - 


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UNION  TRUST  COMPANY  OF  NEW  YORK 

80  Broadway  425  Fifth  Avenue 

,The  Surplus  of  the  Union  Trust  Company  of  New  York  is  over  $8,- 
000,000 — more  than  eight  times  its  capital  of  $1,000,000.  This  fact 
expresses  more  strongly  than  could  be  done  in  any  other  way  the 
conservatism  and  able  management  of  this  company,  and  the  popu- 
lar confidence  in  the  institution. 

This  company  is  authorized  to  act  in  every  capacity  of  trust 
and,  in  addition,  allows  interest  on  deposits  subject  to  check,  and 
provides  safe  keeping  for  the  valuables  of  its  customers.  It  attends 
especially  to  the  management  of  real  estate. 

EDWIN  G.  MERRILL,  President 
AUGU8TU8  W.  KELLEY  CARROLL  O.  RAWLINGS 
Vice-President  Trust  Officer 

JOHN  V.  B.  THAYER  HENRY  M.  POPHAM 

Vice-Pres.  and  See.  Assistant  Secretary 

EDWARD  R.  MERRITT  T.  W.  HARTSHORNS 

Vice-President  Assistant  Secretary 

HENRY  M.  BIYRICX 

Assistant  Secretary 

RESOURCES  OVER  SEVENTY -ONE  MILLION  DOLLARS 


KNICKERBOCKER 
TRUST  COMPANY 

358  Fifth  Ave.  60  Broadway 

Lenox  Ave.  & 125th  St.  Third  Ave.  & 148th  St. 

NEW  YORK 


Transacts  a General  Trust  Company  Business 
Issues  Letters  of  Credit 

Accepts  Management  of  Real  and  Personal  Property 
Collecting  Income  and  Remitting  as  Directed 
Safe  Deposit  Vaults  At  All  Offices 


CAPITAL-SURPLUS,  $9,000,000 


Digitized  by  C joogle 


SECOND 

NATIONAL  BANK 

OF  PITTSBURGH,  PENNSYLVANIA 

Capital  - - $ 1 ,800,000.00 
Surplus  - - 2,000,000.00 

HENRY  C.  HUGH  MAN.  President 

THOMAS  W.  WELSH,  Jr.,  Vice  Pres. 
WILLIAM  NcCONWAY,  Viee-Pres. 

JAMES  M.  YOUNG.  Cashier 

BROWN  A.  PATTERSON,  Asst.  Cashier 

DIRECTORS 

HENRY  C.  BUGHMAN,  President 

WM.  L.  CURRY,  of  McKeesport  Tin  Plate  Co. 

TH08.  D.  CHANTLER,  Attorney  at  Law 
ROBERT  D.  EL  WOOD,  of  R.  D.  Elwood  & Co. 
WILLIAM  M.  KENNEDY',  of  Commonwealth  Trust  Co. 
JAMES  S.  KUHN,  Pres.  Pittsburgh  Bank  for  Savings 
WILLIAM  McCONWAY,  of  McConway  & Torley  Co. 
FRANK  C.  OSBURN,  Attorney  at  Law 
EDWARD  B.  TAYLOR.  Vice-President  Penn'a  Co. 
FRANK  S.  WILLOCK,  President  Tarentnm  Payer  Mills 
L.  L.  MCCLELLAND,  of  J.  8.  & W.  8.  Kuhn,  Inc. 
THOMAS  W.  WELSH,  JR.,  Vice-President 
JAMES  M.  YOUNG,  Cashier 

CORRESPONDENCE  INVITED 


Hew  fork  ff ife  Insurance  and  frust  (ffnwpanj 

NO.  52  WALL  STREET 

CHARTERED  IN  1830 


Accepts  only  private  trusts  and  declines  all  corporation  or  other  public  trusts 


Grants  Annuities. 

Aeeepts  Trusts  created  by  Will  or  other- 
wise. 

Manages  Property  as  Agent  for  the  Owners 


Allows  Interest  on  Deposits  payable  after 
ten  days’  notice. 

Legal  Depository  for  Executors,  Trustees* 
and  Money  in  8uit. 


TRUSTEES 

Charles  G.  Thompson  Henry  a.  c.  Taylor  Samuel  Thorne  John  McL.  Nash 

Hrnry  Parish  c.  O’D.  Isblin  John  L.  Cadwaladkr  John  claflin 

Frederic  w.  Stevens  w.  Emlen  Roosevelt  Augustus  d.  Juilliard  Cleveland  H.  Dodgb 

Stuyvksant  fish  h.  Van  Rensselaer  Kennedy  Henry  Lewis  Morris  Thomas  Denny 

Xdmunl*  L.  Bayliks  John  Jacob  Astor  George  g.  Dewitt  Lincoln  Cromwell 

George  8.  bowdoin  Joseph  h.  Choate  Cornelius  Vanderbilt  Paul  Tuckrrxan 

Henry  c.  hulbert 


HENRY  PARISH.  Presid-nt 

WALTER  KERR,  1st  Vice-President  HENRY  PARISH,  Jr.,  2d  Vice-President 

8.  M.  B.  HOPKIN8,  3d  Vice-President  GEORGE  M.  CORNING,  Secret  ary 

Z.  W.  van  ZELM,  Ass’t  Secretary  IRVING  L.  ROE,  Ass’t  Secretary 

J.  LSWI8  van  ZELM,  Aaat  Saeratary  JOHN  C.  VEDDER,  Aaa’t  feeratary 


Digitized  by 


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ADRIAN  H.  MULLER  & SON 

55  William  Street,  NEW  YORK 


The  business  ot  Banks,  Bankers,  Investors 
and  Dealers  in  Securities  generally, 
receives  prompt  and  caretnl 
attention 


..AUCTIONEERS.. 


PROMPT  RETURNS  ON 
ALL  BUSINESS 
ENTRUSTED  TO  U8 


STOCKS  AND  BONDS 

AT  AUCTION 


Regular  Auction  Sales  of  All  Classes  of  Stocks  and 
Bonds  Every  Wednesday 


REAL  ESTATE  AT  PUBLIC  AND  PRIVATE  SALE. 


N.  W.  HARRIS  & CO 

BANKERS 

Pine  Street,  Corner  William 

• 

NEW  YORK 

3S  Federal  Street,  Boston 

Receive  deposits  subject  to  cheek 
and  allow  Interest  on  balances. 

Act  as  fiscal  agents  for  munici- 
palities and  corporations.  Issue 
letters  of  credit  and  deal  In 

BONDS  FOR  INVESTMENT 

LIST  ON  APPLICATION 


The  Peoples  Trust  Company 

Borough  of  Brooklyn,  City  of  New  York 

Capital  and  Surplus  - - - $2,600,000 


CHARLES  A.  BOODY 
DAVID  A.  BOODY 
AMORY  8.  CARHART 
WILLIAM  C.  COURTNEY 
WALTER  V.  CRANFORD 
J.  O.  DETTMER 
CHARLES  M.  ENGLIS 
WILLIAM  H.  GOOD 


CHARLE8  A.  BOODY 

J.  G.  DETTMER 

HORACE  J.  MORSE 

CHARLES  L.  8CHENCK.  *d 


TRUSTEES 

WILLIAM  E.  HARMON  HERBERT  L.  PRATT 

WILLIAM  B.  HILL  CHARLES  R.  ROBERTSON 

SOLOMON  W.  JOHNSON  MAX  RUCKGABER,  JR. 

JAMES  JOURDAN  CLARENCE  W.  SEAMANS 

ADRIAN  T.  KIERNAN  HOWARD  M.  SMITH 

W.  EUGENE  KIMBALL  CA8IMIR  TAG 

JAME8  McMAHON  GEORGE  P.  TANGBMAN 

HORACE  J.  MORSE  WM.  H.  ZIEGLER 

OFFICERS 

President  HENRY  M.  HEATH .Asst.  Secretary 

1st  Vice-President  WILLIAM  A.  FISCHER Asst.  Secretary 

.2d  Vice-President  J.  FRANK  BIRDSELL Asst.  Secretary 

Vlce-Pres  and  Sec.  CLARENCE  I.  McGOWAN,  Asst  Secretary 


Invites  Deposits  from  Individuals,  Firms  and  Corporations,  and  Seeks  Appoint  meat  as  Execator  aid  Trnstee 


Digitized  by 


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KINGS  COUNTY  TRUST  COMPANY 

City  of  New  York.  Borough  of  Brooklyn 

Capital*  Surplus  and  Undivided  Profits  Over  $295009000 

OFFICERS 


JULIAN  D.  FAIRCHILD,  President 
WILLIAM  HARKNESS.  ) 

D.  W.  MCWILLIAMS,  > Vice-Presidents 

JULIAN  P.  FAIRCHILD,  > 


THOMAS  BLAKE,  Secretary 
WILLIAM  J.  WASON,  JR.,  Asst.  8ec’y 
J.  NORMAN  CARPENTER,  Trust  Offleer 
GEORGE  V.  BROWER.  Counsel 


JOHN  ARBUCKLE 
A.  ABRAHAM 
WALTER  E.  BEDELL 
GEO.  V.  BROWER 
ROBERT  A.  DRYSDALE 
ROSWELL  ELDRIDGE 
JULIAN  D.  FAIRCHILD 
JULIAN  P.  FAIRCHILD 


TRUSTEES 
JOSEPH  P.  GRACE 
WILLIAM  HARKNESS 
JOSEPH  HUBER 
H.  K.  KNAPP 
WHITMAN  W.  KENYON 
JOSEPH  LIEBMANN 
D.  W.  MCWILLIAMS 
JOHN  McNAMEE 


CORD  MEYER 
HENRY  A.  MEYER 
CHARLES  A.  O’DONOHUB 
CHARLES  E.  PERKINS 
DICK  S.  RAMSAY 
H.  B.  SCHARMANN 
W.  M.  VAN  ANDEN 
JOHN  J.  WILLIAMS 


ACCOUNTS  INVITED.  INTEREST  ALLOWED  ON  DEPOSITS 


THE 

ELIOT  NATIONAL  BANK 


OF  BOSTON 


------  $1,000,000 

Surplus  Earned  and  Profits  - - 1,300,000 


OFFICERS 


HARRY  L.  BURRA6E,  President 
WILLIAM  J.  MAROELL,  Cashier 
WILLIAM  P.  BAILEY.  Asst.  CasMer 


GARRARD  COMLY,  Wee-President 
WM.  F.  EOLEFSON,  Asst.  Cashier 
LOUIS  HARVEY.  Ant.  Cashier 


BOOKS  . ON.  BANKING 

THE  Bankers  Publishing  Co.  is  headquarters  for 
Books  on  Banking.  A complete  catalogue  of  all 
books  on  financial  topics  will  be  sent  to  any  address 
on  application. 


The  Bankers  Publishing  Company 

NEW  YORK  CHICA80  BOSTON 


Digitized  by  t^ooQle 


XI 


The  Fourth  Street  National  Bank 


$3,000,000 

6,350,000 


Letters  of  Credit  issued 


OF  PHILADELPHIA 

Capital 

Surplus  and  Profits  - 

Cable  Transfers  made.  Foreign  Exchange  bought  and  sold. 

available  throughout  the  world. 

ACCOUNTS  OF  BANKS,  BANKERS,  CORPORATIONS,  FIRMS  AND  INDIVIDUALS  SOLICITED 

SIDNEY  F.  TYLER,  Chairman  of  the  Board 
E.  F.  SHANBACKER,  President  FRANK  G.  ROGERS,  Vice-President 

JAMES  HAY,  Vice-President  R.  J.  CLARK,  Cashier 

B.  M.  FA1RES,  Vice-President  W.  A.  BULKLEY,  Asst.  Cashier 

W.  K.  HARDT,  Assistant  Cashier 


NO.  8321 


The  First  National  Bank 

FRESNO,  CALIFORNIA 

Capital  Stock  ...  3500,000.00 

Surplus  and  Undivided  Profits,  200,000.00 


O.  J.  WOODWARD,  President 
JACOB  VOGEL,  Vice-President 
E.  A.  WALROND,  Cashier 


ROY  PULLIAM,  Asst.  Casnier 
F.  A.  MAUL,  AaaL  Caahler 
T.  E.  MELLEN,  Asat.  Cashier 


UNITED  STATES  DEPOSITARY 

COLLECTIONS  A SPECIALTY  AND  REMITTED  ON  DAY  OP  PAYMENT 


RESOURCES. 

Loans  and  discounts  $1,905,873.28 

Real  estate  3.828.50 

Bank  building  and  fixtures..  212.604.74 

l\  S.  bonds  820,020.00 

Stocks,  bonds  and  claims..  452.956.13 

Cash  Resources — 

Due  from  banks.  $850,249.31 
U.  S.  Treasurer  40.000.00 
Cash  524. 508. 85— 1,414. 75S.  19 


LIABILITIES. 

Capital  stock  $800,000.00 

Surplus  & und’d  profits  (net)  650,407.92 

Circulation  800,000.00 

U.  S.  deposits  1,000.00 

Dividends  unpaid  240.00 

Deposits  5.558,392.92 


$7, S10, 040.84 


$7,810,040.84 


OFFICERS. 

Willard  Barnhart,  Pres. 

Clay  H.  Hollister.  Vice-Pres.  and  Cashier  William  Jndson,  Vice-Pres. 
Georgs  F.  Mackenzie,  Asst.  Cash.  H,  A.  Woodruff,  Asst.  Cash. 


Edward  Lowe 

Willard  Barnhart 

Wm.  Judson 


DIRECTORS. 


Jos.  H.  Martin  W.  R.  8helby  W.  A.  Smith  Jas.  F.  Barnett 
L.  H.  Wlthey  J.  C.  Holt  C.  F.  Swe*  t Frank  Jewell 

W.  D.  Stevens  Clay  H.  Hollister  Henry  Idema  B.  8.  Hanchett 


Largest  Bank  In  Western  Michigan. 


Digitized  by  CjOOQle 


xll 


National  Bank  of  Commerce  of  Norfolk 


NORFOLK,  VIRGINIA 


Capital  paid  in,  $1,000,000.00 
Surplus  and  Profits,  675,000.00 
Total  Resources,  over  7,000,000.00 

NATHANIEL  BEAMAN,  President 
TAZEWELL  TAYLOR,  Vice-President 
H.  M.  KERR,  Cashier 
M.  C.  FEREBEE,  Asst.  Cashier 
R.  S.  COHOON,  Asst.  Cashier 

UNITED  STATES  AND  CITY  DEPOSITARY 


Sujierior  facilities  for  Collections  throughout  this 
section  and  the  State.  Remittances  made  on 
day  of  payment  and  at  lowest  rates. 
Respectfully  solicits  the  accounts 
of  Banks,  Bankers,  Firms, 
Corporations  and 
Individuals. 

CORRESPONDENCE  INVITED 


WH.  A.  TILDEN,  Vice-President 

JOHN  FLETCHER.  Vice-President  I.  C.  SUORR1SON.  Asst.  Cmshier 

GEORGE  Sit.  'BENEDICT,  Csshier  H.  P.  GATES,  Asst.  Csshitr 


Resources : 

EIGHT  MILLION  DOLLARS 

To  Banks  and  Bankers  having  more  or  less  Live  Stock 
Business,  this  Bank  offers  exceptional  advan- 
tages, and  solicits  correspondence  as 
to  terms  end  facilities 


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XV 


BANKERS  MAGAZINE  ADVERTISERS 

DblOW  Is  an  alphabetical  list  of  advertisers  In  THE  BANKERS  MAGAZINE.  It  Is 
printed  for  the  convenience  of  readers  who  may  be  looking  for  any  particular  an- 
nouncement. 

Special  attention  Is  called  to  the  large  number  s^nd  high  quality  of  the  advertisements 
In  this  publication.  The  amount  and  quality  of  the  advertising  carried  by  a magazine  Is 
a good  criterion  of  the  confidence  placed  In  It  both  by  advertisers  and  readers. 

One  of  the  advertisers  In  this  issue  of  THE  BANKERS,  MAGAZINE  has  not  missed 
a single  issue  in  the  past  thirty-five  years.  Several  of  them  have  used  our  pages  for  a 
generation. 


Albany  Trust  Co.,  Albany,  N.  T. 

American  National  Bank,  Richmond,  Va. 

F.  W.  Anderson  A Co.,  N.  Y.  City. 

A.  H.  Andrews  Co.,  Chicago,  111. 

Atlantic  National  Bank,  Providence,  R.  I. 
Audubon  Nat.  Bank.  N.  Y.  City. 


Baker- V'awter  Co.,  Chicago,  III. 

Bancaria  de  Foments  y Blenes  Ralces  de 
Mexico,  S.  A.,  Mexico  City,  Mex. 

Banco  Central  Mexlcano,  Mexico  City. 

Banco  Mercantll  de  Monterey,  Monterey,  Mex. 
Banco  Mexlcano  de  Comerclo  E Industrie. 
Banco  Mlnero,  Chihuahua,  Mexico. 

Banco  Naclonal  de  Mexico,  Mexico  City. 
Banco  Nuevo  Leon,  Monterey,  Mex. 

Bank  of  British  N.  America.  Montreal,  Que. 
Bank  of  Havana,  Havana,  Cuba. 

Bank  of  Montreal,  N.  Y.  City. 

Bank  of  New  South  Wales,  Sydney,  Aus. 
Bank  of  Nova  Scotia,  Toronto,  Ont. 

Bank  of  Pittsburgh,  Pittsburgh,  Pa. 
Bankers’  Trust  Co.,  N.  Y.  City. 

Bellamore  Armored  Steel  Car  Equipment 
Co..  N.  Y.  City. 

Berger  Mfg.  Co.,  Canton,  O. 

Berlitz  School  of  Languages.  N.  Y.  City. 
Bertron.  Grlscom  A Jenks,  N.  Y.  City. 

A.  H.  Blckmore  & Co.,  N.  Y.  City. 

Blake  & Reeves,  New  York  City. 

Burroughs  Adding  Machine  Co..  Detroit. 


Canadian  Bank  of  Com’rce,  Toronto,  Ont. 
Central  Trust  Co.  of  Illinois,  Chicago,  111. 
Chase  National  Bank.  N.  Y.  City. 
Commercial  Nat.  Bank,  Syracuse,  N.  Y. 
Continental  & Coml.  Nat.  Bk.,  Chicago,  111. 
Corn  Exchange  Nat.  Bank,  Chicago.  111. 
Corn  Exchange  Nat.  Bank.  Philadelphia,  Pa. 


Diamond  Nat.  Bank,  Pittsburg,  Pa. 
Drovers'  Deposit  Nat.  Bank,  Chicago,  111. 


Eliot  National  Bank.  Boston. 


Fidelity  & Casualty  Co.,  N.  Y.  City. 

Fidelity  Title  & Trust  Co..  Pittsburgh,  Pa. 
First  National  Bank,  Fresno,  Cal. 

First  National  Bank,  Richmond,  Va. 

First  National  Bank,  Cleveland,  O. 

First  National  Bank,  Albany,  N.  Y. 

First  National  Bank,  Chicago,  111. 

First  National  Bank,  Boston,  Mass. 

First  National  Bank,  Denver.  Colo. 

First  National  Bank,  Davenport,  Iowa. 

First  National  Bank,  Philadelphia,  Pa. 
Fourth  St.  Nat.  Bank,  Philadelphia,  Pa. 
Franklin  Nat.  Bank.  Philadelphia,  Pa. 
Funding  Co.  of  America.  N.  Y.  City. 


Garfield  National  Bank,  N.  Y.  City. 
General  Electric  Co.,  Schenectady,  N.  Y. 
Girard  Nat.  Bank,  Philadelphia,  Pa. 
Guaranty  Trust  Co..  N.  Y.  City. 

Rudolph  Guenther,  N.  Y.  City. 


Hanover  National  Bank,  N.  Y.  City. 

N.  W.  Harris  A Co.,  Bankers.  N.  Y.  City. 
J.  Hathaway  Pope  & Co.,  N.  Y.  City. 
Hoggson  Brothers,  N.  Y.  City. 

Home  Trust  Co.,  Brooklyn,  N.  Y. 

Hotel  Ansonia,  N.  Y.  City. 

Hotel  Windsor.  Atlantic  City,  N.  J. 

J.  Frank  Howell.  N.  Y.  City. 


Irving  National  Exchange  Bank,  N.Y.  City 
Jennings  A Clute,  Toronto,  Ont. 


Keane,  Zayas  A Potts  Co.,  N.  Y.  City. 
Keystone  Nat.  Bank,  Pittsburgh,  Pa. 
Kings  County  Trust  Co.,  Brooklyn,  N.  Y. 
Knauth,  Nachod  A Kuhne.  N.  Y.  City. 
Knickerbocker  Trust  Co..  N.  Y.  City. 


John  Lewis,  Edmonton,  Alberta. 

Liberty  Nat.  Bank,  N.  Y.  City. 

Lincoln  National  Bank,  New  York  City. 
Oliver  Lippincott,  N.  Y.  City. 


Manganese  Steel  Safe  Co.,  N.  Y.  City. 
Market  A Fulton  Nat.  Bank,  N.  Y.  City. 
Marwick  Mitchell  & Co.,  N.  Y.  City. 
Mechanics  and  Metals  National  Bank, 
N.  Y.  City. 

Mellon  Nat.  Bank,  Pittsburgh,  Pa. 
Mercantile  Bnkg.  Co.,  Mexico  City,  Mex. 
Mercantile  Nat.  Bank,  N.  Y.  City. 
Merchants'  Bk.  of  Canada,  Montreal,  Qua. 
Merchants'  Nat.  Bank,  N.  Y.  City. 
Merchants’  Nat.  Bank,  Richmond,  Va. 
Mexican  Financier,  Mexico  City,  Mexioo. 
Mexico  City  Bnkg.  Co.,  Mexico  City,  Max. 
Miners  Bank.  Joplin,  Mo. 

Mississippi  Valley  Tr.  Co.,  St.  Louis.  Mo. 

J.  P.  Morgan  A Co..  N.  Y.  City. 

Adrian  H.  Muller  A Son,  N.  Y.  City. 


Nat.  Bank  of  Commerce,  Norfolk,  Va. 

Nat.  Bank  of  Cuba,  Havana. 

Nat.  Bank  of  the  Republic,  Chicago,  111. 
National  City  Bank,  Chicago,  111. 

National  Park  Bank.  N.  Y.  City. 

National  Union  Bank,  Boston,  Mass. 

Godfrey  N.  Nelson,  N.  Y.  City. 

New  York  Life  Ins.  A Tr.  Co.,  N.  Y.  City. 
Norfolk  National  Bank.  Norfolk,  Va. 


Old  Colony  Trust  Company,  Boston,  Mass. 
Old  National  Bank,  Grand  Rapids,  Mieb. 


Peoples  Trust  Co.,  Brooklyn,  N.  Y. 
Prentiss  Clock  Imp’m’t  Co.,  N.  Y.  City. 


Remington  Typewriter  Co.,  N.  Y.  City. 
Royal  Bank  of  Canada.  N.  Y.  City. 

T.  K.  Rice,  Jr..  A Co.,  N.  Y.  City. 

Savoy  Trust  Co..  N.  Y.  City. 

Second  Nat.  Bank,  Pittsburg,  Pa. 
Swartwout  A Appenzellar,  N.  Y.  City. 


The  Macey  Co.,  N.  Y.  City. 

Traders*  Bank  of  Canada.  Toronto,  Ont. 
Trust  Co.  of  Cuba,  Havana. 


Union  National  Bank.  Cleveland,  Ohio. 
Union  Trust  Co.,  N.  Y.  City. 

Union  Trust  Co.,  Pittsburgh,  Pa. 

U.  S.  A Mexican  Trust  Co.,  N.  Y.  City. 
United  States  Safe  Deposit  Co.,  N.  Y.  City. 


Vera  Cruz  Banking  Co.,  Vera  Crus,  Mex. 
E.  E.  Vrooman.  Washington,  D.  C. 


Williamson  A Squire,  N.  Y.  City. 
Jno.  Williams.  Inc.,  N.  Y.  City. 


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CALDWELL  HARDY.  President  A.  B.  SCHWARZKOPF.  Vioe-Pre*. 

E.  T.  LAMB.  Vice-President  W.  A.  -GODWIN,  Cashier 

UNITED  STATES  DEPOSITARY 

NORFOLK  NATIONAL  BANK 

NORFOLK,  VIRGINIA 

Capital  $ 1, 000, 000  Surplus  and  Profits,  $600, 000  * 

ORGANIZED  1886 

THE  OLDEST  NATIONAL  SANK  IN  EASTERN  VIRGINIA 

Special  attention  given  to  Collections  and  remittances  promptly  made  on  day  of  pay 
meat  at  current  rates 

CORRESPONDENTS 

National  City  Bank,  New  York;  National  Bank  of  Commerce,  New  York;  Fourtt 
Street  National  Bank,  Philadelphia;  National  Bank  of  Republic,  Boston, 
and  Merchants’ National  Bank,  Baltimore. 


INCORPORATED  NOVEMBER  27,  1886. 


PITTSBURGH,  PA 


Unexcelled  facilities  for  the  proper 
conduct  of  all  Banking  and  Trust  func- 
tions. 

Interest  on  deposits  subject  to  check. 

Letters  of  Credit,  Drafts  and  Travel- 
ers' Checks  available  in  all  parts  of  the 
world. 

Foreign  Exchange. 

Loans  on  collateral  and  mortgages. 

Acts  as  Executor,  Administrator, 
Guardian.  Assignee,  Receiver,  and  in 
all  Trust  Capacities. 

Wills  receipted  for  and  held  free  of 
charge. 


Resources  more  than  $18,000,000 


OFFICERS 
Cyrus  8.  Gray,  President 
James  J.  Donnell.  Vice-President 
H.  S.  A.  Stewart,  Vice-President 
C.  E.  Wlllock,  Treasurer 
John  McGill,  Secretary 
Eugene  Murray,  Asst.  Sec.-Treaa. 
John  M.  Irwin,  Asst.  Treat. 

W.  A.  Royston,  Jr.,  Asst.  Sec. 

A.  F.  Benkart,  AsatJ  Trust  Officer 
Malcolm  McGlffln,  Asst.  Tr.  Offioer 
Wm.  A.  Morrow,  Auditor 
William  H.  McClung,  Gen'l  Counsel 


Albert  H.  Childs 
David  B.  Oliver 
Reuben  Miller 
James  H.  Reed 
Wilson  A.  Shaw 


DIRECTORS 
James  J.  Donnell,  Chalrm*'* 


T.  Clifton  Jenkins 
Edward  J.  House 
H.  S.  A.  Stewart 
Eld  ward  T.  Dravo 


D.  Leet  Wilson 
John  R.  McGftnley 
Cyrus  S.  Gray 
J.  Stuart  Brown 
Nathaniel  Holmee 


ACCOUNTS  SOLICITED  CORRESPONDENCE  INVITED 

DEPOSITORY  OF  THE  UNITED  STATES  o 4ND  STATE  OF  NEW  YORK 


FIRST  NATIONAL  BANK 

(ALBANY,  N.  Y. 

Capital  and  Surplus  -----  $800,000,00 


FREDERICK  A.  MEAD,  Pres.  HORACE  G.  YOUNG,  Vice-Prea. 

JOHN  J.  GALLOGLY,  Vice-Prea.  and  Cashier  CHARLES  C.  BULLOCK,  Jr.,  Asst.  Cashier 
JOHN  A.  DIX,  Vice- Pres.  HUGH  A.  ARNOLD,  Asst.  Cashier 


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xvii 


W.  B.  NBWN  K 
President 

WM.  WUHEROVV 
Vice-President 

A.  S.  BEYM1R 


E.  E McCOV 
Asst  Cashier 


THE 

KEYSTONE 

NATIONAL 

BANK 

of 

PITTSBURG 


$900, ( 


A GENERAL  BANKING  BUSINESS  TRANSACTED 


Wtp  Union 
SIraat  (Uontpang 

of  Jlittaburgli,  Jtentt, 


CAPITAL  AND  8URPLUS 

$28,000,000.00 

Transacts  a General  Bar.  king 
and  Trust  Company  Business 


OFFICERS 

H.  C.  McELDOWNEY President 

A.  W.  MELLON Vice-President 

J.  M.  SCHOON MAKER.  .2nd  VIce-Pres. 

SCOTT  HAYES  Treasurer 

JOHN  A.  IRWIN Secretary 

WILLIAM  L BERRYMAN. Trust  Officer 

DIRECTORS 


B.  C.  Converse 
J.  B.  Finley 
H.  C.  Fownes 
W.  N.  Frew 
H.  C.  Frick 
B.  F.  Jones,  Jr. 

P.  C.  Knox 
James  H.  Lockhart 
J.  M.  Lockhart 

Geo.  E. 


Thomas  Lynch 
A.  W.  Mellon 
R.  B.  Mellon 
Thomas  Morrison 
H.  C.  McEldowney 
D E.  Tark 
Henry  Phipps 
Wm.  r,.  Schiller. 

J.  M.  Sohoonmaker 
Shaw 


Home  Trust  Company 

=OF  NEW  YORK= 

'Borough  of  Brooklyn 


CAPITAL,  SURPLUS  AND  PROFITS 

$1,076,000.00 

ACCOUNTS  solicited  of  banks, 
firms  and  individuals  Acts 
as  executor,  administrator,  guard- 
ian, assignee,  receiver  and  in  all 
trust  capacities. 

OFFICER8 

FREDERIC  E.  OVNNI80N,  President 
WILLIAM  M.  C ALDER,  Vice-President 
JAMES  N.  BROWN,  Vice-President 
WILLIAM  K.  SWARTZ,  Secretary 
JOSEPH  P.  STAIR.  Asst  Secretary 


DIRECTORS 


William  Barbour 
De  Witt  Bailey 
James  N.  Brown 
Charles  M.  Bull 
William  M.  Calder 
John  F.  Calderwood 
John  Lewis  Childs 
Audley  Clarke 


William  O.  Gilmore 
Frederic  E.  Gunnison 
H.  B.  Hubbard 
Thomas  W.  Hynes 
John  C.  Kelley 
Benjamin  H.  Knowles 
Michael  F.  McGoldrlck 
Thomaa  P.  Peters 


Charles  L.  De  Bevoise  Ifivid  Porter 
H.  K.  Dyer  brands  McD.  Sinclair 

Henry  A.  Fairbalrn  J.  Edwd.  Swanstrom 
John  Thatcher 


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Diamond  National  Bank 

PITTSBURGH,  PA. 

OFFICERS 

WILLIAM  PRICE,  President.  D C.  WILLS,  Cashier.  W.  0.  PHILLIPS  Asst.  Cashier 


DIRECTORS 


DIRECTORS 


W.  B.  RODGERS 
Attorney -at- Law 

J.  P.  MCKINNEY 
Treasurer 
McKinney  Mfg.  Co. 

A.  G.  BARNETT 
Retired  Iron  Manuf’r 

J.  I).  CALLERY 
President 

Pittsburgh  Railwya  Co. 

JOHN  W.  ROBINSON 
capitalist 

D.  (\  WILLS 
Cashier 


Bankers  should 

seek 

STRENGTH 
when 
selecting  a 
Reserve  Agent 
or 

Correspondent 


A M.  STEWART 
Ja  Stewart  <&  Co. 
Bud  ling  Contractors 

A.  G.  WETTENGEL 
I n vestment  Broker 

S.  A.  PICKERING 
Merchant 

W.  G.  ROCK 
Secretary  Thompson- 
CouneUsville  Coke  Co. 


E.  E.  SLICK 


Chief  Mec.  Engr. 
Carnegie  Steel  Co. 


WILLIAM  PRICE 
President 


Accounts  of 
Banks,  Bankers, 
Corporations, 
Firms  and 
Individuals 
cordially  invited 

Write 


Capital  .....  $600,000.00 

Surplus  and  Undivided  Profits,  $1,674,553.31 

STATEMENT  AT  CLOSE  OF  BUSINESS  NOV.  10,  1910 


RESOURCES. 

Loans  and  Investments $4,200,820.80 

Overdrafts __ 

United  States  Bonds 305,003.1 5 

Stocks,  Securities,  etc 194,602.50 

Banking  House  and  real  estate...  1,030,803.78 

Interest  Earned 11,080.97 

Due  from  Res.  Agts...  $008,635.89 

Due  from  Ranks 500,765.04 

Due  from  U.  S.  Treas..  55,000.00 

Cash  in  Vault 730,528.07  1,954,929.60 


LIABILITIES. 

Capital  Stock $600,000X0 

Surplus  and  Undivided  Profits....  1,674.053.20 

Reserved  for  Int.  and  Taxes 5,613.56 

Circulation 298,700.00 

DEPOSITS 5,179,239.95 


Total 


$7,757,606.77  Total 


$7,757,606.77 


Digitized  by  Cjooole 


A.  D.  Bissell 

President 

C.  R.  Huntley 

Vice-President 

E.  J.  Newell 

Cashier 

Howard  Bissell 

; Assistant  Cashier 

C.  G.  Fell 

Assistant  Cashier 


THE  1 

PEOPLES 

BANK 
BUFFALO 


Directors 

Charles  F.  Bishop 
John  Hughes 
C.  R.  Huntley 
F.  E.  Wattles 
Daniel  O’Day 
F.  S.  McGraw 
A.  D.  Sikes 
Elgood  C.  Lufkin 
R.  W.  Pomeroy 
■Walter  P.  Cooke 
Arthur  D.  Bissell 


CAPITAL,  $300,000.00 
SURPLUS  AND  PROFITS,  $350,000.00 
DEPOSITS,  $5,000,000.00 

This  bank  is  just  what  its  name  implies,  the 
people’s  bank.  Our  steady  growth,  year  by 
year,  indicates  the  extent  of  popular  confidence 
in  our  institution. 

The  same  qualities  of  soundness,  ability  and 
genuine  service  which  have  built  up  our  local 
business  enable  us  to  handle  the  business  of  out- 
of-town  customers  and  correspondents  with  the 
greatest  satisfaction. 

We  invite  correspondence  with  banks  and  individuals  everywhere 
who  want  the  best  kind  of  banking  service  in 
Buffalo  and  vicinity 


PEOPLES  fl 
BANK  ■ 


™r 

I PEOPLES 


BANK  I 

BUFFALO.  | 

N.  Y.  h 


Digitized  by " 


XX 


Real  Help 

In  Your  Advertising 

IF  you  have  decided  that  you  need 
some  help  in  order  to  get  better 
results  from  your  advertising,  consult 
the  Publicity  Department  of  this 
Company. 

We  have  made  a long  study  of 
bank  advertising  and  have  had  some 
extensive  and  successful  experience 
along  that  line. 

Our  copy  service  is  proving  a won- 
derful assistance  to  many  banks  in 
different  parts  of  the  country.  We 
give  it  to  not  more  than  one  institu- 
tion in  a city.  The  cost  is  moderate. 

Write  for  particulars  of  our  plan 
to  increase  deposits  and  business 

PUBLICITY  DEPARTMENT 

The  Bankers  Publishing  Co. 

253  Broadway,  New  York 


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xxl 


American  Securities 
Foreign  Investors 

Our  continued  prosperity  depends  upon  access 
to  the  world’s  supply  of  capital. 

This  we  cannot  have  unless  the  foreign  investor 
has  confidence  in  our  business  methods  and  the  fair- 
ness of  our  laws  relating  to  railroads  and  industrial 
corporations. 

How  we  may  counteract  the  influences  to  un- 
dermine this  confidence  is  described  in  the  new 
book — 

Confidence,  or  National  Suicide? 

By  Arthur  E.  Stilwell 

i President  Kansas  City,  Mexico  & Orient  Railway) 

Other  Features  of  Interest  are 

1.  Are  You  a Lion  or  a Zebra? 

2.  The  Great  Northern  and  Jas.  J.  Hill 

3.  The  Remedy  for  Bad  Times 

4.  The  Apaches  of  Finance 

5.  “Grabitis”  or  the  National  Disease? 

6.  The  American  Legion  of  Honor 

Cloth  Bound,  $1.00 

BANKERS  PUBLISHING  COMPANY 
253  Broadway,  New  York 


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xxli 


SPECIAL  SALE 

of  Bank  Advertisements 

To  introduce  our  strong  new  series  of  bank  news- 
paper advertisements  and  at  the  same  time  to  clear  up 
our  stock  of  the  former  series,  we  make  this  special 
bargain  offer: 

We  will  sell 

212  Savings  Bank  Advertisements 
146  Commercial  Bank  Advertisements 
56  Trust  Company  Advertisements 
414  Advertisements,  the  original  price  of  which 
was  $12.50. 

All  for  $9.00 

Included  in  this  offer  are  the  Third  Series  of  100 
Savings  Bank  Advertisements  and  60  Commercial  Bank 
Advertisements  and  a copy  of  the  Third  Edition  of  the 
bank  advertising  text-book  “Pushing  Your  Business,” 
by  T.  D.  MacGregor,  who  is  also  author  of  all  of  the  414 
advertisements. 

This  offer  is  good  for  only  one  bank  in  , 
a community.  First  come,  first  served.  j 


PUBLICITY  DEPARTMENT 

The  Bankers  Publishing  Company 

253  Broadway,  New  York  City 


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xxiii 


25c  a Copy 


THE 


$3.00  a Year 


Worlds  Work 

For  1911  will  be  the  Best  History  of  1911 


I . Another  year  of  this  indispensable  magazine  means  a 1500-page  encyclopedia 
of  progress  illuminating  the  significant  happenings  of  the  day  and  voicing  a sane, 
optimistic  belief  in  the  future  of  America.  The  year’s  numbers  will  contain  over 
one  thousand  photographs,  giving  a graphic  picture  story  of  life  and  events  of 
the  day.  Some  of  the  contents  of  the  forthcoming  numbers  will  be  as  follows: 


The  Pension  Carnival 

By  WILLIAM  BAYARD  HALE 

An  astonishing  story  of  “graft”  and  falsehood  and 
fraud  against  the  Government,  even  greater  fraud 
against  the  real  heroes,  the  veterans  of  the  war. 

Chapters  From  My  Experiences 

By  BOOKER  T.  WASHINGTON 

Mr.  Washington's  frank  and  inspiring  “Up  From 
Slavery”  was  written  ten  years  ago.  He  has  now 
written  in  the  same  frank,  autobiographic  way 
his  experiences  in  a wider  field  as  the  leader  of  his 
race,  a figure  of  national  importance  whose  career 
has  brought  him  in  contact  with  the  most  interest- 
ing personalities  of  our  time. 

How  a Business  Man  Would  Run 
the  Government 

A series  of  articles  under  this  general  title  will  show 
the  big  wastes  of  the  various  departments  of  the 
National  Government.  How  300  millions  of  dollars 
a year  can  be  saved- 


Making  Life  Worth  While 

By  HERBERT  W.  FISHER 

The  most  practical  and  inspiring  helps  to  right  liv- 
ing that  have  anywhere  been  brought  together.  The 
way  to  a fuller,  larger,  higher  and  happier  life. 

The  People  Without  a Country 

bt  henry  oyen 

The  life  history  of  a family  that  left  America  by 
moving  down  the  street — into  the  slums.  How 
easily  they  are  forced  into  it,  how  hard  it  is  to  get 
out.  Mr.  Oyen  by  a first-hand  study  tells  the  per- 
sonal story  of  families  who  have  made  the  great 
descent — and  of  some  who  got  out. 

Our  Improving  Architecture 

A series  of  brilliant  articles  will  treat  this  great  art 
and  industry  from  an  entirely  new  point  of  view 
telling  what  we  are  getting  for  the  hundreds  of 
millions  that  we  pour  out  every  year  upon  buildings 
of  all  sorts.  How  we  have  learned  that  beauty  pays. 
What  signs  there  are  of  an  “American  style.” 


Four  Big  Helps  to  Make  the  World  Better 

Showing  a Million  Farmers  How:  The  revolution  in  farming  and  living  made  by  Doctor  Knapp  or  the 
Agricultural  Department  in  Washington.  There  has  never  before  been  such  a fundamental  helpful  work  in 
the  whole  history  of  living  on  the  soil,  f The  Rockfeller  Institute  of  Medical  Research:  Its  unparalleled 
progress  in  discovery.  The  part  it  has  played  in  lessening  death  and  suffering.  Its  distinguished  staff  of 
enthusiastic  workers.  7 The  General  Education  Board  and  the  Carnegie  Foundations : What  these 
great  trusts,  holding  fully  $70,000,000,  have  done  and  are  doing  for  education.  7 Cleaning  Up  a Dozen 
States:  The  thorough  sanitary  crusade  going  on  in  the  South.  The  first  large  rural  area  in  the  world  to 
which  modem  sanitary  methods  have  been  applied. 


If  you  want  the  boat  htatory  of  1911  dolio • 
orod  to  your  homo  in  monthly  installment* 
•abaeribo  to  The  World**  Work. 


CSond  to-day  for  Th o Sub&cribora*  Almanac . 
It  will  *how  you  how  to  moko  taping*  on 
all  your  aubacription*. 


Doubleday,  Page  & Co.,  Garden  City,  N.  Y. 


Digitized  by  t^ooole 


xxiv 


Ten  Cents  a Copy  Three  Dollars  a Year 

fEbe  Jntiepmtient 

A Weekly  Magazine  Founded  in  1848 


THE  TWELFTH  ANNUAL  FINANCIAL  NUMBER  will  be  pub- 
lished December  22,  and  will  be  a notable  number.  In  addition  to 
articles  of  general  interest  from  well  known  writers  there  will  be 
articles  on  important  financial  subjects  as  in  previous  years.  The  financial 
review  of  the  year  written  by  a specialist  will  appear,  and  sixteen  pages 
giving  the  highest  and  lowest  prices  of  bonds  in  1910,  the  last  sale  and  the 
net  yield,  will  also  be  a feature  of  our  Financial  issue. 

Banks,  trust  companies,  savings  banks,  bankers  and  leading  financial 
institutions  were  represented  in  the  last  Financial  issue  in  our  advertising 
columns. 

For  more  than  thirty  years  THE  INDEPENDENT  has  published 
quarterly  reports  of  the  National  and  State  Banks. 

The  prices  for  advertisements  in  this  number  are  as  follows: 


One  page. 

. $112.00 

One-half  page. 

56.00 

One-quarter  page,  . 

28.00 

Two  inches, 

14.00 

The  following  advertisements  appeared  in  last  year’s  Financial  number: 


BANKERS  AND  INVESTMENT  COMPANIES 


American  Finance  & Securities  Co. 

Atwood,  Vlolett  & Company 

J.  S.  Bache  & Company 

August  Belmont  & Company 

A.  H.  Bickmore  & Company 

Blair  & Company 

Blake  Brothers  & Company 

Boody,  McDellan  & Company 

William  P.  Bonbright  & Company 

J.  W.  Bowen  & Company 

Brown  Brothers  & Company 

Carlisle  & Company 

Francis  A.  Cave  & Company 

R.  B.  Chaffin  & Company,  Inc. 

Henry  Clews  & Company 

Samuel  Collyer 

Curtis  & Romaine 

R.  D.  Day  & Company 

G.  W.  Dougherty 

Harvey  Fisk  & Sons 

Fleming  & Company 

F.  P.  Freeman  & Company 

Collins  Gaines  & Company 

W.  R.  Grace  & Co. 

N.  W.  Harris  & Company 


Richard  Irvin  & Company 
Charles  H.  Jones  & Company 
A.  M.  Kidder  & Company 
Knauth,  Nachod  & Kuhne 
J.  S.  & W.  S.  Kuhne,  Inc. 
Dadd  & Wood 
Dee,  Higginson  & Company 
Meikleham  & Dinsmore 
Middlesex  Banking  Company 
John  Muir  & Company 
John  Munroe  & Company 
J.  P.  Morgan  & Company 
Jas.  H.  Oliphant  & Company 
Perkins  & Company 
J.  D.  Pettyjohn  & Company 
William  A.  Read  & Company 
J.  & W.  Seligman  & Company 
Edward  B.  Smith  & Company 
T.  W.  Stephens  & Company 
Swartwout  & Appenzellar 
Trowbridge  & Niver  Company 
G.  W.  Walker  & Company 
J.  G.  White  & Company.  Inc. 
White  & Company 
Walter  D Williamson 


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XXV 


NATIONAL  AND 

Bank  of  America 

Bank  of  Huntington 

Bank  of  the  Metropolis 

Bank  of  North  America,  Philadelphia 

Bank  of  Ottawa 

Battery  Park  National  Bank 

Brooklyn  Bank 

Chartered  Bank  of  India,  Australia  and 
China 

Chatham  National  Bank 
Chelsea  Exchange  Bank 
Commercial  National  Bank,  Chicago 
Drovers  Deposit  National  Bank,  Chicago 
East  River  National  Bank 
Farmers  & Mechanics  National  Bank, 
Philadelphia 
Fifth  National  Bank 
First  National  Bank 
First  National  Bank,  Boston 
First  National  Bank,  Jersey  City 
Fort  Dearborn  National  Bank,  Chicago 
Fourth  Rational  Bank 
Fourth  Street  National  Bank,  Phila- 
delphia 

Franklin  National  Bank,  Philadelphia 


SAVINGS 

Bank  for  Savings 
Bowery  Savings  Bank 
Broadway  Savings  Institution 
Brooklyn  Savings  Bank 
Citizens’  Savings  Bank 
Dime  Savings  Bank  of  Brooklyn 
Dollar  Savings  Bank 
Emigrant  Industrial  Savings  Bank 
Excelsior  Savings  Bank 
Franklin  Savings  Bank 


STATE  BANKS 

Gallatin  National  Bank 
Liberty  National  Bank 
Market  & Fulton  National  Bank 
Merchants  Exchange  National  Bank 
Merchants  National  Bank 
Merchants  National  Bank,  Cincinnati 
Merchants  National  Bank,  Providence 
Metropolitan  Bank,  Toronto 
Nassau  Bank 

National  Bank  of  Commerce,  St  Louis 
National  Butchers’  & Drovers’  Bank 
National  City  Bank  of  Brooklyn 
National  Commercial  Bank,  Albany 
National  Newark  Banking  Co. 

National  Park  Bank 
National  Reserve  Bank 
New  York  County  National  Bank 
Night  & Day  Bank 

Northwestern  National  Bank,  Minneapolis 

Pacific  Bank 

Second  National  Bank 

Third  National  Bank,  St.  Louis 

Union  Exchange  National  Bank 

Union  National  Bank,  Cleveland 

West  Side  Bank 


BANKS 

Greater  New  York  Savings  Bank 
Greenwich  Savings  Bank 
Harlem  Savings  Bank 
Irving  Savings  Institution 
Malden  Lane  Savings  Bank 
North  Side  Savings  Bank 
Schenectady  Savings  Bank 
Union  Dime  Savings  Bank 
West  Side  Savings  Bank 
Williamsburgh  Savings  Bank 


TRUST  AND  8AFE  DEPOSIT  COMPANIES 


Bankers  Trust  Company 
Boston  Safe  Deposit  & Trust  Company 
Brooklyn  Trust  Company 
Central  Trust  Company 
Columbia  Trust  Company 
Commercial  Trust  Company  of  New 
Jersey 

Commercial  Trust  Company 
Empire  Trust  Company 
Farmer’s  Loan  & Trust  Company 
Fidelity  Title  & Trust  Company,  Pitts- 
burgh 

Fidelity  Trust  Company 
Fulton  Trust  Company 
Girard  Trust  Company,  Philadelphia 
Guaranty  Trust  Company 
Hamilton  Trust  Company 
Hudson  Trust  Company 
Kings  County  Trust  Company 
Lawyers  Mortgage  Company 
Lincoln  Trust  Company 
Lawyers  Title  Insurance  & Trust 
Company 


Long  Island  Loan  & Trust  Company 
Mercantile  Trust  Company 
Merchants  Loan  & Trust  Company, 
Chicago 

Mississippi  Valley  Trust  Company 
Mortgage  Trust  Company 
Mount  Vernon  Trust  Company 
Nassau  Trust  Company 
New  Jersey  Title  Guarantee  & Trust 
Company 

New  York  Life  Insurance  & Trust 
Company 

Peoples  Trust  Company 

Rhode  Island  Hospital  Trust  Company 

Slater  Trust  Company,  Pawtucket,  R.  L 

St.  Louis  Union  Trust  Company 

Trustee  Securities  Company 

Trust  Company  of  America 

Union  Trust  Company 

United  States  Mortgage  & Trust  Company 

United  States  Trust  Company 

Washington  Trust  Company 


Advertising  copy  should  be  received  on  or  before  Monday,  December 
19th,  at  the  latest. 


THE  INDEPENDENT 

130  Fulton  Street  ....  New  York 

TELEPHONE  3928  CORTLANDT 


Digitized  by  t^ooole 


xxvi 


A NEW  BOOK  THAT  EVERY 

BANKING  MAN  NEEDS 


THE  ELEMENTS  OF  FOREIGN  EXCHANGE 

dY  franklin  escher 

A Practical  Treatment  of  the  Subject  for  the 
Banker,  the  Business  Man  and  the  Student 

This  is  a short,  practical  treatise  on  foreign  exchange  designed  to 
supply  the  need  for  a book  from  which  a working  knowledge  of  Foreign 
Exchange  can  readily  be  obtained.  Carefully  avoiding  technicalities  and 
confusing  terms,  the  author  explains  his  subject  in  language  so  simple  and 
plain  that  it  can  be  understood  by  everybody. 

Mr.  Escher  is  one  of  the  best  known  writers  on  financial  subjects, 
being  a member  of  staff  of  the  Bankers  Magazine  and  Financial  Editor  of 
Harper's  Weekly.  The  author  combines  a thorough,  practical  training  in 
foreign  exchange  and  long  experience  in  lecturing  on  the  subject  at  New 
York  University.  So  that  he  has  planned  and  written  his  book  in  such 
a way  as  to  make  it  of  a great  value  both  to  the  practical  business  man 
and  the  student. 

Why  exchange  rises  and  falls  as  it  does,  what  can  be  read  from  its 
movements  and  how  merchants  and  bankers  take  advantage  of  them, 
the  effect  that  these  movements  exert  on  the  other  markets  — these  and 
like  questions  are  taken  up  in  the  first  part  of  the  book.  The  second 
part  describes  intimately  the  practical  operation  of  exchange  and  the 
exchange  markets,  and  contains  special  chapters  on  arbitrage,  interna- 
tional trading  in  securities,  the  financing  of  exports  and  imports,  gold 
shipments,  and  other  important  phases  of  the  subject 

This  is  a book  which  every  student  of  foreign  exchange  ought  to 
have  in  his  library  or  on  his  desk. 

It  is  a handsomely  printed  cloth  bound  book  of  160  pages.  Price, 
$1.00,  postpaid. 

Fill  out  the  coupon  and  order  your  copy  now. 


19 

THE  BANKERS  PUBLISHING  CO.,  253  Broadway,  New  York 

Please  find  enclosed  one  dollar  for  which  send  me  one  oopy  “Elements  of 
Foreign  Exchange,”  by  Franklin  Escher. 

Name 

Address 

Signed  by 


Digitized  by 


Google 


xxvit 


New  Bank  Ad.  Series 

READY 


Get  in  Your  Order  Quickly! 

We  have  just  issued  a third  series  of  60  Commercial 
Bank  Advertisements  and  ioo  Savings  Bank  Adver- 
tisements  which  are  sold  to  only  one  bank  in  a com- 
munity— the  first  one  that  applies. 

These  advertisements  are  along  the  same  lines  which 
have  made  the  previous  series  so  successful  as  business 
getters. 

They  are  printed  on  pads,  ready  to  be  sent  to  the 
newspaper  with  the  slight  changes  necessary  to  adapt 
them  to  local  conditions.  The 

60  Commercial  Bank 
Advertisements 


AND  THE 


100  Savings  Bank  Advertise- 
ments 

are  sold  in  connection  with  the  third  edition  of  our  bank  adver- 
tising text-book.  “Pushing  Your  Business,”  by  T.  D.  MacGregor, 
for  $3.00  and  $5.00,  respectively. 

Write  now  for  the  new  series  of  Ads.  Ads.  and  book  sent  on 
approval,  if  you  wish. 

We  have  on  hand  a quantity  of  the  previous  series  of  Com- 
mercial Bank,  Savings  and  Trust  Company  Advertisements 
Ask  for  our  special  combination  offer  on  the  whole  outfit  of  new 
and  old  ads.,  aggregating  414  separate  advertisements  on  all 
phases  of  banking. 

The  Bankers  Publishing  Company 

253  Broadway,  New  York 


Digitized  by 


Google 


xxviil 


GOLD  PRODUCTION 

AND 

FUTURE  PRICES 

BY 

HARRISON  H.  BRACE 


“The  present  volume  reveals  the  student  observing 
affairs  and  commenting  thereupon.” — Louisville  Courier 

Journal. 

The  business  man  should  have  the  benefit  of  the  ripest 
scholarship  on  the  important  question  of  prices.  In 
this  book  Mr.  Brace  examines  the  arguments  of  numerous 
economic  writers  in  regard  to  the  effect  of  gold  production 
upon  prices.  All  other  important  influences  which  may  affect 
general  prices  are  given  the  same  careful  consideration.  The 
arguments  are  weighed  with  judicial  open  mindedness,  a 
conclusion  being  reached  which  is  well  worth  the  considera- 
tion of  the  business  man. 


Beautifully  Printed,  Price,  $1.50,  net 


PUBLISHED  BY 

BANKERS  PUBLISHING  CO. 

253  Broadway,  New  York 


Digitized  by  CjOOQle 


xxix 


The  Rittenhome  eaters  to  a distinctly  refined  patronage, 
both  permanent  and  transient.  Especially  ladies  travel- 
ling alone.  Ii  is  lojated  away  from  the  noise  and  confn- 
■lon’of  the  business  district,  yet  near  enough  to  be  conven- 
ient to  theatres  and  shopping. 

The  reems  and  suites  are  exquisitely  ap- 
pointed. affording  every  convenience 
Small  apartments  of  one.  ter),  three  anl  four  rooms 
rented  on  short  or  long  term  leases. 

An  exclusive  Cafe.  Cuisine  and  service  of  the  high- 
est standard. 


American  Plan,  94.00  per  day  and  up 
European  Plan,  01.00  per  day  and  up 

B.  VAN  GILDER,  Manager 


BUY 

Western  Canada 


Farm  Land 


All  titles  are  Issued  by  the  Govern- 
ment. Prices  range  from  fit  to  $30 
per  acre  and  more.  Many  conservative 
Investors  think  It  will  double  within  flve 
years. 

We  handle  only  the  best  land,  per- 
sonally selected.  We  guarantee  fair, 
reasonable  prices. 

We  believe  it  to  be  to  your  best  Inter- 
est to  pnt  part  of  your  money  In  this 
land. 

We  believe  you  cannot  make  a better 
or  safer  Investment. 

We  request  your  careful  consideration. 
Write  us  what  amount  you  wish  to  In- 
vest and  we  will  send  descriptions  of 
suitable  offerings. 


JOHN  LEWIS 

Western  Farm  Lands 

Bonds  and  Mortgages 

EDMONTON,  ALBERTA 

P.  O.  Box  1413  CANADA 


Individual  Advertising  Preparation 

THE  plan  of  our  advertising  preparation  service  is 
to  make  a very  thorough  study  of  the  situation  in 
the  territory  of  the  bank  or  trust  company  desir- 
ing our  services  and  after  getting  all  the  necessary  data, 
we  prepare  a plan  and  a series  of  advertisements,  and 
we  keep  in  constant  touch  with  the  institution,  receive 
publications  in  which  the  advertisements  appear  and  give 
our  constant  advice  and  suggestions  as  to  the  conduct  of 
the  campaign.  The  cost  of  this  service  is  according  to 
the  amount  of  time  and  work  required,  the  average  price 
being  reasonable  and  within  the  means  of  any  bank.  No 
contract  is  made,  the  service  continuing  only  as  long  as 
satisfactory  to  the  institution  employing  us.  We  will 
not  handle  the  advertising  of  competing  institutions  in 
the  same  territory. 

We  plan,  write  and  print  strong,  dignified,  result- 
getting advertisements,  booklets,  circulars  and  form  let- 
ters for  banks,  trust  companies,  real  estate  and  other 
investment  houses. 

THE  BANKERS  PUBLISHING  COMPANY 

253  BROADWAY  NEW  YORK 


Digitized  by  AjOOQle 


Bank  of  Montreal 

(ESTABLISHED  1817) 

Capital  - - - $14,400,000 

Rest  ....  12,000,000 

Undivided  Profits  - • 681,561 

New  York  Agency: 

(Opened  1859) 


64  Wall  Street 


xxxi 


The  Bank  of  British  North  America 

Established  in  1636.  .Incorporated  by  Royal  Charter  in  1840. 

Paid-Up  Capital  £1,000,000  Sterling. 
Reserve  Fund  £520,000  Sterling. 


HEAD  OFFICE,  5 GRACECHURCH  ST.,  LONDON,  E.  C. 


COURT  OF  DIRECTORS. 


JOHN  H.  B ROD  IE,  ESQ.  RICHARD  H.  GLYN,  ESQ. 

J.  J.  CATER,  B8Q.  BDW.  ARTHUR  HOARE,  ESQ. 

J.  H.  MAYNE  CAMPBELL,  ESQ.  HENRY  J.  B.  KENDALL,  ESQ. 

a.  o.  Wallis,  Secretary. 


FREDERIC  LUBBOCK,  E8Q. 

C.  W.  TOMKINSON,  ESQ. 

GEO.  DUNBAR  WHATMAN,  ESQ. 

w.  s.  goldby.  Manager. 


Head  Office  in  Canada,  140  St.  James  St.,  Montreal. 

H.  STIKEMAN,  Cenenl  Muu*i. 

H.  B.  MACKENZIE,  Superintendent  of  Branches. 

J.  McEACHERN.  Superintendent  of  Central  Branches,  Winnipeg. 

JAMES  ANDERSON,  Inspector.  O.  R.  ROWLEY,  Inspector  of  Branch  Returns. 

E.  STONHAM,  Assistant  Inspector.  J.  H.  G1LLARD,  Assistant  hupector. 


Agassiz,  B.  C. 
Alexander,  Man. 
Ashcroft,  B.  C. 
Battleford,  Sask. 
Belmont,  Man. 
Bobcaygeon,  Ont. 
Bow  Island,  Alta. 
Brandon,  Man. 
Brantford,  Ont. 
Burdett,  Alta. 
Calnsvllle,  Ont. 
Calgary,  Alta. 
Campbellford,  Ont. 
Darllngford,  Man. 
Davidson,  Sask. 
Dawson,  Yukon. 
Duck  Lake,  Sask. 
Duncans,  B.  C. 
Estevan,  Sask. 
Fenelon  Falls,  Ont 


BRANCHES 

Fort  George,  B.  C. 
Forward,  Sask. 
Fredericton,  N.  B. 
Girvln,  Sask. 
Greenwood,  B.  C. 
Halifax,  N.  S. 

Hamilton,  Ont 

“ Westlngh’se  Ave. 
Victoria  Ave. 
Hedley,  B.  C. 

Ituna,  Sask. 

Kaslo,  B.  C. 

Kelllher,  Sask. 
Kingston,  Ont 
Lovls,  F.  Q. 

London,  Ont 

“ Market  Sq. 
Longueull,  P.  Q. 
Macleod,  Alta. 


IN  CANADA. 

Midland,  Ont. 

Montreal,  P.  Q. 

**  St  Catherine  St. 
North  Vancouver,  B.  C. 
North  Battleford,  Sask. 
Oak  River,  Man. 
Ottawa,  Ont. 

Paynton,  Sask. 

Prince  Rupert,  B.  C. 
Punnlchy,  Sask. 

Quebec,  Que. 

" St  John's  Gate 
Quesnel.  B.  C. 

Ray  more,  Sask. 

Reston,  Man. 

Rossland,  B.  C. 

Rob  them,  Sask. 

St.  John,  N.  B. 

M Union  St 


St  Martins,  N.  B. 

St.  Stephen,  N.  B. 
Saltcoats,  Sask. 
Saskatoon,  Sask. 
Semans,  Sask. 
Toronto,  Ont 

j King  and 
/ Dufferln  Sts. 
M j Bloor  and 
I Lansdowne 
Trail,  B.  C. 
Vancouver,  B.  C. 
Varennes,  P.  Q. 
Victoria,  B.  C. 
Waldron,  Sask. 
Weston,  Ont. 

West  Toronto,  Ont 
Winnipeg,  Man. 
Wynyard,  Sask. 
Yorkton,  Sask. 


AGENCIES  IN  THEJ,UNITED  STATES 

New  Y#rk,  52  Wall  Street  Sai  Fnscbce,  264  CaHfernia  Street. 

H.  M.  J.  McMICHAEL  ud  W.|T.  OUVER,  A*»u.» f J.  C.  WELSH  *ad  A.  S.  IRELAND, 'A^nu. 


Drafts  on  South  Africa  and  West  Indies  may  be  obtained  at  the  Bank's  Branches. 
Commercial  Credits  issued  for  use  in  Europe,  China,  Japan,  East  and  West  Indies ; Brazil, 
River  Plate,  Australia,  etc. 

Travelers  Letters  of  Credit  issued  in  pounds  Sterling,  available  In  all  parts  of  the  world. 

AGENTS  m CANADA  tor^Cetadal  Bask  Lead* i sad  West  todies. 

AGENTS  m NEW  YOKE  tor  Baict  de  Uadres  y Mexico  Mexico  City  aid  Bracket. 


Digitized  by  L,OOQle 


xxxil 


BANK  OF 
NOVA  SCOTIA 

(INCORPORATED  1882) 

Capital,  $3,000,000 

Reserve  Fund,  5,500,000 

HEAD  OFFICE,  HALIFAX,  N.  3. 

DIRECTORS: 

'JOHN  Y.  PAYZANT,  President  CHARLES  ARCHIBALD,  Vice-President 
R.  L.  BORDEN  G.  S.  CAMPBELL  J.  VALTER  ALLISON 
HECTOR  McINNES  H.  C.  McLEOD  N.  CURRY 

GENERAL  MANAGER’S  OFFICE,  TORONTO,  ONT. 

H.  A.  RICHARDSON,  General  Manager  D.  WATERS,  Asst.  General  Manager 
GEO.  SANDERSON,  C.  D.  8CHURMAN,  Inspectors 


BRANCHES: 


Amherst 

Annapolis  Royal 

Antagonist! 

Bridgetown 

Canning 

Dartmouth 


NOVA  SCOTIA 

Digby  New  Waterford  Spri 

Glace  Bay  North  Sydney  Stell 

Halifax  Oxford  Sydi 

Kentvllle  Parrsboro  Sydi 

Liverpool  Plcton  Tree 

New  Glasgow  River  Hebert  Gh 

NEW  BRUNSWICK 
Jacqnet  River  Port  Elgin 

Moncton  BaokvUIe 

Newcastle  St.  Andrews 


Thorbnrn— sub.  to 

SteUartoQ  New  Glasgow 

Sydney  Truro 

Sydney  Mines  Westville 

Trenton— sub.  to  New  Whitney  Pier 
Glasgow  Windsor 

ir<n  Yarmouth 


St.  Stephen 

8nssex 

Woodstock 


Amprlor 

Barrie 

Belmont 

Berlin 

Brantford 

Hamilton 

MANITOBA 

Winnipeg 


Harrietsville  Pei 

Sub.  to  Ba 

Belmont  St. 

London  8t. 

Ottawa  To 

Port  Arthur 

riTOBA  SASKATCHEWAN 

Innlpeg  Regina  8askatoon 

BRITISH  COLUMBIA 

Vancouver  B 


Campbellton  Jacqnet  River  Port  Elgin  hi.  George  St.  Stephen 

Chatham  Moncton  Backvllle  *t.  John  8nssex 

Prederickton  Newcastle  St.  Andrews  “ Charlotte  St.  Woodstock 

PRINCE  EDWARD  ISLAND  QUEBEC 

Charlottetown  Snmmerslde  Grand  River  Montreal  New  Richmond  Paspeblao 

Quebec  New  Carlisle— sub.  to  Paspeblao 

ONTARIO 

Amprlor  Harrietsville  Peterborough  Toronto  Bloor  St.  Wat 

Barrie  Sub.  to  Rainy  River  "Owen  <4-  Church  8ts. 

Belmont  Belmont  St.  Catharines  41  Bloor  A 8padina 

Berlin  London  8t.  Jacobs  “ Don  Branch 

Brantford  Ottawa  Toronto  King  Street  Welland 

Hamilton  Port  Arthur  44  Dundas  Street  Weston,  Woodstock 

MANITOBA  SASKATCHEWAN  ALBERTA 

Winnipeg  Regina  8askatoon  Calgary  Edmonton 

BRITISH  COLUMBIA  NEWFOUNDLAND 

Vancouver  Bonavlsta  Burin  Carbonear  Grand  Bank 

Harbor  Grace  St,  Johns  Twilllngate 

UNITED  STATES 

Boston  Chicago  New  York  (Agency) 

WEST  INDIES 

CUBA— Havana  Clenfuegos  PORTO  RICO— San  Juan 

JAMAICA— Kingston  Mandeville  Montego  Bay  Port  Antonio  Port  Marla 

Savanna-larMar  St.  Ann's  Bay 

- CORRESPONDENTS: 

GREAT  BRITAIN.— Royal  Bank  of  Scotland 
FRANCE.— Credit  Lyonnais  and  Branohen 
GERMANY.— Dresdner  Bank  and  Branches 

UNITED  STATES 

Nbw  York— Bank  of  New  York,  N.  B.  A.  Boston— Merchants’  National  Bank 

Chicago— First  National  Bank  Philadblphi a— Fourth  Street  National  Bank 

Baltimore— Ottisens’  National  Bank  8 an  Francisco— Canadian  Bank  of  Commerce 

Minneapolis— First  National  Bank 


Twilllngate 


Digitized" 


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xxxlli 


CANADA 

THE  NEW  YORK  AGENT  OP 

THE  ROYAL  BANK  OF  CANADA 

SB  WILLIAM  STREET 
WILL  BE  PLEASED  TO  QUOTE  RATES 
FOR  EVERY  DESCRIPTION  OF  BANK- 
ING BUSINESS  IN  CANADA  OR  IN  CUBA 

155  BRANCHES  IN  CANADA 

LONDON,  ENGLAND,  2 BANK  BLDGS.,  PRINCES  STREET,  E.G. 

AGENCIES  IN  CUBA,  ETC. 

HAVANA  (2  branches)  ANTILLA  CAIBAR1EN  CAMAGUE7 
CARDENAS  CIRNFUEGOS  MANZANILLO  MATANZA8  6AGUA 
SANTIAGO  PORTO  RIOO,  Ponce.  San  Juan  BAHAMAS,  Nassau 
TRINIDAD,  Port  of  Spain 

Capital,  $6,200,000  Surplus,  $6,900,000 

Total  Assets,  $95,000,000 


CUBA 


INCORPORATED  1885  

The  Traders  Bank 


of  Canada 

Head  Office,  TORONTO,  CANADA. 

Capital  8 Surplus,  $6,550,000 
Total  Assats,  44,500,000 

BOARD  OF  DIRECTORS 

C.  D.  Warren,  Esq.,  Pres.  Hon.  J.  R.  Stratton,  V.-Pree. 
C.  Kloepfer,  Esq.,  Guelph  W.  J.  Sheppard,  Esq., 

C.  S.  Wilcox,  Esq.,  Hamilton  Waubaushene 

H.  S.  Strathy,  Esq.,  Toronto  E.  F.  B.  Johnston,  Esq.,  K. 

C.t  Toronto 

OFFICER8 

Stuart  Strathy,  Gen.  Mgr.  P.  Sherris,  Inspector 

N.  T.  Hillary,  Asst.  Gen.  Mgr.  J.  L.  Willis,  Director’s 
J.  A.  M.  Alley,  Secretary  Auditor 

BANKER8 

GREAT  BRITAIN— The  London  City  A Midland  Bank,  LL 
NEW  YORK—  National  Park  Bank 
CH  1C  AGO—  First  National  Bank 
BUFFALO— Marine  National  Bank 

Over  1 12  Branohes  In  Canada  marine  all  portions  of  the  Donrinloa 


CANADIAN  COLLECTIONS:  Will  be  pleaMd  te  give  Information  as  to  rates  on  any 
data  of  business.  Special  facilities  for  making  collections  throughout  Canada. 


Digitized  by  t^ooQle 


xxxlv 


THE  CANADIAN  BANK 
OE  COMMERCE 

Head  Office:  TORONTO 

ESTABLISHED  1861 

Paid-Up  Capital,  $10,000,000  Rest,  $6,000,000 

8lr  EDMUND  WALKER,  C.  V.  O.,  LL.  D.f  D.  C.  L.,  Pros.  A.  LAIRD,  Gen.  Mgr. 

BRANCHES  IN  CANADA 

Paclflc  Slope  and  Ynken  South  Hill 

Greenwood  Nakusp  Penticton  Stewart 

Kamloops  Nanaimo  Prince  Rupert  Vancouver  (5  offices) 

Ladysmith  Nelson  Princeton  Victoria  (2  offices) 

Mission  City  New  Westminster  Revels toke  White  Horse 


Western  Provinces 


Bassano 

Elgin 

Lethbridge 

Olds 

Swan  River 

Bawlf 

Elkhorn 

Lloydminster 

Outlook 

Swift  Current 

Brandon 

Gilbert  Plains 

Maoleod 

Plnoher  Creek 

Treherne 

Broderick 

Glelohen 

Medicine  Hat 

Ponoka 

Tngaske 

Calgary  (3  offices) 

Grandview 

Melfort 

Portage  la  Prairie 

Vegrevllle 

Canora 

Granum 

Melville 

Prince  Albert 

Vermilion 

Carman 

Hardisty 

Milestone 

Provost 

Vlrden 

Carmangay 

Hawarden 

Milk  River 

Radlsson 

Vonda 

Clareehoim 

Herbert 

Monarch 

Red  Deer 

Wadena 

Clevervllle 

High  River 

Mooeqjaw 

Regina 

Warner 

Crossfield 

Humboldt 

Mooeomln 

Rivers 

Watrous 

Dauphin 

Inniafail 

Morse 

Saskatoon 

Watson 

Dellsle 

Innlsfrse 

Nan  ton 

SheUbrook 

Wetaskiwin 

Drinkwater 

Eamsaok 

Neepawa 

8tavely 

Weyborn 

Durban 

Eindersley 

New  Dayton 

Stony  Plain 

Wiloox 

Edmonton 

Langham 

Nokomls 

Strathoona 

Winnipeg  (7offloea) 

Elbow 

Lanlgan 

North  Battleford 

Strathmore 

Yellowgrass 

Elfros 

Laahburn 

Yorkton 

Ontario  and  <|iesee 

Ayr 

Dresden 

Guelph 

Parry  Sound 

Stratford 

Barrie 

Dun  das 

Hamilton 

Peterboro 

Strathroy 

BeUevins 

DnnnvIUs 

Kingston 

Port  Arthur 

Thedford 

Berlin 

Elk  Lake 

Latohford 

Port  Perry 

Toronto  (12  offloee) 

Blenheim 

Exeter 

Lindsay 

Qnebeo 

Walkerton 

Brantford 

Forest 

London 

Rainy  River 

Walkervllle 

Cayuga 

Fort  Frances 

Montreal  (2  offices)  8 1. Catharines 

Waterloo 

Chatham 

Fort  William 

Orangeville 

Sarnia 

West  Toronto 

Cobalt 

Galt 

Ottawa  (2  offices) 

Saolt  Ste.  Marie 

Wlarton 

Oolllngwood 

Goderloh 

Paris 

Seafortb 

Windsor 

Credlton 

Gowganda 

Parkhlll 

Slmooe 

Wingbam 

Woodstock 

Maritime  Provinces 

Alberton 

Bridgewater 

Montagna 

Shelburne 

8ydney 

Amherst 

Charlottetown 

New  Glasgow 

Souris 

Truro 

Antlgonlsh 

Halifax 

Parrsboro 

Sprlnghlll 

Windsor 

Barrington 

Middleton 

St.  John 

Summerslde 

IN  THE  UNITED  STATES 

NEW  YOKE  AGENCY,  16  Exchange  Place,  WM.  GRAY  aid  C D.  MACUNTGS1,  Agcate 

Pertland  Ore.;  San  Francises,  Cal.)  Seattle,  Wash.)  Skagwuy,  Alaska. 

IN  MEXICO 

MEXICO  CITY,  J.  P.  BELL,  Manager 
IN  GREAT  BRITAIN 

LONDON,  2 Lombard  Street,  E.  G,  H.  V.  F.  Jones,  Manager. 

BANKERS  IN  GREAT  BRITAIN 

Bank  of  England;  Bank  of  Scotland;  Barclay  A Co„  Limited:  Lloyds  Bank  Limited; 

Union  of  London  ann  smiths  Bank.  Limited. 

BANKERS  IN  NEW  YORK 
The  American  Exchange  National  Bank 

CANADIAN  COLLECTIONS 

This  Bank,  having  over  300  branches  distributed  throughout  the  Dominion,  Is  enabled 


Oranbrook 

Creston 

Dawson 

Temls 


XXXV 


MERCHANTS  BANK  OF  CANADA 

HEAD  OFFICE,  - MONTREAL 


Capital  Paid  Up ♦ * * - $ 6,000,000 

Reserve  Fund  and  Undivided  Profits,  4, 602, 157 
Board  of  Directors 

SIR  H.  MONTAGU  ALLAN,  Pres.  JONATHAN  HODGSON,  ESQ.,  Vicb-Pbbs. 
THOS.  LONG,  ESQ.  C.  F.  SMITH,  E8Q.  HUGH  A.  ALLAN,  ESQ. 


C.  M.  HAYS,  ESQ. 


E.  F.  HEBDEN 
T.  E.  ME  BRETT 


C.  F.  SMITH,  E8Q.  HUGH  A.  A 

ALEX.  BARNET.  ESQ.  F.  OEE  LEt 

K.  W.  BLACKWELL,  ESQ. 

- - - - General  Manager. 

- Bnpt.  of  Branches  and  Chief  Inspector. 
Assistant  Inspectors! 


HUGH  A.  ALLAN,  ESQ. 
F.  ORR  LEWIS,  ESQ. 


W.  E.  BUTLER 
R.  SHAW 


J.  J.  GALLOWAY 
M.  J.  MANNING 


Branches  and  Agencies 


Ontario 


Acton 

Alvinstoii 

Athens 

Belleville 

Berlin 

BothweU 

Brampton 

Chatham 

Obatsworth 

Chesley 

Creemore 


Delta 

Eganvllle 

Elgin 

Rlora 

Finch 

Fort  WlUiam 
Galt 

Gananoque 
Georgetown 
Glencoe 
Gore  Bay 


Gran  ton  London 

Hamilton  Lucan 

Hanover  Lyudhu 

Hespeler  Markdal 

Ingereoll  Men  fore 

Kincardine  Mildmiu 

Kingston  Mitchell 

Lancaster  Muirkir 

Lansdowne  Na  panel 

Leamington  Oakville 

Little  Current  Orillia 
Owatta 


London 

Lucan 

Lyud  hurst 

Markdale 

Meaford 

Mildmay 

Mitchell 

Muirkirk  (Sub.) 

Napanee 

Oakville 


Owen  Sound 

Parkdale 

Perth 

Prescott 

Preston 

Renfrew 

Stratford 

8t.  Eugene 

St.  George 

St.  Thomas 

Tara 

ThamosviUe 


Tilbury 
Toronto 
44  Parl’tSt. 

44  DundasSt. 

Walkerton 

Watford 

West  Lome 

Westport 

Wheatley 

Williams  town 

Windsor 

Yarker 


Montreal, 

44  Head  Office,  St.  James  St. 
44  1355  St.  Catherine  St.,  E. 
44  820  St.  Catherine  St.,  W. 


Quebec 

Montreal,  Lachine  Sherbrooke 

44  1380  Sr.  Lawrence  Boul.  Quebec  Ste.  Agathe  des  Mouts 

44  1866  St  Lawrence  Boul.  44  St.  8auveur  St.  Jerome 

Beauharnois  Rigaud  8t.  Johns 

Sbawville  St.  Jovite 

Manitoba 


Brandon  Gladstone  Macgregor  Napfnka  Oak  Lake  Russell  Souris 

Carberry  Griswold  Morris  Nee  paw  a Portage  la  Prairie  Sidney  Winnipeg 

JHberta 

Acme(Tapscot  P.O.)  Edson  Lethbridge  Olds  Stettler  Vegreville 

Botha  (Sub.)  Fox  Coulee Mannville  Okotoks  8trome(Sub.)  Viking(Meighen) 

Brooks  Is.ay  Medicine  Hat  Red  Deer  Tofleld  Walnwrigbt 

Calgary  CastorfWilliston  P.O.)  Klllam  New  Norway  Sedgewfck Trochu  Wetasklwln 

Cam  rose  Edgerton  Lacombe 

Carstairs  Edmonton  Leduc 

Dayaland  44  Namayo  Are  Saskatchewan 

Antler  Areola  Carnduff  Gainsborough  Lull  Lake  Kisbey  Maple  Creek  Melville 
Oxbow  Saskatoon  Unity  Whltewood 

British  Columbia 

Chilliwack  Elko  Nanaimo  New  Westminster  Sidney  Vancouver  Victoria 

Alova  Scotia  New  Brunswick 

Halifax  St.  John 


Nova  Scotia 

Halifax 


NEW  YORK  AGENCY,  63-65  Wall  Street 


W.  M.  RAMSAY, 
C.  J.  CKOOKALL, 


| Agents 


Bankers  in  Great  Britain.— London,  Glasgow,  Edinburgh,  and  other  points. 
The  London  Joint  Stock  Bank,  Ltd. 

Bankers  in  France.— Credit  Lyonnais. 

Bankers  in  Germany.— Deutsche  Bank. 

Bankers  in  United  States.— New  York— American  Exchange  National  Bank. 
Boston — Merchants’  National  Bank.  Chicago — Northern  Trust  Co.  8t.  Paul— First 

National  Bank.  Detroit — First  National  Hank.  Buffalo — Bank  of  Buffalo.  San 
Francisco — Anglo  & London-Paris  National  Bank. 

Canadian  Collections 

Having  1 33  branohat  in  Canada,  this  Banh’a  facilities  for  meKing  collec- 
tions throughout  the  Dominion  ere  unsurpassed. — Canadian  cash 
Items  negotiated  at  minimum  retes  et  tHe  New  York  Agenoy. 


Digitized  by 


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xxxvii 


ESTABLISHED  1844 


The  Bankers  Magazine 


Volume  LXXXI 


DECEMBER,  1910 


No.  6 


CONTENTS 


All  Contents  are  Covered  by  Copyright,  1918 


Page 

A Central  Bank  with  Branches,  or  a 
System  of  Real  Reserve  Banks — 
Which  Would  Best  Suit  Our  Needs 
and  Conditions?  775 

Editorial  Comment  779 

Bank  Atmosphere.  By  Herbert  Q 
Stockwell  783 

Adjusting  Branch  Bank  Finances.  By 
H.  M.  P.  Eckardt  786 

Foreign  Banking  and  Finance  788 

The  Monetary  Reform  in  the  Ar- 
gentine, 7S8 — Merger  of  the  Russo- 
Chinese  Bank.  7S9— The  Finances 
of  Portugal,  789 — Extending  Use  of 
Domiciled  Bills,  790— Foreign  Cap- 
ital in  Canada,  791— Stable  Ex- 
change in  Brazil,  791 — Money  Con- 
ditions in  Germany,  791. 

Banking  and  Commercial  Law  793 

Recent  Decisions  of  Interest  to 
Bankers,  793 — Notes  of  Canadian 
Cases  AfTecting  Bankers,  800 — Re- 
plies to  Law  and  Banking  Ques- 
tions, SOS. 

Trust  Companies  806 

New  York  Trust  Companies,  806 — 
Officers  of  Trust  Company  Section, 

807 — Twenty  Fruitful  Years,  808 — 
Foreign  Branches,  808 — Savings  De- 
posits. 808. 

Practical  Banking  809 

Keeping  a Record  of  Open  and 
Closed  Accounts.  By  Edgar  G. 
Alcorn,  809 — A Unique  Certificate  of 
Deposit,  813. 

Savings  Banks  814 

Surplus  and  Dividends.  By  Charles 
E.  Sprague,  814 — Posting  and  Prov- 
ing Methods.  By  W.  H.  Kniffln, 

Jr.,  816 — Four  Billions  in  Banks, 

823. 

Investments  824 

Europe’s  Investment  in  American 
Securities.  By  John  Terret,  824 — 
Improvement,  826  — Short-Term 
Notes  as  Investments.  By  Casper 
Cromwell,  826 — The  Real  Bond 
Market.  By  B.  Nathan  Moran,  828 
— Dividend  Payments.  By  William 


H.  Lough,  831 — Three  Billion  Bush- 
els of  Corn,  835 — The  “Barometer” 
Industry,  836 — The  Interest  Rate  on 
Government  Bonds,  836 — The  In- 
surance Companies’  Dilemma,  838 — 
Investment  and  Miscellaneous  Se- 
curities, 839 — Bank  and  Trust  Com- 
pany Stocks,  842. 

Safe  Deposits  844 

Guarding  Against  the  Carelessness 
of  Safe  Deposit  Box  Renters.  By 
Thomas  W.  Hotchkiss,  844 — In- 
creasing Business  by  Publicity,  847 
— French  Bankers  Studying  the  Safe 
Deposit  System,  849 — Chicago  Com- 
pany Spreading  Out,  849. 

Industrial  Houston.  By  Adolph  Boldt  850 

Starting  Postal  Banks  865 

Nation’s  Pot  of  Gold  866 

Latin  America  867 

From  the  Rio  Grande  to  Panama. 

By  Fullerton  L.  Waldo,  867 — Grow- 
ing Business  Relations  Between 
Mexico  and  the  United  States.  879 
— Winning  South  American  Trade, 

879 — Immigration  to  South  Amer- 
ica. 880. 

Banking  Publicity  881 

Going  One  Better  than  Four  Per 
Cent.  Interest.  By  G.  P.  Blackls- 
ton,  881 — More  Thrift  Experiences, 

882 —  How  Banks  are  Advertising, 

883 —  Christmas  and  New  Year’s,  885 
— Two  Good  Books.  885 — Mr.  Lewis 
Honored,  888. 

Book  Reviews  888 

The  Banker  in  a New  Aspect  889 

The  Banks  of  Atlantic  City — America’s 

Popular  Pleasure  Resort  890 

Modern  Financial  Institutions  and  Their 

Equipment  891 

The  Plainfield  Trust  Company, 
Plainfield,  New  Jersey,  891 — The 
Bank  of  British  North  America, 

895 — Remodeling  Interior  Scranton 
Savings  Bank,  Scranton,  Pa.,  898. 

Banking  and  Financial  Notes  899 

Banks  Closed  or  in  Liquidation  918 


CMTtRtO  IN  THC  POST-OFFICI  AT  BOSION,  MASS..  .AS  SICOND-CtASS  MATTCR 


THE  BANKERS  MAGAZINE  has  been  for  sixty  years  the  standard  banking  monthly  of 
the  world.  It  aims  to  cover  the  whole  broad  field  of  banking  In  its  various  phases, 
giving  special  attention  to  the  practical  problems  which  the  every-day  banker  has  to 
meet. 

SUBSCRIPTIONS. — The  subscription  price  Is  $5.00  a year,  payable  in  advance.  This  price 
Includes  postage,  except  to  Canada,  which  will  be  50  cents  additional,  and  to  other 
foreign  countries,  $1.10  additional.  The  publishers  will  continue  to  send  THE  MAGA- 
ZINE to  subscribers  until  a definite  order  for  discontinuance  is  received. 

ADVERTISEMENTS. — Advertising  rates  will  be  sent  on  application.  Correspondence  so- 
licited. 

MANUSCRIPTS.— The  editors  of  THE  BANKERS  MAGAZINE  will  be  glad  to  receive  man- 
uscripts on  any  subject  within  the  scope  of  the  publication,  particularly  such  as  re- 
late to  safe  deposit  business,  banking  publicity,  and  the  practical  management  of  the 
National  Bank,  State  Bank,  Trust  Company  or  Savings  Bank. 

BOOK  DEPARTMENT.— The  Bankers  Publishing  Company  publishes  many  valuable  books 
on  banking  topics  and  deals  In  all  publications  In  the  banking  field.  8 pedal  list 
mailed  on  application. 


THE  BANKERS  PUBLISHING  COMPANY 

BOSTON— 127  Federal  St.  CHICAGO-93«  Calumet  Bldg. 

253  BROADWAY,  NEW  YORK 


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xxxviil 


“The  Pen  That’s  As  Good  As  Its  Reputation” 


(ideal) 

FoiraSBm  Pen 


TO  EMPLOYER  OR  EMPLOYEE 

Waterman's  Ideals  as  gifts  are  compliments  to  the  good 
taste,  business  ability  and  up-to-dateness  of  anyone.  They 
are  sure  to  be  deeply  appreciated  and  their  usefulness  and 
lasting  qualities  will  provide  an  implement  which  will  last 
for  a lifetime,  and  be  remembered  in  its  superior  services  as 
the  gift  of  a discriminating  friend.  Every  branch  of  office 
system  and  work  is  improved  by  the  use  of  Waterman's  Ideals 

Illustrated  booklet  maiUd  on  request.  Avoid  substitutes 

Dealers  Everywhere 

L.  E.  Waterman  Co.,  173  Broadway,  New  York 


8 School  Street,  Bontcn  189  Clark  Street,  Chicairo  734  Market  St.,  Snn  Francisco 
Kingaway,  London  L.  E.  Waterman  Company,  Limited,  Montreal  6 Rue  de  Hauovre,  Parla 


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xxx  ix 


The  Fidelity  and  Casualty  Company 


OF  NEW  YORK 


1910 


92*94  Liberty  and  97-103  Cedar  Streets 


Officers 


GEO.  F.  SEWARD 
ROBT.  J.  HILLAS 
HENRY  CROs&LEY  - 
FRANK  E.  LAW  - - 

GEORGE  W.  ALLEN  - 


- President 
V.- Pres.- Sec. 
• Asst.  Sec. 
id  Asst.  Sec. 
3d  Asst.  Sec. 


*H 

SLffii  n " 


[IttSH 

uttum 

IkccckkI 


Pufai  «ELH 

hlUStiLK&iC 

■ (C  'DtlC  U U (K 
|“  KP5  SKKCCC 
liliLBt  5ttt.ES 

r^rtnnr 


Directors 

Wm.  P.  Dixon  Wm.  J.  Matheson 
Alfred  W.  Hoyt  Alexander  B.  Orr 
Geo.  B.  Ide  Henry  B.  Plerrepont 

W.  G.  Low  Anton  A.  Raven 

Frank  Lyman  John  J.  Riker 

J.  G.  McCullough  W.  Emlen  Roosevelt 
Geo.  F.  Seward 


fidelity  Bonds  . . . 

' Employers*  Liability 
Personal  Accident  . 

Health  . . ^ . . 

Steam  Boiler  . . . 

Plate  Glass  . . . 

Burglary  . . . . 

Fly  Wheel  . . . . 


This  Company  has  been  In  business  over 
thirty  years. 

During  this  time  we  have  done  nothing 
spectacular.  Our  business  has  grow n to 
great  volume  as  a result  of  the  confidence 
of  the  public  In  our  efficiency  and  in  our 
Intent  to  do  right  things. 

Whoever  deals  with  us  may  be  sure 
that  our  rates  are  based  on  a very  wide 
experience  and  are  not  higher  than  is 
necessary  If  we  are  to  do  right  things. 
Our  stockholders  take  nothing  from  our 
premium  earnings,  being  content  that 
their  dividends  shall  be  based  on  a moiety 
of  our  interest  earnings. 

We  believe  that  it  may  be  said  with 
absolute  truth  that  we  grant 

INSURANCE  THAT  INSURES 


FINANCIAL  STATEMENT  DECEMBER  31,  1909 


ASSETS 

Stocks  and  Bonds. ..  .$7,178,867.77 

Real  Estate  1,382,385.23 

Cash  in  Banks  and 

Office  60,812.42 

Gross  Premiums  in 
course  of  collection 
(not  overdue)  ....  910,331.81 

Loans  secured  by 

Collateral  177,500.00 

All  other  Assets  ....  39,826.79 


LIABILITIES 

Reserve  for  Unearned  Premiums 98,790,474*54 

(Claims  resisted  for  Policy-holders  741,225.00 

In  process  of  adjustment 97475.00 

Further  Reserve  under  N.  Y. 

law  of  1905  100,742.48 

Steam  Boiler  Losses,  in  process  of  adjust- 
ment   27455.00 


27455.00 

overdue)  ....  910,331.81  All  Other  Losses,  in  process  of  adjustment  71542440 

secured  by  Commission  on  Premiums  In  course  of  col- 

eral  177,500.00  411  lecti°n  . 25B,0M.68 

er  Assets  39436.79  Capital  stock  51,000,000.00  j Surplus  to  X . ltA  li 

Net  Surplus  $246448940  X Policyholders  i <46442040 

$9,598,934.02  $9,590424.0$ 

of  All  Losses  Paid  to  December  81,  1000  $81,68640841 


$9,598,934.02 


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xl 


1850  STRICTLY  A COMMERCIAL  BANK  1910 

The  Mercantile  National  Bank 

OF  THE  CITY  OF  NEW  YORK 

195  Broadway 

Capital  and  Surplus,  $5,000,000 

WILLIS  G.  NASH,  President 

MILES  M.  O’BRIEN,  Vice-President  WILLIAM  H.  TAYLOR,  Vice-President 

WILLIAM  SKINNER,  Vice-President  EMIL  KLEIN,  Cashier. 

SAMUEL  UEDFERN,  Assistant  Cashier 

CORRESPONDENCE  WITH  A VIEW  TO  BUSINESS  IS  INVITED 


Boston's  Oldest  Banking  Institution.  Incorporated  1782. 

The  National  Union  Bank 

Boston 

CAPITAL,  $1,000,000  SURPLUS,  $1,000,000  DEPOSITS,  $10,000,000 

Henry  S.  Grew  . . . President  Charles  P.  Blinn,  Jr.  . Vice-President 

Theophllus  Parsons  . . Vice-President  William  8.  B.  Stevens  . . . Cashier 

We  invite  correspondence  or  an  interview  with  Individuals,  Firms , 
Corporations  and  Banks  with  a view  to  opening  new  accounts. 


THE  FIRST  NATIONAL  BANK 

DENVER,  COLORADO 

Deposits,  $30,000,000  Capital  & Surplus,  $3,000,000 

D.  H.  Moffat,  President. 

Thomas  Keelt,  Vice-President.  F.  G.  Moffat,  Cashier. 

C.  8.  Haughwout,  Assistant  Cashier.  J.  C.  Houston,  A Mint  ant  Cashier. 


Collection*  promptly  attended  to.  Correspondence  solicited 


The  National  City  Bank  of  Ghicago 


UNITEO  STATES  DEPOSITORY 


Capital 
Surplus  - 


Organized  1907 


$1,500,000.00 

300,000.00 

25,000,000.00 


Jkli  Accounts  under  the  direct  supervision  of  the  Officers  of  this  Bank, 

OFFICER8 

D.  R.  FORGAN,  President 

ALFRED  L.  BAKER.  Vice-President  A.  W.  MORTON,  Asst.  Cashier 

II.  K.  OTTE,  Vice-President  W.  T.  PERKINS,  Asst.  Cashier 

F.  A.  CRANDALL.  Vice-President  HENRY  MEYER,  Asst.  Cashier 

I,.  H.  GRIMM E,  Cashier  W.  N.  JARNAGIN.  Asst.  Cashier 

W.  D.  DICKEY.  Asst.  Cashier  R.  U.  LANSING,  Mgr..  Bond  Dept. 


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New,  Interesting  and  Profitable  Book  for  All  Bankers 


A Practical  Treatise  on  Banking 
and  Commerce 

By  GEORGE  HAGUE, 

Formerly  General  Manager  of  the  Merchants  Bank  of  Canada. 

H£RE  is  a splendid  new  400-page  book  which  every  bank  man  ought 
to  have  in  his  working  library. 

Mr.  Hague,  who  is  one  of  the  oJdest  and  best  known  bankers  in  Can- 
and,  in  writing  this  book  has  drawn  upon  the  experience  of  fifty  years. 
The  author  has  filled  his  pages  with  practical  information  and  helpful 
suggestions — food  for  thought  and  stimulus  for  successful  efforts  on 
the  part  of  every  reader. 

In  its  forty  chapters,  the  book  shows  the  relation  of  commerce  to 
banking  and  is  of  value  to  all  merchants  and  bankers  who  are  interested 
in  the  broad  field  of  business  in  general,  as  well  as  to  the  men  at  the  head 
of  a financial  institution  or  behind  the  counters  of  a bank  in  any  capacity. 

The  book  is  written  in  a bright  and  interesting  style.  At  times  the 
author  is  epigrammatic.  Always  he  is  sound  and  helpful.  The  con- 
stant impression  the  reader  gets  is  that  he  is  being  taken  into  the  con- 
fidence of  a man  who  has  done  big  things,  but  has  not  overlooked  the 
importance  of  details — the  little  things  that  make  for  success  in  business. 

Mechanically,  the  book  is  a fine  example  of  the  bookmaker’s  art. 
It  is  clearly  printed  on  fine  paper  and  handsomely  bound. 

The  price  is  $3.00,  carriage  prepaid. 

Send  for  full  descriptive  circular  or  fill  out  this  coupon  now. 


BANKERS  PUBLISHING  CO., 

253  Broadway,  New  York. 

Enclosed  find  $3.00  for  which  send  to  the  address  below  one  copy 
of  “A  PRACTICAL  TREATISE  ON  BANKING  AND  COM- 
MERCE,” by  George  Hague. 


Name 

Address 


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“¥  TOW  TO  READ  CHARACTER  IN  HANDWRITING’’ 


An  authoritative  and  interesting:  publication,  illustrating:  principles 
of  analysis.  A valuable  reference  book  for  bankers,  lawyers  and 
business  men.  Limp  Leather,  $1.00. 


PHILADELPHIA  REFERENCE  LIBRARY,  3730  No.  Sydenham  St.,  PHILADELPHIA,  PA. 


— A.  C.  Robinson  and  George  D.  Ed- 
wards have  been  elected  vice-presidents  of 
the  Commonwealth  Trust  Company  of 
Pittsburgh. 

— Stockholders  of  the  Republic  Trust 
Company  of  Philadelphia  have  voted  to 
increase  the  capital  stock  of  the  company 
from  $200,000  to  $300,000.  The  stock  will 
be  offered  to  stockholders  on  a basis  of 
fifty  per  cent,  of  their  present  holdings  at 
$62.50  a share  ($50  to  be  applied  to  capi- 
tal account  and  $12.50  to  surplus),  making 
the  total  capital  and  surplus  $400,000. 

— F.  \V.  Capper  has  been  appointed  cash- 
ier of  the  Home  National  Bank  of  Union 
City,  Pa.,  vice  James  M.  Dunbar. 

— At  a meeting  of  the  board  of  directors 
of  the  Corn  Exchange  National  Bank  of 
Philadelphia,  Frank  H.  Moss  was  elected  a 
director  to  fill  the  vacancy  caused  by  the 
death  of  Benjamin  Githens.  The  sum  of 
$50,000  was  added  to  surplus,  making  that 
fund  $1,450,000. 

— At  a meeting  of  the  directors  of  the 
First  National  Bank  of  McKeesport,  Pa., 
Charles  A.  Tawney,  cashier,  was  elected 
vice-president  of  the  institution,  to  fill  the 
position  made  vacant  by  the  death  of  J.  W. 
Bailie  a few  weeks  ago.  Mr.  Tawney  will 
continue  as  cashier. 

— Jacob  H.  Schiff,  senior  member  of  the 
firm  of  Kuhn,  Loeb  & Co.,  of  New  York, 
has  been  made  a trustee  of  the  Central 
Trust  Company  of  New  York.  He  was  also 
elected  a member  of  the  executive  commit- 
tee. 

—The  Arlington  Trust  Company  of  Law- 
rence, Mass.,  began  business  on  October  17 
with  $200,000  capital.  It  is  successor  to  the 
Arlington  National  Bank,  which  was  placed 
in  voluntary  liquidation  on  October  15.  The 
bank  had  a capital  of  $100,000. 

— Henry  F.  Wilson,  assistant  secretary  of 
the  Bankers  Trust  Company  of  New  York, 
has  forsaken  his  bachelor  ways.  He  was 
married  Nov.  9 to  Miss  Ruth  Gray  Ludlow, 
the  daughter  of  Mr.  and  Mrs.  L.  R.  Ludlow 
of  Sherman,  Texas.  Mr.  Wilson  commenced 
his  banking  career  in  1900,  when  he  became 
connected  with  the  New  York  Security  and 

916 


Trust  Company.  He  worked  his  way  up 
and  in  1904  became  identified  with  the 
Bankers  Trust  Company,  in  which  company 
he  now  holds  the  important  official  position 
of  assistant  secretary. 

— Newton  D.  Ailing,  who  has  been  with 
the  Nassau  Bank  of  New  York  twenty 
years,  and  Ray  M.  Bailey,  who  has  been 
with  it  fourteen  years,  have  been  elected 
assistant  cashiers  of  the  bank. 

Mr.  Ailing  for  the  last  two  years  has 
been  chief  clerk  of  the  bank.  This  past 
year  he  was  president  of  the  American  In- 
stitute of  Banking  section  of  the  American 
Bankers’  Association,  presiding  at  the  an- 
nual convention,  wi~^ii  was  held  last  June 
at  Chattanooga.  He  has  been  a member  of 
the  board  of  governors  of  the  New  York 
Chapter  of  the  American  Institute  of  Bank- 
ing, and  is  a past  president  of  the  chapter. 
Mr.  Bailey,  the  other  new'ly  elected  assistant 
cashier,  is  also  an  enthusisatic  member  of 
the  A.  I.  B. 

— On  Nov.  1,  Fred  Sutton,  cashier  of  the 
First  State  Bank  of  Oklahoma  City,  Okla., 
was  succeeded  by  C.  M.  Hammel,  formerly 
assistant  cashier;  M.  M.  Bath  was  elected 
assistant  cashier,  and  C.  O.  Rhoades,  teller. 

—The  Union  Trust  Company  of  San 
Francisco  is  now  doing  business  in  its  new 
home  at  Market  street  and  Grant  avenue. 
The  new  building,  a graceful  granite  struc- 
ture of  Grecian  type,  is  one  of  the  most 
beautiful  banking  houses  in  the  West,  and 
represents  a money  outlay  of  about  $1,750,- 
000.  The  main  room  is  fifty-five  feet  in 
height  from  ceiling  to  dome,  but  the  effect 
of  unusual  height  is  softened  and  mini- 
mized by  a gallery  running  around  the  en- 
tire room,  furnishing  a mezzanine  floor,  on 
which  are  located  the  trust  department, 
bookkeepers’  desks,  etc.  The  directors’ 
room,  beautifully  finished  in  Circassian 
walnut,  is  on  the  third  floor.  The  vaults, 
bank  and  safe  deposit  are  in  the  basement, 
belowf  the  street  level.  The  color  scheme 
produced  by  marble  and  bronze  fixtures, 
and  the  rich  gold  and  ivory  tinting  in  walls 
and  ceiling,  sets  a new  standard  in  interior 
bank  architecture  in  San  Francisco.  Every 
modern  device  for  facilitating  quick  com- 
munication and  a high  degree  of  service, 
such  as  the  dictograph,  telautograph,  pneu- 
matic tube  system,  etc.,  are  to  be  found. 


Digitized  by  t^ooQLe 


The  Question  of  GOLD 
PRODUCTION  Simplified 

for  the  Business  Man 


All  important  aspects  of  the  recent  increased 
Production  of  Gold  and  the  Future  of  Prices 
are  discussed  in  a new  book  published  by 
THE  BANKERS  PUBLISHING  CO. 


GOLD  PRODUCTION  AND  FUTURE  PRICES 

by 

Harrison  H.  Brace,  LL.M. 


The  whole  subject  is  presented  in  a remarkably 
lucid  manner. — Omaha  World-Herald . 

The  book  is  a careful  study  of  the  theme  at  hand. 
It  presents  in  a condensed  form  a great  mass  of 
data  which  must  prove  of  value  to  the  student  of 
prices. — St.  Paul  Pioneer  l*re$8. 


Beautifully  Printed  — Price  $1.50  net 

PUBLISHED  BY 

THE  BANKERS  PUBLISHING  CO. 

{253  Broadway,  New  York 


Digitized  by 


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THE  BANKERS  MAGAZINE 


and  the  wisdom  and  good  taste  displayed  in 
the  structure  and  furnishing  of  the  bank 
are  to  be  commended.  The  total  assets 
under  the  control  of  the  bank  in  all  depart- 
ments exceed  $140,000,000. 


BANKS  CLOSED  OR  IN  LIQUIDA- 
TION 

ARKANSAS. 

Mena — National  Bank  of  Mena;  in  liquida- 
tion, Nov.  1. 

CALIFORNIA. 

Los  Angeles — All  Night  & Day  Bank;  in 
hands  of  state  superintendent,  October  14. 

KENTUCKY. 

Beattyville — National  Bank  of  BeattyviUe; 
closed  October  16. 

Olive  Hill— Olive  Hill  National  Bank;  in 
liquidation,  Oct.  16. 

LOUISIANA. 

Baton  Rouge — First  National  Bank;  In  vol- 
untary liquidation,  October  l. 

MASSACHUSETTS. 

Brookline — Brookline  National  Bank;  in 
liquidation.  Oct.  31. 

Lawrence — Arlington  National  Bank;  in 
liquidation,  Oct.  15. 

MICHIGAN. 

Grand  Rapids — Grand  Rapids  National 
Bank;  in  voluntary  liquidation,  October  1. 

Detour— Chippewa  County  Bank;  closed  Oc- 
tober 6. 

MISSISSIPPI. 

Vicksburg — American  National  Bank;  in 
liquidation,  Nov.  2. 

NEW  JERSEY. 

North  Plainfield — Borough  National  Bank; 
In  voluntary  liquidation,  September  15. 

NEW  YORK. 

Poland — National  Bank  of  Poland;  in  volun- 
tary liquidation,  July  1. 

NORTH  DAKOTA. 

Maddock — First  National  Bank;  in  volun- 
tary liquidation  October  4. 

WISCONSIN. 

Ladysmith— Ladysmith  National  Bank;  in 
liquidation  Oct.  24. 

WYOMING. 

Saratoga— First  National  Bank;  in  volun- 
tary liquidation  July  1. 


THOSE  “ SOFT  HUNDRED  DOLLAR 
BILLS 

44*  I SHE  request  for  an  ‘old  soft  hundred 
A dollar  bill’  has  become  so  frequent 
of  late,”  said  the  ladies*  teller  in 
an  uptown  bank,  “that  I made  so  bold  as  to 
ask  a friendly  depositor  what  this  feminine 
craze  for  shabby  hundred  dollar  bills  stood 
for. 


‘“All  your  hundred  dollar  bill  ladies  have 
autos,  I suppose?*  she  said.  I admitted 
that  most  of  them  had. 

“ ‘Most  of  them  have  country  places  with- 
in easy  motoring  distance?*  was  her  next 
question.  I thought  a minute  and  said  that 
many  of  them  were  semi-suburbanites. 

“She  then  went  on  to  say  that  if  I was 
any  kind  of  a Sherlock  Holmes  I’d  be  able 
to  put  these  facts  together  and  see  that 
suburban  living  often  necessitated  rapid 
motoring;  that  this  meant  arrest  and  that 
bail  was  a good  thing  to  have  on  hand. 
An  extra  hundred  dollar  bill,  closely  wadded 
and  pinned  under  a cushion  of  the  machine 
was  fairly  safe  from  theft  and  often  saved 
the  situation.  A new  bill  is  too  crisp  for 
pinning  and  is  apt  to  rustle  when  touched. 
The  old  bill’s  just  the  thing  for  tucking 
away  in  a card  case  or  vanity  bag  or  pin- 
ning in  some*  pocket  of  the  machine. 
‘Quite  safe,  but  effective,*  was  the  way  she 
summed  up  the  bailing  virtues  of  the  shab- 
by hundred  dollar  bill.*’ — New  York  Sun. 


SUB-TREASURIES  AT  ST.  LOUIS 
AND  CHICAGO  TO  MUTILATE 
OLD  PAPER  MONEY 

THE  Treasury  Department  has  ex- 
tended the  system  of  cancelling  notes 
to  the  sub-treasuries  at  St.  Louis  and 
Chicago,  which,  it  is  said,  will  result  in  a 
saving  of  about  $75  per  day  at  each  place. 

The  old  system  was  to  send  the  money 
for  redemption  to  Washington,  where  it  was 
cancelled  and  cut.  The  government  had  a 
standing  contract  with  the  express  compan- 
ies to  transport  this  money.  Now  since  the 
money  is  cancelled  and  cut  at  the  sub- 
treasuries,  the  mutilated  money  can  be  sent 
by  registered  mail  with  a great  saving. 
This  plan  has  been  in  operation  in  the  sub- 
treasury at  New  York  for  some  time. 


A NOVEL  “BANK  BOOK” 

Victor  M.  Grab  & Co.  of  Chicago,  manu- 
facture a beautifully  oxidized  copper  fin- 
ished bank,  made  of  best  cold  rolled  steel. 
It  locks  with  master  key  and  has  openings 
for  coin  and  bills.  It  is  shaped  like  a book. 
It  is  neat,  handy  to  carry  and  light  in 
weight,  yet  practically  indestructible.  Size 
3%x5xl%  inches.  H as  nickeled  name  plate, 
on  which  bank’s  name  is  stamped.  Every 
bank  like  this  given  out  insures  increased 
deposits,  because  the  teller  has  the  key  and 
he  alone  can  open  the  bank  and  take  out 
money  placed  therein. 


Digitized  by  t^ooQie 


xJl 


Talk  No.  11 


The  Cashier  Says:— 

’‘The  State  Bank  Examiner 
made  quite  a record  here — 
completed  his  summary  in  less 
than  two  days — but  he  uses 
the  Burroughs*  That  makes 
the  big  difference. 

Why,  only  a few  years  ago 
die  Examiner  required  fully  a 
* week  to  learn  our  condition. 
We  used  to  sort  of  dread  his 
coming — meant  bother  and 
night  work  to  us — now,  it  is 
just  a pleasant  diversion. 

This  Examiner  is  a new 
man,  an  ex-cashier.  He 
asked  for  two  clerks  and  two 
Burroughs  and  got  busy.  With 
this  mechanical  bookkeeper, 
in  one  third  the  time  required 
by  the  old  method  of  adding 
and  listing  figures  by  hand,  he 
totals  up  all  collateral,  stocks, 
loans,  deposits — also  the  blot- 
ters, registers  and  bill  books. 
He  has  it  down  to  simple 
system — the  Burroughs  does 
it — he  surely  is  a Burroughs 
enthusiast 

Wo  keep  6 Burroughs  buoy  here 
all  the  time  and  I've  asked  the 
Board  for  two  more— I'll  get  them 
tool  We  all  appreciate  their  value 
as  money-savers.  Drop  a line  to  the 
factory  and  ask  for  their  interesting 
Bank  literature.  Address  them  this 

•t 

way: 


Burroughs  Adding  Machine  Co. 


Bvrrougki 
Block,  Dotroit, 
Michigan, 

u.  s.  XT 


European 

Address; 

65  High  Hoi- 
born.  London, 
W.  d EnsUnd 


I 


Bank  Furniture 


DESKS 

CHAIRS 

and 

Filing  Cabinets 

in 

Fined  Mahogany 

and 

Quartered  Oak 


Write  for  Catalogs 

JTieJCacey'Co. 

343  BROADWAY  . . NEW  YORK 


Two 

Valuable  Books 

This  Company  is  selling  agent  for 
these  two  important  English  finan- 
cial books : 

Accountancy.  311  pp.,  cloth,  silt,  $9.90. 
By  FRANCIS  W.  PIXLEY.  An  en- 
tirely new  work  dealing  with  Ac- 
countancy, Constructive  and  Record- 
ing, from  a theoretical  and  a practi- 
cal point  of  view.  The  latest  exposi- 
tion of  the  science. 

Money,  Exchange  and  Banking.  170  pp„ 

cloth,  gilt,  $3.00.  By  H.  T.  EASTON, 
Associate  of  the  Institute  of  Bankers. 
Treats  of  the  above  subjects  in  their 
practical,  theoretical,  and  legal  aspects. 

“Is  so  complete  and  contains 
so  much  that  business  men  and 
banks  in  the  financial  districts 
have  ordered  their  clerks  to  read 
it.  It  also  contains  Information 
that  every  modern  business  man 
should  have  at  his  fingers'  ends.'* 

— N.  Y.  Evening  Telegram. 

The  Bankers  Publishing  Co. 

253  Broadway,  Now  York 


1x47  ▲ 


Digitized  by  L^OOQle 


The  Bankers  Magazine  Classified  List  of 
American  Banks,  Bankers  and 
Trust  Companies. 


ALABAMA 

W.  R.  RISON  BANKING  CO. 

HUNTSVILLE,  ALA. 


Capital $75,000 

Surplus 26,000 

Undivided  Profits. . . 62,000 

A.  L.  Bison,  Pres. 

Harry  M.  Rhett,  Cash. 


Collections  will  receive  prompt 
attention  and  be  remitted  for  on 
day  of  payment.  Established  1866. 


ARIZONA 


BANK  OF  ARIZONA. 

(Incorporated  1877.) 
PBBSCOTT,  ARIZ. 

Capital $50,000 

Surplus  and  Undi- 
vided  Profits...... 116, 000 

Hugo  Richards.  Pres. 

Ed.  W.  Wells,  Vice-Pres. 

M.  B.  Hazeltine,  Cash. 

C.  A.  Peter,  Asst.  Cash. 

Oldest  bank  in  Arizona.  All  sorts 
of  collections  at  fair  prices,  with 
quick  returns.  Deposits  one  million 
dollars.  We  serve  others— we  want 
to  serve  you. 


ARKANSAS 


AMERICAN  NATIONAL  BANK. 

FOOT  SMITH,  ARK. 

Capital $200,000 

Surplus 130,000 

T.  W.  M.  Boone,  Pres. 

Jos.  M.  Spalding,  Vice-Pres. 

P.  A.  Ball,  Cash. 

A.  8.  Dowd.  Asst.  Cash. 

E.  M.  Dickenson,  Asst.  Cash. 

We  want  yonr  collections.  A 
trial  will  prove  satisfactory.  Cor- 
respondence solicited  relative  to 
accounts  and  investments  in  this 
locality. 


GEORGIA 


ATLANTA  NATIONAL  BANK. 

ATLANTA,  GA. 

Capital $500,000 

Surplus 465,000 

C.  E.  Currier.  Pres. 

Hugh  T.  Inman.  Vice-Pres. 
George  R.  Donovan,  Cash 
James  S.  Floyd,  Asst.  Cash. 


GEORGIA  RAILROAD  BANK. 

AUGUSTA,  GA. 

Capital $200,000 

Undivided  Profits..  309,000 

Jacob  Phinizv.  Pres. 

Wm.  A.  Latimer,  Vice-Pres. 
Charles  G.  Goodrich,  Cash. 
Rufus  H.  Brown,  Asst.  Cash. 

Capital  paid  up.  Careful  atten- 
tion to  all  business  entrusted  to  us. 
Special  care  given  to  investments. 
Correspondence  invited. 


NATIONAL  BANK  OF  BRUNSWICK. 


BRUNSWICK,  GA. 

Capital $150,000 

Surplus 112,000 

C.  Downing,  Pres. 

E.  H.  Mason,  Vice-Pres. 

Albert  Fendlg,  Vice-Pres. 

C.  H.  Sheldon,  Cash. 

J.  H.  Parker,  Asst.  Cash. 

Special  attention  given  collec- 
tions which  are  actually  presented 
and  remitted  for  on  day  of  payment. 
Write  us  for  terms  on  accumulated 
balances. 


SAVANNAH  BANK  & TRUST  CO. 

SAVANNAH,  GA. 

Capital $628,600 

Surplus 450,000 

W.  F.  McCauley,  Pres. 

Chas.  G.  Bell,  Vice-Pres. 

8.  L.  Clay,  Cash. 

M.  D.  Papy,  Asst.  Cash. 

Collections  handled  promptly  and 
remitted  for  at  lowest  rate  of  ex- 
change. Accounts  of  banks,  bank- 
ers, merchants,  corporations  and 
individuals  solicited. 


HAWAII 


BISHOP  & CO. 

HONOLULU,  HAWAII. 

Capital $800,000 

(S.  M.  Damon 

Alexander  Garvie 

A.  W.  T.  Bottomley) 

Collections  anywhere  in  the  Is- 
lands promptly  made  and  remit- 
ted for  at  most  favorable  rates. 
| Cable  address  "Snomad.” 


ILLINOIS 


ALEXANDER  CO.  NAT.  BANK. 

CAIRO,  ILL. 

Capital $100,000 

Surplus 100,000 

E.  A.  Buder,  Pres. 

Chas.  Feuchter,  Jr.,  Vice-Pres. 

C.  O.  Patier,  Vice-Pres. 

J.  H.  Galligan,  Cash. 

• Frank  Spencer,  Asst.  Cash. 

Send  us  your  Cairo  items.  Satis- 
faction guaranteed. 


LOUISIANA 

OPELOUSAS  NATIONAL  BANK. 

OPRLOU8A8,  LA. 


Capital $50,000 

Surplus 25,000 

Undivided  Profits. . . 4,000 


E.  B.  Dubuisson,  Pres. 

J.  B.  Sandoz,  Vice-Pres. 

A.  Leon  Dupre,  Cash. 

J.  A.  Perkins,  Asst.  Cash. 

Charter  No.  6920.  Began  busi- 
ness October  1,  1903.  Collections 
solicited. 


MARYLAND 


FIRST  NATIONAL  BANK. 

CUMBERLAND,  MD. 

Capital $100,000 

Surplus 100.000 

Undivided  Profits..  60,000 

Robert  Shriver,  Pres 

J.  L.  Griffith,  Cash 

Transacts  a general  banking  busi- 
ness. Prompt  attention  given  to 
collections  and  correspondence. 


MISSOURI 


MISSISSIPPI  VALLEY  TRUST  CO. 

ST.  LOUIS,  MO. 

Capital $3,000,000 

Surplus 3,500,000 

Undivided  Profits  1,917,107 

Julius  S.  Walsh,  Chairman 
Breckinridge  Jones,  Pres. 

John  D.  Davis,  Vice-Pres. 

8.  E.  Hoffman,  Vice-Pres. 

J.  E.  Brock,  Sec. 

Hugh  R.  Lyle,  Asst.  See. 
Henry  C.  Ibbotson,  Asst.  Sec. 

O.  Hunt  Turner,  Jr.,  Asst.  Sec. 
Louis  W.  Fricke,  Asst.  8ec- 

Transacts  a general  financial, 
bond,  real  estate,  safe  deposit  and 
fiduciary  business.  Correspondence 
invited.  For  further  particulars 
see  lower  one-half  Inside  back 


cover  page. 

Digitized  by 


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xliii 


NEVADA 


NIXON  NATIONAL  BANK. 

(Sucoe  to  Bank  of  Nevada) 

KEXO,  NEVADA. 

Capital $1,000,000 

Surplus 200,000 

Geo.  8.  Nixon,  Pres. 

F.  M.  Lee.  Vice- Pres. 

R.  C.  Turrittiu,  Cash. 

H.  H.  Kennedy,  Asst.  Cash. 

Any  business  entrusted  to  our 
care  will  receive  prompt  and  care- 
ful attention. 


NEW  JERSEY 


CITIZENS’  NATIONAL  BANK. 

(Chartered  1890) 
ENGLEWOOD,  N.  J. 


Capital. $50,000 

Surplus 75,000 

Undivided  Profits.  34.000 
Deposits 992,000 


Donald  Mackay,  Pres. 

Clinton  H.  Blake.  Vice-Pres. 
Geo.  W.  Springer,  Cash. 

Collections  solicited.  Remittance 
on  day  of  payment  at  lowest  rates. 
Send  us  your  business. 


VINELAND  NATIONAL  BANK. 

VINELAND,  Si.  J. 

Capital $50,000 

Surplus 60,000 

Undivided  Profits...  23,000 

Myron  J.  Kimball,  Pres. 

D.  Harry  Chandler,  Vice-Pres. 
Chas.  Lafferty,  cash. 

Wm.  Macgeorge,  Asst.  Cash. 

Prompt  and  careful  attention  to 
all  collections  in  Southern  New 
Jersey. 


NEW  YORK 


PEOPLE’S  BANK 

BUFFALO,  N.Y. 

Capitol $300,000 

Surplus  and  Profits  325,000 
Deposits 5,000,000 

A.  D.  Bissell,  Pres. 

C.  R.  Huntley,  Vice-Pres. 

B.  J.  Newell,  Cash. 

Howard  Bissell.  Asst.  C. 

C.  G.  Fell,  Asst.  C. 

The  moat  careful  supervision 
given  our  collection  department 
and  especial  attention  to  drafts 
with  bills  of  lading. 


JEFFERSON  CO.  NATIONAL  BANK. 

WATERTOWN.  N.  T. 

Capital $260,000 

Surplus.... 60,000 

Undivided  Profits.  301,000 

G.  B.  Massey,  Pres. 

John  C.  Knowlton,  Vice-Pres. 

G.  V.  8.  Camp,  Cash. 

P.  Norton,  Asst.  Cash. 

Oldest  and  largest  bank  In  North- 
ern New  York.  Your  business 
solicited. 


PENNSYLVANIA 


TEXAS 


WYOMING  NATIONAL  BANK 

WILKES-BARRE,  PA. 


Capital $150, 000 

Surplus 600,000 

Undivlded^Proflts.  104.000 

A.  H.  McClintock,  Pres. 

Irving  A.  Stearns,  Vice-Pres. 
Geo.  H.  Flanagan,  Cash. 

Collections  promptly  made  on  all 
accessible  points  at  reasonable 
rates  and  remitted  for  on  day  of 
payment. 


RHODE  ISLAND 


INDUSTRIAL  TRUSTCO . 

(Pawtucket  Branch.) 

PAWTUCKET,  R.  I. 

Capital $3,000,000 

Surplus 4,000,000 

William  H.  Park,  Mgr. 

Chas.  L.  Knight,  Asst.  Mgr. 

Collections  on  this  city  and  vicin- 
ity solicited  and  promptly  remitted 
for  at  lowest  rates.  (Succeeded 
First  National  and  Pacific  National 
Banks  of  Pawtucket). 


SOUTH  CAROLINA 


BANK  OF  CHABLESTON  N.B.A. 

CHARLESTON,  8.  C. 

Capital $300,000 

Surplus  and  Profits...  350,000 


*•  H.  Pringle,  Pres. 

M.  W.  WiUon.  Cash. 


B.  H.  Pringle,  Jr.,  Asst.  Cash. 


special  attention  given  to  city 
collections.  Drafts  on  Charleston 
drawn  with  exchange  remitted 
without  charge. 


GEKMANIA  SAVINGS  BANK 

CHARLESTON,  8.  C. 

Capital $80,000 

Surplus 80,000 

Undivided  Profits  over  80,000 
Deposits  over 2,800,000 

Henry  Schachte,  Pres. 

Walter  Williman,  Cash. 

H.  J.  Bollman.  Asst.  Cash. 


PALMETTO  NATIONAL  BANK 

COLUMBIA.  8.  C. 

Capital $250,000 

Surplus 55,000 

Wilie  Jones,  Pres. 

John  Siebels,  Vioe-Prea. 

J.  P.  Matthews,  Cash. 


ed.  McCarthy  & co. 

GALVESTON,  TEX. 


General  banking  business.  Send 
us  yoar  Texas  items,  especially 
your  Galveston  business.  Prompt 
attention  given. 


VIRGINIA 


NATIONAL  STATE 

AND  CITY  BANK. 

RICHMOND,  VA. 

Capital $1,000,000 

Surplus 600,000 

Wm.  H.  Palmer,  Pres. 

J . 8.  Ellett,  Vice-Pres. 

Wm.  M.  Hill,  Vice-Pres. 

J.  W.  Slaton,  Vice-Pres. 
Julien  H.  Hill,  Cash. 

Collections  remitted  for  on  day  of 
payment.  Correspondence  solicited. 


WISCONSIN 


WISCONSIN  NATIONAL  BANK, 

OF  MILWAUKEE. 

Capital $2,000,000 

Surplus 1,000,000 

L.  J.  Petit,  Pres. 

Fredk.  Kasten,  Vice-Pres. 

Chas.  E.  Arnold,  Vice-Pres. 
Herman  F.  Wolf,  Cash. 

L.  G.  Bonrnique,  Asst.  Cash. 
W.  L.  Cheney,  Asst.  Cash. 
Walter  Kasten,  Asst.  Cash. 

Charter  No.  4817.  Accounts  of 
banks  and  individuals  solicited. 
Prompt  attention  to  collections. 
Correspondence  invited. 


CANADA. 


MANITOBA 


Winnipeg 


BANK  OF  OTTAWA. 

Head  Office,  Ottawa. 

Capitol  paid  up.. $3, 000, 000 

Rest  A Undivided 
Profits  3.405,991 

Total  Assets 33,524,891 

Special  attention  given  to  collec- 
tions on  points  in  Western  Canada 
and  returns  made  promptly  at  low- 
est rates. 


J.  B.  Monk,  Mgr.  Winnipeg  Branch. 


Digitized  by 


Google 


LAWYERS'  LIST. 


xliv 


Selected  List  of  Lawyers. 


NOTICE.— The  Lawyers  in  this  List  comprise  bank,  commercial  and  corporation  Attorneys  who 
have  been  recommended  to  the  Publishers  of  The  Bankers’  Magazine  by  a Bank  or  well- 
known  merchant  in  the  place  or  vicinity.  It  is  the  intention  to  have  the  List  include  only 
the  names  of  individual  Lawyers  and  firms  especially  equipped  for  handling  (1)  the  general 
legal  business  arising  from  tanking  operations;  (2)  litigated  cases  intimately  related  to  bank- 


ing, mercantile  and  corporation  business,  and  (3)  collections  of  bankers  and  merchants. 

Legal  business  may  be  entrusted  to  the  Lawyers  represented  below  with  the  assurance  that 
it  will  receive:  1st,  proper  attention;  2d,  a quick  and  business-like  response;  and  3d,  prompt 


remittances  of  collections. 

ARKANSAS. 

Texarkana,  Miller  Co  . .C.  B.  & HENRY  MOORE* 
Corporation  and  commercial  law.  Attorneys 
for  Merchants  & Planters  Bank.  Compilers  of 
the  Laws  of  Arkansas  for  The  Bankers  Direc- 
tory. 

NEW  JERSEY. 

Camden,  Camden  Co — WILSON  & CARR, 

314  Market  Street. 

Practice  in  all  Courts  of  New  Jersey.  Cor- 
poration, bankruptcy  and  commercial  law. 

Refer  to:  Security  Trust  Co. 


MIN  NESOTA . 

Winona,  Winona  Co — SIMPSON  & SIMPSON, 
Attorneys  for  Second  National  Bank.  Cor- 
poration real  estate  and  probate  law. 

Kefer  to:  Mississippi  River  Logging  Co., 


Chippewa  Falls,  Wisconsin;  Chicago,  Great 
Western  Railway  Co.,  St.  Paul,  Minnesota; 
Green  Bay  and  Western  Railway  Co..  Green 


Ui Cv>U  JkJCkj  aim  roiciu  isnii  way  \ v/. . uiuvu 

Bay,  Wisconsin;  United  States  Fidelity  and 
Guaranty  Co.,  Baltimore,  Md.  Also  any  bank 
in  the  City  of  Winona,  Minn. 


MISSISSIPPI. 

Cleveland,  Bolivar  Co.. CH AS*  SCOTT,  WOODS 
& SOMERYILLE. 

Rosedale,  Bolivar  Co.. . . CHAS.  SCOTT,  WOODS 
& SOMERYILLE. 

Refer  to:  Supreme  Court  Judges  of  Mias.; 
Hanover  National  Bank,  and  Mr.  Stuyvesant 
Fish,  President  Ills.  Central  R.  R.,  New  York 
City;  Bank  of  Rosedale,  of  which  Charles  Scott 
Is  president. 

MISSOURI. 

St.  Louis  Co..  ...GERBIT  H*  TEN  BROEK, 
717  Locust  Street. 

MtlWRDCI  Attorney  and  Counsellor.  - 


NEW'  YORK. 

New  York  Co..  . .GODFREY  N.  NELSON, 

52  Broadway. 

Corporation,  bankruptcy  and  commercial  law. 
Refer  to:  Standard  Trust  Company,  New 
York;  New  Nelherland  Bank,  New  York; 
Swariwout  & Appenzellar.  Bankers,  New 
York;  H.  W.  Miller  of  Keech,  Loew  & Com- 
pany, Bankers,  New  York;  Madison  Trust 
Company,  New  York. 


TEXAS. 

Denison,  Grayson  Co...  N.  H.  L.  DECKER, 

Corporation  and  commercial  law  and  land  1114 - 

5ation.  specialties.  Local  attorney  M.K.4T. 
ty.  Notaries.  No  criminal  cases. 

Refers  to:  National  Bank  of  Denison,  Deni- 


son ; Franklin  MeVeagh,  Chicago. 


Sa  Antoni  Co ROBERT  L.  BALL, 

Attorney  for  National  Bank  of  Commerce, 
San  Antonio,  Texas,  of  which  Mr.  Ball  ia  Vice- 
President. 

Refer  to:  National  Bank  of  Commerce,  New 
York;  F.  £.  Marshall,  President  Phenix  Nat- 
ional Bank,  New  Yorx;  H.  P.  Hilliard.  Vice- 
President  Mechanics  American  National  Bank, 
St.  Louis;  Seymour  Coman  & Co.,  Bankers. 
Chi -ago:  First  National  Bank,  Kansas  City, 
Missouri. 


CANADA. 


ONTARIO. 

Toronto,  York  Dist JENNINGS  * CLUTE. 

Traders  Bank  Building. 

Barristers,  Solicitors,  Notaries  Public.  Solic 
itors  for  the  Bank  of  Hamilton. 


GODFREY  N.  NELSON 

Certified  Public  Accountant,  State  of  New  York 

Member  of  the  New  York  Bar 

52  BROADWAY,  NEW  YORK 

Telephone,  3466  Broad.! 

General  Accounting,  Auditing,  Special  Investigations,  Bank  Audits, 
Estate,  Bankruptcy  and  Municipal  Accounting 
Reports  for  Underwriters,  etc. 

COMMERCIAL  AND  BANKING  REFERENCES 


Digitized  by 


Google 


xlv 


PATENTS 


$180,340,005 

MADE  BY  MY  CLIENTS  ^ 

Ton  Should  Have  My  FfclE  BOOKS 

telling  HOW  OTHERS  will  do  the  same  IN  THE 
FUTURE.  “WHAT  AND  HOW  TO  INVENT” 
book  free. 

E.  E.  V ROOM  AN,  Patent  Lawyer 

848  F St.,  Washington,  D.  C. 


Hotel  Puritan 


60  DAYS 

after  date  of  first  winding  the 
next  winding  will  be  due,  bat  not 
an  1 1 1 then  if  yon  have  a PrentiM  60 
Day  clock.  This  la  a moat  exoel* 
lent  timekeeper  whloh  keeps  per* 
feet  time  throughout  its  long  ran, 
and  the  calendar  cluing***  dav  after 
day  without  any  attention.  If  Jon 
nse  a Prentiss  60  Day  Calendar 
clock  you  will  always  have  the 
correct  time  and  date. 

Also  Prying-pan,  Synchronised, 
Program , Electric  and  Watch- 
man’s  cloclet. 

Send  for  Catalogue  No.  327. 

THE  PRENTISS  CLOCK 
IMPROVEMENT  CO. 

Dept.  32, 92  Chambers  8t.,  N. Y.  City 


390  COMMONWEALTH  AVENUE 
BOSTON 

100  Yards  West  of  Massachusetts  Avenue 
Car  Lines 

A Distinctive  Boston  House 


Opened  last  November  with  every  modern 
resource  for  transient  and  permanent 
guest  s 


Write  for  Literature 


E.  P.  COSTELLO  - Manager 


ONLY  N.  Y.  HOTEL  WITH  WINDOW  SCREENS  THROUGHOUT 

Hotel  Cumberland 


KEPT  BY  A FORMER  BANKER 


NEW  YORK 


S.  W.  Corner  Broadway  at  54th  Street . 

.Near  50th  8t.  Subway  Station  and  53d  St.  Elevated 

Ideal  Location.  Xcar  Depot s,  Shops  and  Central  Park 
Broadway  cars  from  Grand  Central  Depot  pass  the  door 

NEW  AND  FIRE-PROOF 
STRICTLY  FIRST-CLASS  RATES  REASONABLE 
$2.50  with  Bath,  and  up 


10  MINI  TEH  WALK  FKOM  ttO  THEATRE* 

SBXU  FOB  BOOKLRT 

H.  P.  ST1MSON,  Formerly  President  American  National  Bank  of 
Kansas  City ; lately  with  Hotel  Imperial,  N.  Y. 


HE  J§  QQ  UJ§  R TE  ft  S FOR  B J§  JY  K B R S 


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LOCATING  IN  NEW  YORK 

If  you  contemplate  living  in  New  York  consider 

The  Hotel  Ansonia 

as  your  permanent  or  temporary  stopping  place 
HOUSEKEEPING  AND  NON-HOUSEKEEPING  APARTMENTS 

Furnished  and  Unfurnished  Maid  Service  Optional 
HOUSEKEEPING  NON-HOUSEKEEPING 


5 Rooms  and  Bath  . 

6 Rooms  and  Bath  . 

. $1,800 

$1,800 

2.000 

2 Rooms  and  Bath  . 

. $900 

$1,200 

7 Rooms  and  Bath  . 

2.700 

3 Rooms  and  Bath 

1,500 

2,000 

10  Rooms  and  Two  Baths 

11  Rooms  and  Three  Baths 

. 3.600 

3.600 

3.800 

3 Rooms  and  Two  Baths 

* 

2,400 

Fireproof  in  Every  Sense  of  the  Word 

Broadway  at  Seventy-Third  Street  Subway  Express  Station 

May  a diagram  book  be  sent  you  ? 


ATLANTIC  CITY,  N.  J. 

Directly  on  the  Beach  Front 

Open  all  year  8.  g.  PHOEBUS.  Manager 


HOTEL  WINDSOR 


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xlvii 


4 


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The  Safe  to  Trust 

If  you  are  organizing  a new  Bank,  or  have  wisely  come 
to  the  conclusion  that  your  old  style  plate  safe  is  an 
antique  and  unsafe,  you  should  not  be  satisfied  to  have  as 
a vital  part  of  your  equipment  any  but  the  best  safe  made. 

We  are  the  originators  of  the  Manganese  Steel  Safe. 

Ask  the  opinion  of  any  of  the  thousands  of  bankers  using 
our  safes.  It  is  a proven  proposition. 


Write  To-day  tor  Full  and  Interesting  Information 


Manganese  Steel  Safe  Co. 

PLAINFIELD,  N.  J. 


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xlvlll 


It  is 

The  One  Machine  Which  Does  It  All 

For  bank  remittance  work,  country  bank  statement  work,  cus- 
tomer's statement  work,  or  any  other  kind  of  bank  work,  this 
machine  is  always  a finisher. 


Send  for  our  new  illustrated 
booklet 

“The  Machine  for  Banks” 

Remington  Typewriter  Company 

(Incorporated) 

325-327  Broadway,  New  York,  Or  Any  City  on  Earth 


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It  Begins  and  it  Finishes  your  work 

This  is  exactly  what  is  done  by  the 


Remington 

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The  machine  which  writes 
but  doesn’t  add,  stops  half 
way. 

The  machine  which  adds 
but  doesn’t  write,  stops  half 
way. 

But  the  Remington- 
Wahl  machine  doesn’t  stop 
half  way. 


Bertron,  Griscom  & Jenks 

BANKERS 

Members  of  the  New  York  Stock  Exchange 

I 

40  Wall  Street  Land  Title  Bldg. 

New  York  Philadelphia 

Investment  Securities 


We  make  a specialty  of  Organizing,  Operating,  Financing 
and  Selling  the  Securities  of  Public  Service  Corporations 


Ho°£MkuAli 

Manifold  Protection  for  Investors,  Bankers  and  Business  Men 


Moody's 

Manual 


The  standard  authority  on 
American  Corporations.  Ao- 
onrate  and  oomplete  descrip- 
tions of  8000  steam  rail- 
roads, public  utilities,  prl- 
vate  Industries,  mines,  eta 
Their  date  and  plaoe  of  In- 
corporation, securities,  cap- 
italisation. earnings,  divi- 
dends, bond  Issues,  directors 
with  their  addresses,  and 
much  other  useful  Informa- 
tion. 


1010  Edition,  3000  pages, 
now  being  delivered.  Indis- 
pensable to  everyone  with  money 
to  invest.  Adopted  by  the  Gov- 
eminent. 


Monthly 

Digest 

▲ monthly  supplement  to 
Moody's  Manual,  reporting 
all  corporation  changes,  such 
as  new  Issues  of  stocks  and 
bonds,  earnings.  Income  ac- 
counts, reorganisations,  re- 
ceiverships, eta  Keeps  the 
Manual  down-to-date.  This 
Is  a vital  feature,  exclusive 
with  us,  which  has  hereto- 
fore been  Impossible  In  a 
yearly  publication.  Antici- 
pates Inquiries,  and  makes 
many  special  reports  un- 
necessary. 


Statistical 

Research 

Private  reports  on  any 
corporation.  Absolutely  ac- 
curate and  confidential.  Of 
great  value  for  studying  se- 
curities before  purchasing, 
and  for  watching  them  af- 
terwards. Will  keep  sub- 
scribers continually  posted. 
If  desired,  invaluable  to  In- 
vestors owning  speculative 
securities  and  to  banks  hold- 
ing many  collateral  loans 
These  researches  are  made 
by  experts 


In  addition  to  these  protections  sgsinst  unsound  investments  the  Moody  Manual  Service 
includes  the  exhaustive  analyses  of  Mr.  Roger  W.  Babaon,  the  famous  statistician,  concerning 
the  investment  value  of  the  securities  of  IN  of  the  important  railroad  systems  of  America 


$12  is  the  oost  of  the  Manual  in  the  U.  8.  and  Canada.  $14  elsewhere.  The  digest  is  gratis. 
By  all  means  subscribe  for  this  efficient  financial  service.  We  will  refund  your  money  if 
unsatisfactory. 


Moody  Manual  Company,  31-33  Broadway,  New  York 


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$100  $500  $1000 


Six  par  Cent  to  the  Purchaser  of  the  First  Mortgage  and 
Collateral  Trust  6%  Gold  Bonds 
or  TBS 

North  Platte  Valley  Irrigation  Company 

Am  Imres tment  la  these  bonds  Is  protected  by  the  follow* 
lay  remarkable  combination  of  safe-yarding  features: 


Location.  The  property  adjoins  on 
two  sides  Senator  Carey's  famous  lrrl- 

Kted  farms,  the  products  of  whioh 
ve  won  prises  in  many  agricultural 
congresses  in  California.  Colorado,  Ida- 
ho, Wyoming  and  other  states.  This 
location  assures  the  character  of  the 
soil  and  supply  of  water. 

Construction  of  the  dam  which  Is 
completed  (the  largest  reinforced  steel 
concrete  dam  in  the  world),  reservoirs, 
canals,  ditches,  etc.,  were  under  the 
supervision  of  the  Ambursen  Hydraulic 
Construction  Co.,  of  Boston,  who  have 
acquired  a reputation  for  such  work. 


Legality.  All  legal  stepa  pertaining 
to  the  development  of  the  North  Platte 
Valley  Irrigation  Company  have  been 
taken  under  the  direction  of  Clark, 
Reiner  ft  Clark  of  Cheyenne  and  Wood 
ft  Oakley  of  Chicago,  who  have  given 
unqualified  approval. 

Development.  A portion  of  this  prop- 
erty is  already  under  cultivation  and 
producing  most  satisfactory  results. 

Settlement.  About  38,000  acres  of 
this  land  have  already  been  sold  to 
bona  fide  settlers  whose  contracts  have 
been  passed  upon  by  oounsel  for  the 
Trustee. 


Every  bond  Issued  represents  land  actually  sold  to  bona  fide  settlers  with 
water  on  the  land.  Suoh  bonds  are  further  secured  by  water  purchase  con- 
tracts deposited  with  the  Trustee  to  the  amount  of  $188  for  every  $100  worth  of 
bonds  Issued. 


'Descrtptfbe  circular  containing  additional  safeguarding  features  be  sent  upon  request 


BLAKE  ft  REEVES  34  Pine  Street  NEW  YORK  CITY 


Funding  Company  of  America 

40  Exchange  Place 

NEW  YORK 

Capital  $1,000,000  Rcprcsertatircs  b all  pnarigd  dies 

Underwriting  Department  solicits  correspondence  with  high-grade 
industrial  corporations,  desirous  of  procuring  funds  through  first 
mortgage  bond  issues  for  improvement  or  extension  purposes. 


Investment  Department  issues  5-year  Gold  Bonds,  registered, 
redeemable  by  owner  at  par  and  interest  at  any  time  on  30  days 
notice;  also  6%  10-year  Participating  Gold  Bonds. 

Descriptive  circular  on  request . 


Fiscal  Agency.  Acts  as  registrar  and  transfer  agent  for  securities 
of  municipal,  railroad  ana  other  corporations. 


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The  Chase  National  BanK 

or  THE  CITY  or  NEW  YORK 

CLEARING-HOUSE  BUILDING 

[SEPT.  1,  1910] 


Capital  .... 
Surplus  and  Profits  (Earned) 
Deposits  - - 

A.  B.  HBPIU'RN,  President 

A.  U.  WIQ0TO,  Vlee.Prr.ldeU 
8.  H.  Mil. LEU,  VIee>Pmiami 

B.  M.  CONKEY.  Ouhler 


S5.000.000 
- 8.108.252 

89.966.860 

C.  C.  NI.ADE,  Aaat.  ('■shier 
K.  A.  LKK,  Aaat.  CuUtr 
W.  R.  PIRDY.  Aml  Cuhler 
A.  C.  ANUKKW.H,  Ami.  t'aahlrr 


DIRECTORS 

H.  W.  OAjnroM.  Ohainnaii  ghajtt  B>  scaur  J.  J.  Hill  «t.  Pam,  Minn.  Jon  l Watimuii 
sioui  w.  Bitn  Au  Barron  BiraciR  auubt  H.  wioon  Groms  y.  Ron,  Jt,  Francis I*  Ham 

FORBION  BJJSCCTFTjAJlTCSbW  DEPARTMENT 


THE 


LIBERTY 


Capital  ■ <1.000,000 
Surplus.  <S, 000,000 
Profits  . <780,000 


Frederick  H.  Soiiekcr,  President 
Daxibl  G.  Retd.  Vice-President 
Zohbth  8.  Freeman,  VIoe-Prwident 
Charles  W.  Kiboks,  Vice-Proa,  and  Cashier 
Frederick  P.  McGlynn,  Asst.  ORghler 
Henry  8.  Bartow,  Asst.  Cashier 
UswiY  P.  Davison.  Chairman  Ex.  Com. 


BANK 


OF  NEW  YORK 

ISO  Broadway 


The  Girard  National  Bank 

OF  PHILADELPHIA 


Capital 

Snrplna  and  Protita 
Reaonrcea 

FBANCIB  B REEVES,  President 


$9,000,000 

4.300.000 

44.100.000 


TBANCIB  B REEVES,  Prcatdent  T.  t WIEDER8EKOC,  9d  VIob-PrMidnt 

Ri CHARD  L.  AUSTIN,  Yloo-Preeldent  JOSEPH  WATNB,  Ja.,  CMhlnr 

C.  U.  ASHTON,  Assistant  Cashier 

HAVE  YOU  A PHILADELPHIA  ACCOUNT? 

YOU  NEED  ONE  TO  PROPERLY  HANDLE  YOUR  BUSINESS 


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